# SECURITIES AND EXCHANGE COMMISSION

# Washington,
D.C. 20549

# FORM 10-KSB

Annual
Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
Fiscal Year Ended: December 31, 2002
Commission File No. 0-23965

Entrust Financial Services, Inc.
(Exact Name of Small Business Issuer as spcified in its charter)

| | Colorado
(State or other jurisdiction  of incorporation) |  | 84-1374481
(IRS Employer File Number)
| | -------------------------------------------------------- |  | -------------------------------------

Fifth Floor,
6795 E. Tennessee Ave., Denver, CO        80224
(Address of principal executive offices)        
           
 (Zip Code)

Registrants
telephone number, including area code: (303) 322-6999
Securities Registered Under Section 12(B) of the Exchange Act: None
Securities Registered Under Section 12(G) of the Exchange Act:Common Stock,$.0000001 per share par value

Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X]  No [  ]

Check
if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form and no disclosure will be contained, to
the best of Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB. [  ]

State
issuers revenues for its most recent year were $12,124,479.
The aggregate market value of the voting stock of the Registrant held by
non-affiliates as of December 31, 2002 was approximately $1,504,800.
The number of shares outstanding of the Registrants common stock, as
of the latest practicable date, December 31, 2002, was
2,520,385 after giving effect to a one-for-ten reverse split of the
Companys common shares, which became effective on February 4, 2002.

References
in this document to us, we, our, or
the Company refer to Entrust Financial Services, Inc. its
predecessors and its subsidiaries.

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PART I

## Item 1.
Description of Business.

The
following are definitions of terms used in this Form 10KSB:

Closed Loan:
A mortgage loan which has been funded.

Conforming Mortgages:
Mortgages which meet the Federal National Mortgage Association
(FNMA) or Freddie Mac underwriting guidelines.

Federal National
Mortgage Association (FNMA or Fannie Mae):
A Congressionally chartered corporation which buys conforming mortgages,
combines them and sells them in a pool as mortgage-backed securities to
investors in the open market. Monthly principal and interest payments are
guaranteed by FNMA but not by the U.S. Government. This organization is
sometimes called Fannie Mae.

Freddie Mac:
Freddie Mac is a stockholder-owned corporation chartered by Congress in 1970 to
create a continuous flow of funds to mortgage lenders in support of
homeownership and rental housing. Freddie Mac purchases mortgages from lenders,
packages them and pools them into securities that are sold to investors.

Limited Documentation
Loans:
Loans
which do not require verification of certain, defined information on a
borrowers loan application.

Mortgage Bankers:
Those who close and fund loans with their own funds or credit facilities.

Mortgage Brokers:
Those
who originate loans directly with consumers but whose loans are funded by
others.

Non-Conforming
Mortgage:
Mortgages which do not conform to FNMA or Freddie Mac underwriting guidelines.

Prime Market:
Those who buy FNMA or Freddie Mac quality loans.

Secondary Markets:
Those who buy closed loans.

Service Release
Premiums:
Fees paid for selling closed loans with servicing rights attached.

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RISK
FACTORS

THE
OWNERSHIP AND INVESTMENT IN OUR SECURITIES INVOLVES SUBSTANTIAL RISKS. OUR COMMON
SHARES SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THESE RISKS RELATING TO OUR
COMPANY.

WE HAVE ONLY
RECENTLY BECOME PROFITABLE AND THERE IS NO GUARANTEE THAT IT WILL  CONTINUE.

We
were formed in 1996 and acquired the operations of a company in 1999. From the
time we began operations until 2001, we operated at a loss. We have
only been profitable in fiscal year 2001. Since we have no history of
profitability over a sustained period of time, we have limited financial results
upon which you may judge our potential. While we do not expect to continue to
incur losses in the near future, there can be no guarantee that we will be able
to sustain our profitable operations. We have experienced in the past and may
experience in the future under-capitalization, shortages, setbacks and many of
the problems, delays and expenses encountered by any early stage business, many
of which are beyond our control. These include:

| | - | substantial
delays and expenses related to testing and development of new products,
| | - | -----------------------------------------------------------------------------------

| | - | development
and marketing problems encountered in connection with our new and existing products and
technologies,
| | - | -----------------------------------------------------------------------------------------------------------------

| | - | competition
from larger and more established companies, and
| | - | -----------------------------------------------------------

| | - | lack
of market acceptance of our new products.
| | - | ----------------------------------------------

BECAUSE
OUR HISTORY IS LIMITED AND WE ARE SUBJECT TO INTENSE COMPETITION, ANY INVESTMENT
IN US WOULD BE INHERENTY RISKY.

Because
we are a company with a limited history of operations and profitability, our
activity can be expected to be extremely competitive and subject to numerous
risks. The mortgage brokerage business is highly competitive with many companies
having access to the same market. Substantially all of them have greater
financial resources and longer operating histories than we have and can be
expected to compete within the business in which we engage and intend to engage.
There can be no assurance that we will have the necessary resources to become or
remain competitive. We are subject to the risks which are common to all
companies with a limited history of operations and profitability. Therefore,
investors should consider an investment in us to be an extremely risky venture.

WE HAVE
RECENTLY COMPLETED A FINANCING. HOWEVER, EVEN WITH THIS FINANCING AND WHILE WE ARE
CURRENTLY PROFITABLE, WE MAY STILL NEED  ADDITIONAL FINANCING.

On
December 31, 2002, we completed a financing. We borrowed $2,000,000 and pledged
all of the assets and common shares of our subsidiary, Entrust Mortgage, Inc. As
a result, for the foreseeable future, we expect to rely principally upon the
proceeds of this financing and our cash flow. We cannot guarantee the success of
this plan. We believe that from time to time, we may have to obtain additional
financing in order to expand our business consistent with our proposed
operations. There can be no guaranty that additional funds will be available
when, and if, needed. If we are unable to obtain such financing, or if the terms
thereof are too costly, we may be forced to curtail proposed expansion of
operations until such time as alternative financing may be arranged, which could
have a materially adverse impact on our operations and our shareholders
investment. At the present time, we have no definitive plans for additional
financing.

WE REMAIN AT
RISK REGARDING OUR CONTINUED ABILITY TO CONDUCT SUCCESSFUL OPERATIONS.

The
results of our operations will depend, among other things, upon our ability to
develop and to market our mortgage brokerage products. Further, it is possible
that our operations will not continue to generate income sufficient to meet
operating expenses or will generate income and capital appreciation, if any, at
rates lower than those anticipated or necessary to sustain ourselves. Our
operations may be affected by many factors, some known by us, some unknown, and
some which are beyond our control. Any of these problems, or a combination
thereof, could have a materially adverse effect on our viability as an entity
and might cause the investment of our shareholders to be impaired or lost. Our
products are in various stages of development. Some of our developing products
may not be completed in time to allow production or marketing due to the
inherent risks of new product and technology development, limitations on
financing, competition, obsolescence, loss of key personnel and other factors.
Unanticipated obstacles can arise at any time and result in lengthy and costly
delays or in a determination that further development is not feasible.

3

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While
we have limited products, the development of additional products may take longer
than anticipated and could be additionally delayed. Therefore, there can be no
assurance of timely completion and introduction of improved products on a
cost-effective basis, or that such products, if introduced, will achieve market
acceptance such that, in combination with existing products, they will sustain
us or allow us to achieve profitable operations.

THE
FAILURE TO DEVELOP AND TO INCREASE DISTRIBUTION OF OUR MORTGAGE PRODUCTS COULD
IMPEDE OUR FUTURE GROWTH.

The
future growth of our business will depend in part on our ability to develop our
relationships with mortgage brokers, to identify and develop additional channels
for the distribution and sale of our mortgage products and to manage these
relationships. As part of our growth strategy, we intend to continue to develop
relationships with additional mortgage brokers. We will also look to identify
and develop relationships with additional partners that could serve as
distributors for our products. Our inability to successfully execute this
strategy could impede our future growth.

THERE A
SIGNIFICANT RISKS ASSOCIATED WITH NON CONFORMING LOANS

The
market for non conforming loans involves risks that are not present with
conforming loans. Entrust Mortgage underwrites its loans on delegated authority
from its lenders. Generally loans are underwritten to established criteria. The
lender is bound to purchase loans written according to that criteria. On the
other hand, if a loan is not written to the established criteria, the lender is
not required to purchase the loan. Entrust Mortgage then sells the loan as non
conforming into an alternative market, usually at a discount. However, these non
conforming loans provide for limited recourse to Entrust Mortgage. Therefore, if
the borrower defaults on a loan within three months of sale into the secondary
market, Entrust Mortgage must repurchase the loan. For second mortgages, the
repurchase obligation could be as long as twelve months. Entrust Mortgage is
responsible for repurchase if a determination is made that fraud was involved in
the transaction. Generally, Entrust Mortgage sells most of its loans prior to
the due date of the first payment. In the event that a payment becomes due prior
to Entrust Mortgages sale of the loan into the secondary market, and that
payment is not made, the lender to whom to loan was sold would not be required
to buy the loan. Entrust Mortgage would then be required to find an alternative
buyer, usually at a discount. The existence of a significant number of non
conforming loans with problems could have a significant negative effect on the
operations of Entrust Mortgage and us. There can be no guarantee that we can
continue to build a successful business marketing non conforming loans.

OUR PROPOSED
MANUFACTURED HOME LOAN MARKET PROGRAM IS NEW AND SUBJECT TO SIGNIFICANT RISKS

We
have developed a program to be the lender who will finance manufactured housing
from the construction loan to permanent financing. We have identified a lending
partner in the program who will provide the warehouse funding and equity for the
loan prior to the loan being sold into the secondary markets. This partner has
also agreed to indemnify Entrust Mortgage on defaulted loans. Entrust Mortgage
would have the liability for any loan which is not written to proper
underwriting criteria. In any case, however, Entrust Mortgage would face risks
associated with loan defaults in excess of loan loss reserves and any liability
from defaults from obligations by Entrusts partner. In addition, since
this is a new program, there can be no guarantee that we will be successful.

IF WE
FAIL TO EXPAND OUR CONTROLS AND INTEGRATE NEW PERSONNEL TO SUPPORT OUR
ANTICIPATED GROWTH, OUR BUSINESS OPERATIONS WILL SUFFER.

We
are undergoing rapid growth in the number of our employees, the size of our
physical facilities and the scope of our operations. We grew our
operations by approximately sixteen percent in 2003 over our
operations in 2002. We grew our operations approximately fifty
percent in 2002 over our operations in 2001. Our business, prospects,
results of operations or financial condition could be harmed if we encounter
difficulties in effectively managing the budgeting, forecasting and other
process control issues presented by such a rapid expansion.

4

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WE
HAVE NO EXPERIENCE MARKETING OUR MORTGAGE PRODUCTS AT THE LEVEL WE PLAN TO SELL
IN THE FUTURE.

We
cannot assure you that we will be successful in executing our planned expansion
of our activities to the levels which we are seeking. We have not previously
sold our products in high volume. We do not know whether or when we will be able
to develop or continue efficient, low-cost marketing capabilities and processes
that will enable us to meet the standards or volumes required to successfully
market large quantities of our mortgage products. Even if we are successful in
developing our capabilities and processes, we do not know whether we will do
sustain our production or to continue to satisfy the requirements of our
customers.

OUR BUSINESS
DEPENDS ON OUR ABILITY TO SECURE WAREHOUSE LINES OF CREDIT.

We
rely upon warehouse lines of credit to fund loans prior to the loan sale into
the secondary market. The warehouse lender generally contributes approximately
98% of the loan amount, and we contribute the remainder. The loss of warehouse
lines of credit would significantly impair our ability, through Entrust
Mortgage, to engage in wholesale mortgage lending and would have a significant,
adverse effect on an investors investment. Entrust Mortgage currently has
two warehouse credit lines which total approximately $25,000,000. Both warehouse
lines of credit are subject to periodic review and renewal. Our primary
warehouse line is subject to renewal in August, but has recently been increased
by the investor. The other is payable on demand. Loss of our primary warehouse
line of credit could seriously affect our ability to continue to fund loans at
our current level, and if our primary warehouse line was not renewed, and an
alternative lender could not be arranged, our business model would be in
jeopardy.

OUR BUSINESS
DEPENDS ON THE AVAILABILITY OF MORTGAGES AT REASONABLE RATES.

The
success of our mortgage origination business is dependent upon the availability
of mortgage funding at reasonable rates. Although there has been no limitation
on the availability of mortgage funding in the last few years, there can be no
assurance that mortgages at attractive rates will continue to be available.
While we primarily fund purchase transactions rather than refinancings, we are
sensitive to increases in mortgage rates. Increases in mortgage rates could
adversely affect our operations and profitability.

WE ARE SUBJECT
TO EXTENSIVE REGULATION

Our
operations are subject to extensive regulation, supervision and licensing by
federal, state and local governmental authorities and are subject to various
laws and judicial and administrative decisions imposing requirements and
restrictions on part or all of our operations. Our consumer lending activities
are subject to the Federal Truth-in-Lending Act and Regulation Z (including the
Home Ownership and Equity Protection Act of 1994), the Federal Equal Credit
Opportunity Act, as amended, and Regulation B, the Fair Credit Reporting Act of
1970, as amended, the Federal Real Estate Settlement Procedures Act and
Regulation X, the Home Mortgage Disclosure Act, the Federal Debt Collection
Practices Act and the National Housing Act of 1934, as well as other federal and
state statutes and regulations affecting our activities.

We
are also subject to the rules and regulations of, and examinations by, state
regulatory authorities with respect to originating and processing loans. These
rules and regulations, among other things, impose licensing obligations on us,
establish eligibility criteria for mortgage loans, prohibit discrimination,
govern inspections and appraisals of properties and credit reports on loan
applicants, collection, foreclosure and claims handling, investment and interest
payments on escrow balances and payment features, mandate certain disclosures
and notices to borrowers and, in some cases, fix maximum interest rates, fees
and mortgage loan amounts. Failure to comply with these requirements can lead to
loss of approved status, certain rights of rescission for mortgage loans, class
action lawsuits and administrative enforcement action.

OUR
PROPRIETARY INFORMATION IS IMPORTANT TO US, BUT WE MAY NOT BE ABLE TO PROTECT
IT.

A
successful challenge to our ownership of our proprietary mortgage software could
materially damage our business prospects. We rely on a combination of trade
secret laws, confidentiality procedures and licensing arrangements to protect
our proprietary information. We own the trade name Mortgage 2000". We
also own proprietary computer software and customer data base which we use in
our operations. Any proprietary ownership may be challenged and invalidated. The
possibility exists that we may be unable to provide meaningful protection or to
maintain commercial advantage. Our competitors may also be able to develop
comparable proprietary information which would nullify any competitive advantage
we may have.

5

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Furthermore,
our competitors may assert that our proprietary software infringes on their
patents or proprietary rights. Problems with maintaining our rights could
increase the cost of our products or delay or preclude new product development
and commercialization by us. If infringement claims against us are deemed valid,
we may not be able to use our proprietary software in connection with our
products. Litigation could be costly and time-consuming but may be necessary to
protect our future positions or to defend against infringement claims.

WE
ARE SUBJECT TO INTENSE COMPETITION FROM COMPANIES WHICH ARE LARGER AND HAVE
GREATER RESOURCES THAN WE DO.

Competition
from larger and more established companies is significant and expected to
increase. There are many sources of mortgages available to potential borrowers
today. These sources include consumer finance companies, mortgage banking
companies, savings banks, commercial banks, credit unions, thrift institutions,
credit card issuers and insurance companies. Many of these alternative sources
are substantially larger and have considerably greater financial, technical and
marketing resources than we do, as well as more experience. Additionally, many
financial services organizations against whom we compete for business have
formed national loan origination networks or have purchased home equity lenders.
We compete for mortgage loan business in several ways, including convenience in
obtaining a loan, customer service, marketing and distribution channels, amount
and term of the loan, loan origination fees and interest rates. If any of these
competitors significantly expand their activities in our market, our business
could be materially adversely affected. Changes in interest rates and general
economic conditions may also affect our business and our competitors. During
periods of rising interest rates, competitors who have locked into lower rates
with potential borrowers may have a competitive advantage. Our ability to
compete effectively may be adversely affected by the ability of these
competitors to devote greater resources to the sale and marketing of their
mortgage products than we can. In addition, one or more of our competitors may
succeed or may already have succeeded in developing technologies that are more
effective than any we currently offer regarding our proprietary mortgage
software. In addition, there can be no guarantee that we will be able to protect
our proprietary software from being copied or infringed upon. Therefore, there
are no assurances that we will ever be able to maintain our profitable position
in the marketplace

FOR THE
FORESEEABLE FUTURE, OUR SUCCESS WILL BE DEPENDENT UPON OUR MANAGEMENT.         Our
success is dependent upon the decision making of our directors and executive  officers.
These individuals intend to commit as much time as necessary to our  business. The loss
of any or all of these individuals could have a materially  adverse impact on our
operations. We have no employment agreement with any  individuals and have not obtained
key man life insurance on the lives of any of  them. In July, 2002, a majority of our
Board of Directors, including our  Chairman, resigned. We replaced them with three
Directors and a new Chief  Financial Officer and Treasurer. We believe that this change
will enhance our  plan to seek application for listing on a national securities exchange,
although  we have not yet made application at this time. We cannot guarantee the results
of this change although we believe that it will be positive for the oversight of  our
operations. With the exception of our Chairman, we lost no operational  personnel.

OUR
STOCK PRICE MAY BE VOLATILE, AND YOU MAY NOT BE ABLE TO RESELL YOUR SHARES AT OR
ABOVE YOUR INITIAL SALE PRICE.

There
has been, and continues to be, a limited public market for our common stock.
Although our common stock trades on the NASD Bulletin Board, an active trading
market for our shares has not, and may never develop or be sustained. If you
purchase shares of common stock, you may not be able to resell those shares at
or above the initial price you paid. The market price of our common stock may
fluctuate significantly in response to numerous factors, some of which are
beyond our control, including the following:

|° |  | actual
or anticipated fluctuations in our operating results;
|- |  | ------------------------------------------------------------

|° |  | changes
in financial estimates by securities analysts or our failure to perform in line with
such estimates;
|- |  | ------------------------------------------------------------------------------------------------------------

|° |  | changes in market valuations of other mortgage brokerage companies, particularly
those that sell products similar to as ours;
|- |  | -----------------------------------------------------------------------------------------------------------------------------

|° |  | announcements
by us or our competitors of significant innovations, acquisitions, strategic
partnerships, joint ventures or capital commitments;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

|° |  | introduction
of technologies or product enhancements that reduce the need for our products; and
|- |  | -----------------------------------------------------------------------------------------------

|° |  | departures
of key personnel.
|- |  | ----------------------------

Of
our total outstanding 2,520,385 shares as of December 31,
2002, a total of 652,500 or approximately 26%, will be
restricted from immediate resale but may be sold into the market in the near
future. The remaining 1,867,885, or approximately 74% is eligible for
resale. This could cause the market price of our common stock to drop
significantly, even if our business is doing well.

As
restrictions on resale end, the market price of our stock could drop
significantly if the holders of restricted shares sell them or are perceived by
the market as intending to sell them.

ISSUANCE OF
ADDITIONAL SHARES COULD DEPRESS OUR STOCK PRICE.

As
of February 28, 2003, under various arrangements which we have, a total of
920,667 shares may be issued upon the exercise of various stock options,
warrants and conversion of debentures. These shares of our common stock are at
various exercise prices. We have registered these securities under a Form S-3.
Any or all of these potential share issuances may have a negative effect on the
share price of our common stock in the future.

OUR STOCK HAS A
LIMITED PUBLIC TRADING MARKET.

While
our common stock currently trades, our market is limited and sporadic. We cannot
assure that such a market will improve in the future, even if our securities are
listed on the Nasdaq SmallCap Market or the American Stock Exchange. We cannot
assure that an investor will be able to liquidate his investment without
considerable delay, if at all. If a more active market does develop, the price
may be highly volatile. The factors which we have discussed in this document may
have a significant impact on the market price of the common stock. It is also
possible that the relatively low price of our common stock may keep many
brokerage firms from engaging in transactions in our common stock.

THE
OVER-THE-COUNTER MARKET FOR STOCK SUCH AS OURS HAS HAD EXTREME PRICE AND VOLUME
FLUCTUATIONS.

The
securities of companies such as ours have historically experienced extreme price
and volume fluctuations during certain periods. These broad market fluctuations
and other factors, such as new product developments and trends in the our
industry and in the investment markets generally, as well as economic conditions
and quarterly variations in our operational results, may have a negative effect
on the market price of our common stock.

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THE MARKET FOR
OUR COMMON STOCK IS SUBJECT TO RULES RELATING TO LOW-PRICED STOCK

Our
common stock is currently listed for trading in the NASD Over-The-Counter
Bulletin Board Market and is subject to the penny stock rules
adopted pursuant to Section 15 (g) of the Securities Exchange Act of
1934, as amended. In general, the penny stock rules apply to non-NASDAQ or
non-national stock exchange companies whose common stock trades at less than
$5.00 per share or which have tangible net worth of less than $5,000,000
($2,000,000 if the company has been operating for three or more years). Our
tangible net worth was below this minimum requirement as of December
31, 2002. Such rules require, among other things, that brokers who trade
penny stock to persons other than established customers
complete certain documentation, make suitability inquiries of investors and
provide investors with certain information concerning trading in the security,
including a risk disclosure document, quote information, brokers
commission information and rights and remedies available to investors in penny
stocks. Many brokers have decided not to trade penny stock because
of the requirements of the penny stock rules and, as a result, the number of
broker-dealers willing to act as market makers in such securities is limited.
The penny stock rules, therefore, may have an adverse impact on the
market for our common stock.

WE DO NOT
EXPECT TO PAY DIVIDENDS ON COMMON STOCK

We
have not paid any cash dividends with respect to our common stock, and it is
unlikely that we will pay any dividends on our common stock in the foreseeable
future. Earnings, if any, that we may realize will be retained in the business
for further development and expansion.

(a)
General Development of Business

Entrust
Financial Services, Inc (the Company) was incorporated on November
8, 1996 under the laws of the State of Colorado as Centennial Banc Share Corp.

The
Company began operations in 1997 as a mortgage broker.. The Company completed a
private placement in February, 1998, which increased the working capital
permitting it to expand its mortgage brokerage business operations.

On
April 30, 1999, the Company acquired Entrust Mortgage, Inc. (Entrust
Mortgage), a private nationwide wholesale mortgage banking company.
Entrust Mortgage, a Colorado corporation, is now a wholly-owned subsidiary of
the Company. The acquisition of Entrust Mortgage allowed the Company to expand
its business operations into the wholesale mortgage banking industry.

In
January and February of 2000, the Company completed a private placement of a
convertible debenture for the purpose of increasing working capital to expand
its mortgage banking operations. Also, in January 2000, the Company initiated a
three-for-one forward split of its common shares, which was approved by the
Board of Directors and became effective on March 14, 2000. In March 2000, the
Company sold common stock, in a private placement to accredited investors. In
June, 2000, the Company changed its name to easyQual.com, Inc. On April 6, 2001,
the Company changed its name to Entrust Financial Services, Inc.. In April 2001,
the Company completed a private placement of a convertible debentures to further
fund the expansion of the mortgage banking business. The proceeds from this
convertible debenture provided the necessary capital to fund the expansion of
the mortgage banking operations so that the Company achieved profitability for
the first time.

On
January 29, 2001, the Companys shareholders approved a one-for-ten reverse
split of the common shares, which became effective on February 4, 2002. This
reverse split of the common stock of the Company is part of the Companys
restructuring plan to achieve a sufficient price per share for the common stock
so that the Company will qualify to have its shares become listed on either a
National Securities Exchange or NASDAQ.

On
December 31, 2002, the Company borrowed Two Million Dollars from BBSB, LLC, an
unaffiliated private Colorado limited liability company. On that date, the
Company executed a Convertible Promissory Note for a term of twenty-seven
months, payable interest-only until maturity at 12% per annum, payable monthly,
in arrears, plus a 33% bonus interest payable only upon maturity or prepayment
of the Note. However, upon maturity or prepayment of the Note, BBSB, LLC will
have the option of either receiving the additional bonus interest or foregoing
the additional bonus interest and converting the Two Million Dollars of
principal into the Companys common shares at a conversion price of $3.00
per share, subject to price adjustments in certain defined circumstances. The
Note is secured by the stock and assets of Entrust Mortgage, Inc., the
Companys wholly owned subsidiary. The Company plans to use the proceeds of
this loan as an asset to increase its mortgage banking lending capacity.

7

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The
Company has not been subject to any bankruptcy, receivership or similar
proceeding.

(b)
Description of the Business

General

From
the Companys inception until April 30, 1999 when Entrust Mortgage was
acquired, the Company acted as a mortgage brokering business. Since the
acquisition of Entrust Mortgage, the core business of the Company has been
focused on wholesale mortgage banking through Entrust Mortgage. Entrust Mortgage
is a nationwide wholesale mortgage banking company, with regional offices in
Colorado, Georgia, Nevada, and California. Entrust Mortgage incorporates
traditional marketing with a web-based, proprietary automated underwriting
system that allows its mortgage broker clientele to process loan applications 24
hours a day, 7 days a week. Entrust Mortgage also facilitates limited
documentation loans for good credit quality borrowers.

In
2001, the Company became profitable in its consolidated operations but was
unprofitable in  2002,.  However, Management believes that
the profitability of the Company will return for the year ended December 31,
2003.

No
independent market surveys have ever been conducted to determine demand for the
Companys mortgage loan products and services. However, as explained below
in the Operations section, the mortgage loan industry is estimated to be in
excess of $1.5 trillion annually.

Organization

The
Company operates through its principal subsidiary, Entrust Mortgage, Inc., which is in
the wholesale mortgage banking  business. The Company has three Colorado subsidiary
corporations: (i) Entrust Mortgage, Inc. ("Entrust"), (ii) Entrust Homes, Inc.
("Homes"), and (iii) A.I. Dynamics, Inc. ("A.I."). Homes and A.I. are
essentially dormant at this time.

The
Companys goals are to build a highly efficient and profitable mortgage
banking business which operates nationwide and uses state-of-the-art technology
in its underwriting and activities to achieve a competitive advantage in the
mortgage industry.

Entrust
Mortgage, Inc.

Entrust
Mortgage is a traditional wholesale mortgage banking operation, with regional
offices in Colorado, Georgia, Nevada, and California. Entrust Mortgage is
licensed to conduct business in 37 states and has active contractual
relationships with over 5,000 broker firms in these states. These 5,000 mortgage
brokers have executed brokerage agreements with Entrust permitting them to
submit loans for approval without having to go through the broker approval
process necessary to become an Entrust approved mortgage broker. Entrust
Mortgage agreements with these brokers do not prohibit them from doing business
with other lenders. We believe that these brokers will use Entrust Mortgage over
our competitors for our niche products and quality of service. Entrust Mortgage
accepts non-conforming first and second mortgage loan submissions, for which
yields are substantially higher than for conforming mortgage loans. The
mortgages are funded using Entrust Mortgages approved revolving warehouse
lines of credit. Presently Entrust Mortgage has approximately $25
million in revolving warehouse lines of credit.

(c)
Operations

The
United States is one of the largest mortgage markets in the world with total
outstanding mortgages exceeding $4.0 trillion. The mortgage market growth has
been driven by a loan origination volume that is estimated to have been in
excess of $2 trillion this past year. The mortgage banking business
in the United States is highly fragmented with over 20,000 mortgage loan
originators operating in the 50 states and its territories. In fact, the ten
largest mortgage originators in the U.S. constitute less than 40% of the total
mortgage loan market and no single mortgage originator holds a market share
exceeding 8%. To capitalize on the opportunities available in the vast and
potentially lucrative mortgage industry, The Company is utilizing its
proprietary state-of-the-art technology and established contracts with 5,000
mortgage brokerage firms in 37 states as sources to gain an
increasing share of the mortgage loan market.

8

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Online
mortgage loan applications have grown at a significant rate in recent years, and
independent sources project this segment of the mortgage loan market to reach
$300 billion within the next five years in the U.S. The Company plans to focus
its primary marketing efforts on this online segment of the mortgage loan
market.

Entrust
Mortgage has entered into sellers agreements with certain financial
institutions, which management believes will provide outlets for its mortgage
loan products. Entrust Mortgage offers limited documentation, unsecured personal
lines of credit, no income verification loans with preferential interest rates,
and high loan-to-value mortgages as its primary products. With these niche loan
products, the Company is able to sell its non-conforming mortgages in the
secondary markets at substantially higher prices than other mortgage lenders who
market conforming mortgages.

The
market for non conforming loans involves risks that are not present with
conforming loans. Entrust Mortgage underwrites its loans on delegated authority
from its lenders. Generally loans are underwritten to established criteria. The
lender is bound to purchase loans written according to that criteria. On the
other hand, if a loan is not written to the established criteria, the lender is
not required to purchase the loan. Entrust Mortgage then sells the loan as non
conforming into an alternative market, usually at a discount. However, these non
conforming loans provide for limited recourse to Entrust Mortgage. Therefore, if
the borrower defaults on a loan within three months of sale into the secondary
market, Entrust Mortgage must repurchase the loan. For second mortgages, the
repurchase obligation could be as long as twelve months. Entrust Mortgage is
responsible for repurchase if a determination is made that fraud was involved in
the transaction. Generally, Entrust Mortgage sells most of its loans prior to
the due date of the first payment. In the event that a payment becomes due prior
to Entrust Mortgages sale of the loan into the secondary market, and that
payment is not made, the lender to whom to loan was sold would not be required
to buy the loan. Entrust Mortgage would then be required to find an alternative
buyer, usually at a discount.

The
Company earns revenues from three basic sources: (i) fees charged at closing;
(ii) interest earned on a loan while the loan is held by Entrust Mortgage ; and,
(iii) through service release premiums earned from loan sold into the secondary
markets.

During
the year 2002, the Company continued to increase revenues from its loan business
while controlling and reducing costs relative to staffing and facilities
requirements using improved loan processing procedures and state-of-the-art
technology. We believe that these increased revenues in the year 2002 were tied
directly to significantly more mortgage loan originations than in the previous
year.

A
large segment of profitability in the mortgage loan business comes after the
mortgage is completed and funded for the borrower. Once funded, the mortgages
are sold into secondary markets on an individual loan basis or packaged into
several loans on a bulk sale basis. Loan purchasers either hold the loans to
earn interest from the coupon rate or securitize the loan portfolio to receive
more immediate realization of profit. Entrust locks its loans with secondary
markets prior to closing to avoid the risk in interest rate hedging. The loans
are typically shipped to the investor within 10 days of funding and purchased by
the secondary markets typically within two weeks of shipping. Entrust earns the
interest on the loans until the sale of the loan. In most cases, the interest
income exceeds the interest charged by the warehouse lender during the holding
period.

The
Company has implemented an automated underwriting and a computer based mortgage
loan application process using state-of-the-art technology. Generally, the
mortgage industry conducts its business through many manual steps, in a
multi-forms, paper based system prone to errors. The Companys
state-of-the-art technology based system is an electronic system set up to
permit its mortgage broker customers to process an application very quickly.
Typically an application with Entrust Mortgage can be processed in one to three
minutes, thus saving two or more days of processing time. Currently, the
pre-approval and documentation process for a loan in the mortgage industry
requires approximately one to two days to complete before submission for
processing. The more loan programs offered by the mortgage company, the more
complexity there is for completing the paper based forms , thus substantially
increasing the time requirements to process these paper based applications.

9

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In
the competitive mortgage loan lending environment, providing a diverse range of
mortgage loan programs, for every ten applications that the underwriter
pre-approves, a significant number are pre-approved for the wrong program. On
average half of the pre-approved loans have to be redone, then resubmitted, thus
significantly extending the processing time to lending cycle.

On
average, for every ten loan applications submitted, one-half are pre-qualified
and generate a list of documentation requirements that need to be completed to
complete the mortgage loan process. Of the customers receiving a list of these
additional documentation requirements, only one half return a full completed
loan application package. The time delays required to get a loan application
pre-approval encourage the borrower to shop around for other competitive
mortgage loan offerings. Document completion by the customer (assisted by the
mortgage loan broker) can take another seven to ten days, on average. Of the
customers responding to the additional loan documentation requirements, only
one-half actually complete their loans. On average, out of ten initial mortgage
loan applications submitted, fewer than one (.833) is funded in an industry
completion process that takes an average of eighteen days. Entrust has been able
to improve upon this process by closing loans in an average of sixteen days.

With
the Companys state-of-the-art technology based system, it has been
experiencing closing ratios that are significantly improved over industry
averages. Out of ten initial loan applications, the Company presently completes
approximately three and one-half loans , which is a major increase in revenues
coupled with a reduction in expenses and time resources. The Company has
integrated the loan application process with a simplified technology based
application processing system to achieve lower costs per loan processed and
higher success rates generating more revenue per application received. In the
Companys fully implemented state-of-the-art technology based loan
processing system, its automated mortgage loan underwriting, incorporated with
its proprietary search engine, the system is able to examine multiple loan
options, if necessary, to find an exact match for each customer profile without
mistakes. Pre-approval and documentation requirements are complete in about
sixty seconds, thus saving substantial time. Entrusts underwriting system
differs from competitors systems in its ease of operation and
responsiveness. The Company believes that it has the most advanced software
program available for this purpose. The mortgage broker is required only to
input the most basic information for the program to generate a detailed
response. Additionally, in the event of a decline to loan by the lender, the
program gives specifics of the decline which may help direct the broker to a
program for which his borrower does qualify. The Company believes that it has
minimal risk associated with computerized pre-approvals because all loans are
underwritten by Entrust delegated underwriters who review the entire file for
meeting approval guidelines.

With
the Companys technology based system, initial data entry processing and
human underwriting time necessary to evaluate a mortgage prospects application
under a manual system is eliminated. Back office data entry is also eliminated.
There is limited human interface in the initial underwriting process and the
Companys loan underwriters time is reserved to review the
authenticity of required documentation. With the Companys technology based
system, management believes that the cost of back office personnel will continue
to decrease, providing margins for employing higher quality personnel using
systems that ensure an efficient document review process. Consequently, the loan
approval process can be significantly enhanced to improve the quality of the
loans.

The
Companys technology based system turns an inexperienced loan officer into
a seemingly experienced loan officer, able to provide definite answers to the
borrowers questions instantaneously, without the customary mistakes. With
every requirement of the loan process scripted, the customer gets accurate
information from the broker who no longer has to constantly call the home office
for answers.

With
the Companys technology based application processing system, a loan
officers time is released to sell rather than study dozens of alternative
loan programs offered by the firm. The Companys system also removes the
insecurity that currently prevails when an inexperienced sales person attempts
to describe complex loan options. Additionally, the current limits on the number
of mortgage loans a producer can manage are dramatically expanded. The
confidence that the lender has for the integrity of the underwriting and loan
process may be enhanced as well.

Automated
mortgage loan underwriting can be found currently in limited pockets of the
industry. For the prime market, which are loans offering standard, government
backed mortgage programs to the creditworthy customer, automated underwriting is
now available on a widespread basis. The prime market, however, represents less
than half of the total mortgage loan business. For the non-conforming loan
market, involving more complexity, including credit issues and the need for
individual loan tailoring, the manual mortgage system prevails throughout the
industry.

10

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The
non-conforming market represents more than half of the total U.S. mortgage
origination business, but provides three to four times the profit margins of the
conforming loan market. It is in the non-conforming loan market where the
Company is seeking to create a new standard and, by this standard, to establish
itself as the new industry leader. The Company intends to offer a product which
will lend on a construction loan through permanent loan in one continuous
program. . The credit will be underwritten to the Companys permanent loan
criteria, utilizing its automated prequalification process. The Company believes
that the interface of its software and underwriting criteria for non-conforming
loans for approving the construction loans, creates a new standard in the
industry for this type of program, and positions the Company to establish itself
as the industry leader.

The
Company focuses on niche loan products. The Companys underwriting criteria
consists of loans of up to 100% of the property value with programs ranging from
fully documented loans to loans which require no income or asset verification.
The Company generally writes loans with borrowers with 620 or higher credit
scores, which is industry standard for this type of product. Loan to value
availability lowers with lesser documentation or lower borrower credit scores.

The
Companys system targets both the wholesale and retail mortgage industry.
Since small mortgage brokers dominate this industry, the Company has designed
its technology based automated system to meet the growing needs of the small to
medium mortgage brokerage offices currently operating in every rural and urban
region of the United States with the goal of substantially increasing its
business.

The
Companys plan to expand its loan application submissions for the U.S.
wholesale mortgage industry uses relationships with mortgage brokerage firms.
This plan allows the local mortgage broker to retain its autonomy, name, while
expanding the loan programs it can offer to its customers thus increasing the
Companys mortgage loan originations.

During
the coming fiscal year, the Company intends to continue providing its technology
based loan processing system to the mortgage industry through industry
publications and other media outlets, a web site, an industry newsletter and a
team of aggressive account executives.

In
2002, the Company discontinued its loan program for manufactured
housing which it had instituted in 2001. The Companys rating
agency lowered the rating on such loans. As a result, this program became
unprofitable.

On
December 31, 2002, the Company borrowed Two Million Dollars from BBSB, LLC, an
unaffiliated private Colorado limited liability company. On that date, the
Company executed a Convertible Promissory Note for a term of twenty-seven
months, payable interest-only until maturity. The interest is payable at 12% per
annum, payable monthly, in arrears, and there is a 33% bonus interest payable
only upon maturity or prepayment of the Note. However, upon maturity or
prepayment of the Note, BBSB, LLC will have the option of either receiving the
additional bonus interest or foregoing the additional bonus interest and
converting the Two Million Dollars of principal into the Companys common
shares at a conversion price of $3.00 per share, subject to price adjustments in
certain defined circumstances. In the event the note is converted into shares,
these new shares may be registered under a Registration Rights Agreement. The
Note is secured by the stock and assets of Entrust Mortgage. Under the terms of
the Note, the Company was required to make BBSB, LLC its senior lender and to
create an escrowed sinking fund upon any default. In addition, Mr. David A.
Hite, one of the Companys officers and directors, has pledged all of his
rights, title and interests in his personal securities in our company as
collateral. The Company plans to use the proceeds of this loan as an asset to
increase its mortgage banking lending capacity.

(d)
Markets

The
Company plans to continue to market residential mortgages through its network of
5,000 mortgage brokerage firms in 37 states, using traditional
methods. Currently, the Company has a marketing strategy which uses regional
sales representatives, along with an in-house sales team to market its mortgage
loan products nationwide. While the Company has an established based of 5,000
mortgage brokerage firms, it plans to add new accounts through full time
in-house representatives employing direct solicitation, fax blast marketing,
mass e-mail marketing, and participation in mortgage industry trade shows.

11

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(e)
Raw Materials

The
use of raw materials is not now a material factor in the Companys
operations.

(f)
Customers and Competition

The
mortgage banking business is a highly competitive and fragmented industry with
over 20,000 licensed mortgage loan originators. The United States is one of the
largest mortgage markets in the world with total outstanding mortgages exceeding
$4.0 trillion. The mortgage market is driven by a loan origination volume in
excess of $2 trillion per year and continues to grow as inflation and
other factors increase the average price of a house. The ten largest mortgage
originators in the U.S. constitute less than 40% of the total mortgage
origination market with no single originator holding a market share greater than
8%.

The
Companys operational activities focus primarily on the mortgage loan
origination business, in which there is a great deal of competition. The Company
anticipates that competition will come from a number of sources, many of which
will have greater resources than the Company. All lenders in the United States
are potential competitors. There can be no guarantee that the Company will be
able to compete successfully over the short term or long term.

(g)
Employees

Currently,
the Company employs forty-six full-time people. These employees
consist of seven management staff and thirty-nine loan
origination staff and clerical support. The Company plans to hire additional
employees in the future to facilitate anticipated growth projections. None of
the Companys employees are subject to a collective bargaining agreement.

(h)
Backlog

At
December 31, 2002, the Company had approximately $53,133,082 of
mortgage loans to be processed for which it anticipates approximately a 35%
closure rate.

(i)
Proprietary Information

The
Company owns the tradename Mortgage 2000 and own proprietary
state-of-the-art computer software which it uses as the base of the
Companys technology based system in its operations. The Company has a
proprietary database of over 5,000 mortgage brokerage firms as potential
customers.

(j)
Government Regulation

The
Company is, and expects to continue to be, subject to material governmental
regulation and approvals customarily incident to the operation of a mortgage
banking business . The Company is regulated by applicable Federal and state laws
and rules. It is the Companys policy to fully comply with all governmental
regulations and regulatory authorities.

(k)
Research and Development

During
the fiscal year, the Company spent approximately $50,000 in research
and development activities for the Companys automated state-of-the-art
loan underwriting technology.

(l)
Environmental Compliance

The
Company is not subject to any material environmental compliance.

---

Item 2.
Description of Properties.

The Companys
executive offices are located at 6795 E. Tennessee Ave., Fifth Floor, Denver,
Colorado 80224. These are also the offices of Entrust Mortgage. The Company
rents this office space on a five year lease at a cost of $13,560 per
month from an unaffiliated third party. The lease terminates in 2005. The
Company also has sales representative and production offices in California,
Georgia, and Nevada. The Company owns office equipment to furnish all of its
offices. The Company also owns the tradename Mortgage 2000". The
Company owns proprietary computer software which it uses in its operations. All
of the management activities of the Company are performed in Colorado.

Item
3. Legal Proceedings

There
are no legal proceedings of a material nature to which the Company is a party
were pending during the reporting period. The Company knows of no legal
proceedings of a material nature pending or threatened or judgments entered
against any of the Companys directors or officers in his capacity as such.

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

The
Company did not submit any matter to a vote of security holders through
solicitation of proxies or otherwise during the fourth quarter of the year
covered by this report.

# PART
II

Item 5.
Market for Common Equity and Related Stockholder Matters.

(a)
Principal Market or Markets

The
common stock of the Company has traded on the NASD Over-the-Counter Bulletin
Board since May, 2000. Currently, the common stock of the Company trades under
the symbol ENFN. The following table sets forth the high and low bid quotation
for the Companys common stock for each quarterly period in 2002 and 2001.
These quotations have been adjusted to reflect the one-for-ten reverse split of
the common stock, which became effective on February 4, 2002.

| |  | Bid Price      | 
| |  | -------------- | 
|
|
| |  | First Quarter  | 
| |  | Second Quarter | 
| |  | Third Quarter  | 
| |  | Fourth Quarter | 
|
|
| |  | First Quarter  | 
| |  | Second Quarter | 
| |  | Third Quarter  | 
| |  | Fourth Quarter | 

(b)
Approximate Number of Holders of Common Stock

As
of the December 31, 2002, the Company had a total of
2,520,385 shares of common stock issued and outstanding, after giving
effect to a one-for-ten reverse split of the common shares, which became
effective on February 4, 2002. The number of holders of record of the
Companys common stock at that date was approximately Six Hundred and
Eighty-Five (685).

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(c)
Dividends

Holders
of common stock are entitled to receive such dividends as may be declared by the
Companys Board of Directors. No dividends on the common stock were
declared or paid by the Company during the periods reported herein nor does the
Company anticipate paying dividends in the foreseeable future.

Item 6.
Managements Discussion and Analysis or Plan of Operation.

GENERAL

Entrust
Financial Services, Inc., (the Company) is a publicly traded (OTCBB:ENFN)
holding company with a core focus on wholesale mortgage banking, through its
wholly owned subsidiary, Entrust Mortgage Inc. (Entrust Mortgage).
Entrust Mortgage markets consumer financial products, including first and second
mortgages, and home equity loans. Entrust Mortgage specializes in limited
documentation loans for good credit quality borrowers. Entrust Mortgage is
licensed as a mortgage banker in 37 states and provides mortgage banking
services to more than 5,000 contracted mortgage brokers.

The
Company was founded in 1996, under the laws of Colorado, as Centennial Banc
Share Corp., for the purpose of operating as a mortgage broker. In 1997, the
Company began a long-term strategy to aggressively acquire and develop
diversified mortgage banking related businesses. In April 1999 the Company
acquired Entrust Mortgage Inc. and expanded its business into the wholesale
mortgage banking area. Subsequently, in April 2001, the Company changed its name
to Entrust Financial Services Inc. The acquisition of new mortgage banking
related business opportunities has usually been for a combination of cash and
the issuance of new shares of common stock. Generally, the issuance of a portion
of these new shares of common stock has been contingent upon the successful
performance of the new business opportunity.

In
2000, management determined that the Company had over diversified. The Company
had incurred substantial losses in 2000; was receiving a going
concern exception for the year from its auditors; determined that the only
profitable operations were mortgage banking; and decided that a restructuring of
the business operations was necessary to survive and achieve profitability. The
management team from Entrust Mortgage took control of the Company and initiated
a restructuring plan. The unprofitable operations were sold or discontinued. The
Company initiated a 1 for 10 reverse split of its common stock, which was
completed in February 2002. This rollback of the stock reduced the issued and
outstanding shares to approximately 2,320,000 shares, with about 1,200,000 of
these shares in the Public Float. All of the financial statement
amounts for earnings per share for the prior years included herein have been
restated to reflect this 1 for 10 reverse split of its common stock of the
Company.

The
Company is registered under the United States Securities and Exchange Act and
its stock trades principally on the Over-the-counter Bulletin Board in the
United States under the symbol ENFN. The Company maintains several WEB sites
under the following names; www.entrustmtg.com; www.entrustfs.com;
www.easyqual.com.

FORWARD-LOOKING
STATEMENTS

The
following discussion contains forward-looking statements regarding the Company,
its business, prospects and results of operations that are subject to certain
risks and uncertainties posed by many factors and events that could cause the
actual business, prospects and results of operations to differ materially from
those that may be anticipated by such forward-looking statements. Factors that
may affect such forward-looking statements include, without limitation: the
ability of the Company to successfully develop new products for new markets; the
impact of competition on the revenues of the Company, changes in laws or
regulatory requirements that may adversely affect or preclude customers from
using the Companys products for certain applications; delays in the
introduction of new products or services; failure by the Company to keep pace
with emerging technologies, potential losses from increasing level of defaulted
loans due to adverse national economic conditions, and potential losses from
loan fraud.

14

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When
used in this discussion, words such as believes,
anticipates, expects, intends,
may and similar expressions are intended to identify forward-looking
statements, but are not the exclusive means of identifying forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report. The
Company undertakes no obligation to revise any forward-looking statements in
order to reflect events or circumstances that may subsequently arise. Readers
are urged to carefully review and consider the various disclosures made by us in
this report and other reports filed with the Securities and Exchange Commission
that attempt to advise interested parties of the risks and factors that may
affect the Companys business.

THE
BUSINESS

Entrust
Financial Services, Inc. is a holding company with a core focus on wholesale
mortgage banking, through its wholly-owned subsidiary, Entrust Mortgage, Inc.,
(Entrust Mortgage). Entrust Mortgage specializes in the
non-conforming loan market. The mortgage loan market has been in excess of $ 2.2
trillion a year for the past two years in loan fundings and the non-conforming
segment of this market is estimated to be more than 50% of that total. Entrust
Mortgages financial products include first and second mortgages, and home
equity loans.

What
differentiates the Company from other emerging growth companies is that its core
business, mortgage banking, has completed three years of successful growth
operations and achieved profitability and positive cash flow as a nationwide
lender. Entrust Mortgage has established great relationships with its providers
of mortgage warehouse lines of credit, and has developed seasoned, contractual
relationships with more than 5,000 mortgage loan brokers. Additionally, Entrust
Mortgage is licensed to do business as a mortgage banker in 37 states giving it
geographic diversity.

One
key to Entrust Mortgages success is its proprietary, web-based software
that provides automated pre-qualification of loan applications. This software
quickly provides stipulated decisions to Entrust Mortgages retail broker
network. This proprietary, automated pre-qualification feature gives Entrust
Mortgage a competitive edge because it reduces the risk of losses associated
with the non-conforming loan market. Entrust Mortgages software allows
mortgage loan brokers to be more effective and increase their ability to close
loans while also reducing Entrust Mortgages cost of doing business. The
result is a win-win solution to mortgage lending in the
non-conforming loan market.

At
this time, Entrust Mortgage is funding approximately 140 loans per month with
the anticipation of substantially increasing that amount by the end of 2003. One
important factor in Entrust Mortgages loan structure is that the loan
brokers do not share their loan fees with Entrust Mortgage. This factor allows
Entrust Mortgage to gain a growing percentage of the loan broker market.

LIQUIDITY
AND CAPITAL REQUIREMENTS

Entrust
Financial Services, Inc.s (the Company) financial performance
is dependent on many external factors. Interest rates and the real estate market
are cyclical, difficult to predict, volatile, subject to governmental fixing,
pegging and/or controls, and respond to changes in domestic and international
political, social and economic environments. Additionally, in the current period
of worldwide economic and political uncertainty the availability and cost of
funds for warehouse lines of credit and other costs have become increasingly
hard to estimate. These conditions and events could materially affect the
financial performance of the Company.

As
of December 31, 2002, the Company had net working capital of $2,336,040
consisting of cash or cash equivalents of $2,459,425, compared to cash or cash
equivalents of $858,848 as of December 31, 2001. Further, management believes
that the Company will have adequate working capital and cash to meet all of its
anticipated needs for the next 12 months.

15

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Net
cash used by operating activities was $10,119,515 for the twelve months ended
December 31, 2002, compared to net cash used of $9,675,239for the twelve months
ended December 31, 2001. As a result of expanded operations and mortgage loan
originations, the net cash used for operations increased in 2002. Certain items
such as notes and accounts receivable changed as a result of the increased
volume of business. At the end of 2002 the Company was successful in raising an
additional $2,000,000 of working capital to finance the anticipated future
growth of the Company. As a result, the Company was able to liquidate the
convertible debt and cancel some of the warrants outstanding after the end of
the year thereby reducing the prospect of future dilution to the shareholders.
The Company has certain intangible assets that were evaluated at the end of 2002
and determine to be carried at the lower of cost or fair market value as thus
were not impaired by current economic factors.

The
Company decided to discontinue the Board of Advisors starting in 2003, which
will reduce future costs. The year 2002 had an impact of about $121,000 to
operations for the expenses associated with the Board of Advisors. The Company
made a small private placement of its common stock in 2002 that raised $200,000.

Cash
flows used for investing activities were $5,431 for the twelve months ended
December 31, 2002, compared to NIL for the twelve months ended December 31,
2001. Cash flows provided by financing activities accounted for $11,725,523 for
the twelve months ended December 31, 2002, compared to $10,425,968 for the
twelve months ended December 31, 2001. This increase in cash flows from
financing activities is a result of the Companys increased business
activity in loan originations and the Company obtaining substantial outside
financing.

The
Company funds loans utilizing two warehouse lines of credit totaling
$25,000,000. The primary warehouse line of credit is for $20,000, 000 and
provides funds at a floating rate of LIBOR plus 2.5%. The secondary warehouse
line of credit has a floating rate of LIBOR plus 3%. The primary warehouse line
was committed through August 2002 and has been on an extension since that date
pending delivery of audited financial statements. The secondary warehouse line
of credit is for $5,000,000 and is payable upon demand. It has been customary
for the warehouse lines of credit to be renewed annually. The warehouse lines
may be cancelled or reduced in amount if the Company does not meet certain
financial ratio requirements. Loss of the primary warehouse line without being
replaced would seriously affect the Companys ability to remain profitable.
At the present time the Company is in negotiations with several providers of
warehouse lines of credit to expand the warehouse lines and loan product lines
of credit to facilitate anticipated future growth objectives. The Company does
not intend to pay dividends in the foreseeable future.

OVERVIEW

While
the Company experienced profitability during the fiscal year ended December 31,
2001, the Company incurred substantial losses in 2002 as a result of its
commitment to expand its loan origination capacity. To achieve this commitment
to future growth the Company instituted a massive internal change of management
and expended its sales and operations staff in anticipation of the planned
growth over the next few years. Toward the goal of achieving substantial
increases in mortgage banking growth, the Company borrowed $2,000,000 of working
capital to assure that it would have adequate cash reserves to assist with the
funding of its growth objectives. The Company almost doubled its revenue in 2001
as compared to 2000 and continued its growth into 2002. The Company has been
able to manage its growth by utilizing its established infrastructure and
efficiencies afforded by its proprietary state-of-the-art software technology
thereby minimizing much of the cost associated with rapidly growing companies.
However, the mortgage banking industry remains a labor-intensive personal
service to homebuyers and owners where personnel costs must be incurred in
advance of increased revenues from loan fundings.

16

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The
mortgage banking operations have been the primary revenue and profit generator
for the Company since it acquired Entrust Mortgage in 1999. Entrust Mortgage has
demonstrated a steady and consistent growth pattern in its mortgage banking
operations since it was acquired. Management feels the mortgage banking
operations provide the greatest potential for increased revenue growth and
profitability in the years to come.

The
Company is actively hiring new account executives to expand it loan origination
capacity. The use of the Companys state-of-the-art proprietary software to
facilitate automated approval of loan applications coupled with its new
comprehensive sales training program helps to familiarize new account executives
with Entrust Mortgages loan products much faster than in the past. Entrust
Mortgage is also hiring more qualified account executives by using personal
profile testing (performed by the Profile Group) of all potential candidates.
While the hiring of these new sales representatives carries a heavy cost burden
initially, management feels confident that the future loan originations and
profits will justify these initial expenses.

The
Company has various representations and warranties it makes to the investors in
the loans sold into the secondary market. If a mortgage goes into early payment
default (usually within 3 months) the Company is obligated to repurchase the
loan. If it is determined that fraud has been committed on a loan application,
the Company is also obligated to repurchase the loan. The Company usually sells
these defaulted loans into an available market, typically at a discount. In some
cases, the Company forecloses on the loan, and then sells the property to
recover its potential losses.

The
repurchase of loans requires capital or credit to repurchase the loan until the
resolution of the loan status. The Company currently uses a repurchase line of
credit to facilitate repurchases, but anticipates the need to expand these
facilities.

RESULTS
OF 2002 COMPARED TO 2001

The
Company reported a net loss of $345,610 ($0.14 per share) for the year ended
December 31, 2002 as compared to net income (as restated) of $630,908 ($0.29 per
share) for the year ended December 31, 2001 Total Revenues of the Company
increased to $12,124,479 for the year ended December 31, 2002 as compared
revenues of $10,238,345 for the year 2001. Loan origination revenues increased
for the year ended December 31, 2002 to $10,544,762 compared to loan origination
revenues of $9,040,504 for the same period ended December 31, 2001. These
increases of about 16% in revenues and loan origination fee revenues were the
result of the increased in the Companys mortgage banking staff and
resultant loan origination activities.

Total
operating expenses for the twelve months ended December 31, 2002 were
$12,517,829 compared to total operating expenses of $9,587,175 for the same
period ended December 31, 2001. The general and administrative expenses for the
twelve months ended December 31, 2002 increased to $1,506,200 compared to
general and administrative expenses of $1,304,958 for the same period ended
December 31, 2001. The increase in general and administrative expenses was due
to the increased staff levels resulting from the expanded administrative staff
being developed to achieve the next level of projected sales growth. The loan
origination costs increased for the twelve months ended December 31, 2002 to
$9,921,748 compared to loan origination costs of $7,136,589 for the same period
ended December 31, 2001. This increase was the result of the increased volume of
loan originations in 2002. The interest expense decreased for the twelve months
ended December 31, 2002 to $1,089,881 compared to interest expense of $1,145,628
for the same period ended December 31, 2001 as a result of the overall decreased
in interest rates during the year. The major components of operating expenses
include independent contractor fees, office salaries and associated payroll
costs, general and health insurance costs, rent and telephone expenses.

Short
term capital has been sufficient to meet its current growth trends, but to
continue to grow at its projected pace, the Company will need to increase its
warehouse lines of credit and possibly seek equity investments to keep our debt
to equity ratios in line with its warehousing lenders requirements. At the
present time, the Company is in active discussions to increase its warehouse
credit lines.

17

---

RESULTS
OF 2001 COMPARED TO 2000

The
Company reported net income (as restated) of $630,908 ($0.29 per share) for the
year ended December 31, 2001 as compared to a net loss (as restated) of
$2,733,739 ($1.79 per share) for the year ended December 31, 2000. Revenues of
the Company increased significantly for the twelve months ended December 31,
2001 as compared to the year 2000. At the same time, operating expenses
decreased as a percentage of revenues. As a result, the Company posted the first
yearly profit in its history. For the year ended December 31, 2001, total
revenues were $10,238,345 as compared to revenues of $5,176,760 for the year
ended December 31, 2000. The loan origination fee revenues increased for the
twelve months ended December 31, 2001 to $9,040,504 compared to loan origination
fees of $4,428,185 for the same period ended December 31, 2000. These increases
in revenues and loan origination fee revenues were the result of the increased
mortgage banking activities.

Total
operating expenses for the twelve months ended December 31, 2001 were $9,587,175
compared to total operating expenses of $6,510,499 for the same period ended
December 31, 2000. The general and administrative expenses for the twelve months
ended December 31, 2001 decreased to $1,304,958 compared to general and
administrative expenses of $1,671,705 for the same period ended December 31,
2000. The decrease in general and administrative expenses was due to the
decreased staff levels resulting from efficiencies by discontinuing certain
unprofitable operations.

The
loan origination costs increased for the twelve months ended December 31, 2001
to $7,136,589 compared to loan origination costs of $4,025,835 for the same
period ended December 31, 2000, which was the result of the increased volume of
loan originations. While the amount of expense increased due to the increased
volume of business, the actual ratio between loan origination cost and the
amount of fees and premium earned decreased because the Companys new loan
programs limit the amount of yield spread premium available to be paid to the
broker. The interest expense increased for the twelve months ended December 31,
2000 to $1,145,628 compared to interest expense of $812,959 for the same period
ended December 31, 2000 as a result of the increased warehouse lines of credit
to support the increased loan originations. The major components of operating
expenses include independent contractor fees, office salaries and associated
payroll costs, general and health insurance costs, rent and telephone expenses.

As
a result of the operations, the Company had a net profit of $630,908 for the
twelve months ended December 31, 2001 compared to a net loss of $2,733,739 for
the same period ended December 31, 2000. The net profit per share for the twelve
months ended December 31, 2001 was $0.29 per share compared to a loss of $1.79
per share for the same period ended December 31, 2000. The net profits per share
amounts give the effect of the one-for-ten reverse split of the common stock,
which became effective on February 4, 2002.

This
increased level of profitability and increasing trend towards greater profits
from mortgage operations is the fundamental reason the Company has shifted its
principal focus to the mortgage banking business. Management believes that the
Company is poised to embark on an extended period of substantial growth in
revenues and profits as it continues to expand its presence in the highly
fragmented mortgage banking arena. The Companys earnings comes from: fees
charged at closing, margins earned by selling loans into secondary markets for a
premium, and the interest paid on a loan while the Company holds the loan for
sale. The price secondary markets pay for loans is determined by many economic
factors, but we lock our loan rates with our secondary markets to maintain a
constant margin.

During
late 2000 the Company decided to divest or discontinue all of its non-profitable
businesses. Management further streamlined operations to contain costs and
facilitate the Companys recently focused niche mortgage loan product line
to achieve continued growth. With the introduction of its web-enabled automatic
underwriting system, the Company expects to increase loan volume, while
continuing to contain operational costs.

18

---

RESULTS OF 2000
COMPARED TO 1999

The
Company reported a net loss (as restated) of $2,733,739 ($1.79 per share) for
the year ended December 31, 2000 as compared to a net loss (as restated) of
$1,334,699 ($5.24 per share) for the year ended December 31, 1999. In 1999, the
Companys initial year of combined operations, Entrust Mortgage funded over
$50 million in mortgage loans.

Revenues
increased significantly for the year ended December 31, 2000 to $5,176,760,
compared to revenues of $3,399,737 for the same period ended December 31, 1999.
Most significantly, loan origination fees increased for the year ended December
31, 2000 to $4,428,185 compared to loan origination fees of $3,386,987 for the
same period ended December 31, 1999.

Total
operating expenses for the twelve months ended December 31, 2000 were $6,510,499
compared to total operating expenses of $4,734,416 for the same period ended
December 31, 1999. The general and administrative expenses for the twelve months
ended December 31, 2000 were $1,671,705 compared to general and administrative
expenses of $994,402 for the same period ended December 31, 1999. The loan
origination costs increased for the twelve months ended December 31, 2000 to
$4,025,835 compared to loan origination costs of $3,501,981 for the same period
ended December 31, 1999. The interest expense increased for the twelve months
ended December 31, 2000 to $812,959 compared to interest expense of $238,033 for
the same period ended December 31, 1999. The major components of operating
expenses are independent contractor fees, office salaries and associated payroll
costs, general and health insurance costs, rent and telephone expenses.

The
principal portion of our net loss in 2000 came as a result of increased interest
expense and general and administrative costs. In 2000, the Company discontinued
the operations of Focvs, the Companys entry into the Application Service
Provider (ASP) market, and believes that we will see significant
cost savings as a result. We plan to put our emphasis on our core mortgage
origination operations and associated activities.

IMPACT OF
INFLATION AND CURRENCY FLUCTUATIONS

Inflation
affects the operations of The Company by its effect on the interest rates and
prices of real estate and costs of funds. The Companys current operations
are limited the United States of America. The strength or weakness of the
American dollar versus other currencies in the world could affect the long-term
cost of real estate and interest rate policies to the extent that it could
impact The Companys lending policies and capabilities.

Item
7. Financial Statements.

TABLE OF
CONTENTS

|                                        | Page
|--------------------------------------- | ----
|Independent Auditors Report            |     
|Consolidated Balance Sheet              |     
|Consolidated Statement of Operations    |     
|Stockholders Equity (Deficit)          |     
|Consolidated Statement of in Cash Flows |     
|Notes to Financial Statements           |     

19

---

# INDEPENDENT
AUDITORS REPORT

Board of Directors
Entrust Financial Services, Inc.
Denver, CO

We
have audited the accompanying consolidated balance sheet of Entrust Financial
Services, Inc. and its subsidiary as of December 31, 2002 and 2001, and the
related consolidated statements of operations, cash flows, and
stockholders equity for the years then ended. These financial statements
are the responsibility of the Companys management. Our responsibility is
to express and opinion on these financial statements based on our audits.

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

In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Entrust Financial Services,
Inc. and its subsidiary as of December 31, 2002 and 2001, and the results of
their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States.

/s/ Michael Johnson & Co., LLC
Denver, CO
April 10, 2003

F-1

---

# ENTRUST
FINANCIAL SERVICES, INC.
Consolidated Balance Sheets
December 31,

|                                                   | 2002 | 2001          
|-------------------------------------------------- | ---- | --------------
|ASSETS:                                            |      |               
|Current assets:                                    |     
|Cash                                               |      | $   2,459,425 
|Accounts Receivable                                |      | 863,793       
|                                                   |      |               
|Total current assets                               |      | 3,323,218     
|                                                   |      |               
|Fixed assets                                       |     
|Computers & Equipment                              |      | 233,847       
|Furniture & Fixtures                               |      | 176,918       
|                                                   |      |               
|Total fixed assets                                 |      | 410,765       
|Less accumulated depreciation                      |      | (306,088      
|                                                   |      |               
|Net fixed assets                                   |      | 104,677       
|                                                   |      |               
|Other assets:                                      |     
|Marketable Security                                |      | 3,200         
|Note Receivable                                    |      | 500,000       
|Loans Held for Resale                              |      | 26,600,422    
|Loan Repurchases                                   |      | 243,156       
|Prepaid Expenses                                   |      | 247,682       
|Title Co. Advances                                 |      | 522,787       
|Intangible Assets (Net)                            |      | 1,470,000     
|Deposit                                            |      | 32,708        
|                                                   |      |               
|Total other assets                                 |      | 29,619,955    
|                                                   |      |               
|TOTAL ASSETS                                       |      | $ 33,047,850  
|                                                   |      |               
|                                                   |      |               
|LIABILITIES AND STOCKHOLDERS EQUITY               |     
|Current liabilities:                               |     
|Accounts payable                                   |      | $      142,399
|Accrued Expenses                                   |      | 332,378       
|Notes Payable                                      |      | 244,611       
|Loan Reserve                                       |      | 105,690       
|Debenture Payable                                  |      | 162,100       
|                                                   |      |               
|Total current liabilities                          |      | 987,178       
|                                                   |      |               
|Other liabilities:                                 |     
|Warehouse Line Payable                             |      | 26,431,314    
|                                                   |      |               
|Total other liabilities                            |      | 26,431,314    
|                                                   |      |               
|Long-Term Liability:                               |     
|Loan Payable                                       |      | 2,000,000     
|                                                   |      |               
|Total Long-Term Liability                          |      | 2,000,000     
|                                                   |      |               
|Stockholder's equity:                              |     
|Preferred stock, $.0000001 Par Value               |     
|1,000,000 Shares Authorized. None Issued           |      | --            
|Common stock, $.0000001 Par Value                  |     
|50,000,000 Shares Authorized, 2,520,385 are        |     
|issued and outstanding for 2002 and 2,273,622 were |      | 1             
|issued and outstanding for 2001                    |     
|Additional Paid-In Cash                            |      | 7,550,504     
|Retained Earnings (Deficit)                        |      | (3,840,097    
|Deferred Compensation                              |      | (81,050       
|                                                   |      |               
|Total Stockholders' Equity                         |      | 3,629,358     
|                                                   |      |               
|TOTAL LIABILITIES & STOCKHOLDERS EQUITY:          |      | $ 33,047,850  
|                                                   |      |               
|                                                   |      |               

The
accompanying notes are an integral part of these financial statements.

F-2

---

# ENTRUST
FINANCIAL SERVICES, INC.
Consolidated Statements of Operations
December 31,

|                                            | 2002 | 2001           
|------------------------------------------- | ---- | ---------------
|REVENUE:                                    |      |                
|Loan Origination Fees                       |      | $ 10,544,762   
|Interest Income                             |      | 1,564,472      
|Other Income                                |      | 15,245         
|                                            |      |                
|Total Revenue                               |      | 12,124,479     
|                                            |      |                
|OPERATING EXPENSES:                         |     
|Loan Origination Costs                      |      | 9,921,748      
|Interest Expense                            |      | 1,089,881      
|General & Administrative                    |      | 1,506,200      
|                                            |      |                
|Total Operating Expenses                    |      | 12,517,829     
|                                            |      |                
|Other Income and Expenses:                  |     
|Loss on Marketable Securities               |      | --             
|Interest Expense                            |      | (24            
|Interest Income                             |      | 47,764         
|                                            |      |                
|Total Other Income/Expense                  |      | 47,740         
|                                            |      |                
|Net Profit/(Loss)                           |      | $    (345,610  
|                                            |      |                
|                                            |      |                
|Basic earnings per share                    |      | $         (0.14
|                                            |      |                
|                                            |      |                
|Diluted earnings per share                  |      | $         (0.14
|                                            |      |                
|                                            |      |                
|Basic Weighted Average Shares Outstanding   |      | 2,396,051      
|                                            |      |                
|                                            |      |                
|Diluted Weighted Average Shares Outstanding |      | 2,726,051      
|                                            |      |                
|                                            |      |                

The
accompanying notes are an integral part of these financial
statements.

F-3

---

# ENTRUST
FINANCIAL SERVICES, INC.
STOCKHOLDERS EQUITY (DEFICIT)
December 31, 2002

|                                                   | COMMON STOCKS Shares    Amount | AdditionalPaid- InCapital | RetainedEarnings(Deficit) | DeferredCompensation | TotalStockholdersEquity |            
|-------------------------------------------------- | ------------------------------ | ------------------------- | ------------------------- | -------------------- | ------------------------ | -----------
|Balance December 31, 1999                          |                                | 1,366,200                 |                           | $1                   |                          | $ 3,969,259
|Issuance of stock for services 6/00                |                                | 74,500                    |                           | --                   |                          | 126,650    
|Issuance of stock for cash 6/00                    |                                | 109,166                   |                           | --                   |                          | 700,000    
|Issuance of stock for repayment of Debenture 10/00 |                                | 285,626                   |                           | --                   |                          | 500,000    
|Issuance of stock for acquistion 12/00             |                                | 150,000                   |                           | --                   |                          | 1,400,000  
|Net loss for the year                              |                                | --                        |                           | --                   |                          | (2,733,739 
|                                                   |                                |                           |                           |                      |                          |            
|Balance December 31, 2000                          |                                | 1,985,492                 |                           | 1                    |                          | 6,695,909  
|                                                   |                                |                           |                           |                      |                          |            
|Issuance of stock for cash 3/01                    |                                | 50,000                    |                           | --                   |                          | 100,000    
|Issuance of stock for services 3/10                |                                | 30,000                    |                           | --                   |                          | 30,000     
|Issuance of stock for cash 4/01                    |                                | 64,596                    |                           | --                   |                          | 70,424     
|Issuance of stock for services 5/01                |                                | 138,534                   |                           | --                   |                          | 107,219    
|Issuance of stock for services 7/01                |                                | 5,000                     |                           | --                   |                          | 3,000      
|Warrants Granted                                   |                                | --                        |                           | --                   |                          | 207,363    
|Warrants Earned                                    |                                | --                        |                           | --                   |                          | --         
|Net profit for the year                            |                                | --                        |                           | --                   |                          | --         
|                                                   |                                |                           |                           |                      |                          |            
|Balance December 31, 2001                          |                                | 2,273,622                 |                           | 1                    |                          | 7,213,915  
|                                                   |                                |                           |                           |                      |                          |            
|Issuance of stock for services 2/02                |                                | 10,000                    |                           | --                   |                          | 13,000     
|Issuance of stock for services 4/02                |                                | 8,882                     |                           | --                   |                          | 5,329      
|Issuance of stock for services 6/02                |                                | 17,790                    |                           | --                   |                          | 14,744     
|Issuance of stock for services 7/02                |                                | 12,000                    |                           | --                   |                          | 10,230     
|Issuance of stock for services 9/02                |                                | 8,000                     |                           | --                   |                          | 16,000     
|Issuance of stock for services 9/02                |                                | 20,000                    |                           | --                   |                          | 30,000     
|Issuance of stock for cash 10/02                   |                                | 128,206                   |                           | --                   |                          | 200,000    
|Issuance of stock for services 10/02               |                                | 20,000                    |                           | --                   |                          | 22,000     
|Issuance of stock for services 11/02               |                                | 10,000                    |                           | --                   |                          | 11,000     
|Issuance of stock for services 12/02               |                                | 25,000                    |                           | --                   |                          | 27,500     
|Cancellation of stock 12/02                        |                                | (13,115                   | )                         | --                   |                          | (92,414    
|Warrants Granted                                   |                                | --                        |                           | --                   |                          | 79,200     
|Warrants Earned                                    |                                | --                        |                           | --                   |                          | --         
|Net loss for the Year                              |                                | --                        |                           | --                   |                          | --         
|                                                   |                                |                           |                           |                      |                          |            
|Balance December 31, 2002                          |                                | 2,520,385                 |                           | $1                   |                          | $ 7,550,504
|                                                   |                                |                           |                           |                      |                          |            
|                                                   |                                |                           |                           |                      |                          |            

The
accompanying notes are an integral part of these financial
statements.

F-4

---

# ENTRUST
FINANCIAL SERVICES, INC.
Consolidated Statements of Cash Flow
(Unaudited)

|                                                 | 2002 | 2001              
|------------------------------------------------ | ---- | ------------------
|Cash Flows from Operating Activities:            |      |                   
|Net Income/(Loss)                                |      | $    (345,610     
|Adjustments to reconcile net loss to net cash    |     
|used for operating activities                    |     
|Depreciation                                     |      | 109,280           
|Amortization                                     |      | 90,000            
|Stock issued for services                        |      | 149,803           
|Compenstation expense related to options         |      | 79,200            
|(Increase) decrease in notes receivable          |      | 145,769           
|(Increase) in accounts receivable                |      | (225,454          
|(Increase) decrease in prepaid expenses          |      | (188,118          
|(Increase) in title co. advances                 |      | (192,540          
|(Increase) in loans held for resale              |      | (9,530,628        
|Decrease in marketable securities                |      | --                
|(Increase) in deposits                           |      | (10,978           
|(Increase) in loan repurchases                   |      | (243,156          
|(Decrease) increase in accounts payable          |      | 876               
|(Decrease) increase in accrued expenses          |      | (22,612           
|Increase in loan reserve                         |      | 64,653            
|                                                 |      |                   
|Net Cash Provided by Operating Activities        |      | (10,119,515       
|                                                 |      |                   
|Cash Flows Used for Investing Activities:        |     
|Capital Expenditures                             |      | (5,431            
|                                                 |      |                   
|Net Cash Used for Investing Activities           |      | (5,431            
|                                                 |      |                   
|Cash Flows from Financing Activities:            |     
|                                                 |      |                   
|Increase in Warehouse line Payble                |      | 9,537,014         
|Repayment of Debt                                |      | --                
|Proceeds from borrowing                          |      | 2,080,923         
|Debentures Payable                               |      | --                
|Issuance of Common Stocks                        |      | 107,586           
|                                                 |      |                   
|Net Cash Provided by Financing                   |      | 11,725,523        
|                                                 |      |                   
|Net Increase in Cash & Cash Equivalents          |      | 1,600,577         
|Cash & Cash Equivalents at Beginning of Period   |      | 858,848           
|                                                 |      |                   
|Cash & Cash Equivalents at End of Period         |      | $   2,459,425     
|                                                 |      |                   
|                                                 |      |                   
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |     
|Cash Paid During the Year for:                   |     
|Interest                                         |      | $               24
|                                                 |      |                   
|                                                 |      |                   
|Income Taxes                                     |      | $               --
|                                                 |      |                   
|                                                 |      |                   
|NON-CASH TRANSATIONS                             |     
|Common stock issued in exchange for services     |      | $      149,803    
|                                                 |      |                   
|                                                 |      |                   
|Warrants granted for services                    |      | $        79,200   
|                                                 |      |                   
|                                                 |      |                   
|Warrants granted for debenture holders           |      | $               --
|                                                 |      |                   
|                                                 |      |                   

The
accompanying notes are an integral part of these financial statements.

F-5

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

## Note 1 
Organization and Summary of Significant Accounting Policies:

## Organization
 Nature of Operations:

Entrust
Financial Services, Inc. (the "Company") was incorporated on November 8, 1996,
under the laws of the  State of Colorado as Centennial Banc Share Corporation.  The name
of the Company was changed to Entrust  Financial Services, Inc. as of April 6, 2001.  The
Company was formed for the purpose of developing and  maintaining the business associated
with mortgage banking.

On April 30,
1999 the Company purchased 100% of Entrust Mortgage, Inc. for eight hundred thousand
shares of  common stock.  Entrust Mortgage, Inc. became a wholly owned subsidiary of the
Company and is included in these  consolidated financial statements utilizing the
purchase method of accounting.  Entrust Mortgage, Inc. was  incorporated under the laws
of the State of Colorado on March 4, 1999.

The
Company, through its subsidiary, Entrust Mortgage, Inc., is an approved mortgage
banker in 37 states. The Company has a correspondent relationship with several
large financial institutions. The Company originates residential real estate
loans in over thirty-seven and sells them to financial institutions. The Company
receives fees from borrowers and Service Release Premiums on loans sold to
financial institutions. Management believes that the Company is not economically
dependent on any one financial institution because the Company assigns loans to
numerous financial institutions.

The
Company acts as a loan correspondent for lenders for certain loans closed and
funded by the Company. The Company has entered into various loan purchase and
sale agreements. The transfers of the mortgage loans that are subject to these
agreements are subject to the warranties, representations and provisions in the
agreement. Certain lenders have the right to require the Company to repurchase a
mortgage loan for any of the following reasons: (a) if a representation and
warranty given by the Company as to a particular mortgage loan is breached, (b)
if there has been a breach of any other terms and conditions of the agreement,
and (c) if final post-closing documentation is improper or incomplete after a
reasonable period of time, the determination of which is at the banks
discretion. At the lenders option, the Company shall be required either
(1) promptly to cure such a breach in all material respects; (2) to repurchase
the mortgage loan at a price equal to the principal balance of the mortgage
loan, recapture of the service release premium, and interest at the mortgage
loan rate from the date to which the interest has last been paid to the date of
repurchase.

Capital
Stock Transactions:

The
authorized capital stock of the corporation is 50,000,000 shares of common stock
at $.0000001 and 1,000,000 shares of preferred stock at $.0000001 par value. No
preferred stock has been issued. On January 28, 2002, the Company, upon approval
by the shareholders of the Company, resolved to do a one-for-ten split of the
issued and outstanding common shares of the Company. The one for ten split of
the issued and outstanding common stocks of the Company became effective
February 4, 2002. No change in the par value or in the total number of
authorized shares will be made.

All
share and per share amounts in the accompanying financial statements or the
Company have been retroactively adjusted to give effect to the one for ten stock
split.

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

Note
1  Organization and Summary of Significant Accounting Policies (Cont):

Cash and
Cash Equivalents:

The
Company considers all highly liquid debt instruments, purchased with an original
maturity of ninety (90) days or less, to be cash equivalents.

Concentration
of Credit Risk:

Financial
instruments, which potentially subject the Company to concentration of credit
risk, consist primarily of mortgage notes receivable. The Company grants credit
to mortgage borrowers nationwide. Concentrations of credit with respect to trade
receivables are limited due to the large number of customers comprising the
Companys customer base and the fact that the commissions and fees paid to
the Company are remitted to the Company within a short period after the closing.
As of December 31, 2002, the Company has no significant concentrations of credit
risk with regard to these financial instruments.

Geographic
Area of Operations and Interest Rates:

The
Company originates residential loans in thirty-seven states and most geographic
areas of the United States. The potential for severe financial impact which can
result from negative effects of economic conditions within the market of
geographic areas are limited due to the Companys diverse geographic
originations. The interest rates at which borrowers can refinance or
obtain new financing for real estate acquired has a direct effect on the demand
for the Companys services. Changes in interest rates could result in
potential severe impacts on future operations of the Company.

Property
and Equipment:

Property
and equipment is stated at cost. The cost of ordinary maintenance and repairs is
charged to operations while renewals and replacements are capitalized.
Depreciation is computed on the straight line method over the following
estimated useful lives:

| |  |                       
| |  | ----------------------
| |  | Furniture and fixtures
| |  | Computers & Equipment 

Revenue
Recognition:

The
Companys earnings come from fees charged at closing, margins earned by
selling loans into secondary markets for a premium and interest paid to the
Company on a loan while the Company holds the loan for sale. Loan origination
fees are earned at closing and loan origination costs are expensed when
incurred. Margins earned by selling loans are recognized when the purchaser has
taken title and assumes the risks and rewards of ownership. Income on all loans
is recognized on the interest method. Accrual of interest income is suspended at
the time at which collection of an account becomes doubtful.

F-7

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

Note
1  Organization and Summary of Significant Accounting Policies (Cont):

Intangible
Assets:

Intangible
assets consist of the following at December 31, 2002:

|                  | Acquis.Cost | Accum.Amot. | Net | Est. Useful Life
|----------------- | ----------- | ----------- | --- | ----------------
|Client Contracts  |             | $1,200,000  |     | $220,000        
|Technology Rights |             | 200,000     |     | 72,000          
|State Approvals   |             | 400,000     |     | 38,000          
|                  |             |             |     |                 
|Total             |             | $1,800,000  |     | $330,000        
|                  |             |             |     |                 
|                  |             |             |     |                 

|                  | AmortizationExpenseFor the Year
|----------------- | -------------------------------
|Client Contracts  |                                
|Technology Rights |                                
|State Approvals   |                                
|                  |                                
|Total             |                                
|                  |                                
|                  |                                
|                  |                                

Intangible
assets represents the excess of acquisition costs over the fair market value of
the net assets of acquired business which have been allocated to identified
intangible assets and are being amortized on a straight-line basis over their
estimated useful lives ranging from ten to forty years. In accordance with FASB
142, Goodwill and Intangible Assets, the Company continues to evaluate the
amortization period to determine whether events or circumstances warrant revised
amortization periods. Additionally, the Company considers whether the carrying
value of such assets should be reduced based on the future benefits of its
intangible assets. See footnote No. 5.

Fair
value of Financial Instruments:

The
carrying amount of cash, accounts receivable, accounts payable and accrued
expenses are considered to be representative of their respective fair values
because of the short-term nature of these financial instruments. The carrying
amount of the notes payable are reasonable estimates of fair value as the loans
bear interest based on market rates currently available for debt with similar
terms.

The
fair value estimates presented herein are based on relevant information
available to management as of December 31, 2002. Management is not aware of any
factors that would significantly affect these estimated fair value amounts.

Loans
Held for Sale:

Mortgages
acquired by the Company and intended for sale in the secondary market are
carried at lower of cost or estimated market value in the aggregate. The market
value of these mortgage loans is determined by obtaining market quotes for loans
with similar characteristics.

F-8

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

Note
1  Organization and Summary of Significant Accounting Policies (Cont):

Income
Taxes:

The
provision for income taxes is computed using the liability method, under which
deferred tax assets and liabilities are recognized for the expected future tax
consequences of temporary differences between the financial reporting and tax
bases of assets and liabilities. Deferred tax assets are reduced by a valuation
allowance when it is more likely than not that some portion or all of the
deferred tax assets will not be realized.

Net
earnings (loss) per share:

Basic
and diluted earnings (loss) per share information is presented under the
requirements of SFAS No. 128, Earnings per Share. Basic net loss per
share is computed by dividing net loss by the weighted average number of shares
of common stock outstanding for the period, less shares subject to repurchase.
Diluted net earnings per share reflects the potential dilution of securities by
adding other common stock equivalents, including stock options, share subject to
repurchase, warrants and convertible preferred stock, in the weighted-average
number of common shares outstanding for the period, if dilutive.

Stock
Based Compensation:

SFAS
No. 123, Accounting for Stock-Based Compensation,establishes a fair
value method of accounting for employee stock options and similar equity
instruments. The fair value method requires compensation cost to be measured at
the grant date based on the value of the award and is recognized over the
service period. The Company has elected to adopt the disclosure only provisions
of paragraph 11 of SFAS 123 as they apply to stock compensation instruments
granted to employees.

Loan
Loss Reserve:

The
Companys loan loss reserve is based on managements estimate of risk
exposure based on the past experience and on current economic circumstances. For
2002, management based the loan loss reserve upon 1⁄4 of 1% of wholesale
loan fundings and provided an additional amount at year end based on the loan
default experience.

Use
of Estimates:

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

F-9

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

Note
2  Notes Receivable:

Notes
receivable as of December 31, 2002 consist of the following:

| |  |                                                                     
| |  | --------------------------------------------------------------------
| |  | Convertible note receivable from EMB Corporation dated September 30,
| |  | 2002 with an interest rate of 12%. Payable by March 31, 2004.       
| |  | Redemption discount                                                 
| |  |                                                                     
| |  | Total Notes Receivable                                              
| |  |                                                                     
| |  |                                                                     

Note
3  Note Payable:

Notes
payable as of December 31, 2002 consist of the following:

| |  |                                                               
| |  | --------------------------------------------------------------
| |  | Note payable to Jerry Burden dated April 20, 2000.With 13 1/2%
| |  | interest payable April 3, 2003.                               
| |  |                                                               
| |  | Total notes payable                                           
| |  |                                                               
| |  |                                                               

Note
4  Convertible Debenture:

The
Company issued a 16% convertible debenture to Bayview Marketing for cash
proceeds totaling $162,100 in fiscal year 2002. This convertible debenture has a
maturity date of April 2, 2003 and is convertible into common stock at $1.00 per
share. The Company also issued Class A Warrants equivalent to the amount of the
debenture held divided by the warrant price of $1.20 per share to be exercised
over the period of three years. The conversion price of all of the Debentures
were negotiated on an arm-length basis. The Company issued a series of 16
non-interest bearing convertible debentures on June 1, 2002, totaling $128,560
to Dan and Diane King. This note is convertible in April, 2005.

Note
5  Impact of Recently Issued Accounting Standards:

SFAS
No. 131 requires disclosure of certain information regarding operating segments,
products, and services, geographic areas of operation and major customers. SFAS
No. 134 accounting for mortgage-backed securities retained after the
securitization of mortgage loans held for sale by a mortgage banking enterprise.
SFAS No. 140 accounts for transfers and servicing of Financial Assets and
Extinguishment of Liabilities.

F-10

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

Note
5  Impact of Recently Issued Accounting Standards (Cont):

In
July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141 Business Combinations (FAS
141) and Statement of Financial Accounting Standards No. 142 Goodwill and
Other Intangible Assets (FAS 142). FAS 141requires all business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method. The Company is in the transitional period of adopting FAS 142.
Under FAS 142, goodwill and intangible assets with indefinite lives are no
longer amortized but are reviewed annually (or more frequently if impairment
indicators arise) for impairment. Separable intangible assets that are not
deemed to have indefinite lives will continue to be amortized over their useful
lives (but with no maximum life). The amortization provisions of FAS 142 apply
to goodwill and intangible assets acquired after June 30, 2001. With respect to
goodwill and intangible assets acquired prior to July 1, 2001, the Company is
required to adopt FAS 142 effective January 1, 2002. Management adopted this new
accounting pronouncement.

In
August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (FAS 144), which supersedes both Statement
of Financial Accounting Standards No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long Lived Assets to Be Disposed Of (FAS 121,
and the accounting and reporting provisions of APB Opinion No. 30,
Reporting of Operations  Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions, (Opinion 30), for the disposal of a segment of a
business. FAS 144 retains the fundamental provisions in FAS 121 for recognizing
and measuring impairment loss on long-lived assets to be disposed of by sale,
while also resolving significant implementation issues associated with FAS 121.
For example, FAS 144 provides guidance on how a long-lived asset that is used as
part of a group should be evaluated for impairment, establishes criteria for
when a long-lived asset is held for sale, and prescribes the accounting for a
long-lived asset that will be disposed of other than by sale.

The
Company is required to adopt FAS 144 no later than its fiscal year beginning
after December 15, 2001. Management does not expect the adoption of FAS 144 for
long-lived assets held for use to have a material impact on the Companys
consolidated financial position or results of operations because the impairment
assessment under FAS 144 is largely unchanged from FAS 121. The provisions of
this statement for assets held for sale or other disposal generally are required
to be applied prospectively after the adoption date to newly initiated disposal
activities and therefore, will depend on future actions, if any, initiated by
management. As a result, management cannot determine the potential effects that
adoption of FAS 144 will have on the Companys consolidated financial
position or results of operations with respect to future disposal decisions.

Note
6  Warrants:

The
Company has issued warrants to purchase common stock to certain consultants of
the Company. These warrants have terms ranging from two to three years.

At
December 31, 2001, warrants to purchase 335,084 shares of the Companys
common stock at a weighted average exercise price of $1.06 per share were
outstanding. At December 31, 2001 warrants for 185,084 shares are exercisable
and the balance may be exercisable according to a specific schedule. None of the
warrants have been exercised.

F-11

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

Note
7  Marketable Securities:

The
Company also owns 10,000 shares of Sea View Underwater Research, Inc. with a
fair market value of $.32 per share as of December 31, 2001. These are trading
securities bought principally for purpose of selling them in the near term.
Amounts are reported at fair value, with unrealized gains and losses included in
earnings.

Note
8  Income Taxes:

Significant
components of the Companys deferred tax liabilities and assets are as
follows:

|                                       | 2002 | 2001          
|-------------------------------------- | ---- | --------------
|Deferred Tax Liability                 |      | $            0
|                                       |      |               
|                                       |      |               
|Deferred Tax Assets                    |     
|Net Operating Loss Carryforwards       |      | $  131,332    
|Future Deduction for Intangible Assets |      | 90,000        
|Future Deduction for Reserves & Others |      | 105,750       
|                                       |      |               
|Total Deferred Tax Assets              |      | 327,082       
|Less Valuation Allowance               |      | (327,082      
|                                       |      |               
|Net Deferred Tax Liability             |      | $            0
|                                       |      |               
|                                       |      |               

The
effective tax rate was 0% due to a net operating loss and the non-recognition of
any deferred tax assets. Entrusts federal statutory and effective tax
rates were 34% and 0% respectfully for 2002 and 2001.

A
reconciliation of income tax expense at the statutory federal income tax rate to
net income tax expense included in the accompanying consolidated statements of
operations is as follows:

| |  | December 31                                      | 
| |  | ------------------------------------------------ | 
|
| |  | U.S. federal taxes (benefit) at statutory rate   | 
| |  | Unbenefitted net operating losses (Prior yr NOL) | 
| |  | Other                                            | 
| |  |                                                  | 
| |  | Effective tax rate                               | 
| |  |                                                  | 
| |  |                                                  | 

As of
December 31, 2002, the Company had a net operating loss carryfoward for federal
tax purposes approximately equal to the accumulated deficit recognized for book
purposes, which will be available to reduce future taxable income. The full
realization of the tax benefit associated with the carryforward depends
predominantly upon the Companys ability to generate taxable income during
the carryforward period. Because, the current uncertainty of realizing such tax
assets in the future, a valuation allowance has been recorded equal to the
amount of the net deferred tax asset, which caused the Companys effective
tax rate to differ from the statutory income tax rate. The net operating loss
carryforward, if not utilized, will begin to expire in the year 2013.

F-12

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

Note
9  Loans Held for Sale and Warehouse Line Payable:

Loan
receivable represents loans that have been placed for purchase as of December
31, 2002. The Warehouse Line Payable is the amount of money set aside to finance
these Loans receivable. These items are offset items.

Note
10  Subsequent Events:

On
March 31, 2003 the Company paid the Bayview Marketing convertible debenture in
full and cancelled the warrants related thereto. On February 16, 2003 the
Company paid the note payable to Jerry Burden in full. On February 26, 2003 the
Company paid the Dan & Diane King convertible debentures in full and
cancelled the warrants related thereto.

Note
11  Forward Looking Statement:

The
following discussion contains forward-looking statements regarding the Company,
its business, prospects and results of operations that are subject to certain
risks and uncertainties posed by many factors and events that could cause the
actual business, prospects and results of operations to differ materially from
those that may be anticipated by such forward-looking statements. Factors that
may affect such forward-looking statements include, without limitation: the
ability of the Company to successfully develop new products for new markets; the
impact of competition on the revenues of the Company, changes in laws or
regulatory requirements that may adversely affect or preclude customers from
using the Companys products for certain applications; delays in the
introduction of new products or services; failure by the Company to keep pace
with emerging technologies, potential losses from increasing level of defaulted
loans due to adverse national economic conditions, and potential losses from
loan fraud.

When
used in this discussion, words such as believes,
anticipates, expects, intends,
may, and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. The Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to adivse interested parties of
the risks and factors that may affect the Companys business.

F-13

---

# ENTRUST
FINANCIAL SERVICES, INC.
Notes to Financial Statements
December 31, 2002

Note
12  Commitments:

The
Company leases its offices under long-term leases that are accounted for
as operating leases. Future minimum rental payments on all non-cancelable
operating leases with initial or remaining lease terms in excess of one year are
as follows:

| | Year Ending | Amount                  
| | ----------- | ------------------------
| |             | January - December, 2003
| |             | January - December, 2004
| |             | January - December, 2005
| |             |                         
| |             |                         
| |             |                         
| |             |                         

On
July 5, 2002, Jim Saunders resigned from the Company as Chairman of the Board.
Beginning in July 2002 and continuing for a period of forty-eight months,
Employee shall be entitled to an amount equivalent to 15 basis points on the
first $12,500,000 in monthly funding and 5 basis points on the remaining monthly
funding on wholesale and retail loans funded by the Company or the
Companys lenders on behalf of the Company. Payments shall be made by the
Company and/or Entrust on August 15 and the 15th day of each month
thereafter for forty-eight consecutive months.

On
July 23, 2002 Ed Alfke resigned from the Company as Chairman of the Advisory
Board. The settlement agreement outlines options for a total of 70,000 shares of
common stock (post reverse split) to be issued at fair market value ($2.15) as
of the date of this settlement agreement. Provided, however, that a maximum of
10,000 shares may be exercised per quarter for quarters ending, September 30,
2002, December 31, 2002, March 31, 2003, June 30, 2003, September 30, 2003,
December 31, 2003 and March 31, 2004. Such options are fully vested as of the
date hereof. Each quarter, quarters ending September 30, 2002, December 31,
2002, March 31, 2003, June 30, 2003, September 30, 2003, December 31, 2003 and
March 31, 2004, Alfke will be paid the sum of $21,500 as an additional
compensation bonus, however, Alfke hereby agrees and covenants to apply all such
payments solely to the exercise of his stock options as set forth above. Such
bonus is non-cancelable until it expires March 31, 2004.

F-14

---

Item 8.
Disagreements With Accountants on Accounting and Financial Disclosure.

There
were no disagreements on accounting and financial disclosures with the present
accounting firm during the reporting period.

# PART
III

Item 9.
Directors, Executive Officers, Promoters, and Control Persons; Compliance with Section
16(a) of the Exchange Act.

The
Directors and Executive Officers of the Company, their ages and positions held
in the Company as of December 31, 2002 are as follows:

|NAME           | AGE | POSITION HELD
|-------------- | --- | -------------
|Scott J. Sax   |     | 34           
|David A. Hite  |     | 60           
|Thomas Randall |     | 51           
|Bryson Farrill |     | 75           

The
Directors of the Company will serve in such capacity until the next annual
meeting of the Companys shareholders and until their successors have been
elected and qualified. The officers serve at the discretion of the
Companys Directors. There are not any arrangements or understandings
between any of the Companys directors or officers or any other person
pursuant to which any officer or director was or is to be selected as an officer
or director.

Scott
J. Sax

Mr.
Sax has been the Companys President and a Director since 1999. He has been involved with
us through Entrust Mortgage  since 1999 and has also been the President of Entrust
Mortgage during this period. From 1997 to 1999, he was Operations Manager of  EMB
Mortgage Corp., a private mortgage company. From 1993 to 1997, he was an officer of
Investment Consultants, Inc., which did  business as Equityline Financial Services, Inc.
Mr. Sax as a B.S. degree in Management from Georgia Institute of Technology.

David
A.  Hite

Mr.
Hite has been the Companys Vice President, Secretary-Treasurer and a Director since
2002. Mr. Hite has over 35 years  experience in the public company arena. He is a
licensed CPA and real estate broker in California. He began his career as an  accountant
with the firm of Ernst & Young in 1967.  Since 1972, he has served as the CFO for several
Fortune 500 companies. Mr. Hite  has a B.S. degree in Accounting from California State
University at Long Beach.

Thomas
Randall

Mr.
Randall has been a Director since 2002. From 2000 to the present, he has
been the Managing Director of Tribco West, Ltd, a company which manages private
funds in small companies that are significantly undervalued. From 1998 to 2000,
he was Managing Director of Torrey Pines Securities, a regional NASD
broker/dealer located in San Diego, California. He has been involved in the
securities and investment banking business since 1974. He has a B.A. in
Economics and Psychology from Franklin and Marshall College and an MBA from New
York University Graduate Business School.

20

---

Bryson
Farrill

Mr.
Farrill has been a Director since 2002. He has been involved in the
securities and investment banking business since 1962. He has provided financial
consulting to clients from 1989 to the present. He was a member of the New York
Stock Exchange from 1981 to 1989. He was involved with McLeod Young Weir Ltd
(Toronto) from 1962 to 1979. He was Chairman of Scotia McLeod (USA) Inc. from
1978 to 1989.

Advisory
Board

In
2002, the Company disbanded its Advisory Board.

Committees

Board of Directors has established an audit committee, which
consists of David A. Hite, Thomas Randall, and Bryon Farrill. This committee
held two meetings during the fiscal year ended December 31 2002. All members
were present for those meetings. Otherwise, the Board of Directors has no other
committees.

Compliance
with Section 16(a) of the Securities Exchange Act of 1934.

Section
16(a) of the Securities Exchange Act of 1934 (the 34 Act) requires
the Companys officers and directors and persons owning more than ten
percent of the Common Stock, to file initial reports of ownership and changes in
ownership with the Securities and Exchange Commission (SEC).
Additionally, Item 405 of Regulation S-B under the 34 Act requires the Company
to identify in its Form 10-KSB and proxy statement those individuals for whom
one of the above referenced reports was not filed on a timely basis during the
most recent year or prior years. Mr. Sax filed a timely Form 5 covering a late
filing of a Form 4 during the last fiscal year. All of the new officers or
directors filed timely Forms 5 covering late Forms 3 filings in the last fiscal
year.

Item
10. Executive Compensation.

# SUMMARY
COMPENSATION TABLE

|             |  | Annual Compensation | Long Term Compensation |           |  |    | 
|------------ |  | ------------------- | ---------------------- | --------- |  | -- | 
|
|
|Scott J      |  | 2002                |                        | $300,223  |  | -- | 
|Sax          |  | 2001                |                        | 190,412   |  | -- | 
|President    |  | 2000                |                        | 154,823   |  | -- | 
|David A      |  | 2002                |                        | $  60,000 |  | -- | 
|Hite         |  | 2001                |                        | -0-       |  | -- | 
|Treasurer(1) |  | 2000                |                        | -0-       | 
|James        |  | 2002                |                        | $126,125  |  | -- | 
|Saunders(2)  |  | 2001                |                        | 189,437   |  | -- | 
|             |  | 2000                |                        | 154,038   | 
|Patricia W   |  | 2002                |                        | $  20,862 |  |    | 
|Saunders(3)  |  | 2001                |                        | 37,249    |  | -- | 
|             |  | 2000                |                        | 34,097    |  | -- | 
|             |  |                     |                        |           |  |    | 

____________________________

21

---

|(1) |  | Became
an officer in 2002.
|--- |  | --------------------------

|(2) |  | Mr.
Saunders resigned in 2002.
|--- |  | ------------------------------

|(3) |  | Ms.
Saunders resigned in 2002.
|--- |  | ------------------------------

|(4) |  | Mr. Sax received 3,000 shares at $.2.50 per share and 3,000 shares at $1.35 per
share under our Equity Stock Option Plan during the fiscal year ended December
31, 2002.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Mr. Hite received 3,000 shares at $2.50 per share, 3,000 shares at $1.35 per share,
and 4,500 shares at $2.45 per share under our Equity Stock Option Plan during
the fiscal year ended December 31, 2002.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | We
have also issued Warrants to Mr. Hite to purchase up to 200,000  shares of our common
stock,  after adjustment for our one-for-ten  reverse split. The Warrants are for a
period of two years from  the  date of grant and are exercisable at $1.00 per share,
after adjustment for our  one-for-ten  reverse split. The warrants may be exercised
according  to the following schedule:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants are currently exercisable;
| | ------------------------------------------

| | 50,000
warrants shall be exercisable at such time as we have received at  least  $1,000,000 in
additional equity financing or other acceptable  alternative financing  and/or credit
lines;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants shall be exercisable at such time as our common stock bid  price  reaches $5.00
per share for thirty consecutive trading days,  after adjustment for  our one-for-ten
reverse split, reducing the  issued and outstanding shares to less  than 3,000,000; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants shall be exercisable upon our listing on a national stock exchange  agreeable to
us.
| | ----------------------------------------------------------------------------------------------------

We
pay the Companys Directors 3,000 shares per quarter for their service on
our Board of Directors. Otherwise, none of the Directors have agreements to
acquire common shares.

2001
STOCK COMPENSATION PLAN

The
Company has a current registration statement on Form S-8 for its 2002 Stock
Compensation Plan I. A total of 150,000 shares have been registered under the
plan. The Company has issued a total of 200,000 shares and no
options under this plan as of March 3, 2003.

EQUITY
INCENTIVE PLAN

A
total of 250,000 shares of common stock, post split, are reserved under the
Companys Equity Incentive Plan. The Company has issued options to acquire
100,000 shares under plan as of December 31, 2002.

Item 10.
Security Ownership of Certain Beneficial Owners and Management.

The
following sets forth the number of shares of the Companys $.0000001 par
value common stock beneficially owned by (i) each person who, as of
December 31,  2002, was known by us to own beneficially more than
five percent (5%) of its common stock; (ii) the individual Directors; and (iii)
the Officers and Directors as a group. As of December 31, 2002, there were
2,520,385 common shares issued and outstanding, after giving effect
to a one-for-ten reverse split of the common shares, which became effective on
February 4, 2002.

22

---

|Name and Addressof Beneficial Owner | Amount and Nature ofBeneficial Ownership (1)(2) | Percent ofClass
|----------------------------------- | ----------------------------------------------- | ---------------
|Scott J. Sax                        |                                                 | 636,000        
|6795 E. Tennessee Ave               |                                                
|Fifth  Floor                        |                                                
|Denver, Colorado  80224             |                                                
|David A. Hite                       |                                                 | 10,500         
|6795 E. Tennessee Ave               |                                                
|Fifth  Floor                        |                                                
|Denver, Colorado  80224             |                                                
|Thomas Randall                      |                                                 | 3,000          
|6795 E. Tennessee Ave               |                                                
|Fifth  Floor                        |                                                
|Denver, Colorado  80224             |                                                
|Bryson Farrill                      |                                                 | 3,000          
|6795 E. Tennessee Ave               |                                                
|Fifth  Floor                        |                                                
|Denver, Colorado  80224             |                                                
|Officers and Directors              |                                                 | 652,500        
|as a Group (4 Persons)              |                                                

|(1) |  | All
ownership is beneficial and of record, unless indicated otherwise.
|--- |  | ----------------------------------------------------------------------

|(2) |  | Beneficial
owner listed above has sole voting and investment power with respect to the  shares
shown, unless otherwise indicated
|--- |  | --------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Directors
earn  3,000 shares per quarter for their service on our Board of Directors.
|--- |  | -------------------------------------------------------------------------------------

|(4) |  | We
have also issued Warrants to Mr. Hite to purchase up to 200,000 shares of our common
stock,  after adjustment for our one-for-ten reverse split. The Warrants are for a period
of two years from  the date of grant and are exercisable at $1.00 per share, after
adjustment for our one-for-ten  reverse split. The warrants may be exercised according to
the following schedule:
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants are currently exercisable;
| | ------------------------------------------

| | 50,000
warrants shall be exercisable at such time as we have received at least  $1,000,000 in
additional equity financing or other acceptable alternative financing  and/or credit
lines;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants shall be exercisable at such time as our common stock bid price  reaches $5.00
per share for thirty consecutive trading days, after adjustment for  our one-for-ten
reverse split, reducing the issued and outstanding shares to less  than 3,000,000; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants shall be exercisable upon our listing on a national stock exchange  agreeable to
us.
| | ----------------------------------------------------------------------------------------------------

| | Mr.
Hite became our Secretary-Treasurer and Chief Financial Officer as of July 5, 2002. On
December 31, 2002, we borrowed  $2,000,000. As a part of the financing, Mr. Hite pledged
his right, title, and interest to all securities owned by him in  our Company, which
includes common shares and warrants.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

Item 12.
Certain Relationships and Related Transactions.

| | We
issued Warrants to Mr. Hite to purchase up to 200,000 shares of our common stock, after
adjustment for our one-for-ten reverse split. The Warrants are for a period of two years
from the  date of grant and are exercisable at $1.00 per share, after adjustment for our
one-for-ten reverse  split. The warrants may be exercised according to the following
schedule:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants are currently exercisable;
| | ------------------------------------------

| | 50,000
warrants shall be exercisable at such time as we have received at least  $1,000,000 in
additional equity financing or other acceptable alternative financing  and/or credit
lines;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants shall be exercisable at such time as our common stock bid price  reaches $5.00
per share for thirty consecutive trading days, after adjustment for  our one-for-ten
reverse split, reducing the issued and outstanding shares to less  than 3,000,000; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 50,000
warrants shall be exercisable upon our listing on a national stock exchange  agreeable to
us.
| | ----------------------------------------------------------------------------------------------------

| | Mr.
Hite became our Secretary-Treasurer and Chief Financial Officer as of July 5, 2002. On
December 31, 2002, we borrowed  $2,000,000. As a part of the financing, Mr. Hite pledged
his right, title, and interest to all securities owned by him in  our Company, which
includes common shares and warrants.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

PART IV

Item 13.
Exhibits and Reports on Form 8-K.

(a)
The following financial information is filed as part of this report:

| | (1)
Financial Statements
| | ------------------------

| | (2)
Schedules
| | -------------

| | (3)
Exhibits. The following exhibits required by Item 601 to be filed herewith are
incorporated by reference to previously filed documents:
| | -------------------------------------------------------------------------------------------------------------------------------------------

24

---

|Exhibit No. | Description
|----------- | -----------

|3.1* | Articles
of Incorporation, filed with Form 10SB, March 27, 1999.
|---- | ----------------------------------------------------------------

|3.2* | Bylaws,
filed with Form 10-SB, March 27, 1999.
|---- | ----------------------------------------------

|3.3* | Articles
of Amendment to change name to easy Qual.com, Inc., filed with Form 10-KSB,  March 29,
2001
|---- | ----------------------------------------------------------------------------------------------------

|3.4* | Articles
of Amendment to change name to Entrust Financial Services, Inc. , filed with  Form
10-KSB, March 29, 2001.
|---- | -------------------------------------------------------------------------------------------------------------------

|4.1* | Equity
Incentive Plan, filed with definitive proxy, July 17, 2001.
|---- | ------------------------------------------------------------------

|4.2* | 20012
Stock Compensation Plan I , filed with Form S-8, February 14, 2002.
|---- | -------------------------------------------------------------------------

|4.3* | Form
of Bayview Debenture, filed with Form 10-KSB, April 12, 2002. as Exhibit 10C
|---- | ---------------------------------------------------------------------------------

|4.4* | Form of Bayview Warrant, filed with Form S-3, May 15, 2002.
|---- | -----------------------------------------------------------

|4.4a* | Bayview
Warrant.
|----- | ----------------

|4.5* | Form of Hite Warrant , filed with Form S-3, May 15, 2002.
|---- | ---------------------------------------------------------

|4.5a* | Hite
Warrant.
|----- | -------------

|4.6* | Form of Catalyst Warrant, filed with Form S-3, May 15, 2002.
|---- | ------------------------------------------------------------

|4.6a* | Catalyst
Warrant.
|----- | -----------------

|4.7* | Form of Barrett Warrant, filed with Form S-3, May 15, 2002.
|---- | -----------------------------------------------------------

|4.7a* | Barrett
Warrant.
|----- | ----------------

|4.8* | Form of King Debenture, filed with Form S-3, May 15, 2002.
|---- | ----------------------------------------------------------

|10.1* | Asset
Purchase Agreement with Allegro Software, Inc., filed with Form 10-KSB, March 29,  2001
|----- | ---------------------------------------------------------------------------------------------

|10.2* | Employment
Agreement with Mr. Edward Nichols, filed with Form 10-KSB, March 29, 2001
|----- | ------------------------------------------------------------------------------------

|10.53* | Consultant
Agreement with Catalyst Group, LLC, filed with Form S-3, May 15, 2002.
|------ | ---------------------------------------------------------------------------------

|10.64* | Consultant
Agreement with William Barrett , filed with Form S-3, May 15, 2002.
|------ | ------------------------------------------------------------------------------

|10.5* | Consultant Agreement with David  A.Hite, filed with Form 10-KSB, April 12, 2002.
|----- | --------------------------------------------------------------------------------

|10.6* | Convertible Promissory Note, filed with Form 8-K, January 14, 2003.
|----- | -------------------------------------------------------------------

|10.7* | Pledge Agreement, filed with Form 8-K, January 14, 2003.
|----- | --------------------------------------------------------

|10.8* | Guaranty Agreement, filed with Form 8-K, January 14, 2003.
|----- | ----------------------------------------------------------

|10.9* | Registration Rights Agreement, filed with Form 8-K, January 14, 2003.
|----- | ---------------------------------------------------------------------

25

---

|10.10* | Escrow
Agreement, filed with Form 8-K, January 14, 2003.
|------ | --------------------------------------------------------

|10.11* | Security Agreement, filed with Form 8-K, January 14, 2003.
|------ | ----------------------------------------------------------

|99.1 | Certification
by Chief Executive Officer
|---- | ----------------------------------------

|99.2 | Certification
by Chief Financial Officer
|---- | ----------------------------------------

*Previously
filed

(b)
Reports on Form 8-K. The Company filed no reports on Form 8-K during the fourth
quarter of the fiscal year ended December 31, 2002.

26

---

SIGNATURES

In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to  be signed on its behalf by the undersigned,
thereunto duly authorized.

| | Entrust
Financial Services, Inc.
| | --------------------------------

|Date: APRIL
14, 2003 |  | By:/s/  Scott J. Sax
      Scott J. Sax, President and Director
|-------------------- |  | ---------------------------------------------------------------

Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed below by  the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

|Date: APRIL
14, 2003 |  | By:/s/  David  A. Hite
      David  A. Hite, Chief Financial and 
      Accounting Officer, Treasurer and Director
|-------------------- |  | ------------------------------------------------------------------------------------------------------------------

|Date: APRIL
14, 2003 |  | By:/s/  Thomas Randall
      Thomas Randall, Director
|-------------------- |  | -----------------------------------------------------

|Date: APRIL
14, 2003 |  | By:/s/  Bryson Farrill
      Bryson Farrill, Director
|-------------------- |  | -----------------------------------------------------

27

---

# CERTIFICATIONS

I, Scott J.
Sax, certify that:

| | 1. | I
have reviewed the report being filed on Form 10-KSB by Entrust Financial Services, Inc.;
| | -- | ------------------------------------------------------------------------------------------

| | 2. | Based
on my knowledge, the 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 the report;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Based
on my knowledge, the financial statements, and other financial information included in
the report, fairly present in  all material respects the financial condition, results of
operations and cash flows of Entrust Financial Services,  Inc. as of, and for, the
periods presented in the report;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | I
and the other certifying officer are responsible for establishing and maintaining
disclosure controls and procedures (as  such term is defined in Regulation 13a-14 of the
Securities Exchange Act of 1934) for Entrust Financial Services,  Inc and have:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|i. |  | Designed
such disclosure controls and procedures to ensure that material information relating to
Entrust Financial Services,  Inc., including its consolidated subsidiaries, is made known
to us by others within those  entities, particularly during the period in which the
periodic reports are being prepared;
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ii. |  | Evaluated
the effectiveness of Entrust Financial Services, Inc's disclosure controls and procedures
as of a date within 90  days prior to the filing date of the report ("Evaluation
Date"); and
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|iii. |  | Presented
in the report our conclusions about the effectiveness of the disclosure controls and
procedures based on our  evaluation as of the Evaluation Date;
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | I
and the other certifying officer have disclosed, based on our most recent evaluation, to
the Entrust Financial Services,  Inc. auditors and the audit committee of the board of
directors (or persons fulfilling the equivalent function):
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|i. |  | All
significant deficiencies in the design or operation of internal controls which could
adversely affect Entrust Financial  Services, Inc.'s ability to record, process,
summarize and report financial data and have  identified for Entrust Financial Services,
Inc.'s auditors any material weaknesses in internal  controls; and
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ii. |  | Any
fraud, whether or not material, that involves management or other employees who have a
significant role in the issuer's  internal controls; and
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | I
and the other certifying officer have indicated in the 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: APRIL
14, 2003 |  | /s/  Scott J. Sax
Scott J. Sax,
Chief Executive Officer
|-------------------- |  | -------------------------------------------------------

28

---

# CERTIFICATIONS

I, David A.
Hite, certify that:

| | 1. | I
have reviewed the report being filed on Form 10-KSB by Entrust Financial Services, Inc.;
| | -- | ------------------------------------------------------------------------------------------

| | 2. | Based
on my knowledge, the 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 the report;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Based
on my knowledge, the financial statements, and other financial information included in
the report, fairly present in  all material respects the financial condition, results of
operations and cash flows of Entrust Financial Services,  Inc. as of, and for, the
periods presented in the report;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | I
and the other certifying officer are responsible for establishing and maintaining
disclosure controls and procedures (as  such term is defined in Regulation 13a-14 of the
Securities Exchange Act of 1934) for Entrust Financial Services,  Inc and have:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|i. |  | Designed
such disclosure controls and procedures to ensure that material information relating to
Entrust Financial Services,  Inc., including its consolidated subsidiaries, is made known
to us by others within those  entities, particularly during the period in which the
periodic reports are being prepared;
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ii. |  | Evaluated
the effectiveness of Entrust Financial Services, Inc's disclosure controls and procedures
as of a date within 90  days prior to the filing date of the report ("Evaluation
Date"); and
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|iii. |  | Presented
in the report our conclusions about the effectiveness of the disclosure controls and
procedures based on our  evaluation as of the Evaluation Date;
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | I
and the other certifying officer have disclosed, based on our most recent evaluation, to
the Entrust Financial Services,  Inc. auditors and the audit committee of the board of
directors (or persons fulfilling the equivalent function):
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|i. |  | All
significant deficiencies in the design or operation of internal controls which could
adversely affect Entrust Financial  Services, Inc.'s ability to record, process,
summarize and report financial data and have  identified for Entrust Financial Services,
Inc.'s auditors any material weaknesses in internal  controls; and
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ii. |  | Any
fraud, whether or not material, that involves management or other employees who have a
significant role in the issuer's  internal controls; and
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | I
and the other certifying officer have indicated in the 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: APRIL
14, 2003 |  | /s/  David  A. Hite
David  A. Hite,
Chief Financial Officer
|-------------------- |  | -----------------------------------------------------------

29

---

SECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549
FORM 10-KSB
EXHIBITS
TO
Entrust Financial Services, Inc.

|Exhibit No. | Description
|----------- | -----------

|3.1* | Articles
of Incorporation, filed with Form 10SB, March 27, 1999.
|---- | ----------------------------------------------------------------

|3.2* | Bylaws,
filed with Form 10-SB, March 27, 1999.
|---- | ----------------------------------------------

|3.3* | Articles
of Amendment to change name to easy Qual.com, Inc., filed with Form 10-KSB,  March 29,
2001
|---- | ----------------------------------------------------------------------------------------------------

|3.4* | Articles
of Amendment to change name to Entrust Financial Services, Inc. , filed with  Form
10-KSB, March 29, 2001.
|---- | -------------------------------------------------------------------------------------------------------------------

|4.1* | Equity
Incentive Plan, filed with definitive proxy, July 17, 2001.
|---- | ------------------------------------------------------------------

|4.2* | 20012
Stock Compensation Plan I , filed with Form S-8, February 14, 2002.
|---- | -------------------------------------------------------------------------

|4.3* | Form
of Bayview Debenture, filed with Form 10-KSB, April 12, 2002. as Exhibit 10C
|---- | ---------------------------------------------------------------------------------

|4.4* | Form of Bayview Warrant, filed with Form S-3, May 15, 2002.
|---- | -----------------------------------------------------------

|4.4a* | Bayview
Warrant.
|----- | ----------------

|4.5* | Form of Hite Warrant , filed with Form S-3, May 15, 2002.
|---- | ---------------------------------------------------------

|4.5a* | Hite
Warrant.
|----- | -------------

|4.6* | Form of Catalyst Warrant, filed with Form S-3, May 15, 2002.
|---- | ------------------------------------------------------------

|4.6a* | Catalyst
Warrant.
|----- | -----------------

|4.7* | Form of Barrett Warrant, filed with Form S-3, May 15, 2002.
|---- | -----------------------------------------------------------

|4.7a* | Barrett
Warrant.
|----- | ----------------

|4.8* | Form of King Debenture, filed with Form S-3, May 15, 2002.
|---- | ----------------------------------------------------------

|10.1* | Asset
Purchase Agreement with Allegro Software, Inc., filed with Form 10-KSB, March 29,  2001
|----- | ---------------------------------------------------------------------------------------------

|10.2* | Employment
Agreement with Mr. Edward Nichols, filed with Form 10-KSB, March 29, 2001
|----- | ------------------------------------------------------------------------------------

|10.53* | Consultant
Agreement with Catalyst Group, LLC, filed with Form S-3, May 15, 2002.
|------ | ---------------------------------------------------------------------------------

|10.64* | Consultant
Agreement with William Barrett , filed with Form S-3, May 15, 2002.
|------ | ------------------------------------------------------------------------------

|10.5* | Consultant Agreement with David  A.Hite, filed with Form 10-KSB, April 12, 2002.
|----- | --------------------------------------------------------------------------------

|10.6* | Convertible Promissory Note, filed with Form 8-K, January 14, 2003.
|----- | -------------------------------------------------------------------

|10.7* | Pledge Agreement, filed with Form 8-K, January 14, 2003.
|----- | --------------------------------------------------------

|10.8* | Guaranty Agreement, filed with Form 8-K, January 14, 2003.
|----- | ----------------------------------------------------------

|10.9* | Registration Rights Agreement, filed with Form 8-K, January 14, 2003.
|----- | ---------------------------------------------------------------------

30

---

|10.10* | Escrow
Agreement, filed with Form 8-K, January 14, 2003.
|------ | --------------------------------------------------------

|10.11* | Security Agreement, filed with Form 8-K, January 14, 2003.
|------ | ----------------------------------------------------------

|99.1 | Certification
by Chief Executive Officer
|---- | ----------------------------------------

|99.2 | Certification
by Chief Financial Officer
|---- | ----------------------------------------

*Previously
filed

31

---