---

# U.S.
SECURITIES AND EXCHANGE COMMISSION

# Washington, D.C. 20549

# FORM 10-KSB

---

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

For
the year ended December 31, 2003

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

Commission File Number 0-23965

Entrust Financial Services,
Inc.(Exact name of
small business issuer in its charter)

| | Colorado
(State of incorporation) | 84-1374481
(I.R.S. Employer File Number)
| | --------------------------------- | ----------------------------------------

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

(303)
322-6999
(Issuers telephone number, including area code)

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

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

Indicate
by check mark if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B contained herein, and will not be contained, to the best
of the issuers knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [  ]

State
issuers revenues for its most recent year were $8,569,929. The aggregate
market value of the voting stock of the Registrant held by non-affiliates as of
December 31, 2003 was approximately $290,000. The number of shares outstanding
of the Registrants common stock, as of the latest practicable date,
December 31, 2003, was 2,576,795.

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

---

FORM
10-KSBEntrust
Financial Services, Inc.INDEX

|                                                                        | Page
|----------------------------------------------------------------------- | ----
|PART I                                                                  |     
|Item 1. Description of Business                                         |     
|Item 2. Description of Property                                         |     
|Item 3. Legal Proceedings                                               |     
|Item 4. Submission of Matters to a Vote of Security Holders             |     
|PART II                                                                 |     
|Item 5. Market for Common Equity, Related Stockholder Matters and       |     
|Issuer Purchases of Equity Securities                                   |     
|Item 6. Management's Discussion and Analysis of Financial Condition and |     
|Results of Operations                                                   |     
|Item 7. Financial Statements                                            |     
|Item 8. Changes in and Disagreements with Accountants on Accounting and |     
|Financial Disclosures                                                   |     
|Item 8A. Controls and Procedures                                        |     
|PART III                                                                |     
|Item 9. Directors, Executive Officers, Promoters and Control Persons;   |     
|Compliance with Section 16(a) of the Exchange Act                       |     
|Item 10. Executive Compensation                                         |     
|Item 11. Security Ownership of Certain Beneficial Owners and Management |     
|Item 12. Certain Relationships and Related Transactions                 |     
|Item 13. Exhibits and Reports on Form 8-K                               |     
|Item 14. Principal Accountant Fees and Services                         |     
|Financial Statements pages                                              |     
|Signatures                                                              |     
|Certifications                                                          |     

2

---

PART
I

Item
1.   Description of Business

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

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.

Cautionary
Statement for Purposes of the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995.

The matters
discussed in  this report on Form 10-KSB, when not historical matters, are
forward-looking  statements that involve a  number  of risks and uncertainties that could
cause actual results to differ materially  from projected results. Factors that may
affect such forward-looking statements  include, without limitation: our ability to
successfully develop new products  for new markets; the impact of competition on our
revenues, changes in laws or  regulatory requirements that may adversely affect or
preclude customers from  using our products for certain applications; delays in the
introduction of new  products or services; failure by us to keep pace with emerging
technologies and  business practices, potential losses from increasing level of defaulted
loans  due to adverse national economic conditions, and potential losses from loan
fraud. and other risk factors as described from time to time in our filings with  the
Securities and Exchange Commission. Most of these factors are beyond our  ability to
control or predict. We disclaim any intent or obligation to update  our forward-looking
statements, whether as a result of receiving new  information, the occurrence of future
events, or otherwise.

3

---

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 DO
NOT HAVE A SUSTAINED HISTORY OF PROFITS IN OUR OPERATIONS AND THERE IS NO
GUARANTEE THAT WE EVER WILL BE PROFITABLE AGAIN.

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 were only
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:

| |  | Lack of capital for our mortgage banking operations,
|- |  | ----------------------------------------------------

| |  | 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,
|- |  | ------------------------------------------------------------------------------------------------

| |  | Competition from larger and more established companies, and
|- |  | -----------------------------------------------------------

| |  | Lack of market acceptance of our 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 banking and 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.

AT THE END OF
OUR FISCAL YEAR IN 2002 WE COMPLETED A FINANCING. WE WILL STILL NEED ADDITIONAL FINANCING
BECAUSE WE ARE IN DEFAULT ON  THIS 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. As of the date hereof, we are in default on this financing, although
we are working to resolve the situation. We believe that we must obtain
additional financing in order to resolve this default and to expand our business
consistent with our proposed operations. There can be no guaranty that such
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. If we cannot cure our default,
we may be forced to liquidate all or a portion of our assets. 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 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.

4

---

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.

While
we have limited products, the opportunity for 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 those 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.

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 believe that our
operations will grow by approximately twenty-five percent in 2004 over our
operations in 2003. We grew our operations approximately thirty three percent in
2003 over our operations in 2002. 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.

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 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
sustain our production or continue to satisfy the requirements of our
customers.

5

---

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 $28,500,000. Both warehouse
lines of credit are subject to periodic review and renewal. Our primary
warehouse line is subject to renewal in May 2004. 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 refinancing, 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 database, 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.

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.

6

---

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. Our Chief Executive Officer has an employment
agreement, which expires on July 1, 2006. In 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. During 2003 three
Directors, the Chief Financial Officer and Chief Operating Officer resigned. All
positions have been filed with the exception of the Chief Operating Officer
whose duties were reassigned to certain members of the executive team. We cannot
guarantee the results of this change although we believe that it will be
positive for the oversight of our operations.

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:

|o |  | Actual or anticipated fluctuations in our operating results;
|- |  | ------------------------------------------------------------

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

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

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

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

|o |  | departures
of key personnel.
|- |  | ----------------------------

7

---

Of our
total outstanding 2,576,795 shares as of February 28, 2004, a total of 1,245,368
or 48.3%, will be restricted from immediate resale but may be sold into the
market in the near future. The remaining 1,331,427 or approximately 51.7% 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, 2004, under various arrangements, which we have, a total of 680,000
shares may be issued upon the exercise of various stock options and warrants.
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. 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.

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 the minimum requirement as of December 31, 2003.
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.

8

---

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
early 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, the Company initiated a three-for-one forward split of its
common shares, which was approved by the Board of Directors. The Company also
sold common stock, in a private placement to accredited investors. In June 2000,
the Company changed its name to easyQual.com, Inc.

In
April 2001, the Company changed its name to Entrust Financial Services, Inc. and
completed a private placement of 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.

In
January 2002, 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 was part of the Companys
restructuring plan.

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 has used the proceeds of
this loan as an asset to increase its mortgage banking lending capacity.
Beginning in July 2003, the Company was in default under certain financial
performance covenants because of its quarterly loss. As a consequence, the Note
has been classified as debt due within one year. In accordance with the Note,
the Company has deposited $500,000 into the sinking fund as of December 31, 2003
and will be required to make a $100,000 deposit on a monthly basis until the
default is cured. The lender also informed the Company that there was a default
in certain unspecified representation covenants relating to the Note. The
Company disagrees that there has been a default in any representation covenants.

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 origination volume is estimated to
be in excess of $2.0 trillion annually.

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

Operations

The
Company, through its wholly owned subsidiary, Entrust Mortgage, Inc. is engaged
in mortgage banking activities in 37 states. The Companys mortgage banking
business is principally focused on wholesale and retail residential mortgage
origination activities. The Company primarily originates non-conforming mortgage
loans, which are loans that do not conform to FNMA, FHLMC, FHA and VA
requirements. The principal deviation from such standards relate to the lower
documentation standards where there is a lower loan-to-value ratio, although
some do not conform because of the size of the mortgage loan. The Companys
underwriting guidelines are based upon the underwriting standards established by
investors to whom such loans are sold. 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 an
approved revolving warehouse lines of credit. Presently Entrust Mortgage has
approximately $28.5 million in revolving warehouse lines of credit.

9

---

Wholesale
loan origination involves the funding by the Company of loans submitted by
non-affiliated mortgage brokers. The Company has active contractual
relationships with over 600 brokers firms and supports this clientele with
traditional telemarketing and a web-based, proprietary automated underwriting
system that supports the loan application process 24 hours a day, 7 days a week.
These 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. The Company believes that these brokers will use
Entrust Mortgage over our competitors for our niche products and quality of
service. In addition, the Company has a regional sales force in Florida,
California, Nevada and Colorado supporting the wholesale division. The Company
realizes revenue from the sale of such loans to investors for a price greater
than the amount paid to the mortgage broker.

Retail
loan origination involves the direct solicitation of realtors, builders and
prospective borrowers for the origination of mortgage loans. The Company derives
revenues from the loan origination fees and the loan premium fee that is
received from the purchaser of the loan. Generally, the revenue is shared on a
negotiated basis with loan officers and others who procure the loan and assist
in the loan origination process. The financial benefits to the Company of the
retail division is both as a source of loans for the wholesale division and as a
source of loan fees to improve total profits.

Companys
management monitors the revenue streams of the various products and services.
Operations are managed and financial performance is evaluated on a company-wide
basis. Accordingly, the Companys entire mortgage banking operation is
considered by management to be aggregated in one reportable operating segment.

The
United States is one of the largest mortgage markets in the world with total
outstanding mortgages exceeding $4 trillion. The mortgage market growth has been
driven by a loan origination volume that is estimated to have been in excess of
$2.0 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 600 mortgage brokerage firms in 37 states as
sources to gain an increasing share of the mortgage loan market.

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 those 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.

10

---

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. Generally, the mortgage industry conducts its business
through many manual steps, in a multi-forms, paper based system prone to errors.
The Companys technology 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 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. With the Companys 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 four loans.

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.

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.

11

---

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 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.

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. Beginning in July 2003, the
Company was in default under certain financial performance covenants because of
its quarterly loss. As a consequence, the Note has been classified as debt due
within one year. In accordance with the Note, the Company has deposited $500,000
into the sinking fund as of December 31, 2003 and will be required to make a
$100,000 deposit on a monthly basis until the default is cured. The lender also
informed the Company that there was a default in certain unspecified
representation covenants relating to the Note. The Company disagrees that there
has been a default in any representation covenants.

Markets

The
Company plans to continue to market residential mortgages through its network of
600 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 mortgage brokerage
firms, it plans to add new accounts through direct solicitation, fax blast
marketing, mass e-mail marketing, and participation in mortgage industry trade
shows.

Raw
Materials

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

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.

Employees

Currently,
the Company employs sixty-five full-time people. These employees consist of four
management staff and sixty-one 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.

Backlog

At
December 31, 2003, the Company had approximately $65 million of mortgage loans
to be processed for which it anticipates approximately a 35% closure rate.

12

---

Proprietary
Information

The
Company owns the trade name Mortgage 2000 and owns proprietary
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.

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. Applicable Federal and state laws and rules regulate the
Company. It is the Companys policy to fully comply with all governmental
regulations and regulatory authorities.

Research
and Development

During
the fiscal year, the Company did not spend any money on research and
development.

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 $14,030.84
per month from an unaffiliated third party. The lease terminates in 2005. The
Company owns office equipment to furnish all of its offices. 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.

13

---

PART
II

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

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 2003 and 2002.

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

Approximate
Number of Holders of Common Stock

As
of the December 31, 2003, the Company had a total of 2,576,795 shares of common
stock issued and outstanding. The number of holders of record of the
Companys common stock at that date was approximately 250 shareholders.

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.

14

---

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

General

Entrust
Financial Services, Inc., 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 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 loan
services to more than 600 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 April 1999
the Company acquired Entrust Mortgage Inc. and expanded its business into the
wholesale mortgage banking area. In late 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 change was necessary. 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 has reduced the outstanding shares to 2,576,795
shares, with approximately 1,250,000 of these shares in the Public
Float.

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.

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 its wholly owned subsidiary
Entrust Mortgage, Inc. engaged in mortgage banking activities in 37 states. The
Companys business is principally focused on wholesale and retail
residential mortgage origination activities. The Company primarily originates
non-conforming mortgage loans, which are loans that do not conform to FNMA,
FHLMC, FHA and VA requirements. The principal deviation from such standards
relate to the lower documentation standards where there is a lower loan-to-value
ratio, although some do not conform because of the size of the mortgage loan.
The Companys underwriting guidelines are based upon the underwriting
standards established by investors to whom such loans are sold.

15

---

Wholesale
loan origination involves the funding by the Company of loans submitted by
non-affiliated mortgage brokers. The Company has active contractual
relationships with over 600 brokers firms and supports this clientele with
traditional telemarketing and a web-based, proprietary automated underwriting
system that supports the loan application process 24 hours a day, 7 days a week.
In addition, the Company has a regional sales force in Florida, California,
Nevada and Colorado supporting the wholesale division. The Company realizes
revenue from the sale of such loans to investors for a price greater than the
amount paid to the mortgage broker.

Retail
loan origination involves the direct solicitation of realtors, builders and
prospective borrowers for the origination of mortgage loans. The Company derives
revenues from the loan origination fees and the loan premium fee that is
received from the purchaser of the loan. Generally, the revenue is shared on a
negotiated basis with loan officers and others who procure the loan and assist
in the loan origination process. The financial benefits to the Company of the
retail division is both as a source of loans for the wholesale division and as a
source of loan fees to improve total profits.

Results of
2003 compared to 2002

Loan
origination fees and gain on sale of loans increased from $10.6 million for 2002
to $12.2 million in 2003. The increase is attributable to the wholesale Division
increased funding from $185 million in 2002 to $217 million in 2003. In
addition, the Companys retail division increased funding to $92.4 million
for 2003 compared to $55.7 million in 2002. The loan volume increased
substantially from period to period because of the interest rate environment as
individuals continue to refinance their mortgage loans. Revenue realized on each
loan sold in 2003 remained the same compared to loans sold in the same period of
2002. Direct cost increased from $3.6 million in 2002 to $4.2 million in 2003.
The increase was attributed to the increase in loan origination volume.

Interest
income increased from $1.6 million for 2002 to $1.9 million 2003. This increase
was attributable to an increase in overall loan originations and an increase in
the average balance of loans held for sale. Warehouse line of credit interest
expense increased from $1.2 million in 2002 to $1.4 million in 2003 because of
the increase loan volume from period to period.

Salaries,
commissions and benefits increased from $4.2 million in 2002 to $5.9 million in
2003. This 40% increase is consistent with the increase in the numbers of
employees and the continued investment in the expansion of the Companys
wholesale organization.

The
loan loss provision increased to $2.9 million in 2003 from $1.0 million in 2002.
The Companys loan loss reserve can fluctuate from time to time based on
managements most current estimate of risk exposure, using past experience
and the most available economic circumstances. During 2003, management increased
the loan loss reserve to 1/2% of 1% for wholesale loan funding and provided an
additional amount based on the loan default experience. The effect of the change
in estimate was a one-time non-cash reduction to the Companys earnings of
$1.4 million. In addition, during 2003 the Company determined that a $500,000
note receivable was uncollectible and was written off to the loan loss
provision.

Interest
expense related to corporate borrowings increased from $47,000 to $1million in
2003 was the result of the interest paid and accrued on the $2,000,000
Convertible Promissory Note.

General
and administrative expenses decreased from $1.7 million in 2002 compared to $1.2
million in 2003. This decrease was primarily attributable to the Company
spending less on third party services such as consultants.

During
the fiscal year ended December 31, 2003, the Company changed its method of
accounting for loan revenue and related direct costs, to recognize these amounts
upon the transfer and receipt of proceeds from the purchaser of the loans.
Previously, the Company had recognized the revenue and related costs upon the
closing of the loan. The implementation of the change in revenue recognition has
been accounted for as a change in accounting principle and applies cumulatively
as if the change occurred at April 1, 2003. The effect of the change was a
one-time non-cash reduction to the Corporations Earnings of $400,656 or
approximately $0.16 per share.

16

---

The
Company reported a net loss in 2003 of $3.6 million (approximately $1.43 per
share) compared to net loss of $345,610(approximately $0.14 per share) in 2002.

Results of
2002 compared to 2001

Loan
origination fees and gain on sale of loans increased for the year ended December
31, 2002 to $10.6 million compared to $9.0 million for the same period ended
December 31, 2001. The increase is attributable to the wholesale Division
increased funding from $149 million in 2001 to $185 million in 2002. In
addition, the Companys retail division increased funding to $55.7 million
for 2002 compared to $36.2 million in 2001. The loan volume increased
substantially from period to period because of the interest rate environment as
individuals continue to refinance their mortgage loans. Direct cost increased
from $2.8 million in 2001 to $3.6 million in 2002. The increase was attributed
to the increase in loan origination volume.

Interest
income increased from $1.2 million for 2001 to $1.6 million 2002. This increase
was attributable to an increase in overall loan originations and an increase in
the average balance of loans held for sale. Warehouse line of credit interest
expense increased from $1.1 million in 2001 to $1.2 million in 2002 because of
the increase loan volume from period to period but was offset by lower interest
rates during the year.

Salaries,
commissions and benefits increased from $3.4 million in 2002 to $4.2 million in
2003. This increase is the result of increasing the Companys mortgage
banking staff and resultant loan origination activities.

The
loan loss provision increased to $943,000 in 2002 from $380,000 in 2001. The
Companys loan loss reserve can fluctuate from time to time based on
managements most current estimate of risk exposure, using past experience
and the most available economic circumstances.

General
and administrative expenses increased from $0.8 million in 2001compared to $1.7
million in 2002. 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 major
components of G&A 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.

The Company
reported a net loss of $345,610 (approximately $0.14 per share) for the year ended
December 31, 2002 as compared to net  income (as restated) of $630,908 (approximately
$0.29 per share) for the year ended December 31, 2001.

Liquidity
and Capital Resources

Loan
origination increased substantially in 2003 compared to 2002. The increase is
attributable to the wholesale divisions increase in funding from $185
million in 2002 to $217 million in 2003. In addition, the Companys retail
division increased funding to $92.4 million for 2003 compared to $55.7 million
in 2002.

As a
consequence, during 2003, net cash provided by operating activities was $1.4
million compared to net cash used by operating activities of $10 million in
2002. Net cash used in operating activities is impacted primarily by the
origination of and proceeds from the sale of mortgage loans held for sale.

17

---

Net
cash used in investing activities was minimal in 2002 and approximately $900,000
in 2003 because of capital expenditures for new phone systems and computer
hardware and software. In addition, the Company deposited $500,000 into a
sinking fund in connection with the convertible promissory note.

Net
cash used for financing activities in 2003 was $2.0 million and in 2002 net cash
provided from financing activities was $11.7 million. This change resulted
largely from the fluctuation in warehouse lines of credit and the Company
borrowing $2 million in 2002.

The
decrease in net cash flow from operating, financing, and investing activities
was $1.4 million in 2003 compared to an increase in cash of $1.7 million in
2002.

Item 7.  
Financial Statements.

Financial
statements for the years ended December 31, 2003 and 2002 are presented in a separate
section of this report following Item 14.

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

Effective
November 19, 2003, Entrust Financial Services, Inc. (the Company)
dismissed Michael Johnson & Co., LLC as the Companys independent
accountants.

The reports of
Michael Johnson & Co., LLC on the Companys  consolidated financial statements
for the fiscal years ended December 31, 2002  and 2001 contained no adverse opinion or
disclaimer of opinion and were not  qualified or modified as to uncertainty, audit scope
or accounting principle.

The
Board of Directors approved the Companys change in independent
accountants.

In
connection with the Companys audits for the two fiscal years ending
December 31, 2002 and 2001 and through November 19, 2003, the Company has had no
disagreements with Michael Johnson & Co., LLC on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of Michael
Johnson & Co., LLC would have caused them to make reference thereto in their
report on the consolidated financial statements of the Company for such years.

During
the Companys two fiscal years ending December 31, 2002 and 2001 and
through November 19, 2003, the Company has had no reportable events as defined
in Item 304 (a) (1) (v) of Regulation S-K.

Michael
Johnson & Co., LLC has furnished the Company with a letter addressed to the
Securities and Exchange Commission stating that it agrees with the above
statements. A copy of this letter, dated November 21, 2003, was filed as Exhibit
16.1 to the Form 8-K, filed November 19, 2003.

The Company has
engaged Richey, May & Co., LLP as its new independent accountants effective November 19,
2003.

During
the Companys two fiscal years ending December 31, 2002 and 2001and through
November 19, 2003, the Company has not consulted with Richey, May & Co., LLP
regarding either (i) the application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit opinion that
might be rendered on the Companys financial statements, and neither a
written report nor oral advice was provided to the Company Richey, May &
Co., LLP concluded was an important factor considered by the Company in reaching
a decision as to the accounting, auditing or financial reporting issue; or (ii)
any matter that was either the subject of a disagreement, as that term is
defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to
Item 304 of Regulation S-K, or a reportable event, as that term is defined in
Item 304(a)(1)(v) of Regulation S-K.

18

---

Item 8a.  
Controls and Procedures

Evaluation
of Disclosure Controls and Procedures

As of
the end of the period covered by this annual report on Form 10-KSB, we evaluated
the effectiveness of the design and operation of its disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
and 15d-15(e)). That evaluation was performed under the supervision and with the
participation of its management, including its Chief Executive Officer and its
Chief Financial Officer. Based on that evaluation, our Chief Financial Officer
concluded that the Companys disclosure controls and procedures are
effective in timely alerting him to material information relating to Entrust
Financial Services required to be included in its periodic SEC filings.

Changes in
Internal Control over Financial Reporting

The
Company has made no significant change in its internal control over financial
reporting during the most recent fiscal quarter covered by this annual report on
Form 10-KSB that has materially affected, or is reasonably likely to materially
affect, its internal control over financial reporting.

---

PART
III

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

Directors
and Executive Officers

The
Companys executive officers and directors, their respective ages,
positions and biographical information are presented below. The Directors of the
Company will serve in such capacity until the next annual meeting of the
Companys shareholders and until there successors have been elected and
qualified. The Companys executive officers are chosen by its board of
directors and serve at its discretion. There are no existing family
relationships, between or among any of the Companys officers or 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.

|Name               | Age | Position | Since
|------------------ | --- | -------- | -----
|Scott Sax          |     | 34       |      
|Linda Elliot       |     | 53       |      
|Kate Longenecker   |     | 49       |      
|Steve Johnson      |     | 56       |      
|Krista Sweat       |     | 36       |      
|Jeffrey D. Rudolph |     | 42       |      

Scott J. Sax

Mr. Sax has
been the Companys President and a Director since 1999. He has been involved with
the Company 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.

Linda Elliot

Linda
Elliott is a management consultant, specializing in strategy and technology. She
consults to major financial services firms, works in the digital identity
marketplace, and serves on Corporate Advisory Boards. Ms. Elliotts
background includes work in the oil exploration industry and the bankcard
industry, with emphasis on harnessing the power of processing to advance
business strategies. Ms. Elliott held executive positions in Visas IT
organization for 12 years before being promoted to Executive Vice President of
Inovant, Visa Internationals wholly owned processing arm. Ms. Elliott also
served as Executive Vice President of Visa Internationals Year 2000 Global
Program Office. Prior to joining Visa, Ms. Elliott worked for fifteen years in
the oil industry in Houston, Texas. She managed worldwide development and
implementation of geophysical and exploratory software for Western Geophysical,
an international company providing services to the oil industry. Ms. Elliott, a
native of Texas, graduated Phi Beta Kappa and magna cum laude from the
University of Oklahoma with a bachelors degree in mathematics.

Kate
Longenecker

Kate
Longenecker is the President of Corporate Solutions, Inc., an executive
consulting company she founded in 1996. Corporate Solutions specializes in new
business ventures, organizational strategies/solutions and executive leadership
in the technology and communication industries. Most recently, Ms. Longenecker
was a Principal in the Denver Office of Heidrick & Struggles. She was a
member of the firms International Technology Practice, which included the
Software & Services and Semi-Conductor/Hardware/Systems Specialty Practices.
Ms. Longenecker has also served as the Senior Vice-President HR, MediaOne
Broadband; Global HR Vice President for Apple Computer. Kate is also a Colorado
attorney, having practiced law for a period of time in Vail, Colorado. Kate
earned a Bachelor of Science degree in Political Science and a Juris Doctor from
the University of Wyoming. She holds a Master of Science degree in Industrial
and Labor Relations from the University of Oregon. Ms. Longenecker continues to
maintain a license to practice law in Colorado.

20

---

Steve Johnson

Steve Johnson
founded The S.E. Johnson Company (SEJCO), an organization that offers Strategic People
Development Planning(TM) to  organizations. SEJCO is the culmination of nearly 20 years
of experience in working with organizations. Mr. Johnson created the Life  & Career
Center with a view toward servicing individuals with their career and relationship needs.
Mr. Johnson founded The Profile  Group in 1984 with a vision and mission of creating and
developing new technologies through a portfolio of assessments to help  corporate and
individual clients discover their passion, mission and vision.  Mr. Johnson originally
served as an officer for the  Valley National Corporation in Phoenix, Arizona, and led in
the conversion of Valley National Bank to the Personal Banking System.  Mr. Johnson
received his B.S. in Educational Psychology and Special Education, Mankato State
University, Mankato, MN. And his M.A. in  Organizational and Educational Leadership,
Denver Seminary, Denver, CO. Mr. Johnson is also a current professor: Denver Seminary
Graduate School; School of Leadership.

Krista Sweat

Krista
Sweat has over 17 years of extensive experience in all areas of Executive
Secretarial, Real Estate Legal, and Management experience. Ms. Sweat started her
career with the subsidiary of the Woolworth Corporation, Kinney Shoes as the
Executive Assistant to the District Manager of Atlanta, Georgia in their
Regional office. Among her duties was the training of all new secretaries in the
Southeast United States, thus winning her the title of Corporate Secretary of
the Year. Ms. Sweat earned her Real Estate Legal experience with a Closing
Attorney Firm in Atlanta, Georgia. Moving to Denver, Colorado, Ms. Sweat has
been with Entrust since August of 1996 and became the Corporate Secretary of
Entrust Financial Services in July 2003.

Jeffrey D.
Rudolph

Jeffrey D.
Rudolph joined Entrust Financial Services, Inc. in June 2003 and serves as Chief
Financial Officer and Chief Accounting  Officer. Mr. Rudolph started his career in 1983
with Coopers & Lybrand as a staff accountant and was promoted to audit manager and
was one of the original members of the Corporate Finance Group in Denver. Mr. Rudolph
joined Intelligent Electronics, a Fortune 500  company, in 1994 as Director of Financial
Services. Mr. Rudolph joined SSDS/Knowledge Workers in 1997 as Chief Financial Officer
during a period of financial distress and in need of discipline and strategic planning.
He participated in the development the  strategic plan, achieved positive cash flow and
led the M&A effort in selling a division of the company. Based upon his performance
in that role, he was promoted to Chief Operating Officer and lead Knowledge Workers
through aggressive revenue and operational growth  while also raising capital. Mr.
Rudolph continues to serve as a member of the Board of Directors of Knowledge Workers as
Chairman of  the Audit Committee and Corporate Secretary & Treasurer of the Company.
Mr. Rudolph earned a B.A. in Business  Administration-Accounting from Wittenberg
University and an M.B.A. in Finance, from the University of Denver. Mr. Rudolph is a
Certified Public Accountant, in the State of Colorado.

Audit
Committee Financial Expert

The
Company does not have an audit committee and as a result its entire board
of directors performs the duties of an audit committee. Accordingly, the Company
does not have an audit committee financial expert serving on an audit
committee.

21

---

Section
16(a) Beneficial Ownership Reporting Compliance

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. All officers and
directors had responsibility for making filings during the fiscal year. None
made timely filings. Mr. Sax has made a late Form 5 filing covering
late Form 4 transactions. Mr. Rudolph and Ms. Sweat, as new officers, filed late
Forms 5 covering late Forms 3 filings in the last fiscal year.

Code of
Ethics

The
Company has not adopted a code of ethics for its principal executive and
financial officers. The Companys board of directors will revisit this
issue in the future to determine if adoption of a code of ethics is appropriate.
In the meantime, the Companys management intends to promote honest and
ethical conduct, full and fair disclosure in its reports to the SEC, and
compliance with applicable governmental laws and regulations.

ITEM 10.
EXECUTIVE COMPENSATION

The
following table discloses, for the years indicated, the compensation for the
Companys Chief Executive Officer and each executive officer that earned
over $100,000 during the year ended December 31, 2003 (the Named
Executives).

|             |  | Annual Compensation | Long Term Compensation |         |  |     | 
|------------ |  | ------------------- | ---------------------- | ------- |  | --- | 
|
|
|Scott J      |  | 2003                |                        | 355,586 |  | -0- | 
|Sax          |  | 2002                |                        | 300,223 |  | -0- | 
|President(3) |  | 2001                |                        | 190,412 |  | -0- | 
|             |  |                     |                        |         |  |     | 

|(1) |  | 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 fiscal year ended December 31,
2002.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Mr. Sax received 3,000 shares at $0.53 per share under our Equity Stock Option
Plan during fiscal year ended December 31, 2003.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Mr. Sax has a written employment agreement with the Entrust Mortgage subsidiary,
which is guaranteed by the Company. The employment agreement expires on July 1,
2006. The Employment Agreement includes an annual salary of $200,000 and
additional compensation equivalent to five basis points on all monthly funding
on wholesale and retail loans funded by the Company or its lenders on behalf of
the Company.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

DIRECTOR
COMPENSATION

Each
Board member receives $300 per meeting attended for their
service on our Board of Directors. Otherwise, none of the Directors have
agreements to acquire common shares.

The
Company has hired one of its directors, Mr. Steve Johnson, in a consulting
capacity at $3,000 per month. This arrangement began in May 2003 and is
terminable at will.

22

---

2002 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 not issued any shares under this plan as of December
31, 2003.

EQUITY
INCENTIVE PLAN

The
Equity Incentive Plan was developed in 2001, and a total of 250,000 shares of
common stock are reserved under this Plan. The Company has issued options to
acquire 105,000 shares under this plan as of December 31, 2003.

ITEM 11.  
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS

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,
2003, was known by us to own beneficially more than five percent (5%) of its
common stock; (ii) the individual Officers and Directors; and (iii) the Officers
and Directors as a group. As of February 28, 2004, there were 2,576,795 common
shares issued.

|Name and Address of Beneficial Owner | Amount and Nature of BeneficialOwnership (1) (2) | Percent of Class
|------------------------------------ | ------------------------------------------------ | ----------------
|Scott J. Sax                         |                                                  | 639,000         
|6795 E. Tennessee Ave                |                                                 
|Fifth Floor                          |                                                 
|Denver, Colorado 80224               |                                                 
|                                    
|Linda Elliot                         |                                                  | --              
|6795 E. Tennessee Ave                |                                                 
|Fifth Floor                          |                                                 
|Denver, Colorado 80224               |                                                 
|                                    
|Kate Longenecker                     |                                                  | --              
|6795 E. Tennessee Ave                |                                                 
|Fifth Floor                          |                                                 
|Denver, Colorado 80224               |                                                 
|                                    
|Steve Johnson                        |                                                  | --              
|6795 E. Tennessee Ave                |                                                 
|Fifth Floor                          |                                                 
|Denver, Colorado 80224               |                                                 
|                                    
|Krista Sweat                         |                                                  | 7,500           
|6795 E. Tennessee Ave                |                                                 
|Fifth Floor                          |                                                 
|Denver, Colorado 80224               |                                                 
|                                    
|Jeffrey D. Rudolph(4)                |                                                  | --              
|6795 E. Tennessee Ave                |                                                 
|Fifth Floor                          |                                                 
|Denver, Colorado 80224               |                                                 
|                                    
|Officers and Directors as a Group    |                                                  | 646,500         
|(6 Person)                           |                                                 
|                                    

|(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) |  | Through June 2003, directors earned 1,500 shares per quarter for their service
on our Board of Directors. Of the current directors, only Mr. Sax has received
shares.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Mr.
Rudolph has been granted stock options under the Equity Incentive Plan which amount to
55,000 shares at prices ranging from  $0.51 to $0.57.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

23

---

ITEM 12.  
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The
Company has hired one of its directors, Mr. Steve Johnson, in a consulting
capacity at $3,000 per month. This arrangement began in May 2003 and is
terminable at will.

Otherwise,
the Company has not engaged in any transactions in excess of $50,000 during the
past two years, nor does it propose to engage in any such transactions,
involving its executive officers, directors, more than 5% stockholders or
immediate family members of such persons.

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:
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------

|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* | 2002
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.
|---- | ----------------------------------------------------------

|10.53* | 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.
|----- | ---------------------------------------------------------------------

24

---

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

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

|10.12 | Employment
Agreement of Scott Sax.
|----- | ----------------------------------

|31.1 | Certification
of CEO pursuant to Sec. 302
|---- | -----------------------------------------

|31.2 | Certification
of CFO pursuant to Sec. 302
|---- | -----------------------------------------

|32.1 | Certification
of CEO pursuant to Sec. 906
|---- | -----------------------------------------

|32.2 | Certification
of CFO pursuant to Sec. 906
|---- | -----------------------------------------

*Previously
filed

(b) Reports on
Form 8-K. The Company filed one report on Form 8-K during the fourth quarter of
the fiscal year ended December 31, 2003. The report was dated November 21, 2003
and announced a change of accountant firm.

ITEM 14:  
PRINCIPAL ACCOUNTANT FEES AND SERVICES

The
Companys former independent auditor, Michael Johnson & Co., LLC,
Certified Public Accountants, billed an aggregate of $24,420.24 for the year
ended December 31, 2002 and $34,605.00 for the year ended December 31, 2003 for
professional services rendered for the audit of the Companys annual
financial statements and review of the financial statements included in its
quarterly reports. The Companys independent auditor Richey May & Co.,
LLP have billed the Company $4,391.25 for tax fees related to prior year state
tax returns for the year ending December 31, 2003.

The
Company does not have an audit committee and as a result its entire board of
directors performs the duties of an audit committee. The Companys board of
directors evaluates the scope and cost of the engagement of an auditor before
the auditor renders audit and non-audit services.

25

---

ENTRUST
FINANCIAL SERVICES, INC.

FINANCIAL
STATEMENTS

FOR THE
YEARS ENDEDDECEMBER 31, 2003 AND 2002

ENTRUST
FINANCIAL SERVICES, INC.

TABLE OF
CONTENTS

|                                                           | Page
|---------------------------------------------------------- | ----
|FINANCIAL STATEMENTS-                                      |     
|INDEPENDENT AUDITORS REPORT                               |     
|INDEPENDENT AUDITORS REPORT                               |     
|CONSOLIDATED BALANCE SHEETS                                |     
|CONSOLIDATED STATEMENTS OF OPERATIONS                      |     
|CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY |     
|CONSOLIDATED STATEMENTS OF CASH FLOWS                      |     
|NOTES TO FINANCIAL STATEMENTS                              |     

26

---

# INDEPENDENT
AUDITORS REPORT

The Board of
Directors and StockholdersEntrust Financial Services, Inc.Denver, Colorado

We have
audited  the  consolidated  balance  sheet of Entrust  Financial  Services,  Inc.  as of
December  31,  2003,  and the related  consolidated  statements of  operations,  changes
in  stockholders  equity,  and cash flows for the year then ended.  These  financial
statements  are the  responsibility  of the  Company's  management.  Our  responsibility
is to express  an opinion on these  financial  statements based on our audit.

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

In our opinion,
the financial  statements  referred to above present fairly,  in all material  respects,
the  consolidated  financial  position of Entrust  Financial  Services,  Inc. as of
December 31, 2003,  and the  consolidated  results of its operations and its cash  flows
for the year then ended in conformity with accounting principles generally accepted in
the United States of America.

As discussed in
Note B, the Company changed its method of accounting for loan revenue and related direct
costs during 2003.

Richey May & Co.,
LLPEnglewood, ColoradoMarch 1, 2004

F-1

---

INDEPENDENT
AUDITORS REPORT

The Board of
Directors and Stockholders
Entrust Financial Services, Inc.Denver, Colorado

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

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

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

/s/Michael
Johnson & Co., LLCEnglewood, ColoradoApril 10, 2003

F-2

---

# ENTRUST
FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,

|                                             | 2003 | 2002         
|-------------------------------------------- | ---- | -------------
|ASSETS                                       |      |              
|CURRENT ASSETS                               |     
|Cash and cash equivalents                    |      | $   1,042,742
|Cash, restricted                             |      | 500,050      
|Accounts receivable                          |      | 94,773       
|Mortgage loans held for sale                 |      | 25,506,524   
|Prepaid expenses and other current assets    |      | 141,511      
|                                             |      |              
|Total current assets                         |      | 27,285,600   
|                                             |      |              
|PROPERTY AND EQUIPMENT                       |     
|Furniture and equipment                      |      | 178,700      
|Computer hardware and software               |      | 547,244      
|                                             |      |              
|Total property and equipment                 |      | 725,944      
|Less accumulated depreciation                |      | (327,111     
|                                             |      |              
|Property and equipment, net                  |      | 398,833      
|                                             |      |              
|OTHER ASSETS                                 |     
|Intangibles, net of accumulated amortization |     
|of $420,000 and $330,000, respectively       |      | 1,380,000    
|Note receivable                              |      | --           
|Deposits                                     |      | 389,278      
|                                             |      |              
|Total other assets                           |      | 1,769,278    
|                                             |      |              
|TOTAL ASSETS                                 |      | $ 29,453,711 
|                                             |      |              
|                                             |      |              

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

F-3

---

# ENTRUST
FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,

|                                                          | 2003 | 2002        
|--------------------------------------------------------- | ---- | ------------
|LIABILITIES AND STOCKHOLDERS EQUITY                      |     
|CURRENT LIABILITIES                                       |     
|Warehouse lines of credit                                 |      | $ 24,670,295
|Accounts payable                                          |      | 105,270     
|Accrued other expenses                                    |      | 1,247,091   
|Loan indemnification reserve, current portion             |      | 159,359     
|Long-term debt, current portion                           |      | --          
|Convertible Promissory Note                               |      | 2,000,000   
|Capital lease obligations, current portion                |      | 70,622      
|                                                          |      |             
|Total current liabilities                                 |      | 28,252,637  
|Loan indemnification reserve, less current portion        |      | 962,707     
|Capital lease obligations, less current portion           |      | 135,026     
|                                                          |      |             
|Total liabilities                                         |      | 29,350,370  
|                                                          |      |             
|COMMITMENTS AND CONTINGENCIES (Note K )                   |     
|STOCKHOLDERS EQUITY                                      |     
|Common stock, $.0000001 par value, 50,000,000 shares      |     
|authorized, 2,576,795 issued and outstanding for 2003 and |      | 1           
|2,520,385 issued and outstanding for 2002                 |     
|Paid-in capital                                           |      | 7,583,655   
|Deferred Compensation                                     |      | --          
|Retained earnings                                         |      | (7,480,315  
|                                                          |      |             
|Total stockholders' equity                                |      | 103,341     
|                                                          |      |             
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                |      | $ 29,453,711
|                                                          |      |             
|                                                          |      |             

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

F-4

---

# ENTRUST
FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,

|                                                              | 2003 | 2002           
|------------------------------------------------------------- | ---- | ---------------
|REVENUE                                                       |      |                
|Loan origination fees and gain on sale of loans, net of       |     
|direct costs of $4,163,725 and $3,650,098, respectively       |      | $   8,055,063  
|Interest income                                               |      | 1,888,615      
|Interest expense, warehouse and other debt                    |      | (1,373,749     
|                                                              |      |                
|Total revenue                                                 |      | 8,569,929      
|                                                              |      |                
|EXPENSES                                                      |     
|Salaries, commissions, and benefits                           |      | 5,899,483      
|Occupancy, equipment and communication                        |      | 622,503        
|General and administrative                                    |      | 1,167,420      
|Provision for loan losses                                     |      | 2,927,002      
|Interest Expense, convertible promissory note                 |      | 1,003,713      
|Depreciation expense                                          |      | 99,370         
|Amortization expense                                          |      | 90,000         
|                                                              |      |                
|Total expenses                                                |      | 11,809,491     
|                                                              |      |                
|INCOME (LOSS) BEFORE INCOME TAXES AND                         |     
|CUMULATIVE EFFECT OF ACCOUNTING CHANGE                        |      | (3,239,562     
|PROVISION FOR INCOME TAXES                                    |      | --             
|                                                              |      |                
|INCOME (LOSS) BEFORE CUMULATIVE EFFECT                        |     
|OF ACCOUNTING CHANGE                                          |      | (3,239,562     
|CUMULATIVE EFFECT ON PRIOR YEARS                              |     
|OF ACCOUNTING CHANGE, NET OF TAX                              |      | (400,656       
|                                                              |      |                
|NET INCOME (LOSS)                                             |      | $(3,640,218    
|                                                              |      |                
|                                                              |      |                
|Basic earnings per common share before cumulative effect      |      | $         (1.27
|of accounting change                                          |     
|Per share cumulative effect of change in accounting principle |      | (0.16          
|Basic Earnings per share                                      |      | $         (1.43
|                                                              |      |                
|                                                              |      |                
|Diluted earnings per share                                    |      | $         (1.43
|                                                              |      |                
|                                                              |      |                
|Basic Weighted Average Shares Outstanding                     |      | 2,548,590      
|                                                              |      |                
|                                                              |      |                
|Diluted Weighted Average Shares Outstanding                   |      | 3,178,590      
|                                                              |      |                
|                                                              |      |                

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

F-5

---

# ENTRUST
FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

|                           | Common Stock Shares    Amount | Paid-inCapital | DeferredCompensation | RetainedEarnings | TotalStockholdersEquity |           
|-------------------------- | ----------------------------- | -------------- | -------------------- | ---------------- | ------------------------ | ----------
|Balance, December 31, 2001 |                               | 2,273,622      |                      | $1               |                          | $7,550,504
|Stock Issued for Services  |                               | 118,557        |                      | --               |                          | 57,389    
|Sale of Stock              |                               | 128,206        |                      | --               |                          | 200,000   
|Net income                 |                               | --             |                      | --               |                          | --        
|                           |                               |                |                      |                  |                          |           
|Balance, December 31, 2002 |                               | 2,520,385      |                      | 1                |                          | 7,550,504 
|Stock Issued for Services  |                               | 56,410         |                      | --               |                          | 33,151    
|Warrant Expired            |                               | --             |                      | --               |                          | --        
|Net loss                   |                               | --             |                      | --               |                          | --        
|                           |                               |                |                      |                  |                          |           
|Balance, December 31, 2003 |                               | 2,576,795      |                      | $1               |                          | $7,583,655
|                           |                               |                |                      |                  |                          |           
|                           |                               |                |                      |                  |                          |           

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

F-6

---

# ENTRUST
FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,

|                                                       | 2003 | 2002           
|------------------------------------------------------ | ---- | ---------------
|CASH FLOWS FROM OPERATING ACTIVITIES                   |      |                
|Net income (loss)                                      |      | $(3,640,218    
|Non-cash items-                                        |     
|Depreciation and amortization                          |      | 189,370        
|Provision for loan losses                              |      | 1,516,376      
|Other                                                  |      | 114,201        
|(Increase) decrease in-                                |     
|Accounts receivable                                    |      | 769,020        
|Mortgage loans held for sale                           |      | 1,859,841      
|Prepaid expenses and other assets                      |      | (247,196       
|Increase (decrease) in-                                |     
|Accounts payable                                       |      | (52,314        
|Accrued other expenses                                 |      | 929,897        
|                                                       |      |                
|Net cash provided (used) by operating activities       |      | 1,438,977      
|                                                       |      |                
|CASH FLOWS FROM INVESTING ACTIVITIES                   |     
|Purchase of property and equipment                     |      | (393,528       
|Increase in restricted cash                            |      | (500,050       
|                                                       |      |                
|Net cash provided (used) by investing activities       |      | (893,578       
|                                                       |      |                
|CASH FLOWS FROM FINANCING ACTIVITIES                   |     
|Net borrowings (repayments), warehouse lines of credit |      | (1,761,019     
|Repayment of long-term debt                            |      | (406,711       
|Borrowings, capital lease obligations                  |      | 235,416        
|Proceeds from Borrowings                               |      | --             
|Issuance of Common Stock                               |      | --             
|Repayments, capital lease obligations                  |      | (29,768        
|                                                       |      |                
|Net cash provided (used) by financing activities       |      | (1,962,082     
|                                                       |      |                
|INCREASE (DECREASE) IN CASH                            |     
|AND CASH EQUIVALENTS                                   |      | (1,416,683     
|CASH AND CASH EQUIVALENTS,                             |     
|BEGINNING OF YEAR                                      |      | 2,459,425      
|                                                       |      |                
|CASH AND CASH EQUIVALENTS, END OF YEAR                 |      | $ 1,042,742    
|                                                       |      |                
|                                                       |      |                
|SUPPLEMENTAL INFORMATION                               |     
|Cash Paid For Income Taxes                             |      | $          None
|                                                       |      |                
|                                                       |      |                
|Cash Paid For Interest                                 |      | $ 1,638,526    
|                                                       |      |                
|                                                       |      |                

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

F-7

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

A.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES

Organization

| | 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Entrust
Mortgage, Inc. was incorporated in Colorado in 1999 and is a wholly owned
subsidiary of the Company. Entrust Mortgage engages primarily in the origination
and wholesale purchase of non-conforming residential mortgage loans in
thirty-eight states. The Companys headquarters is located in Denver,
Colorado and it has regional sales forces in Colorado, Florida, California and
Nevada.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 was 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Principles
of Consolidation

| | The
accompanying financial statements include the accounts of the Company and its
wholly owned subsidiary, Entrust Mortgage, Inc. All intercompany balances and
transactions have been eliminated.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Use
of Estimates

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

Cash,
Restricted

| | In
connection with the $2,000,000 convertible promissory note agreement between
Entrust Financial Services, Inc. and the lender, the Company is required to
deposit $100,000 per month into a cash escrow account until its cures the
default under the agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-8

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

A.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Mortgage
Loans Held for Sale

| | Mortgage
loans held for sale are stated at the lower of cost or market determined on an
aggregate loan basis. Mortgage loans are stated net of premiums or discounts and
deferred net loan costs. Market value for mortgage loans covered by investor
commitments is based on commitment prices. Market value for uncommitted loans is
based upon current delivery prices.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Property
and Equipment

| | Computer
hardware and software is depreciated and amortized using the straight-line
method over five years. Furniture and equipment is depreciated using the
straight-line method over seven years.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Loan
Indemnification Reserve

| | Loans
sold to investors by the Company and which met investor and agency underwriting
guidelines at the time of sale may be subject to repurchase in the event of
specific default by the borrower or subsequent discovery that underwriting
standards were not met. The Company may, upon mutual agreement, indemnify the
investor against future losses on such loans. The Company has established a
reserve for losses related to these representations and warranties.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of December 31, 2003, the Company has outstanding indemnification agreements
with investors totaling $1,007,821, requiring current aggregate monthly payments
of $36,316 and expiring October 2004 through July 2006. These liabilities are
included as part of the loan indemnification reserve.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue
Recognition

| | Loan
origination fees, net of direct costs, are deferred and recognized over the term
of the loan or at the time the loan is sold. Gains or losses from the sale of
mortgages are recognized when the proceeds are received from the purchaser.
Interest income is accrued and credited to income based on the principal amount
outstanding.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Intangible
Assets

| | Intangible
assets are amortized on a straight-line basis over their estimated useful lives.
The Company, in accordance with SFAS No. 142, Goodwill and Other
Intangible Assets, evaluates the remaining useful lives of the assets each
reporting period to determine whether events and circumstances warrant a
revision to the remaining period of amortization. In addition, the Company
evaluates impairment in accordance with SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets when circumstances indicate
the carrying amount of the assets may not be recoverable based upon the
undiscounted future cash flows of the asset. If the carrying amount is
determined not to be recoverable, a write-down to fair value is recorded.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-9

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

A.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income
Taxes

| | The
Company files consolidated income tax returns with its subsidiary Entrust
Mortgage and tax is computed and allocated to the Companies on a separate return
basis. Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the basis of certain assets and
liabilities for financial and tax reporting. The deferred taxes represent the
future tax return consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered or settled.
Deferred tax assets are limited to amounts considered to be realizable in future
periods.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Advertising

| | Marketing
costs are expensed as incurred and amounted to $172,976 and $218,011 for the
years ended December 31, 2003 and 2002, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------

Cash
and Cash Equivalents

| | For
cash flow purposes, the Company considers cash and temporary investments with
original maturities of three months or less, to be cash and cash equivalents.
The Company typically maintains cash in financial institutions in excess of FDIC
limits. The Company evaluates the creditworthiness of these financial
institutions in determining the risk associated with these cash balances.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Reclassifications

| | Certain
reclassifications have been made to prior year balances to conform to the  current year
financial statement presentation.
| | ---------------------------------------------------------------------------------------------------------------------------------

Stock
Options

| | The
Company accounts for stock options under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. However, we do disclose the
pro-forma effect on net income and earnings per share as if the Company had
applied the fair value recognition provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation, to stock-based employee
compensation in footnote N.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Earnings
Per Share of Common Stock

| | Basic
earnings per share is determined using net income divided by the weighted
average shares outstanding during the period. Diluted earnings per share is
computed by dividing net income by the weighted average shares outstanding,
assuming all dilutive potential common shares were issued. The effect of
outstanding stock options was antidilutive in 2003 and 2002.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-10

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

A.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently
Issued Accounting Pronouncements

| | In
March 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities. SFAS 149 is effective for contracts entered
into  or modified after June 30, 2003. This statement amends and clarifies financial
accounting  and reporting for derivative instruments, including certain derivative
instruments  embedded in other contracts (collectively referred to as derivatives) and
for hedging  activities under SFAS 133, Accounting for Derivative Instruments and
Hedging  Activities. SFAS 149 did not materially effect the financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments  with Characteristics of Both Liabilities and Equity. SFAS 150 is
effective for  financial instruments entered into or modified after May 31, 2003, and
otherwise is  effective at the beginning of the first interim period beginning after June
15, 2003. This  statement establishes new standards for how an issuer classifies and
measures certain  financial instruments with characteristics of both liabilities and
equity. SFAS 150  requires that an issuer classify a financial instrument that is within
the scope of this  statement as a liability because the financial instrument embodies an
obligation of the  issuer. This statement applies to certain forms of mandatorily
redeemable financial  instruments including certain types of preferred stock, written put
options and forward  contracts. SFAS 150 did not materially effect the financial
statements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

B.    ACCOUNTING
CHANGE

| | During
the current year, management changed its method of accounting for loan revenue
and related direct costs, to recognize these amounts upon the transfer and
receipt of proceeds from the purchaser of the loans. Previously the Company had
recognized the revenue and related costs upon closing of the loan. Had this
accounting change been applied retroactively, revenue and net income for 2003
would have been reduced by $42,440 and revenue and net income for 2002 would
have been reduced by $258,065.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

C.    MORTGAGE
LOANS HELD FOR SALE

| | The
following summarizes mortgage loans held for sale at December 31,:
| | ----------------------------------------------------------------------

|                                   | 2003 | 2002       
|---------------------------------- | ---- | -----------
|Mortgage loans held for sale       |      | $25,206,018
|Deferred direct costs, net of fees |      | 300,506    
|                                   |      |            
|                                   |      | $25,506,524
|                                   |      |            
|                                   |      |            

F-11

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

D.    INTANGIBLE
ASSETS

| | Intangible
assets represent the excess of acquisition costs over the fair value of the net
assets of acquired businesses which have been allocated to identifiable
intangible assets as follows at December 31, 2003:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Description       | Estimated      Life | AcquisitionCost | AccumulatedAmortization | Net CarryingValue
|----------------- | ------------------- | --------------- | ----------------------- | -----------------
|Client contracts  |                     | 20 Years        |                         | $1,200,000       
|Technology rights |                     | 10 Years        |                         | 200,000          
|State licenses    |                     | 40 Years        |                         | 400,000          
|                  |                     |                 |                         |                  
|                  |                     |                 |                         | $1,800,000       
|                  |                     |                 |                         |                  
|                  |                     |                 |                         |                  

| | Amortization
expense will amount to $90,000 for each of the next five years.
| | ----------------------------------------------------------------------------

E.    NOTE
RECEIVABLE

| | The
Company had an unsecured, note receivable due from EMB Corporation, dated April
10, 2001, with interest at 12% per annum and maturing March 31, 2004. During
2003 it was determined that the note was uncollectible and was written off to
the loan loss provision.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F.    WAREHOUSE
LINES OF CREDIT

| | The
Company has a $25,000,000 warehouse line of credit agreement dated July 2, 2003,
expiring May 31, 2004, which provides financing for the Companys
origination of mortgage loans. The line of credit bears interest at LIBOR plus
2.25% to 3.75% depending on the underlying collateral. Purchase proceeds are
withdrawn from the Companys bank account as funding proceeds from
investors are deposited. The line of credit is collateralized by the underlying
mortgages and related documents and instruments. At December 31, 2003, the
outstanding principal balance of the warehouse line of credit amounted to
$23,738,335.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
agreement contains certain financial covenants, including maintenance of minimum
tangible net worth and equity base, maximum debt to tangible net worth and
equity base ratios, minimum current ratio, and limitations on transactions with
affiliates and stockholder distributions, as defined in the agreement. As of
December 31, 2003 the Company was in default under certain financial covenants.
The Company is currently having discussions with the lender to resolve all
outstanding issues.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has an additional warehouse line of credit agreement dated July 18, 2000
which provides financing for the Companys origination of mortgage loans
subject to approval by the lender. The line of credit bears interest at LIBOR
plus 4% to 8% depending on the underlying collateral and can be called by the
lender at any time. Purchase proceeds are withdrawn from the Companys bank
account as funding proceeds from investors are deposited. The line of credit is
collateralized by the underlying mortgages and related documents and
instruments. At December 31, 2003, the outstanding principal balance of the
warehouse line of credit amounted to $931,960.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-12

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

G.    CONVERTIBLE
PROMISSORY NOTE

| | The
Company has a Convertible Promissory Note (Note) maturing on March
27, 2005. 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, the Lender has the
option of either receiving the additional bonus interest or foregoing the
additional bonus interest and converting the Note into common stock at a
conversion price of $3.00 per share, subject to price adjustments in certain
defined circumstances. The Note is secured by all the assets (e.g. accounts,
contracts, intangible assets, furniture & fixtures) of Entrust Mortgage,
Inc. In addition, the Company entered into a Pledge Agreement, whereby all the
shares of the common stock of Entrust Mortgage, Inc. are held by the lender to
ensure timely payment and performance of the obligation.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Note contains financial covenants. Beginning in July 2003, the Company was in
default under certain financial performance covenants because of its quarterly
loss. In accordance with the Note, the Company has deposited $500,000 into the
sinking fund as of December 31, 2003 and will be required to make a $100,000
deposit on a monthly basis until the default is cured. The lender also informed
the Company that there was a default in certain unspecified representation
covenants relating to the Note. The Company disagrees that there has been a
default in any representation covenants.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Finally,
the lender has informed the Company that it is not declaring the Note due and
payable but is reserving its future remedies. The Company believes that should
the note be called the Company has adequate resources to satisfy this
obligation. However, in accordance with the Pledge Agreement, the lender can
exercise its future remedies and take control of Entrust Mortgage, Inc., the
only substantial asset of the Company, at any time, until all defaults are
cured. The Company is currently having discussions with the lender to resolve
all outstanding issues. However the Company does not know at this time what the
outcome of those discussions will be.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

H.    LONG-TERM
DEBT

| | The
Company had an unsecured, note payable to an individual, dated April 20, 2002,
with interest at 13.5% per annum, and maturing April 3, 2003. The note was
repaid during 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

I.    CAPITAL
LEASE OBLIGATIONS

| | The
Company leases equipment with a capitalized cost of $235,416 and a book value of
$216,172 under capital leases expiring through November 2006. The lease
agreements call for aggregate monthly payments of $7,331. Following is a
schedule of the future minimum lease payments together with the present value of
the net minimum lease payments as of December 31, 2003:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Year Ending December 31,          | Amount
|--------------------------------- | ------
|2004                              |       
|2005                              |       
|2006                              |       
|                                  |       
|Total minimum lease payments      |       
|Less amount representing interest |       
|                                  |       
|Total obligation                  |       
|Less current portion              |       
|                                  |       
|Long-term portion                 |       
|                                  |       
|                                  |       

F-13

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

J.    INCOME
TAXES

| | The
components of income tax expense (benefit) are as follows for the year ended  December
31:
| | ----------------------------------------------------------------------------------------------

|                                           | 2003 | 2002           
|------------------------------------------ | ---- | ---------------
|Current federal and state income taxes     |      | $          None
|Deferred income tax (benefit)              |      | (1,351,200     
|Increase (decrease) in valuation allowance |      | 1,351,200      
|                                           |      |                
|                                           |      | $          None
|                                           |      |                
|                                           |      |                

| | The
tax effects of significant temporary differences which give rise to the
Companys deferred tax assets and liabilities are as follows at December
31:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

|                                   | 2003 | 2002           
|---------------------------------- | ---- | ---------------
|Deferred tax asset-                |     
|Net operating losses               |      | $ 2,536,500    
|Allowance for losses               |      | 42,600         
|                                   |      |                
|                                   |      | 2,579,100      
|Valuation allowance                |      | (2,579,100     
|                                   |      |                
|Net deferred tax asset (liability) |      | $          None
|                                   |      |                
|                                   |      |                

| | The
Company has net operating losses of approximately $6,800,000 available to offset
future consolidated federal and state taxable income through 2023. Based upon
the Companys current operating losses and the uncertainty as to future
taxable income, a full valuation allowance has been provided for the
Companys net deferred tax asset as of December 31, 2003.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

K.    COMMITMENTS
AND CONTINGENCIES

Commitments
to Originate Loans

| | The
Company regularly enters into commitments to originate loans at a future date
subject to compliance with stated conditions. These commitments have off-balance
sheet risk to the extent the Company does not have matching commitments to sell
the loans, which expose the Company to market risk if interest rates change. The
Company is also exposed to credit loss if the loan is originated and the
mortgagor does not perform. The collateral upon extension of credit typically
consists of a deed of trust in the mortgagors residential property.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Leases

| | The
Company leases its office under a non-cancelable operating lease expiring
December 2005. The Company also leases office equipment under short-term leases.
Total rent expense charged to operations under all operating leases amounted to
$281,037 and $296,970 for the years ended December 31, 2003 and 2002,
respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-14

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

K.    COMMITMENTS
AND CONTINGENCIES (Continued)

Leases
(Continued)

| | Future
minimum rental payments under the office lease is as follows at December 31,  2003:
| | ------------------------------------------------------------------------------------------

|Year Ended December 31, | Amount |     
|----------------------- | ------ | ----
|                        |        | 2004
|                        |        | 2005
|                        |        |     
|                        |        |     
|                        |        |     
|                        |        |     

Separation
Agreements

| | On
July 5, 2002, the Companys Chairman of the Board resigned. Beginning in
July 2002 and continuing for a period of forty-eight months, he 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. The Company and/or Entrust Mortgage shall make payments on
the15th day of each month thereafter for forty-eight consecutive months.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
July 23, 2002 the Companys Chairman of the Advisory Board resigned. The
settlement agreement outlined options for a total of 70,000 shares of common
stock issued quarterly. The Company has one quarter remaining, March 31, 2004,
at which time all shares will have been issued and the obligation paid in full.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Regulatory
Net Worth Requirement

| | In
accordance with the regulatory requirements of the Department of Housing and
Urban Development (HUD) governing non-supervised, direct endorsement mortgagees,
Entrust Mortgage, Inc. is required to maintain a net worth (as defined by HUD)
of $250,000. At December 31, 2003, Entrust Mortgage, Inc. exceeded the
regulatory net worth requirement by $1,003,445.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

L.    EMPLOYEE
BENEFIT PLANS

| | The
Company has a 401(k) plan covering substantially all employees. The Plan covers
eligible employees of the Company who have completed three months of service.
Employees may contribute amounts subject to certain IRS and plan limitations.
The Company made no contributions for the years ended December 31, 2003 and
2002.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

M.    FAIR
VALUE OF FINANCIAL INSTRUMENTS

| | Due
to their short-term nature, the carrying value of cash, short-term receivables,
short-term payables, and warehouse line of credit approximate their fair value
at December 31, 2003 and 2002. The fair value of loans held for sale is
estimated based upon secondary market prices and approximated their carrying
values at December 31, 2003 and 2002.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-15

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

N.    STOCK
OPTIONS AND WARRANTS

| | In
2001, the Company adopted the Equity Incentive Plan, whereby 250,000 shares of the
Companys common stock (after the one-for-ten reverse split) were reserved for
options that could be granted pursuant to the terms of the plan. Under the terms of the
plan, the option price could not be less than 100% of the fair market value of the
Companys common stock on the date of grant, and if the optionee owned more than 10%
of the voting stock, the option price per share could not be less than 110% of the fair
market value.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    | Shares Subject toOutstanding Options | Weighted AverageExercise Price perShare
|------------------- | ------------------------------------ | ---------------------------------------
|December 31, 2001   |                                      | --                                     
|Granted             |                                      | 90,000                                 
|Exercised/Cancelled |                                      | 0                                      
|December 31, 2002   |                                      | 90,000                                 
|Granted             |                                      | 55,000                                 
|Exercised/Cancelled |                                      | 40,000                                 
|December 31, 2003   |                                      | 105,000                                

| |  | Options Outstanding | OptionsExercisable |       
| |  | ------------------- | ------------------ | ------
|
| |  | $     0             | .51                | 15,000
| |  | $     0             | .60                | 40,000
| |  | $     2             | .00                | 50,000

| | The
Company has issued warrants to purchase common stock to certain consultants of
the Company. These warrants have terms ranging from two years to three years. At
December 31, 2003, warrants to purchase 530,000 shares of the Companys
common stock at a weighted average exercise price of $1.08 per share were
outstanding. At December 31, 2003 warrants for 430,000 shares are exercisable
and the balance maybe exercisable according to a specific schedule. None of the
warrants have been exercised.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-16

---

# ENTRUST
FINANCIAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

N.    STOCK
OPTIONS AND WARRANTS (continued)

| | Pro
forma information regarding net income and earnings per share has been
determined as if the Company accounted for the options under the fair value
method of FAS 123. For purposes of pro forma disclosures, the estimated fair
value of the options granted is amortized over the vesting period of the
options. The pro forma information is as follows for the years ended December 31:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                           | 2003 | 2002         
|------------------------------------------ | ---- | -------------
|Net Loss                                   |      | $(3,640,218  
|Pro forma stock-based compensation expense |      | 78,039       
|Pro forma net loss                         |      | $(3,718,257  
|Basic earnings per share:                  |     
|As reported                                |      | $       (1.43
|Pro forma                                  |      | $       (1.46

| | The
fair value of each option grant is estimated using the Black-Scholes option
pricing model. The assumptions used by year, and the calculated weighted average
fair value of options granted, are as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                               | 2003 | 2002   
|------------------------------ | ---- | -------
|Expected Yield                 |      | 1      
|Risk-free interest rate        |      | 1      
|Expected life in years         |      | 4      
|Expected volatility            |      | 0      
|Weighted average fair value of |      | $     0
|options granted                |     

F-17

---

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: March
29, 2004 |  | By:/s/  Scott J. Sax
      Scott J. Sax, Chief Executive Officer
      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: March
29, 2004 |  | By:/s/  Jeffrey D. Rudolph
      Jeffrey D. Rudolph
      Chief Financial Officer
|-------------------- |  | ---------------------------------------------------------------------------------

|Date: March
29, 2004 |  | By:/s/  Linda Elliot
      Linda Elliot, Director
|-------------------- |  | -------------------------------------------------

|Date: March
29, 2004 |  | By:/s/  Kate Longenecker
      Kate Longenecker, Director
|-------------------- |  | ---------------------------------------------------------

|Date: March
29, 2004 |  | By:/s/  Steve Johnson
      Steve Johnson, Director
|-------------------- |  | ---------------------------------------------------

27

---

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

|4.3* | Form
of Bayview Debenture, filed with Form 10-KSB, March 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.
|----- | ----------------

28

---

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

|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, March 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.
|----- | ---------------------------------------------------------------------

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

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

|10.12 | Employment
Agreement of Scott Sax.
|----- | ----------------------------------

|31.1 | Certification
of CEO pursuant to Sec. 302
|---- | -----------------------------------------

|31.2 | Certification
of CFO pursuant to Sec. 302
|---- | -----------------------------------------

|32.1 | Certification
of CEO pursuant to Sec. 906
|---- | -----------------------------------------

|32.2 | Certification
of CFO pursuant to Sec. 906
|---- | -----------------------------------------

*Previously
filed

29

---