SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

                                   (Mark One)

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

                   For the Fiscal Year ended December 31, 2003

                                       OR

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

                 For the Transition Period From ______ To ______

                         Commission file number 0-17018

                         STRATFORD AMERICAN CORPORATION
                 (Name of small business issuer in its charter)

                 Arizona                                   86-0608035
     (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                     Identification No.)

    2400 E. Arizona Biltmore Circle,
        Building 2, Suite 1270,
           Phoenix, Arizona                                   85016
(Address of principal executive offices)                    (Zip Code)

Issuer's telephone number, including area code:  (602) 956-7809

Securities  registered  under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 Par Value
                   Series "A" Preferred Stock, $.01 Par Value

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

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]

     Issuer's revenues for its most recent fiscal year: $3,957,000

     The aggregate market value of the voting stock held by non-affiliates of
the registrant, based on the February 27, 2004 closing price of $0.57 per share,
as reported on the OTC Bulletin Board, was $3,061,000.

     At February 27, 2004, 11,078,105 shares of the issuer's common stock and no
shares of its preferred stock were issued and outstanding.

     Certain portions of the registrant's definitive Proxy Statement, which will
be filed with the Commission on or about April 30, 2004, in connection with the
Annual Meeting of Shareholders of the registrant to be held on June 30, 2004,
are incorporated by reference into Part III of this report.

Transitional Small Business Disclosure Format (check one)  Yes [ ] No [X]

<PAGE>

PART I

ITEM 1. BUSINESS

GENERAL

     GENERAL DEVELOPMENT OF BUSINESS. Stratford American Corporation, an Arizona
corporation incorporated on May 13, 1988 (the "Company"), has several
wholly-owned subsidiaries. The Company also owns 80% of Scottsdale Thompson
Peak, LLC, an Arizona limited liability company ("STP"). Unless otherwise
specified, the term "Company" as used herein includes the Company's
subsidiaries.

     The Company, through its subsidiaries, is engaged principally in the
businesses of real estate management and natural resource exploration and
development. The Company employs four full-time employees.

NARRATIVE DESCRIPTION OF BUSINESS

     REAL ESTATE. On December 11, 2002, the Company, along with other investors,
completed the purchase of an office building leased by a single tenant located
at 20225 North Scottsdale Road, Scottsdale, Arizona (the "Property") for
$25,484,000, which reflects the purchase price of $24,988,000 and closing costs
incurred of $496,000. The Company intends to continue this use of the building.
The Property, upon purchase, was immediately conveyed to Scottsdale Thompson
Peak, LLC, a newly formed Arizona limited liability company ("STP"). The Company
owns 80% of the membership interests in, and is the manager of STP. STP funded
the purchase of the Property through a combination of cash contributions and
loans obtained by STP, in the aggregate amount of $24,300,000. A $20,000,000
loan is financed with a 5.9% interest rate, 22 year straight-line amortization
note and is guaranteed by JDMD Investments, LLC, a major shareholder of the
Company. A loan of $2,500,000 is financed with a 6% interest rate, interest only
note, for a period of two years, due December 11, 2004, and is guaranteed 50% by
JDMD Investments, LLC and 50% by Diamond Ventures, Inc., a major shareholder of
the Company. A loan of $1,800,000 is financed with a 10% interest rate note,
interest only, for a period of two years, due December 2, 2004. The Company also
issued a total of 1,200,000 shares of its common stock to JDMD Investments, LLC,
a major shareholder of the Company, for its agreement to guarantee payment of
certain exceptions or carve outs on the first mortgage, the guarantee of 50% of
the $2,500,000 bank loan, the assignment of all its interests in finding and
negotiating the purchase of the Property, and obtaining the mortgage loan and
other financing involved.

     The Property is 100% leased by a single tenant and used as their corporate
office. The tenant is engaged in selling and installing new tires for autos and
trucks. Under the terms of the lease agreement, STP is to receive annual rents
of $2,096,000, paid in equal monthly installments during the first five years of
the lease. In years six, eleven, and sixteen of the lease, the annual rents are
escalated by 10% of the prior years rent. The Company is reporting results from
this lease as an operating lease. As such, total revenue anticipated for the
life of the lease is recognized in equal annual installments. If the amount of
cash received is less than the revenue recognized, the difference is recorded as
deferred revenue. All repairs and maintenance, insurance, real estate taxes,
rental taxes and utilities are the responsibility of the tenant. The building
has an expected life of forty years and the Company is using straight-line
depreciation over this forty-year period. The Company believes the building is
adequately covered by insurance.

     Although the tenant has entered into a twenty-two year bondable lease
agreement with multiple parties that guarantee payment under terms of the
agreement, if the financial condition of the tenant and the other guarantors

                                       2
<PAGE>

were to deteriorate and the tenant could not pay rents under the terms of the
lease agreement, it would have a material adverse effect on the Company.

     On October 26, 2000, the Company through its membership in Triway Land
Investors, LLC ("Triway"), a limited liability company with two additional
members, entered into an operating agreement to acquire real property in
Scottsdale, Arizona. The acquisition price of the real property acquired by
Triway, approximately 10 acres, was $3,600,000. As a result, the Company made a
$500,000 equity investment in Triway. According to the operating agreement, the
Company and a majority interest member of Triway were required to make
additional contributions up to a proportionate specified amount. As of August 5,
2003, the Company had contributed a total of $570,000 to Triway, which was the
value of the investment on the Company's books on that date. On August 5, 2003,
Triway sold the real property for $4,799,000. After all expenses were deducted,
the Company received a cash distribution of $684,000 for its membership interest
in Triway. The Company recognized a gain of $114,000 from the sale of its
investment in Triway, which is reflected in interest and other income in the
accompanying, audited Consolidated Statements of Operations.

     NATURAL RESOURCES. The Company owns working and/or royalty interests in oil
and gas properties that are primarily located in Oklahoma and Texas. The oil and
gas is sold to numerous oil refiners and natural gas purchasers with no single
entity purchasing 10% of the oil and gas sold.

     On June 5, 2002, the Company, through its wholly owned subsidiary Stratford
American Energy Corporation ("SAEC"), purchased working interests in 23 oil and
gas properties located in Oklahoma and Texas, effective as of April 1, 2002 in
exchange for $738,000 in cash. The purchase price included oil and gas interests
of $687,000 and acquisition costs of $51,000 paid at closing. Additional
acquisition costs of $17,000, relating to the purchase, were incurred. The total
acquisition costs of $68,000 are being amortized equally over a seven-year
period. In addition to the working interest in the properties acquired, the
Company agreed to participate on a proportionate basis in the drilling of a
development well on one of the properties acquired. Drilling costs of $12,000
for the development well were pre-paid at closing and are included in the oil
and gas interests at December 31, 2002. This well is now completed and is a
producing property.

     The natural resource operations of the Company are somewhat seasonal, as
the demand for oil and gas products increases in the winter months and decreases
during the summer months.

     Intense competition from both major oil and gas producers and small,
independent producers characterize the natural resource exploration and
development industry. Many competitors have greater financial and other
resources than the Company. The Company is unable to estimate the number of oil
and gas producers against which it competes. Because oil and gas products are
commodities, producers of such products compete mainly on the basis of price,
which can fluctuate greatly from month-to month. The operators of the wells in
which the Company participates negotiate the price of the oil and gas based on
end user demand, level of supply, and other relevant factors. The operators then
determine whether to supply product at that price.

     The availability of a ready market for oil and gas discovered and produced
by the ventures in which the Company participates depends on numerous factors
beyond the Company's control. These factors include, among others, the extent of
domestic production of oil and gas by other producers, fluctuations in world and
domestic prices for oil and gas, crude oil imports, the marketing of competitive
fuels, conservation efforts, and the regulations of various governmental
agencies concerning the production, transportation, and marketing of oil and
gas.

     To limit the risks inherent in the oil and gas business, the Company
associates with experienced operators in its ventures rather than operating a
property on its own behalf.

                                       3
<PAGE>

     OTHER. On September 4, 2003, the Company exchanged 1,000,000 shares of its
common stock in full satisfaction of a note payable in the amount of $903,000,
along with accrued interest of $28,000. This note was payable to a shareholder.
The market value of the shares at issue date was $0.20 per share. This
transaction resulted in a gain of $614,000 which is reflected as a gain on
restructuring of payables in the accompanying Consolidated Statements of
Operations and an increase in additional paid-in capital of $307,000, $190,000
of which represents excess of fair market value over par value of the shares
issued and $117,000 of which is deemed a capital contribution from the
aforementioned shareholder.

ITEM 2. PROPERTIES

     PRINCIPAL OFFICES. The principal offices of the Company are located at 2400
East Arizona Biltmore Circle, Building 2, Suite 1270, Phoenix, Arizona 85016,
telephone 602/956-7809. The premises are leased at a base rental rate of
approximately $117,000 per year. The term of the current lease expires in
September 2004. The Company believes its office space is sufficient to meet its
operational needs in the near future.

     REAL ESTATE PROPERTIES. On December 11, 2002, the Company, along with other
investors, purchased an office building leased by a single tenant, located at
20225 North Scottsdale Road, Scottsdale, Arizona (the "Property"). The Property,
after being purchased by the Company and the other investors, was immediately
conveyed to Scottsdale Thompson Peak, LLC, an Arizona limited liability company
("STP"). The Company owns 80% of the membership interests in, and is the manager
of STP. (See Item 1 - Narrative Description of Business - Real Estate.)

     NATURAL RESOURCE PROPERTIES - OIL AND GAS. The Company's petroleum and
natural gas activities are focused in the United States. The Company is not an
operator with respect to any oil or gas properties. Rather, the Company
participates in a property interest through a joint operating agreement. The
Company is required to pay its allocable share of drilling and operating
expenses based on its working interest, and participates in any discovery on the
same basis. As a participant, the Company has only limited management rights
with respect to any interest. (See Item 1 - Narrative Description of Business -
Natural Resources.)

     STRATFORD AMERICAN ENERGY PROPERTIES. On June 5, 2002, the Company, through
its wholly owned subsidiary Stratford American Energy Corporation ("SAEC"),
purchased working interests in 23 oil and gas properties located in Oklahoma and
Texas, effective April 1, 2002. During 2003, the Company, through SAEC, elected
to participate proportionately in the drilling of four new development wells. In
January 2004, the Company elected to participate proportionately in the drilling
of a fifth new development well. (See Item 1 - Narrative Description of Business
- Natural Resources.)

     SA OIL PROPERTIES. On April 19, 2001, the Company purchased 100% of the
capital stock of SA Oil and Gas Corporation ("SA Oil"). SA Oil owns working
and/or royalty interests in 87 oil and gas properties located Oklahoma and
Texas. (See Item 1 - Narrative Description of Business - Natural Resources.)

     OTHER PROPERTIES. The Company also owns a nominal interest in four oil and
gas wells located in Arkansas and Oklahoma. (See Item 1 - Narrative Description
of Business - Natural Resources.)

ITEM 3. LEGAL PROCEEDINGS

     The Company is not currently a party to any material legal proceedings.

                                       4
<PAGE>

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

     No matter was submitted to a vote of the Company's shareholders during the
fourth quarter ended December 31, 2003.

EXECUTIVE OFFICERS

Name                    Age              Office                   Officer Since
----                    ---              ------                   -------------

David H. Eaton          68       Chief Executive Officer              6/88
Mel L. Shultz           53       President                            5/87
Daniel E. Matthews      53       Treasurer and Secretary             12/99

     DAVID H. EATON has been the Chairman of the Board of Directors of the
Company since February 29, 1988 and its Chief Executive Officer since June 1,
1988.

     MEL L. SHULTZ has been a Director and the President of the Company since
May 20, 1987. Mr. Shultz was previously involved on his own behalf in real
estate development and oil and gas investments.

     DANIEL E. MATTHEWS was appointed Treasurer and Secretary of the Company on
December 1, 1999. Mr. Matthews has been the Controller of the Company since May
1997. Mr. Matthews was previously involved in accounting management positions in
private industry.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

     The Company's common stock $0.01 par value, is currently listed and traded
on the OTC Bulletin Board (symbol: STFA.OB).

     The high and low bid price for each quarter during the last two years, are
as follows:

                             Time Period            High       Low
                             -----------            ----       ---

              2003:         First quarter            .31       .30
                            Second quarter           .30       .20
                            Third quarter            .20       .20
                            Fourth quarter           .25       .20

              2002:         First quarter            .18       .16
                            Second quarter           .19       .16
                            Third quarter            .19       .15
                            Fourth quarter           .30       .11

     The above information is based on the bid price as furnished by Pink
Sheets, LLC. The quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

                                       5
<PAGE>

HOLDERS

     As of February 27, 2004, the common stock of the Company is estimated to be
held beneficially by approximately 2,000 shareholders. No preferred stock is
outstanding.

DIVIDENDS

     The Company has never paid cash dividends on its common equity. Arizona law
may restrict the ability of a corporation to pay dividends. The Company does not
expect to pay dividends in the foreseeable future, but rather expects to use any
cash otherwise available for distribution to satisfy debt obligations and build
business operations.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

                      EQUITY COMPENSATION PLAN INFORMATION

<TABLE>
<CAPTION>
                                                                                   Number of
                                                                                  securities
                                                                                  remaining
                                             Number of                          available for
                                          securities to be      Weighted-      future issuance
                                            issued upon          average         under equity
                                            exercise of       exercise price     compensation
                                            outstanding       of outstanding   plans (excluding
                                              options,           options,         securities
                                            warrants and       warrants and      reflected in
                                              rights             rights          column (a))
                                               (a)                (b)              (c) (1)
<S>                                       <C>                 <C>              <C>
Equity compensation plans approved
by security holders                            480,000           $ 0.92             302,343
Equity compensation plans not
approved by security holders                         0           $ 0.00                   0

     Total                                     480,000           $ 0.92             302,343
</TABLE>

(1) In July 1998, the Company adopted a Stock Option Plan (the "Plan"). The
aggregate number of shares of common stock for which options may be granted or
for which stock grants may be made to any one individual participating in the
Plan may not exceed 500,000 shares per year or 2,000,000 shares over the term of
the Plan. Options become exercisable over a specific period of continuous
employment according to each grant awarded, but may not be exercised more than
10 years from the Date of Grant. The options under the Plan were granted at the
fair market value of the Company's stock at the date of grant as determined by
the Company's Board of Directors.

     The number of securities remaining available for future issuance under the
Plan is based on a formula. The Plan provides that the total number of shares of
common stock that may be available for grant under the Plan in each calendar
year shall be equal to 3% of the total number of shares of common stock
outstanding as of the first day of each such calendar year for which the Plan is
in effect, commencing with January 1, 1998. As of January 1, 2003, the total
number of outstanding shares of common stock was 10,078,105 shares and 3% of
such number is 302,343. Any shares of common stock available for grant in any
particular calendar year which are not, in fact, granted in such year shall not
be added to the shares of common stock available for grant in any subsequent
calendar year.

                                       6
<PAGE>

     The committee administering the Plan may make or provide for such
adjustments in the maximum number of shares of common stock available for grant
under the Plan as such committee may in good faith determine to be equitably
required in order to prevent dilution or expansion of the rights of participants
that otherwise would result from (a) any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company or (b) any merger, reverse merger in which the Company is the
surviving entity but in which securities possessing more than 50% of the total
combined voting power of the Company's outstanding securities are transferred to
a person or persons different from the persons holding those securities
immediately prior to such merger, consolidation, spin-off, split-off, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of warrants or other rights to purchase securities or any other
corporate transaction or event having an effect similar to any of the foregoing.

RECENT SALES OF UNREGISTERED SECURITIES

     On September 4, 2003, 1,000,000 shares of the Company's common stock were
issued to Bulgheroni SPA, a shareholder in exchange for full satisfaction of
debt of $903,000 and accrued interest of $28,000 due to the shareholder. Market
value of the shares at issue date was $0.20 per share. The Company recognized a
gain on the restructuring of payables of $614,000, which is reflected in
revenues in the accompanying Consolidated Statements of Operations for the year
ended December 31, 2003, and an increase in additional paid-in capital of
$307,000, $190,000 of which represents excess of fair market value over par
value of the shares issued and $117,000 of which is deemed a capital
contribution from the aforementioned minority shareholder. There were no
underwriting discounts or commissions related to this sale.

     On December 12, 2002, the Company issued 1,800,000 shares of its common
stock to the DRD-97 Trust in exchange for $450,000 in cash and issued 200,000
shares of its common stock to David Goldstein in exchange for $50,000 in cash.
The shares were valued at $0.25 per share. There were no underwriting discounts
or commissions related to this sale. Proceeds of the offering were used by the
Company to make an equity contribution to Scottsdale Thompson Peak, LLC.

     On December 12, 2002, the Company issued 1,200,000 shares of its common
stock to JDMD Investments, LLC, a major shareholder of the Company, in exchange
for its agreement to guarantee payment of certain exceptions or carve outs on
the first mortgage, the guarantee of 50% of a $2,500,000 million bank loan, and
the assignment of all its interests in finding and negotiating the purchase of
the Property, and obtaining the mortgage loan and other financing involved for
Scottsdale Thompson Peak, LLC. The Company recorded a loan fee of $240,000 as a
result of this transaction. The loan fee is being amortized monthly, pro-rata
over the life of the loans involved. There were no underwriting discounts or
commissions related to this transaction.

     On December 21, 2001, the Company repurchased 263,663 shares of the
Company's common stock at market price of $0.17 per share. These shares were
subsequently cancelled.

     On April 19, 2001, the Company issued 755,948 shares of its common stock to
the shareholders of SA Oil in exchange for 100% of the outstanding common stock
of SA Oil. The stock was valued at $0.28 per share, a total of $212,000 and is
included as part of the purchase price of the assets acquired. There were no
underwriting discounts or commissions related to this transaction.

     The Company claimed exemption from registration under Section 4(2) of the
Securities Act of 1933, as transactions not involving a public offering, for the
above transactions.

                                       7
<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANYALSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following discussion should be read in conjunction with the attached
financial statements and notes thereto. Except for the historical information
contained herein, any statements that refer to expectations, projections or
other characterization of future events or circumstances, and especially those
which include variations of the words "believes," "intends," "estimates,"
"anticipates," "expects," "plans," or similar words or variations thereof, are
likely to be forward-looking statements, and as such, are likely to concern
matters involving risk, uncertainty, unpredictability and other factors that
could materially and adversely affect the outcome or results indicated by or
inferred from the statements themselves. Therefore, the reader is advised that
the following discussion should be considered in light of the discussion of
risks and other factors contained in this annual report on Form 10-KSB and in
the Company's other filings with the Securities and Exchange Commission, and
that no statements contained in the following discussion or in this Form 10-KSB
should be construed as a guarantee or assurance of future performance or future
results.

GENERAL

     In December 2002, the Company, along with other investors, purchased an
office building leased by a single tenant located at 20225 North Scottsdale
Road, Scottsdale, Arizona, as discussed above and in Note 3 of the consolidated
financial statements as of December 31, 2003. The Property, after being
purchased by the Company and the other investors, was immediately conveyed to
Scottsdale Thompson Peak, LLC ("STP"). The Company owns 80% of the membership
interests in, and is the manager of STP. The Company completed the purchase of
the subject property because it concluded it was a good economic investment. STP
intends to either hold the building or evaluate an appropriate opportunity for
sale.

     As noted in results of operations discussed below, total revenues in
general and property rental income specifically have increased as a result of
the purchase and the Company's controlling membership interest in STP and are
expected to remain at current levels over the life of the lease or as long as
STP holds the building.

     On June 5, 2002, the Company purchased working interests in 23 oil and gas
properties, as discussed above and in Note 4 of the consolidated financial
statements as of December 31, 2003. As discussed in results of operations,
additional revenue related to these oil and gas properties has been recognized.

     The Company, through its membership in Triway Land Investors, LLC, entered
into an operating agreement to acquire real property in Scottsdale, Arizona on
October 26, 2000 and sold the membership interest on August 5, 2003 as discussed
above and in Note 3 of the consolidated financial statements as of December 31,
2003. The 2003 results include a gain of $114,000 recognized on the sale of the
Company's membership interest in Triway.

     In September 2003, the Company identified an opportunity to reduce its debt
level in exchange for equity. As discussed above, and in Note 8 of the
consolidated financial statements as of December 31, 2003, 1,000,000 shares of
the Company's common stock were issued to Bulgheroni SPA, a shareholder, in
exchange for full satisfaction of debt of $903,000 and accrued interest of
$28,000 due to the shareholder. The Company recognized a one-time gain of
$614,000 on the restructuring of payables.

                                       8
<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     The Consolidated Balance Sheet and Statements of Operations have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
the Company to make certain estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to investments, oil and gas interests,
contingencies and litigation. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimated under different assumptions or conditions.

     The Company believes the following critical accounting policies affect its
more significant judgments and estimates used in the preparation of its
consolidated financial statements. The Company accrues production income and
expense based upon historical performance, costs, and prices received for oil
and gas. Revisions in profit estimates are charged to income in the period in
which the facts that give rise to the revision become known. Future adverse
changes in market conditions or poor operating results of underlying investments
could result in losses or an inability to recover the carrying value of the
investment's current carrying value, thereby possibly requiring an impairment
charge in the future.

     Real estate investments are carried at book value, less depreciation. The
Company's investments in real property are subject to many inherent risks that
cannot be controlled, including general economic conditions and the availability
of mortgage funds for operations or refinancing. Future adverse changes could
result in losses or an inability to recover the carrying value of the
investments current carrying value, thereby possibly requiring an impairment
charge in the future. In accordance with SFAS No. 144, long-lived assets, such
as property, plant and equipment, and purchased intangibles subject to
amortization, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to estimated undiscounted future
cash flows expected to be generated by the asset. If the carrying amount of an
asset exceeds its estimated future cash flows, an impairment charge is
recognized by the amount by which the carrying amount of the asset exceeds the
fair value of the asset. Assets to be disposed of would be separately presented
in the balance sheet and reported at the lower of the carrying amount or fair
value less costs to sell, and are no longer depreciated. The assets and
liabilities of a disposed group classified as held for sale would be presented
separately in the appropriate asset and liability sections of the balance sheet.

LIQUIDITY AND CAPITAL RESOURCES

     As discussed above, the Company along with other investors, completed the
purchase of an office building in Scottsdale, Arizona (the "Property") for
$25,484,000, effective December 11, 2002. The Property after being purchased by
the Company and the other investors, was immediately conveyed to STP. The
purchase was funded through a combination of cash contributions and loans
obtained by STP in the aggregate amount of $24,300,000. A loan of $20,000,000 is
financed with a 5.9% interest rate, twenty-two year straight-line amortization
note and is guaranteed by JDMD Investments, LLC, a major shareholder of the
Company. A loan of $2,500,000 is financed with a 6% interest rate, interest only
note, for a period of two years, due December 11, 2004, and is guaranteed 50% by
JDMD Investments, LLC, a major shareholder of the Company, and 50% by Diamond
Ventures, Inc., a major shareholder of the Company. A loan of $1,800,000 is
financed with a 10% interest rate note, interest only, for a period of two
years, due December 2, 2004. The lease with the sole tenant for the entire
building is a bondable, triple-net lease, commencing on December 9, 2002,

                                       9
<PAGE>

expiring on December 31, 2024, excluding unexercised extensions. The annual
basic rent for years one through five is $2,096,000 per year. In years six,
eleven and sixteen of the lease annual rents are escalated by 10% of annual
rents paid in the preceding year. If the financial condition of the tenant and
the other guarantors were to deteriorate and the tenant could not pay rents
under the terms of the lease agreement, it would have a material adverse effect
on the Company.

     Currently scheduled gross property rental revenues of $2,096,000 are
expected to meet debt service requirements to the first lien holder totaling
$1,628,000 in 2004 and interest payments on the two notes due in December 2004
totaling $313,000 in 2004.

     STP intends to refinance the $1,800,000 real estate loan, interest due
monthly at 10%, maturing on December 2, 2004 and the real estate loan of
$2,500,000, interest due monthly at 6% maturing on December 11, 2004, under
terms which will allow for principal and interest repayments to be funded
through property rental receipts. In the event a refinance cannot be obtained,
STP has already begun discussions to extend the above referenced notes.

     During 2003, the Company, through its wholly owned subsidiary, Stratford
American Energy Corporation, elected to participate proportionately in the
drilling of four new development wells with costs paid in 2003 totaling $89,000.
Funds for the development drilling came from Company cash. Two of the
development wells are now producing properties. Future costs to complete the
remaining two development wells will be approximately $31,000 and will be funded
with Company cash. In January 2004, the Company elected to participate
proportionately in the drilling of a fifth development well. The Company prepaid
$25,000 in costs. The funds came from Company cash. If hydrocarbons are located
in commercial quantity, the Company will be responsible for approximately
$18,000 in additional costs to test and equip this fifth well. The funds will
come from Company cash.

     In August of 2003, the Company received a cash distribution of $684,000
from the sale of its investment in Triway Land Investors, LLC. Total cash
contributions made by the Company to Triway were $570,000.

     In September of 2003, the Company was successful in restructuring $931,000
of indebtedness by issuing 1,000,000 shares of its common stock to Bulgheroni
SPA, a shareholder. As a result, notes payable decreased by $903,000, accrued
interest decreased by $28,000 and the Company eliminated annual interest expense
of $54,000.

     The Company's cash and cash equivalents were generated by the sale of its
investment in Triway in 2003, the revenues received from the working interests
in the oil and gas properties, rental revenues from the office building, and the
sale of Company shares in December 2002. The Company expects that the current
cash and cash equivalents will be sufficient to meet its forecasted operating
cash needs for 2004. However, due to any unforeseen circumstances that could
occur outside the Company's control, there can be no assurance that adequate
cash flows from the Company's present cash position and current activity will be
achieved.

     The Company continues to aggressively seek additional potential
acquisitions in establishing its future direction. There can be no assurance
that it will be able to locate suitable acquisition candidates or make any such
acquisitions, or that any acquisitions that are made will be profitable for the
Company. Additionally there can be no assurance that the Company's operations
will be profitable.

                                       10
<PAGE>

RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 2003, COMPARED WITH YEAR ENDED
DECEMBER 31, 2002.

     The Company reported net income of $622,000 for the year ended December 31,
2003 compared to a net loss of $349,000 during 2002.

     OIL AND GAS REVENUES. Oil and gas revenues increased from $591,000 in 2002
to $737,000 in 2003, primarily due to an increase in oil and gas prices in 2003
and to the purchase of working interests in 23 oil and gas properties on June 5,
2002, effective April 1, 2002. Separately, SA Oil properties generated $448,000
and $368,000 in revenue for the years ended December 31, 2003 and December 31,
2002, respectively. The working interests in 23 oil and gas properties, acquired
effective April 1, 2002, generated $273,000 and $212,000 in revenue for the
years ended December 31, 2003 and December 31, 2002, respectively. Properties
owned prior to the acquisition of SA Oil and the June 5, 2002 purchase,
effective April 1, 2002, generated $16,000 and $11,000 in revenue for the years
ended December 31, 2003 and December 31, 2002, respectively.

     PROPERTY RENTAL INCOME. Property rental income increased from $121,000 in
2002 to $2,485,000 in 2003. The rental income for 2002 was prorated for the
month of December, from the purchase date of the Property, December 11, 2002 to
December 31, 2002, and the 2003 results reflect scheduled rental income for the
twelve month period ended December 31, 2003 of $2,096,000 and $389,000 in
deferred rent.

     GAIN ON RESTRUCTURING OF PAYABLES. On September 4, 2003, the Company
exchanged 1,000,000 shares of its common stock in full satisfaction of a note
payable and accrued interest due to a shareholder. The total amount of the debt
was $931,000. The market value of the shares at issue date was $0.20 per share.
The Company recognized a gain of $614,000 on the exchange.

     INTEREST AND OTHER INCOME. Interest and other income increased from $49,000
in 2002 to $121,000 in 2003. The increase is primarily due to the gain of
$114,000 recognized when the Company sold its membership interest in Triway in
August of 2003, offset by the receipt in 2002 of $32,000 in funds that were held
by an insurance company for future vehicle damage claims when the Company was
involved in the rental car business, and also offset by reduced interest income
of $10,000 earned in 2003 on the Company's cash accounts.

     GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased from $450,000 for the year ended December 31, 2002 to $642,000 for the
year ended December 31, 2003. The increase was due to increased office rent
expense in the amount of $14,000, increased professional fees of $38,000,
increased insurance premiums of $31,000, increased consulting fees of $100,000
and a general increase in associated overhead costs of $9,000. The rental
increase is a result of reduced reimbursements received by the Company in 2003
for a sublease of its offices. The increase in professional fees is attributed
to an increase in accounting fees and to fees paid to the Company's directors in
2003 for reimbursement of expenses incurred on behalf of the Company. The
increase in insurance expense is due to increased premiums in 2003. In 2003,
consulting fees were paid to the Chief Executive Officer and the President of
the Company, in lieu of compensation, for services performed by them on behalf
of the Company for the years ended December 31, 2003 and 2002.

     DEPRECIATION, DEPLETION AND AMORTIZATION. Depreciation, depletion and
amortization expense increased from $301,000 in 2002 to $825,000 in 2003. The
depreciation expense increase of $489,000 in 2003 is attributable to the
depreciation expense on the Property purchased on December 11, 2002, and
immediately conveyed to STP. A full twelve months of depreciation was recognized
in 2003, compared to one month's expense recognized in 2002. The increase in

                                       11
<PAGE>

depletion and amortization expense of $35,000 is primarily due to the inclusion
of a complete year of expense for the Stratford American Energy Corporation's
working interests, compared to only nine months in 2002, the year of
acquisition.

     OIL AND GAS OPERATIONS. The increase of $9,000 from 2002 to 2003 in oil and
gas operations expense is also due to the inclusion of a complete year of
operations expense for the Stratford American Energy Corporation's working
interests in 23 oil and gas properties and to increased expense of $5,000 for
existing properties, primarily due to equipment repair costs in 2003.

     INTEREST EXPENSE. Interest expense increased to $1,572,000 in 2003 from
$155,000 in 2002. This increase is primarily due to the interest paid in 2003 on
the debt on the office building purchased by the Company and other investors,
and immediately conveyed to STP, in December of 2002.

     RELATED PARTY TRANSACTIONS. During 2003, the Company received $68,000 from
two companies that are partially owned by four of the Company's executives or
directors. These receipts were reimbursements for administrative expenses
incurred by the Company on behalf of the related parties. These are recorded as
a reduction of general and administrative expense for 2003. At December 31,
2003, $17,000 of these reimbursements are included in related party receivables.

     At December 31, 2003, a note payable of $1,800,000, due December 2, 2004,
bearing an interest rate of 10%, with interest due monthly, was owed to
Southwest Holdings, Ltd, a majority shareholder of the Company. At December 31,
2003, all of the accrued interest on the above-mentioned related party notes
payable had been paid.

     At December 31, 2002, a note payable of $200,000, due no later than June
30, 2003, bearing an interest rate of 10%, with interest and principal due at
maturity, was owed to Southwest Holdings, Ltd, a majority shareholder of the
Company. On April 1, 2003, the principal balance of $200,000 and accrued
interest of $6,000 was paid in full.

OPERATING SEGMENTS

     The Company reports results from three operating segments; Real Estate
Activities, Oil and Gas Activities and Other, with Other primarily being general
and administrative expense and interest income.

     REAL ESTATE ACTIVITIES. As discussed above, the Company purchased an office
building in Scottsdale, Arizona, effective December 11, 2002, and immediately
conveyed the property to STP. Such property is 100% percent leased by a single
tenant for a term of twenty-two years. See "Liquidity and Capital Resources."

     OIL AND GAS ACTIVITIES. The Company, through it's wholly owned subsidiary,
Stratford American Energy Corporation ("SAEC"), purchased working interests in
23 oil and gas properties located in Oklahoma and Texas effective April 1, 2002.
The Company acquired SA Oil through a stock exchange transaction in April 2001.
SA Oil owns working and/or royalty interests in 87 oil and gas properties
located in Oklahoma and Texas. The Company also owns a nominal interest in four
oil and gas wells in Arkansas and Oklahoma that generate insignificant revenues.
See "Liquidity and Capital Resources."

     The Company sells its gas in the spot market, which is highly seasonal and
volatile. Oil prices will continue to be affected by world markets and
conditions. The uncertainty in the Middle East may continue to impact prices.

                                       12
<PAGE>

CAPITAL REQUIREMENTS

     During 2003, the Company, through its wholly owned subsidiary, Stratford
American Energy Corporation, elected to participate proportionately in the
drilling of four new development wells with costs paid in 2003 totaling $89,000.
Funds for the development drilling came from Company cash. Two of the
development wells are now producing properties. Future costs to complete the
remaining two development wells will be approximately $31,000 and will be funded
with Company cash. In January 2004, the Company elected to participate
proportionately in the drilling of a fifth development well. The Company prepaid
$25,000 in costs. The funds came from Company cash. If hydrocarbons are located
in commercial quantity, the Company will be responsible for approximately
$18,000 in additional costs to test and equip this fifth well. The funds will
come from Company cash.

     Other than the events described, the Company does not have any material
plans for future capital expenditures at the present time.

IMPACT OF INFLATION

     Inflation has not had a significant impact on the Company's results of
operations.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

     Certain statements contained in this report, including statements
containing the words "believes," "anticipates," "intends," "expects,"
"estimates," and "plans" and words of similar import, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and are subject to the safe harbors created
thereby. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that may cause the actual results to
be materially different from the forward-looking statements. Such factors
include, among others, the following, the risk that the working interests in the
SAEC oil and gas properties and the operations of SA Oil may not be profitable;
the risk that the Company will continue to recognize losses from operations
unless and until the Company is able to make profitable acquisitions; the risk
that all of the foregoing factors or other factors could cause fluctuations in
the Company's operating results and the price of the Company's common stock; the
risk that the investment by the Company in Scottsdale Thompson Peak, LLC may not
be profitable; and other risks detailed in this report and from time to time in
the Company's other filings with the Securities and Exchange Commission. Given
these uncertainties, readers should not place undue reliance on such
forward-looking statements.

RECENT ACCOUNTING PRONOUNCEMENTS

     On May 15, 2003, the Financial Accounting Standards Board issued Statement
No. 150, ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF
BOTH LIABILITIES AND EQUITY. Statement No. 150 requires issuers to classify as
liabilities (or assets in some circumstance) three classes of freestanding
financial instruments that embody obligations for the issuer. Generally,
Statement No. 150 is effective for financial instruments entered into or
modified after May 31, 2003 and is otherwise effective at the beginning of the
first interim period beginning after June 15, 2003. The Company adopted the
provisions of Statement No. 150 on July 1, 2003. The Company has not entered
into any financial instruments within the scope of Statement No. 150 and has
determined its implementation on July 1, 2003 had no effect on the Company's
consolidated financial statements.

     In April 2003, the Financial Accounting Standards Board issued Statement
No. 149 ("SFAS 149"), AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVTITIES, which amends and clarifies financial accounting and

                                       13
<PAGE>

reporting for derivative instruments, including certain derivative instruments
embedded in other contracts. SFAS 149 is effective for contracts entered into or
modified after June 30, 2003 and for hedging relationships designated after June
30, 2003. The Company has not entered into any financial instruments within the
scope of Statement No. 149 and has determined its implementation on June 30,
2003 had no effect on the Company's consolidated financial statements.

     In January 2003, the FASB issued Interpretation No. 46 ("Interpretation
46"), CONSOLIDATION OF VARIABLE INTEREST ENTITIES, AN INTERPRETATION OF ARB NO.
51. This interpretation of Accounting Research Bulletin No. 51, CONSOLIDATED
FINANCIAL STATEMENTS, addresses consolidation by business enterprises of
variable interest entities (selected entities with related contractual,
ownership, voting or other monetary interests, including certain special purpose
entities), and requires certain additional disclosure with respect to these
entities. The provisions of Interpretation 46 are immediately applicable to
variable interest entities created after January 31, 2003. In December 2003, the
FASB issued a revision to Interpretation 46, commonly referred to as
Interpretation No. 46R ("Interpretation 46R"). The objective of Interpretation
46R was to provide additional clarification to Interpretation 46 and require
public entities to identify those entities that are considered special purpose
entities (SPEs) in which they have variable interests and to apply the
provisions of either Interpretation 46 of 46R at December 31, 2003. The full
provisions of Interpretation 46R will be required by the Company for the first
annual reporting period beginning after December 15, 2004. Currently the Company
believes that the adoption of Interpretation 46R will not have a material effect
on the Company's financial condition or results of operations.

     In December 2003, FASB Statement No. 132 (revised), EMPLOYERS' DISCLOSURES
ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS, was issued. Statement 132
(revised) prescribes employers' disclosures about pension plans and other
postretirement benefit plans; it does not change the measurement or recognition
of those plans. The Statement retains and revises the disclosure requirements
contained in the original Statement 132. It also requires additional disclosures
about the assets, obligations, cash flows, and net periodic benefit cost of
defined benefit pension plans and other postretirement benefit plans. The
Statement generally is effective for fiscal years ending after December 15,
2003. The Company adopted Statement No. 132 upon issuance and Management has
determined that there was no effect on the Company's consolidated financial
statements.

                                       14
<PAGE>

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                Index                                       Page
                                -----                                       ----

Stratford American Corporation and Subsidiaries Consolidated
Financial Statements

     Independent Auditors' Report                                            16

     Consolidated Balance Sheet at December 31, 2003                         17

     Consolidated Statements of Operations for the years ended
     December 31, 2003 and 2002                                              18

     Consolidated Statements of Shareholders' Equity
     for the years ended December 31, 2003 and 2002                          19

     Consolidated Statements of Cash Flows for the years ended
     December 31, 2003 and 2002                                              20

     Notes to Consolidated Financial Statements                              21

Certain schedules are omitted as the required information is inapplicable or not
present in amounts sufficient to require submission of the schedule, or because
the required information is presented in the consolidated financial statements
or notes thereto.

                                       15
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Stratford American Corporation:



We have  audited  the  accompanying  consolidated  balance  sheet  of  Stratford
American  Corporation and  subsidiaries as of December 31, 2003, and the related
consolidated statements of operations,  shareholders' equity, and cash flows for
each of the  years  in the  two-year  period  ended  December  31,  2003.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We conducted our audits 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  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial position of Stratford American
Corporation  and  subsidiaries as of December 31, 2003, and the results of their
operations  and their  cash flows for each of the years in the  two-year  period
ended  December 31, 2003, in conformity  with  accounting  principles  generally
accepted in the United States of America.

                                          /s/ KPMG LLP


Phoenix, Arizona
February 20, 2004


                                       16
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2003

                                     ASSETS

Cash and cash equivalents                                          $    705,000
Receivables:
   Oil and gas                                                           95,000
   Related party                                                         17,000
Oil and gas interests, net                                            1,230,000
Real estate investments, net                                         24,566,000
Loan fees, net                                                          310,000
Deferred rent                                                           389,000
Other assets                                                            190,000
                                                                   ------------

                                                                   $ 27,502,000
                                                                   ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable                                                   $     59,000
Accrued liabilities                                                     222,000
Notes payable                                                        23,800,000
                                                                   ------------

       Total liabilities                                             24,081,000

Minority interest in consolidated subsidiary                            258,000


Shareholders' equity
   Non-redeemable preferred stock, par value, $.01 per share;
     authorized 50,000,000 shares, none issued
   Common stock, par value $.01 per share; authorized
     100,000,000 shares;  issued and outstanding 11,078,105
     shares                                                             111,000
   Additional paid-in capital                                        28,511,000
   Accumulated deficit                                              (25,448,000)
   Treasury stock, 1,967 shares at cost                                 (11,000)
                                                                   ------------

                                                                      3,163,000
                                                                   ------------

                                                                   $ 27,502,000
                                                                   ============

          See accompanying notes to consolidated financial statements.

                                       17
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                                  2003            2002
                                                              ------------    ------------
<S>                                                           <C>             <C>
REVENUES:

   Oil and gas revenues                                       $    737,000    $    591,000
   Property rental income                                        2,485,000         121,000
   Gain on restructuring of payables                               614,000               0
   Interest and other income                                       121,000          49,000
                                                              ------------    ------------
                                                                 3,957,000         761,000
EXPENSES:

   General and administrative                                      642,000         450,000
   Depreciation, depletion and amortization                        825,000         301,000
   Oil and gas operations                                          207,000         198,000
   Property rental operations                                        5,000           4,000
   Interest                                                      1,572,000         155,000
                                                              ------------    ------------
                                                                 3,251,000       1,108,000
                                                              ------------    ------------

Net income (loss) before minority interest and income taxes        706,000        (347,000)

Minority interest share of net (income) loss                       (72,000)          2,000
                                                              ------------    ------------

Net income (loss) before income taxes                              634,000        (345,000)

Income tax expense                                                  12,000           4,000
                                                              ------------    ------------
Net income (loss)                                             $    622,000    $   (349,000)
                                                              ============    ============

Basic and diluted net income (loss) per share                 $       0.06    $      (0.05)
                                                              ============    ============

Shares used to compute income (loss) per share                  10,404,132      10,078,105
                                                              ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       18
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                 Common Stock             Additional                          Treasury Stock              Total
                         ----------------------------       Paid-in      Accumulated    ---------------------------    Shareholders'
                            Shares          Amount          Capital        Deficit         Shares         Amount          Equity
                         ------------    ------------    ------------   ------------    ------------   ------------    ------------
<S>                      <C>             <C>             <C>            <C>              <C>           <C>             <C>
Balance,
   December 31, 2001        6,878,105    $     69,000    $ 27,496,000   $(25,721,000)          1,967   $    (11,000)   $  1,833,000
   Common stock issued      3,200,000          32,000         708,000                                                       740,000
   Net loss                                                                 (349,000)                                      (349,000)
                         ------------    ------------    ------------   ------------    ------------   ------------    ------------
Balance,
   December 31, 2002       10,078,105         101,000      28,204,000    (26,070,000)          1,967        (11,000)      2,224,000
   Common stock issued      1,000,000          10,000         307,000                                                       317,000
   Net income                                                                622,000                                        622,000
                         ------------    ------------    ------------   ------------    ------------   ------------    ------------
Balance,
   December 31, 2003       11,078,105    $    111,000    $ 28,511,000   $(25,448,000)          1,967   $    (11,000)   $  3,163,000
                         ============    ============    ============   ============    ============   ============    ============
</TABLE>


           See accompanying notes to consolidated financial statements

                                       19
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                         2003            2002
                                                                     ------------    ------------
<S>                                                                  <C>             <C>
CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
Net income (loss)                                                    $    622,000    $   (349,000)
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
   Minority interest income (loss)                                         72,000          (2,000)
   Gain on restructuring of notes payable                                (614,000)              0
   Gain on sale of investment in LLC                                     (114,000)              0
   Depreciation, depletion and amortization                               825,000         301,000
   Amortization of deferred loan fees                                      28,000           2,000

Changes in assets and liabilities:
   Decrease (increase) in accounts, mortgage and other receivables        269,000        (275,000)
   Increase in deferred rent                                             (389,000)              0
   Increase in other assets                                               (45,000)        (15,000)
   Increase (decrease) in accounts payable                                (56,000)         60,000
   Increase in accrued liabilities                                        122,000          74,000
                                                                     ------------    ------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                       720,000        (204,000)
                                                                     ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of investment in LLC                                684,000               0
   Investment in LLC                                                       (6,000)        (14,000)
   Purchase of real estate property                                             0     (25,244,000)
   Purchase of oil and gas interests                                      (91,000)       (753,000)
   Purchases of property and equipment                                    (23,000)        (17,000)
   Proceeds from minority interest                                              0         187,000
                                                                     ------------    ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITES                        564,000     (25,841,000)
                                                                     ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from real estate financing                                          0      24,950,000
   Proceeds from issuance of common stock                                       0         500,000
   Payments on notes payable                                             (734,000)       (453,000)
                                                                     ------------    ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                      (734,000)     24,997,000
                                                                     ------------    ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      550,000      (1,048,000)

CASH AND CASH EQUIVALENTS, beginning of year                              155,000       1,203,000
                                                                     ------------    ------------
CASH AND CASH EQUIVALENTS, end of year                               $    705,000    $    155,000
                                                                     ============    ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Interest paid during the period                                   $  1,639,000    $     83,000
                                                                     ============    ============
   Taxes paid during the period                                      $     11,000    $      6,000
                                                                     ============    ============
NON-CASH INVESTING AND FINANCING ACTIVITIES:
   Non-cash investment in LLC                                        $          0    $     18,000
                                                                     ============    ============
   Non-cash issuance of common stock for loan guarantees             $          0    $    240,000
                                                                     ============    ============
   Non-cash issuance of common stock related to restructuring
   of notes payable                                                  $    317,000    $          0
                                                                     ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       20
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002


NOTE 1 - NATURE OF BUSINESS

     Stratford American Corporation and its subsidiaries (the "Company") are
engaged in the businesses of the ownership of real estate and natural resource
exploration and development. The Company has no other significant operations.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

ESTIMATES

     The Consolidated Balance Sheet and Statements of Operations have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
the Company to make certain estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to investments, oil and gas interests and
contingencies and litigation. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

PRINCIPLES OF CONSOLIDATION AND PRESENTATION

     The consolidated financial statements include the accounts of the Company
and its wholly owned and majority owned subsidiaries. All significant
inter-company accounts and transactions have been eliminated in consolidation.
Minority interest expense is recorded for the 20% minority interest held by
outside investors in Scottsdale Thompson Peak, LLC.

CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. The carrying amount
approximates fair value because of the short maturity of the financial
instruments.

INVESTMENTS

     The Company recorded a $500,000 investment for the Triway Land Investors,
LLC ("Triway") The investment related to the purchase of real estate property in
2000. In September 2001, the Company contributed an additional $32,000 to
Triway. In April 2002 and January 2003, the Company contributed an additional
$14,000 and $18,000, respectively, to Triway. In August, 2003 the Company sold
its investment in Triway. (See Note 3)

REVENUE RECOGNITION

     The Company uses the sales method of accounting for crude oil revenues and
for natural gas reserves. Under this method, revenues are recognized based on
actual volumes of oil and gas sold to the purchasers. Revenue from property
rental is recognized straight-line over the life of the lease.

                                       21
<PAGE>

CONCENTRATION OF CREDIT RISK

     Financial instruments that potentially expose the Company to concentrations
of credit risk consist primarily of unsecured accounts receivable from crude oil
and natural gas purchases and the potential that the single tenant of the
building owned by STP may not be able to pay rents as agreed upon in the
bondable lease agreement.

PROPERTY AND EQUIPMENT

     Oil and Gas Properties. The Company utilizes the successful efforts method
of accounting for its oil and gas properties as promulgated by Statement of
Financial Accounting Standards No. 19, "Financial Accounting and Reporting by
Oil and Gas Producing Companies." Under this method all costs associated with
productive wells are capitalized while nonproductive exploration costs are
expensed. Capitalized costs relating to proven properties are depleted using the
straight-line method over a period of five to seven years.

     Capitalized costs of individual properties abandoned or retired are charged
to accumulated depletion, depreciation and amortization. Proceeds from sales of
individual properties are credited to property costs. No gain or loss is
recognized until the entire amortization base is sold or abandoned.

IMPAIRMENT OF LONG-LIVED ASSETS

     In accordance with SFAS No. 144, long-lived assets, such as property, plant
and equipment, and purchased intangibles subject to amortization, are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to estimated undiscounted future cash flows expected to be generated by the
asset. If the carrying amount of an asset exceeds its estimated future cash
flows, an impairment charge is recognized by the amount by which the carrying
amount of the asset exceeds the fair value of the asset. Assets to be disposed
of would be separately presented in the balance sheet and reported at the lower
of the carrying amount or fair value less costs to sell, and are no longer
depreciated. The assets and liabilities of a disposed group classified as held
for sale would be presented separately in the appropriate asset and liability
sections of the balance sheet.

ENVIRONMENTAL

     The Company is subject to extensive Federal, state and local environmental
laws and regulations. These laws, which are constantly changing, regulate the
discharge of materials into the environment. Environmental changes affecting the
oil and gas properties in which the Company owns interests may have an impact on
the Company's future financial position or results of operations.

INCOME TAXES

     Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

                                       22
<PAGE>

NET INCOME (LOSS) PER COMMON SHARE

     The Company calculated basic and diluted net income (loss) per share in
accordance with the provisions of Statement of Financial Accounting Standards
No. 128 "EARNINGS PER SHARE." Basic net income (loss) per share is computed
using the weighted-average number of common shares outstanding during each
period. Diluted income (loss) per share reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the income of the Company. In calculating diluted net
income (loss) per share for 2003 and 2002, respectively, 480,000 dilutive
securities equivalents consisting of stock options have been excluded because
their inclusion would have been antidilutive.

EMPLOYEE STOCK OPTIONS

     The Company has elected to follow Accounting Principles Board Opinion No.
25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25) and related
interpretations in accounting for its employee stock options and to adopt the
"disclosure only" alternative treatment under Statement of Financial Accounting
Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION (SFAS 123). SFAS 123
requires the use of fair value option valuation models that were not developed
for use in valuing employee stock options. Under SFAS No. 123, deferred
compensation is recorded for the excess of the fair value of the stock on the
date of the option grant, over the exercise price of the option. The deferred
compensation is amortized over the vesting period of the option.

     Had the Company determined compensation cost based on the fair value at the
grant date for its stock options under SFAS No. 123, the Company's pro forma net
income (loss) and income (loss) per share would have been:

                                                       Years ended December 31,
                                                          2003          2002
                                                       ----------    ----------

Net income (loss):
   As reported                                         $  622,000    $ (349,000)
                                                       ==========    ==========
Deduct:
   Total stock-based employee compensation
   expense determined under fair value method
   for stock options                                   $        0    $        0
                                                       ==========    ==========
Pro forma                                              $  622,000    $ (349,000)
                                                       ==========    ==========
Basic and diluted income (loss) per share:
   As reported                                         $     0.06    $    (0.05)
                                                       ==========    ==========
Pro forma                                              $     0.06    $    (0.05)
                                                       ==========    ==========

RECLASSIFICATIONS

     Certain reclassifications have been made to the prior year's consolidated
financial statement amounts to conform to the current year presentation.

                                       23
<PAGE>

NOTE 3 - REAL ESTATE INVESTMENTS

     On December 11, 2002, the Company, along with other investors, completed
the purchase of an office building leased by a single tenant located at 20225
North Scottsdale Road, Scottsdale, Arizona (the "Property") for $25,484,000,
which reflects the purchase price and closing costs incurred. The Company
intends to continue this use of the building. The Property is held by Scottsdale
Thompson Peak, LLC, an Arizona limited liability company ("STP"). The Company
owns 80% of the membership interests in, and is the manager of STP. The Company
contributed $750,000 in cash and its 80% undivided interest in the Property in
return for its 80% membership interest in STP, and other investors contributed
$187,000 in cash and their 20% undivided interest in the Property in return for
the remaining 20% of the membership interests in STP.

     The Company's cash contribution of $750,000 came from company cash of
$250,000 and the proceeds of the sale by the Company of 2,000,000 shares of
Company common stock for $500,000. STP funded the purchase of the Property
through a combination of the cash contributions described above and loans
obtained by the LLC in the aggregate amount of $24,300,000. A loan of
$20,000,000 is financed with a 5.9% interest rate, twenty-two year straight-line
amortization note and is guaranteed by JDMD Investments, LLC, a major
shareholder of the Company. A loan of $2,500,000 is financed with a 6% interest
rate, interest only note, for a period of two years, due December 11, 2004, and
is guaranteed 50% by JDMD Investments, LLC and 50% by Diamond Ventures, Inc. A
loan of $1,800,000 is financed with a 10% interest rate note, interest only, for
a period of two years, due December 2, 2004. The Company also issued a total of
1,200,000 shares of its common stock (valued at $0.20 per share) to JDMD
Investments, LLC, a major shareholder of the Company, for its agreement to
guarantee payment of certain exceptions or carve outs on the first mortgage, the
guarantee of 50% of the $2,500,000 bank loan, the assignment of all its
interests in finding and negotiating the purchase of the Property, and obtaining
the mortgage loan and other financing involved. This $240,000 is recorded as a
loan fee and is being amortized monthly, pro-rata over the life of the loans. At
December 31, 2003, the net book value of the loan fee was $215,000.

     The building is leased 100% by a single tenant. Annual basic rent for years
one through five is $2,096,000. In years six, eleven, and sixteen of the lease,
the annual basic rents are escalated by 10% of the prior years rent. The Company
is reporting results from this lease as an operating lease. As such, total
revenue anticipated for the life of the lease is recognized in equal annual
installments. If the amount of cash received is less than the revenue
recognized, the difference is recorded as deferred revenue. The lease is a
bondable, fully triple net twenty-two year lease. The lease commenced on
December 9, 2002 and will expire on December 31, 2024 (excluding unexercised
extensions). Three, five-year renewal options are available to the tenant. The
gross basic rents to be received are as follows:

            Year ending December 31:
            2004                               $  2,096,000
            2005                                  2,096,000
            2006                                  2,096,000
            2007                                  2,096,000
            2008                                  2,306,000
            Thereafter                           41,437,000
                                               ------------
                                               $ 52,127,000

     The Company records depreciation expense on a straight-line basis over the
expected life of the building. The expected life of the building is forty years.
The Company recorded an asset of $25,484,000 for the office building, land and
associated closing costs. As of December 31, 2003, depreciation expense in the

                                       24
<PAGE>

amount of $578,000 and amortization of loan fees of $30,000 have been recorded,
leaving a net asset of $24,876,000.

     Had the purchase been completed as of January 1, 2002, the Company would
have reported the following:

                                                      For the Year Ended
                                                       December 31, 2002
                                                      ------------------
                                                          (Unaudited)

     Total revenue                                       $  3,105,000
     Net income (loss)                                   $    (14,000)
     Basic and diluted net income (loss) per share       $      (0.00)
     Pro Forma weighted average shares outstanding         10,078,105

     On October 26, 2000, the Company through its membership in Triway, a
limited liability company with two additional members, entered into an operating
agreement to acquire real property in Scottsdale, Arizona. The acquisition price
of the real property acquired by Triway, approximately 10 acres, was $3,600,000.
As a result, the Company made a $500,000 equity investment in Triway. According
to the operating agreement, the Company and a majority interest member of Triway
were required to make additional contributions up to a proportionate specified
amount. As of August 5, 2003, the Company had contributed a total of $570,000 to
Triway. On August 5, 2003, Triway sold the real property for $4,799,000. After
all expenses were deducted, the Company received a cash distribution of $684,000
for its membership interest in Triway. The Company recognized a gain of $114,000
from the sale of its investment in Triway, which is reflected in interest and
other income in the accompanying Consolidated Statements of Operations.

NOTE 4 - OIL AND GAS ACTIVITIES

     On June 5, 2002, the Company, through its wholly owned subsidiary Stratford
American Energy Corporation, purchased working interests in 23 oil and gas
properties located in Oklahoma and Texas, effective April 1, 2002. In 2003, the
Company elected to participate proportionately in the drilling of four
development wells. Total capitalized costs of the SAEC properties and
accumulated depletion and amortization are as follows:

                                                        December 31, 2003
                                                        -----------------

     Acquisition of oil and gas interests                   $ 694,000
     Development costs                                         89,000
     Less accumulated depletion and amortization             (175,000)
                                                            ---------
                                                            $ 608,000
                                                            =========

     The Company recognized depletion expense of $99,000 and $74,000 for the
years ended December 31, 2003 and 2002, respectively and amortization expense of
$1,000 for each of the years ended December 31, 2003 and 2002.

     In addition to the oil and gas interests, acquisition costs of $68,000 are
being amortized equally over a seven-year period. The Company recognized
amortization expense of $10,000 and $7,000 for the years ended December 31, 2003

                                       25
<PAGE>

and 2002, respectively. Total accumulated amortization of acquisition costs is
$17,000 at December 31, 2003, leaving net acquisition costs of $51,000 on the
books of the Company.

     On April 19, 2001, the Company purchased 100% of the capital stock of SA
Oil and Gas Corporation ("SA Oil"), from the shareholders of SA Oil, in exchange
for 755,948 shares of common stock of the Company. SA Oil owns working and/or
royalty interests in 87 oil and gas properties located in Oklahoma and Texas.
Total capitalized costs of the SA Oil properties and accumulated depletion and
amortization are follows:

                                                        December 31, 2003
                                                        -----------------

     Oil and gas interests                                 $ 3,654,000
     Development costs                                           2,000
     Less accumulated depletion and amortization            (3,040,000)
                                                           -----------
                                                           $   616,000
                                                           ===========

     Oil and gas interests are being depleted equally over a seven-year period,
which is the estimated life of the wells. The Company recognized depletion
expense of $134,000 for each of the years ended December 31, 2003 and 2002 and
amortization expense of $20,000 and $15,000 for the years ended December 31,
2003 and 2002, respectively.

     In addition to the oil and gas interests, acquisition costs of $48,000 are
being amortized equally over a seven-year period. The Company recognized
amortization expense of $7,000 for each of the years ended December 31, 2003 and
2002. Total accumulated amortization of acquisition costs is $19,000 at December
31, 2003, leaving net acquisition costs of $29,000 on the books of the Company.

     Stratford American Resource Corporation originally paid $38,000 for a
nominal working interest in four oil and gas wells. Accumulated depletion to
date is $32,000, leaving a net asset of $6,000 on the books of the Company at
December 31, 2003.

     Total net oil and gas interests at December 31, 2003 are $1,230,000. Total
net acquisition costs relating to the oil and gas properties are $80,000 at
December 31, 2003.

NOTE 5 - NOTES PAYABLE

     Notes payable consist of the following as of December 31, 2003:

     Note payable to Allianz Life Insurance Company, due
       November 15, 2024, principal and interest due monthly
       at 5.9%, collateralized by the Deed of Trust, Assignment
       of Rents and Security Agreement                             $ 19,500,000

     Note payable to Woodforest National Bank, due
       December 11, 2004, interest due monthly at 6%                  2,500,000

     Note payable to Southwest Holdings, Ltd, a related party,
       due December 2, 2004, interest due monthly at 10%              1,800,000
                                                                   ------------
                                                                   $ 23,800,000
                                                                   ============

                                       26
<PAGE>

     Principal payments on notes payable are as follows:

            Year ending December 31:
            2004                               $   4,749,000
            2005                                     518,000
            2006                                     550,000
            2007                                     583,000
            2008                                     618,000
            Thereafter                            16,782,000
                                                ------------
                                                $ 23,800,000
                                                ============

NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS

     Statement of Financial Accounting Standards No. 107, "DISCLOSURES ABOUT
FAIR VALUE OF FINANCIAL INSTRUMENTS", requires that the Company disclose
estimated fair values for its financial instruments.

     The carrying amount of cash and cash equivalents, receivables, accounts
payable and accrued liabilities approximates fair value as they are expected to
be collected or paid within 90 days of year end.

     The terms of the Company's notes payable approximate the terms in the
marketplace at which it could be replaced. Therefore, the fair value
approximates the carrying value of the financial instrument.

LIMITATIONS

     Fair value estimates are made at a specific point in time and are based on
relevant market information and information about the financial instrument; they
are subjective in nature and involve uncertainties, matters of judgment and,
therefore, cannot be determined with precision. These estimates do not reflect
any premium or discount that could result from offering for sale at one time the
Company's entire holdings of a particular instrument. Changes in assumptions
could significantly affect these estimates.

     Since the fair value is estimated as of December 31, 2003, the amounts that
will actually be realized or paid at settlement or maturity of instruments could
be significantly different.

NOTE 7 - STOCK OPTION PLAN

     In July 1998, the Company adopted a Stock Option Plan (the "Plan"). Common
stock reserved for grants to key employees of the Company under the Plan in each
calendar year is based on a percentage of total common stock outstanding in each
such calendar year. The aggregate number of shares of common stock for which
options may be granted or for which stock grants may be made to any one
individual participating in the Plan may not exceed 500,000 shares per year or
2,000,000 shares over the term of the Plan. Options become exercisable over a
specific period of continuous employment according to each grant awarded, but
may not be exercised more than ten years from the Date of Grant. The options
under the Plan were granted at the fair market value of the Company's stock at
the date of grant as determined by the Company's Board of Directors.

                                       27
<PAGE>

     The following table summarizes information about the stock options
outstanding at December 31, 2003:

<TABLE>
<CAPTION>
                                          Weighted
                                           Average     Weighted                 Weighted
Date of      Range of                     Remaining    Average                  Average
Original     Exercise        Options     Contractual   Exercise     Options     Exercise
 Grant         Price       Outstanding      Life        Price     Exercisable    Price
--------   -------------   -----------   -----------   --------   -----------   --------
<C>        <C>             <C>           <C>           <C>        <C>           <C>
11/09/98   $0.50               100,000           1.9   $   0.50       100,000   $   0.50
10/11/99   $0.79 - $0.80       190,000            .8       0.80       190,000       0.80
01/03/00   $1.25               190,000           1.0       1.25       190,000       1.25
                           -----------   -----------   --------   -----------   --------
           $0.50 - $1.25       480,000           1.1   $   0.92       480,000   $   0.92
                           ===========   ===========   ========   ===========   ========
</TABLE>

     In January 2000, the Board granted stock options to certain directors to
purchase 190,000 shares of common stock. The 2000 options are exercisable at
$1.25 per share, fully vested at grant date, and expire January 2005. 100,000
options originally granted to certain directors in 1998 and previously extended
expired on November 2003. The Board extended these options with an exercise
price of $0.50 for a period of two years with a new expiration date of November
2005. The fair value on the extension date was less than the exercise price;
therefore, no compensation expense was recorded. In October 2002, 50,000 options
granted to a consultant for services performed in 1999 expired. The options were
fully vested at grant date and were valued at $15,000 and charged to
compensation expense in 1999. The Board extended these options with an exercise
price of $0.79 for a period of 2 years with a new expiration date of October
2004. Immediately prior to the extension being granted, the fair value of these
options, as determined using the Black-Scholes model, was zero. The fair value
at the extension date was less than the exercise price; therefore, no
compensation expense was recorded in 2003.

     At December 31, 2003 the per share weighted-average fair value of stock
options extended was zero using the Black-Scholes option-pricing model. The
following weighted-average assumptions were used for 2003: average exercise
price of $0.50, market price of $0.25, expected dividend yield 0%, expected
volatility of 3%, risk free interest rate of 3% and an expected life of 2 years.
No new options were granted in 2003.

     At December 31, 2003, the range of exercise prices and weighted average
remaining on contractual life of options was $.50 - $1.25 and 1.1 years,
respectively.

                                                       Weighted Average Exercise
                                          Number            Price Per Share
                                          ------       -------------------------

      Outstanding, December 31, 2001      480,000               $ 0.92
         Granted                                0                    0
         Canceled                               0                    0
         Exercised                              0                    0
                                          -------               ------
      Outstanding, December 31, 2002      480,000               $ 0.92
                                          =======               ======

         Granted                                0                    0
         Canceled                               0                    0
         Exercised                              0                    0
                                          -------               ------
      Outstanding, December 31, 2003      480,000               $ 0.92
                                          =======               ======

                                       28
<PAGE>

NOTE 8- SHAREHOLDERS' EQUITY

     On December 12, 2002, the Company issued 1,800,000 shares of its common
stock to the DRD-97 Trust in exchange for $450,000 in cash and issued 200,000
shares of common stock to David Goldstein for $50,000 in cash. The DRD-97 Trust
and David Goldstein are related parties. The shares were valued at $0.25 per
share.

     On December 12, 2002, the Company issued 1,200,000 shares of common stock
in the Company to JDMD Investments, LLC, a related party, valued at $0.20 per
share, in exchange for its agreement to guarantee payment of certain exceptions
or carve outs on the first mortgage, the guarantee of 50% of a $2,500,000 bank
loan, the assignment of all its interests in finding and negotiating the
purchase of the Property, and obtaining the mortgage loan and other financing
involved.

     On September 4, 2003, the Company issued 1,000,000 shares of its common
stock to Bulgheroni SPA, a shareholder, in exchange for full satisfaction of an
outstanding note payable of $903,000, along with accrued interest of $28,000.
The market value of the shares at issue date was $0.20 per share This
transaction resulted in a gain of $614,000 which is reflected as a gain on
restructuring of payables and an increase in additional paid-in capital of
$307,000, $190,000 of which represents excess of fair market value over par
value of the shares issued and $117,000 of which is deemed a capital
contribution from the aforementioned shareholder.

NOTE 9 - INCOME TAXES

     Income taxes from continuing operations totaled $12,000 for the year ended
December 31, 2003. A reconciliation of the provision for income taxes on income
from continuing operations and the amount that would be computed using the
statutory federal income tax rate for the year ended December 31 was as follows:

                                                    2003
                                               -------------
     Computed income taxes at statutory
       federal income rate of 34%              $     216,000         34.00%
     State income taxes, net of federal
       effect                                          5,000           .78%

     Change in federal valuation allowance          (238,000)      - 37.46%
     Other                                            29,000          4.57%
                                               -------------       --------
                                               $      12,000          1.89%
                                               =============       ========

The provision for income taxes on income from continuing operations for the year
ended December 31, 2003 consisted of the following:

                         Current        Deferred         Total
                         -------        --------        -------

     Federal             $ 4,000        $      0        $ 4,000
     State                 8,000               0          8,000
                         -------        --------        -------
                         $12,000        $      0        $12,000
                         =======        ========        =======

                                       29
<PAGE>

     The following carryforwards are available at December 31, 2003, to offset
future taxable income and income taxes as follows:

                                        Year Expires       Amount
                                        ------------     ----------

     Net operating loss                   2004-2022      $9,407,000
     General business credit                2019              5,000
     Alternative minimum tax credit                          78,000

If certain substantial changes in the Company's ownership should occur, there
would be an annual limitation on the amount of the carryforwards which can be
utilized, which could potentially impair the ability to utilize the full amount
of the carry forward.

     Deferred income tax assets (liabilities) included in the Consolidated
Balance Sheet at December 31, 2003 consisted of the following:

      Deferred tax asset:
      Allowance for mining interest impairment                      $   369,000
      Net operating loss carryforwards and federal tax credits        3,210,000
      Differences in depreciation and depletion                         230,000
                                                                    -----------

      Total deferred tax assets before valuation allowance            3,809,000

      Valuation allowance                                             3,654,000
                                                                    -----------

      Net deferred tax asset                                            155,000

      Deferred tax liability:
      Deferred rental income                                           (155,000)

      Net deferred taxes                                            $         0
                                                                    ===========

     The valuation allowance for the deferred tax assets as of January 1, 2003
was $3,921,000. The net change in the total valuation allowance for the year
ended December 31, 2003 was a decrease of $267,000.

NOTE 10 - OPERATING LEASE COMMITMENTS

     The aggregate future minimum lease commitments under a non-cancelable
operating lease for the Stratford American Corporation corporate offices are as
follows:

         Year ending December 31:
         2004                                          $87,000

     The Company has no options for renewal under the current lease.

     Rent expense, including base rent and additional charges, was $119,000 and
$105,000 for the years ended December 31, 2003 and 2002, respectively. Rental
expense for each of the two years was reduced by income received from subleases.

                                       30
<PAGE>

NOTE 11 - RELATED PARTY TRANSACTIONS

     During 2003, the Company received $68,000 from two companies that are
partially owned by four of the Company's executives or directors. These receipts
were reimbursements for administrative expenses incurred by the Company on
behalf of the related parties. These are recorded as a reduction of general and
administrative expense for 2003. At December 31, 2003, $17,000 of these
reimbursements is included in related party receivables.

     During 2003, the Company received $6,000 from a Company that is partially
owned by four of the Company's executives or directors for a month-to-month
sublease of the Company's offices. This is recorded as a reduction in rental
expense, included in the general and administrative expense. This arrangement
ended June 30, 2003 and all of the sublease payments had been received.

     Effective November 1, 2003, the Company entered into a month-to-month
sublease of the Company's offices with a company that is owned by a majority
shareholder of the Company. The monthly rent is $2,000, which is at market rate.
This was recorded as a reduction in rental expense, included in general and
administrative expense. At December 31, 2003, all of the sublease payments had
been received.

     At December 31, 2002, a note payable of $200,000, due in June 2003, bearing
an interest rate of 10%, with principal and all accrued interest due at
maturity, was owed to a major shareholder of the Company. On April 1, 2003, the
note and all the accrued interest was paid in full.

NOTE 12 - NET INCOME (LOSS) PER SHARE

The computation of basic and diluted net loss per share are as follows:

                                                       Years Ended December 31,
                                                          2003          2002
                                                      -----------   -----------

Net income (loss)                                     $   622,000   $  (349,000)
                                                      ===========   ===========

Weighted average common shares outstanding - basic     10,404,132     7,053,447
                                                      ===========   ===========

Net income (loss) per share - basic                   $      0.06   $     (0.05)
                                                      ===========   ===========

Weighted average common shares outstanding - basic     10,404,132     7,053,447
Effect of dilutive securities - stock options                   0             0
                                                      -----------   -----------

Weighted average common shares outstanding - diluted   10,404,132     7,053,447
                                                      ===========   ===========

Net income (loss) per share - diluted                 $      0.06   $     (0.05)
                                                      ===========   ===========

Stock options not included in diluted income (loss)
per share                                                 480,000       480,000
                                                      ===========   ===========

NOTE 13 - OPERATING SEGMENTS

     The following summarize information about the Company's operations by
business operating segments for the years ended December 31, 2003 and 2002. The
segment "Oil & Gas" includes working and or/royalty interests in oil and gas
properties that are primarily located in Oklahoma and Texas, as described in
Note 4 of the consolidated financial statements as of December 31, 2003. The
segment "Real Estate" includes an office building, leased to a single tenant,
located in Scottsdale, Arizona, as described in Note 3 of the consolidated

                                       31
<PAGE>

financial statements as of December 31, 2003. The segment "Other" includes the
results of the sale of the Company's investment in Triway Land Investors, LLC,
the restructuring of payables and other corporate activities. The segment
"Elimination" includes intercompany eliminations.

<TABLE>
<CAPTION>
                                   Oil & Gas     Real Estate        Other        Elimination        Total
                                  -----------   -------------    ------------    -----------    ------------
<S>                               <C>           <C>              <C>             <C>            <C>
DECEMBER 31, 2003

Total revenue                     $   737,000   $   2,485,000    $    798,000    $   (63,000)   $  3,957,000

Net income before income taxes        221,000         342,000          71,000              0         634,000

Identifiable assets                 1,482,000      25,430,000         590,000              0      27,502,000

Depreciation, depletion and
amortization expense                  279,000         534,000          12,000              0         825,000

Interest expense                       37,000       1,533,000           2,000              0       1,572,000

Interest income                             0               0           5,000              0           5,000

Other income                                0               0         116,000              0         116,000

Income tax expense                      8,000               0           4,000              0          12,000

Expenditures for additions
(long lived assets)                    91,000               0          23,000              0         114,000


                                   Oil & Gas     Real Estate        Other        Elimination        Total
                                  -----------   -------------    ------------    -----------    ------------
DECEMBER 31, 2002

Total revenue                         591,000         121,000          49,000              0         761,000

Net income (loss) before
income taxes                           95,000         (10,000)       (430,000)             0        (345,000)

Identifiable assets                 1,675,000      25,479,000         935,000              0      28,089,000

Depreciation, depletion and
amortization expense                  245,000          44,000          12,000              0         301,000

Interest expense                       54,000          84,000          17,000              0         155,000

Interest income                             0               0          14,000              0          14,000

Other income                                0               0          35,000              0          35,000

Income tax expense                      4,000               0               0              0           4,000

Expenditures for additions
(long lived assets)                   753,000      25,244,000          17,000              0      26,014,000
</TABLE>

                                       32
<PAGE>

NOTE 14 - COMMITMENTS AND CONTINGENCIES

     The Company has adopted the disclosure provisions of the Financial
Accounting Standards Board Interpretation No. 45, GUARANTOR'S ACCOUNTING AND
DISCLOSUE REQUIREMENTS FOR GUARANTEES, INCLUDING INDIRECT GUARANTEES OF
INDEBTEDNESS OF OTHERS. Interpretation 45 requires disclosures about obligations
under certain guarantees the guarantor has issued While the Company has various
indemnity obligations included in contracts entered into in the normal course of
business, these obligations are primarily in the form of indemnities that could
result in immaterial increases of future costs, but do not represent significant
commitments or contingent liabilities of the indebtedness of others.

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

     The Company has not changed its accountants nor had any disagreements with
accountants on matter of accounting principles or practices, financial
disclosures, or auditing scope or procedure during its two most recent fiscal
years.

ITEM 8A. CONTROLS AND PROCEDURES

     Our Chief Executive Officer, our President and our Controller, based on the
evaluation of our disclosure controls and procedures (as defined in rules
13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended)
required by paragraph (b) of Rule 13a-15 or Rule 15d-15, have concluded that, as
of December 31, 2003, our disclosure controls and procedures were effective to
ensure that the information we are required to disclose in reports that we file
or submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms. During the last fiscal quarter, there was
no change in our internal control over financial reporting identified in
connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule
15d-15 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

PART III

ITEMS 9, 10, 11 AND 12

     The information called for by Part III (Items 9, 10, 11 and 12) is
incorporated herein by reference from the material included under the captions
"Elections of Directors," "Principal Shareholders," and "Executive Compensation"
in Stratford American Corporation's definitive proxy statement (to be filed
pursuant to Regulation 14A) for its Annual Meeting of Shareholders to be held
June 30, 2004 (the "2004 Proxy Statement"). The 2004 Proxy Statement is being
prepared and is expected to be filed with the Securities and Exchange Commission
in definitive form on or about April 30, 2004, and is expected to be furnished
to shareholders on or about May 30, 2004.

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

     (a)  FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES; EXHIBITS - See
          "Item 7 - Financial Statements and Supplementary Data" above.

          The Exhibits listed on the accompanying Exhibits Index are filed as
          part of, orincorporated by reference into, this report.

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<PAGE>

          Contracts with management and any compensatory plans or arrangements
          relating to management are as follows:

          Number   Description
          ------   -----------

           10.2    Stratford American Corporation 1998 Stock Incentive Plan.
                   Incorporated by reference as Exhibit 2 to the Company's
                   Definitive Proxy Statement (Schedule 14A) for its annual
                   meeting of shareholders held on July 8, 1998, which was
                   filed with the Securities and Exchange Commission on
                   April 28, 1998.

     (b)  REPORTS ON FORM 8-K

     There were no reports on Form 8-K filed during the fourth quarter of 2003.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The following is a summary of the fees billed to us by KPMG, LLP, our
independent auditors, for professional services rendered for the fiscal years
December 31, 2003 and December 31, 2002:

Fee Category                     Fiscal 2003 Fees           Fiscal 2002 Fees
------------                     ----------------           ----------------

Audit Fees (1)                       $58,000                     $51,000
Audit-Related Fees (2)                     0                      13,000
Tax Fees (3)                          19,000                      25,000
All Other Fees                             0                           0
                                     -------                     -------

Total Fees                           $77,000                     $89,000
                                     =======                     =======

(1)  Audit Fees consist of aggregate fees billed for professional services
     rendered for the audit of our annual financial statements and review of the
     interim financial statements included in quarterly reports or services that
     are normally provided by the independent auditors in connection with
     statutory and regulatory filings or engagements for the fiscal years ended
     December 31, 2003 and December 31, 2002, respectively.
(2)  Audit-Related Fees consist of aggregate fees billed for assurance and
     related services that are reasonably related to the performance of the
     audit or review of our financial statements and are not reported under
     "Audit Fees." These fees related to a review of Form 8-K and matters
     related to the 2002 issuance of the Company's common stock.
(3)  Tax Fees consist of aggregate fees billed for professional services
     rendered for research and preparation of federal and state tax returns.

     The Audit Committee of the Board of Directors believes that the non-audit
services provided by KPMG, LLP are compatible with maintaining the auditor's
independence. None of the time devoted by KPMG, LLP on its engagement to audit
the Company's financial statements for the years ended December 31, 2003 and
2002 is attributable to work performed by persons other than KPMG, LLP
employees. Before KPMG, LLP is engaged by the Company or its subsidiaries to
render any audit or non-audit services, the engagement is approved by the Audit
Committee of the Board of Directors and all such services are approved, and were
approved, in this manner.

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<PAGE>

     SIGNATURES

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

                                    STRATFORD AMERICAN CORPORATION
                                    Registrant

Date:    March 30, 2004             By       /s/ David H. Eaton
                                       -----------------------------------------
                                       David H. Eaton, Chairman of the Board and
                                       Chief Executive Officer

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

Date:    March 30, 2004             By       /s/ David H. Eaton
                                       -----------------------------------------
                                       David H. Eaton, Chairman of the Board and
                                       Chief Executive Officer
                                       (Principal Executive Officer)


Date:    March 30, 2004             By       /s/ Mel L. Shultz
                                       -----------------------------------------
                                       Mel L. Shultz, President and Director


Date:    March 30, 2004             By       /s/ Gerald J. Colangelo
                                       -----------------------------------------
                                       Gerald J. Colangelo, Director


Date:    March 30, 2004             By       /s/ Richard H. Dozer
                                       -----------------------------------------
                                       Richard H. Dozer, Director


Date:    March 30, 2004             By       /s/ Dale M. Jensen
                                       -----------------------------------------
                                       Dale M. Jensen, Director


Date:    March 30, 2004             By       /s/ Mitchell S. Vance
                                       -----------------------------------------
                                       Mitchell S. Vance, Director


Date:    March 30, 2004             By       /s/ Daniel E. Matthews
                                       -----------------------------------------
                                       Daniel E. Matthews, Controller, Secretary
                                       and Treasurer

                                       35
<PAGE>

                                 EXHIBITS INDEX

Exhibits 21.1, 31.1,  31.2, 31.3 and 32 are filed with this report.  The Company
hereby  incorporates  all other  exhibits by reference  pursuant to Rule 12b-32,
each of which (except Exhibits 3.3, 10.9, 10.10,  10.11,  10.12,  10.13,  10.14,
10.15,  10.16,  10.17,  10.18,  10.19,  and 21.1) was filed as an exhibit to the
Company's Registration on Form 10, which was filed July 22, 1988, and amended on
October 7, 1988, and December 8, 1988.  Exhibit 3.3 was filed with the Company's
Registration  Statement on Form S-1 on June 12, 1989,  with the  Securities  and
Exchange Commission. Exhibit 10.9 was filed as Exhibit 2.1 to the Company's Form
8-K, which was filed with the Securities and Exchange  Commission on October 28,
1998.  Exhibit 10.10 was filed as Exhibit 10.39 to the Company's form 10-KSB for
the year  ended  December31,  1998,  which was  filed  with the  Securities  and
Exchange  Commission on March 31, 1999.  Exhibits 10.11,  10.12,  and 10.13 were
filed with the Company's  Form 10-KSB for the year ended December 31, 1999 which
was filed with the Securities and Exchange Commission on March 30, 2000. Exhibit
10.14 was filed with the Company's  Form 10-KSB for the year ended  December 31,
2000 which was filed with the  Securities  and Exchange  Commission on March 30,
2001.  Exhibit 10.15 was filed as Exhibit 2.1 to the Company's  Form 8-K,  which
was filed with the  Securities and Exchange  Commission on May 2, 2001.  Exhibit
10.16 was filed as Exhibit 2.1 to the Company's  Form 8-K,  which was filed with
the Securities and Exchange Commission on June 18, 2002. Exhibit 10.17 was filed
as Exhibit 2.1 to the Company's  Form 8-K,  which was filed with the  Securities
and Exchange Commission on December 26, 2002. Exhibit 10.18 was filed as Exhibit
10.1 to the Company's Form 8-K, which was filed with the Securities and Exchange
commission  on December 26, 2002.  Exhibit  10.19 was filed with Form 10-KSB for
the year  ended  December  31,  2002,  which was filed with the  Securities  and
Exchange  Commission  on March  31,  2003.  Exhibit  10.20  was  filed  with the
Company's  Definitive  Proxy Statement  (Schedule 14A) for its annual meeting of
shareholders  held on July 8,  1998,  which was filed  with the  Securities  and
Exchange Commission on April 28, 1998.

Number                          Description
------                          -----------

  3.1     Articles of Incorporation
  3.2     By-laws
  3.3     Articles of Amendment to Articles of Incorporation
  4.1     Form of Common Stock Certificate
  4.2     Form of Series "A" Preferred Stock Certificate
  4.3     Articles IV of the Articles of Incorporation
  4.4     Article III of the Bylaws
 10.1     Indemnification Agreement, dated as of May 19, 1988, between the
          Company and Mel L. Shultz
 10.2     Schedule of Omitted Indemnification Agreements
 10.3     Indemnification Agreement, dated as of February 19, 1988, relating to
          guarantees
 10.4     Indemnification Agreement, dated as of May 10, 1988, relating to
          guarantees
 10.5     Registration Agreement, dated as of February 19, 1998
 10.6     Agreement, dated as of February 18, 1988, relating to restrictions
          against preferred shares
 10.7     Trust Agreement, dated as of June 18, 1987
 10.8     Share Sale and Registration Agreement, dated January 31, 1989
 10.9     Acquisition Agreement between Stratford American Car Rental Systems,
          Inc. and Dollar Rent A Car Systems, Inc. dated September 24, 1998

                                       36
<PAGE>

 10.10    Net Lease Agreement between Stratford American Car Rental Systems,
          Inc. and Dollar Rent A Car Systems, Inc. dated October 1, 1998
 10.11    Post-Closing Statement between Dollar Rent A Car Systems, Inc. and
          Stratford American Car Rental Systems, Inc. dated January 27, 1999
 10.12    Settlement Agreement between Stratford American Resource Corporation,
          Energy Investments Advisors, Inc., Oil & Gas Advisors, Inc.,
          Petroleum Advisors & Co., Samuel B. Davis, and Hugh J. Davis, dated
          October 6, 1999
 10.13    Purchase Agreement by and between Foot Creek Corporation of Arizona
          and Grandilla (Arizona), Inc. and Stratford American Car Rental
          Systems, Inc. dated December 29, 1999
 10.14    Operating Agreement between DVI Raintree, LLC, Stratford American
          Corporation and Colonial Raintree, LLC dated October 26, 2000
 10.15    Stock Purchase Agreement, dated March 22, 2001 by and among SA Oil
          and Gas Corporation, the shareholders of SA Oil and Gas Corporation
          and Stratford American Corporation
 10.16    Purchase and Sale Agreement, dated June 5, 2002 by and between Crown
          Energy Drilling Production Fund 2001-1 Limited Partnership and
          Stratford American Energy Corporation
 10.17    Purchase and Sale  Agreement, dated July 17, 2002, by and between
          Opus West Corporation, a Minnesota corporation, and Stratford
          American Corporation
 10.18    Letter Agreement between Stratford American Corporation, JDMD
          Investments, L.L.C., Diamond Ventures, Inc., Golden Gate Apartments,
          Ltd., L.P., Auriga Properties, Inc., DRD-97 Trust and David Goldstein
 10.19    Operating Agreement of Scottsdale Thompson Peak, LLC
 10.20    Stratford American Corporation 1998 Stock Incentive Plan
 21.1     Subsidiaries
 31.1     Certification pursuant to Section 302 of the Sarbanes-Oxley Act
          of 2002
 31.2     Certification pursuant to Section 302 of the Sarbanes-Oxley Act
          of 2002
 31.3     Certification pursuant to Section 302 of the Sarbanes-Oxley Act
          of 2002
 32       Officer Certification pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002

Note: Shareholders may obtain copies of Exhibits by making written request to
the Secretary of the Corporation and paying copying costs of $0.10 per page,
plus postage.

                                       37