U.S. 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, 2004

                                       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 were $3,096,000 including
discontinued operations.

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant, based on the February 28, 2005 closing price of $0.59 per share,
as reported on the OTC Bulletin Board, was $3,169,000.

     At February 28, 2005, 11,078,105 shares of the issuer's common stock and no
shares of its preferred stock were issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Certain  portions of the  registrant's  definitive  Proxy Statement for the
2005  Annual  Meeting of  Shareholders,  expected to be filed not later than 120
days after the end of the fiscal year covered by this report,  are  incorporated
by reference into Part III of this Form 10-KSB.

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

<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

     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 natural resource exploration and development. The Company employs
four full-time employees.

     NATURAL RESOURCE PROPERTIES - OIL AND GAS. 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.

     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.

     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.

     In an attempt 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.

     The Company's oil and gas activities are subject to numerous federal,
state, and local laws and regulations governing environmental quality and
pollution control. The existence of such laws and regulations has, to date, had
no material adverse effect on the Company's operations, and the cost of
compliance has not been material. The Company is unable to assess or predict the
impact that compliance with environmental and pollution control laws and
regulations may have on its future operations, capital expenditures, earnings,
or competitive position.

                                       2
<PAGE>

     STRATFORD AMERICAN ENERGY PROPERTIES. The Company, through its wholly owned
subsidiary Stratford American Energy Corporation ("SAEC"), currently has working
interests in 30 producing oil and gas properties, five of which were added in
2004. The oil and gas properties are located in Oklahoma and Texas. During the
fourth quarter of 2004, the Company elected to participate proportionately in
the drilling of three new development wells. Two of the wells are expected to be
completed early in the second quarter of 2005. Drilling is expected to commence
on the third well during the second quarter of 2005.

     SA OIL PROPERTIES. The Company, through its wholly owned subsidiary, SA Oil
and Gas Corporation ("SA Oil"), owns working and/or royalty interests in 87 oil
and gas properties located in Oklahoma and Texas.

     OTHER PROPERTIES. The Company, through its wholly owned subsidiary
Stratford American Resource Corporation ("SARC"), owns a nominal interest in
four oil and gas wells located in Arkansas and Oklahoma.

     DISCONTINUED OPERATIONS. 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 reflected the purchase of $24,988,000 and
closing costs incurred of $496,000. The Property, upon purchase, 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. Further, STP is a consolidated subsidiary of the Company. 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 was
financed with a 5.9% interest rate, twenty-two year straight-line amortization
note, and was guaranteed by JDMD Investments, LLC, a major shareholder of the
Company. A loan of $2,500,000 was financed with a 6% interest rate, interest
only note, for a period of two years, due December 11, 2004, and was guaranteed
50% by JDMD Investments, LLC and 50% by Diamond Ventures, Inc., an affiliate of
The DRD 97 Trust, a major shareholder of the Company. A loan of $1,800,000, from
an affiliate of The DRD 97 Trust, a major shareholder, was 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.
There was $240,000 recorded as a loan fee and was being amortized monthly,
pro-rata over the life of the loans. Remaining closing costs of $156,000 were
capitalized with the purchase price of the building. Amortization expense on the
above mentioned loan fees ceased as of August 30, 2004, when it was determined
that the criteria had been met to classify the building as an asset held for
sale.

     The building was leased 100% by a single tenant and used as the tenant's
corporate office. Under the terms of the lease agreement, STP was to receive
annual basic 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 were to be escalated by 10% of the prior years rent. The
Company reported the results from this lease as an operating lease. As such,
total revenue anticipated for the life of the lease was recognized in equal
annual installments. Differences between cash received and revenue recognized
were recorded as deferred rent. The lease was a bondable, fully triple net
twenty-two year lease. The lease commenced on December 9, 2002 and was scheduled
to expire on December 31, 2024 (excluding unexercised options). Three, five-year
renewal options were available to the tenant. The building had an expected life
of forty years and the Company was using straight-line depreciation over this
forty-year period. Depreciation expense ceased as of August 30, 2004, when it
was determined that the building met the criteria to be classified as an asset
held for sale.

                                       3
<PAGE>

     On November 9, 2004, the Company, through its 80% owned subsidiary, STP,
sold the Property to Holualoa Thompson Peak, LLC, an Arizona limited liability
company ("Holualoa") for $31,400,000. The Company recognized a gain of
$5,326,000, net of tax of $430,000, from the sale of the Property. Net cash
proceeds from the sale of the Property to STP, of which the Company owns 80% of
the membership interests in, were $7,468,000. The Company's 80% share of the
proceeds was approximately $5,974,000. The results of the real estate operations
have been accounted for as a discontinued operation, as discussed in Note 3 to
the accompanying consolidated financial statements of the Company, and are
reported within discontinued operations in the accompanying consolidated
statements of operations of 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. The Company 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 reported within interest and other income in the accompanying consolidated
statements of operations.

     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 $106,000 per year. The term of the current lease expires in
October 2007. The Company believes its office space is sufficient to meet its
operational needs in the near future.

     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 -Description of Business - Resource
Properties - Oil and Gas.)

     STRATFORD AMERICAN ENERGY PROPERTIES. The Company, through its wholly owned
subsidiary SAEC, currently has working interests in 30 producing oil and gas
properties located in Oklahoma and Texas. (See Item 1 - Description of Business
- Stratford American Energy Properties.)

     SA OIL PROPERTIES. The Company, through its wholly owned subsidiary 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 - SA Oil
Properties.)

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

                                        4
<PAGE>

ITEM 3 - LEGAL PROCEEDINGS

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

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, 2004.

EXECUTIVE OFFICERS

NAME                     AGE      OFFICE                          OFFICER SINCE
----                     ---      ------                          -------------

David H. Eaton           69       Chief Executive Officer              6/88
Mel L. Shultz            54       President                            5/87
Daniel E. Matthews       54       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
                      -----------              ----      ---

            2004:     First quarter            .60       .20
                      Second quarter           .45       .29
                      Third quarter            .41       .32
                      Fourth quarter           .55       .38

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

     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 28, 2005, the common stock of the Company is estimated to be
held beneficially by approximately 600 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. Management is
currently evaluating the future direction of the Company. Potential courses of
action for the Company are to look for investment opportunities or to consider
liquidation and dissolution of the operations of the Company with a liquidating
dividend to the shareholders of the Company.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

<TABLE>
<CAPTION>
                      EQUITY COMPENSATION PLAN INFORMATION

                                                                            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            290,000           $ 0.99              332,343

Equity compensation plans not
approved by security holders                  0             0.00                    0
                                        -------           ------              -------

          Total                         290,000           $ 0.99              332,343
                                        =======           ======              =======
</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, 2004, the total
number of outstanding shares of common stock was 11,078,105 shares and 3% of
such number is 332,343. 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 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 was being amortized monthly, pro-rata
over the life of the loans involved. 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.

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     This annual report contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 (forward-looking statements) that involve certain risks and
uncertainties. The following discussion and analysis should be read in
conjunction with our audited consolidated financial statements and notes thereto
appearing elsewhere in this report. 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

                                        7
<PAGE>

could materially and adversely affect the outcome or results indicated by or
inferred from the statements themselves. 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 recognize losses from operations; 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; and other risks
detailed in this annual report and from time to time in the Company's other
filings with the Securities and Exchange Commission. 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, and the reader is cautioned to not place undue
reliance on such forward-looking statements. The forward-looking statements made
herein are only made as of the date of this annual report on Form 10-KSB, and we
undertake no obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.

GENERAL

     On November 9, 2004, the Company, through its 80% owned subsidiary,
Scottsdale Thompson Peak, LLC, sold the property located at 20225 North
Scottsdale Road, Scottsdale, Arizona. The total sales price for the property was
$31,400,000. Following the payment of debt service obligations and related
interest due of $23,401,000, which were inclusive of the $20,000,000, 5.9% loan,
the $2,500,000, 6% loan and $1,800,000, 10% loan, and the payment of closing
costs and pro-rations of $531,000, cash proceeds to Scottsdale Thompson Peak,
LLC were $7,468,000. The Company's 80% share of the net proceeds was $5,974,000.
This transaction represents the sale of the Company's real estate segment.
Accordingly, the results of operations of this segment are recorded within
income from discontinued operations for all periods presented in the
accompanying consolidated financial statements. See Note 3 to the accompanying
consolidated financial statements of the Company for additional information
related to the sale of the discontinued operations.

     The Company owns working interests in oil and gas properties primarily
located in Oklahoma and Texas as discussed in Note 4 of the accompanying
consolidated financial statements of the Company.

     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 accompanying consolidated financial statements of the
Company. The Company's 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 7 of the
accompanying the consolidated financial statements of the Company, as of
December 31, 2004, 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.

     Other than the transactions described above, the Company has no significant
operations and there can be no assurance that the Company's operations will be
profitable. With the sale of the real estate segment, management is currently
evaluating the future direction of the business of the Company in order to
maximize shareholder return. Potential courses of action for the Company are to
continue to look for investment opportunities, most likely in either oil and gas
interests or real estate, or to consider liquidation and dissolution of the
operations of the Company with a liquidating dividend to the shareholders of the

                                        8
<PAGE>

Company. In determining potential courses of action, management will be
considerate of several factors including the management's outlook for the
Company's current operations, potential future investment opportunities, the
existence of competitors in our industry with greater resources at their
disposal and the regulatory and reporting environment of the Company.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     The consolidated balance sheet and consolidated statements of operations
have been prepared in accordance with U.S. generally accepted accounting
principles. 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 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 estimates 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 could result in losses or
an inability to recover the carrying value of our oil and gas interests, thereby
possibly requiring an impairment charge in the future.

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2004, the Company had $6,696,000 in available cash
resources. A significant amount of the cash available at December 31, 2004 was
generated from the one-time sale of the Property held by the Company's 80%
subsidiary, STP. Proceeds to the Company from the sale of the Property by STP
were $5,974,000.

     At November 9, 2004, principal payments on notes payable, relating to the
Property were as follows:

             Year ending December 31:
             2005                                   $ 4,816,000
             2006                                       547,000
             2007                                       580,000
             2008                                       615,000
             2009                                       652,000
             Thereafter                              16,183,000
                                                    -----------
                                                    $23,393,000
                                                    ===========

     As previously discussed, the Property was sold to Holualoa, effective
November 9, 2004. Part of the proceeds from the sale were used to payoff the
above outstanding debt of $23,393,000, along with all accrued interest due of
$8,000.

     During 2004, the Company, through its wholly owned subsidiary, SAEC,
elected to participate proportionately in the drilling of six new development
wells with costs paid by the Company of $130,000. Funds for the development

                                        9
<PAGE>

drilling came from Company cash. Three of the development wells are now
producing properties. Future costs to complete the remaining three development
wells, should they prove to be producing properties, will be approximately
$50,000 and will be funded with Company cash. In addition, the Company paid
$33,000 to complete two development wells that the Company had elected to
participate in proportionately in 2003. The Company, in 2004, also paid $39,000
for equipment and repairs on two producing wells.

     The primary sources of the Company's cash and cash equivalents were
proceeds from the sale of the Property by STP on November 9, 2004, revenues
received from the working interests in the oil and gas properties and the
one-time sale of the Company's investment in Triway Land Investors, LLC in 2003.
The Company maintains its excess cash funds in interest-bearing deposits. The
Company believes that its current cash and cash equivalents will be sufficient
to meet its forecasted operating cash needs for 2005. 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. Additionally there can be no
assurance that the Company's operations will be profitable.

OFF-BALANCE SHEET ARRANGEMENTS

     The Company has no off balance sheet arrangements as defined by Item 303(c)
of Regulation S-B.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

     The Company's contractual commitment consists of payments due under a
non-cancelable operating lease for its office space. The following table
summarizes the Company's contractual obligation at December 31, 2004.

             Year ending December 31:
             2005                                   $  106,000
             2006                                      106,000
             2007                                       87,000
                                                    ----------
             Total                                  $  299,000
                                                    ==========

     As of December 31, 2004, the Company did not have any other commercial
commitments, such as letters of credit, guarantees, or repurchase obligations.

RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 2004, COMPARED WITH YEAR ENDED
DECEMBER 31, 2003.

     The Company reported net income of $4,324,000 for the year ended December
31, 2004, in comparison to net income of $622,000 for the year ended December
31, 2003. The 2004 results include net income of $4,480,000 from discontinued
operations and the 2003 results include net income of $341,000 from discontinued
operations, as discussed in Note 3 to the accompanying consolidated financial
statements. Additionally, the 2003 results include a gain of $614,000 on the
restructuring of payables as discussed in Note 7 to the accompanying
consolidated financial statements and a gain of $114,000 from the sale of the
Company's investment in Triway as discussed in Note 3 to the accompanying
consolidated financial statements.

     OIL AND GAS REVENUES. For the year ended December 31, 2004, oil and gas
revenues were $1,002,000, increasing $265,000, or 36% from $737,000 for the year
ended December 31, 2003. Oil and gas revenues accounted for 98% of the total
revenue from continuing operations for the year ended December 31, 2004. The

                                       10
<PAGE>

increase is primarily due to the receipt of revenues from a property that
underwent extensive repairs during prior periods, the increase in prices
currently being received for oil and gas, and to the receipt of revenues from
five new producing oil and gas properties. Separately, the SA Oil properties
generated $635,000 and $447,000 in revenue for the years ended December 31, 2004
and December 31, 2003, respectively. The working interests in the SAEC oil and
gas properties generated $352,000 and $273,000 in revenue for the years ended
December 31, 2004 and December 31, 2003, respectively. The SARC oil and gas
properties generated $15,000 and $17,000 in revenue for the years ended December
31, 2004 and December 31, 2003, respectively.

         Oil and gas activities are a major part of the Company's continuing
operations. 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.

     DISCONTINUED OPERATIONS. Property rental income, which is included in the
income from operations of discontinued operations, decreased from $2,485,000 in
2003 to $2,070,000 in 2004. The 2004 results reflect scheduled rental income of
$1,794,000 and deferred rent of $276,000 compared to scheduled rental income of
$2,096,000 and deferred rent of $389,000 for the year ended December 31, 2003.
The rental income for 2003 reflected twelve months of rental activity. The
scheduled rental income reported for the year ended December 31, 2004 was
prorated through November 9, 2004, the date of the sale of the Property.
Depreciation expense decreased from $533,000 in 2003 to $356,000 in 2004. The
deferred rental revenue and depreciation expense were recognized thru August 30,
2004, when it was determined that the criteria had been met to classify the
Property as an asset held for sale. Property rental operations expense increased
from $5,000 in 2003 to $9,000 in 2004. Interest expense decreased from
$1,534,000 in 2003 to $1,282,000 in 2004. As previously discussed, the Property
was sold by STP to Holualoa, effective November 9, 2004 and has been accounted
for as a discontinued operation as discussed in Note 3 to the accompanying
consolidated financial statements.

     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 decreased from
$121,000 in 2003 to $25,000 in 2004. The decrease 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 an increase in interest income of $18,000, earned
in 2004, due to higher balances in the Company's cash accounts.

     GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
decreased from $642,000 for the year ended December 31, 2003 to $631,000 for the
year ended December 31, 2004. The decrease was due primarily to decreased
consulting fees of $100,000 paid in 2003, offset by increased accounting and
professional fees of $63,000, increased insurance premiums of $24,000 and to a
general increase in associated overhead costs of $2,000 in 2004.

     DEPRECIATION, DEPLETION AND AMORTIZATION. Depreciation, depletion and
amortization expense increased from $291,000 for the year ended December 31,
2003 to $306,000 for the year ended December 31, 2004. The depletion expense
increase of $15,000 is due primarily to depletion taken on the SAEC development
wells completed in 2004.

     OIL AND GAS OPERATIONS. Oil and gas operations expense increased from
$207,000 for the year ended December 31, 2003 to $229,000 for the year ended
December 31, 2004. Operating expense for the SAEC properties increased by
$13,000. This was due to increased expense of $7,000 for existing properties,
primarily due to equipment repair costs and to increased expense of $6,000 for

                                       11
<PAGE>

new producing properties. Operating expense for the SA Oil properties increased
by $9,000 and is due to professional fees of $8,000 incurred in 2004 and to
$1,000 in increased general operating costs.

     INTEREST EXPENSE. There is no interest expense from continuing operations
for the year ended December 31, 2004. The decrease of $39,000 is due primarily
to the restructuring of payables in September of 2003, which eliminated debt and
resulted in a decrease in interest expense.

     RELATED PARTY TRANSACTIONS. During 2004, 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 2004 and 2003. At December
31, 2004, $14,000 of these reimbursements are recorded as related party
receivables in the accompanying consolidated balance sheet

     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.
In 2004 and 2003 the Company received $24,000 and $4,000, respectively. These
receipts from the sublease were recorded as a reduction in rental expense,
included in general and administrative expense. At December 31, 2004, all of the
sublease payments had been received.

     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, an affiliate of the DRD 97 Trust, a major shareholder
of the Company. On November 9, 2004, the principal amount of $1,800,000, along
with accrued interest due of $5,000, was paid in full to Southwest Holdings, LTD
as discussed above and in Note 3 of the accompanying consolidated financial
statements.

CAPITAL REQUIREMENTS

     During 2004, the Company, through its wholly owned subsidiary, SAEC,
elected to participate proportionately in the drilling of six new development
wells with costs paid by the Company of $130,000. Funds for the development
drilling came from Company cash. Three of the development wells are now
producing properties. Future costs to complete the remaining three development
wells, should they prove to be producing properties, are expected to be
approximately $50,000 and will be funded with Company cash. In addition, the
Company paid, out of Company cash, $33,000 to complete two development wells
that the Company had elected to participate in proportionately in 2003 and
$39,000 for equipment on two producing wells.

     Other than the events described above, 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

                                       12
<PAGE>

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 in the price of the Company's common stock;
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.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In December 2004, the FASB issued Revised Statement No. 123, ACCOUNTING FOR
SHARE-BASED PAYMENT ("SFAS No. 123R"). This statement requires the company to
recognize the grant-date fair value of stock options in the statement of
operations. This Statement requires that companies account for these share-based
transactions using the fair-value-based method, and eliminates a company's
ability to account for these transactions using the intrinsic value method of
accounting in APB Opinion No. 25. For small business issuers, Statement No.
123(R) is effective as of the beginning of the first interim or annual reporting
period that begins after December 15, 2005. The Company has not yet determined
the exact impact the new standard will have on its consolidated financial
statements. The disclosure included in Note 1 to the consolidated financial
statements discloses the impact on the Company's results of operations as if it
had applied the fair value based method and recognition provisions of Statement
No. 143 to stock-based employee compensation to the current reporting periods.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

     In May 2003, FASB Statement No. 150, ACCOUNTING FOR CERTAIN FINANCIAL
INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY, was issued.
This Statement establishes standards for the classification and measurement of
certain financial instruments with characteristics of both liabilities and
equity. The Statement also includes required disclosures for financial
instruments within its scope. For the Company, the Statement was effective for
instruments entered into or modified after May 31, 2003 and otherwise became
effective as of January 1, 2004, except for certain mandatorily redeemable
financial instruments. For certain mandatorily redeemable financial instruments,
the Statement will be effective for the Company on January 1, 2005. The
effective date has been deferred indefinitely for certain other types of
mandatorily redeemable financial instruments. The Company currently does not
have any financial instruments that are within the scope of this Statement.

     In December 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003), CONSOLIDATION OF VARIABLE INTEREST ENTITIES (FIN 46R), which
addressed how a business enterprise should evaluate whether it has a controlling
financial interest in an entity through means other than voting rights and
accordingly should consolidate the entity. The Company applies FIN 46R to
variable interests in VIEs created after December 31, 2003. For variable
interests in VIEs created before January 1, 2004, the Interpretation will be
applied beginning on January 1, 2005. For any VIEs that must be consolidated
under FIN 46R that were created before January 1, 2004, the assets, liabilities
and noncontrolling interests of the VIE initially would be measured at their
carrying amounts with any differences between the net amount added to the
balance sheet and any previously recognized interest being recognized as the
cumulative effect of an accounting change. If determining the carrying amounts
is not practicable, fair value at the date FIN 46R first applies may be used to
measure the assets, liabilities and noncontrolling interest of the VIE.

     The Company currently does not have any variable interest entities that are
within the scope of the statement.

                                       13
<PAGE>

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                           PAGE

Report of Independent Registered Public Accounting Firm                     15

Consolidated Balance Sheet at December 31, 2004                             16

Consolidated Statements of Operations for the years ended
December 31, 2004 and 2003                                                  17

Consolidated Statements of Shareholders' Equity for the years ended
December 31, 2004 and 2003                                                  18

Consolidated Statements of Cash Flows for the years ended
December 31, 2004 and 2003                                                  19

Notes to Consolidated Financial Statements                                  20

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.

                                       14
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



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, 2004, 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, 2004. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material 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, 2004, and the results of their
operations and their cash flows for each of the years in the two-year period
ended December 31, 2004, in conformity with U.S. generally accepted accounting
principles.

                                            /s/  KPMG LLP


Phoenix, Arizona
February 18, 2005

                                       15
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2004

                                     ASSETS

Cash and cash equivalents                                          $  6,696,000
Receivables:
  Oil and gas                                                           161,000
  Related party                                                          14,000
  Other                                                                  17,000
Oil and gas interests, net                                            1,171,000
Other assets                                                            141,000
                                                                   ------------
                                                                   $  8,200,000
                                                                   ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable                                                   $     78,000
Accrued liabilities                                                     103,000
Net liabilities of discontinued operations                              456,000
Minority interest                                                        76,000
                                                                   ------------
        Total liabilities                                               713,000

Commitments and contingencies (See Note 12)                                   0

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                                               (21,124,000)
  Treasury stock, 1,967 shares at cost                                  (11,000)
                                                                   ------------
                                                                      7,487,000
                                                                   ------------
                                                                   $  8,200,000
                                                                   ============

          See accompanying notes to consolidated financial statements.

                                       16
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 2004 AND 2003

                                                       2004            2003
                                                   ------------    ------------
REVENUES:
  Oil and gas revenues                             $  1,002,000    $    737,000
  Gain on restructuring of payables                           0         614,000
  Interest and other income                              25,000         121,000
                                                   ------------    ------------
                                                      1,027,000       1,472,000
EXPENSES:
  General and administrative                            631,000         642,000
  Depreciation, depletion and amortization              306,000         291,000
  Oil and gas operations                                229,000         207,000
  Interest                                                    0          39,000
                                                   ------------    ------------
                                                      1,166,000       1,179,000
                                                   ------------    ------------
Income (loss) from continuing operations
  before income taxes                                  (139,000)        293,000

Income tax expense                                       17,000          12,000
                                                   ------------    ------------
Income (loss) from continuing operations               (156,000)        281,000
                                                   ------------    ------------
DISCONTINUED OPERATIONS:
  Income from operations                                423,000         413,000
  Gain on sale of building, net of tax of
    $430,000                                          5,326,000               0
  Minority interest                                  (1,269,000)        (72,000)
                                                   ------------    ------------
Income from discontinued operations                   4,480,000         341,000
                                                   ------------    ------------
Net income                                         $  4,324,000    $    622,000
                                                   ============   ============
Basic and diluted net income (loss) per share:
  Income (loss) from continuing operations         $      (0.01)   $       0.03
  Income from discontinued operations                      0.40            0.03
                                                   ------------    ------------
Basic and diluted net income per share             $       0.39    $       0.06
                                                   ============    ============
Shares used to compute income (loss) per share       11,078,105      10,404,132
                                                   ============    ============


          See accompanying notes to consolidated financial statements.

                                       17
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2004 AND 2003

<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, 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
  Net income                                                               4,324,000                                      4,324,000
                         ------------    ------------    ------------   ------------    ------------   ------------    ------------

Balance,
  December 31, 2004        11,078,105    $    111,000    $ 28,511,000   $(21,124,000)          1,967   $    (11,000)   $  7,487,000
                         ============    ============    ============   ============    ============   ============    ============
</TABLE>


           See accompanying notes to consolidated financial statements

                                       18
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2004 AND 2003

                                                        2004            2003
                                                    ------------    -----------

CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
  Net income (loss) from continuing operations      $  (156,000)    $   281,000
  Adjustments to reconcile net income (loss)
    from continuing operations to net cash
    provided by operating activities:
      Gain on restructuring of notes payable                  0        (614,000)
      Gain on sale of investment in LLC                       0        (114,000)
      Depreciation, depletion and amortization          306,000         291,000

  Changes in assets and liabilities:
    Decrease (increase) in accounts, related
      party and other receivables                       (80,000)        269,000
    Decrease (increase) in other assets                 (27,000)          3,000
    Increase (decrease) in accounts payable              19,000         (56,000)
    Increase in accrued liabilities                      61,000          14,000
                                                    -----------     -----------
NET CASH PROVIDED BY CONTINUING OPERATING
ACTIVITIES                                              123,000          74,000
                                                    -----------     -----------
CASH FLOWS FROM CONTINUING INVESTING ACTIVITIES:
  Proceeds from sale of investment in LLC                     0         684,000
  Investment in LLC                                           0          (6,000)
  Purchase of oil and gas interests                    (219,000)        (91,000)
  Purchases of property and equipment                         0         (23,000)
                                                    -----------     -----------
NET CASH PROVIDED BY (USED IN) CONTINUING
INVESTING ACTIVITIES                                   (219,000)        564,000
                                                    -----------     -----------
CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES:
  Payments on notes payable                                   0        (233,000)
                                                    -----------     -----------

NET CASH USED IN CONTINUING FINANCING ACTIVITIES              0        (233,000)
                                                    -----------     -----------

NET CASH PROVIDED BY DISCONTINUED OPERATIONS          6,087,000         145,000

NET INCREASE IN CASH AND CASH EQUIVALENTS             5,991,000         550,000

CASH AND CASH EQUIVALENTS, beginning of year            705,000         155,000
                                                    -----------     -----------
CASH AND CASH EQUIVALENTS, end of year              $ 6,696,000     $   705,000
                                                    ===========     ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest paid during the period                   $ 1,216,000     $ 1,639,000
                                                    ===========     ===========
  Taxes paid during the period                      $     7,000     $    11,000
                                                    ===========     ===========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Non-cash issuance of common stock related to
    restructuring of notes payable                  $         0    $   317,000
                                                    ===========     ===========


          See accompanying notes to consolidated financial statements.

                                       19
<PAGE>

                 STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2004 AND 2003


NOTE 1 - NATURE OF BUSINESS

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

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

     The consolidated balance sheet and statements of operations have been
prepared in accordance with U.S. generally accepted accounting principles.
Certain prior-year amounts have been reclassified to conform to the current year
presentation to reflect the discontinued operations of the real estate segment
as discussed further in Note 3, with no effect on net income.

ESTIMATES

     The preparation of financial statements in conformity with U.S. generally
accepted accounting principles 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

     Cash and cash equivalents include cash on hand and all highly liquid
investments with original maturities of three months or less. The carrying
amount approximates fair value because of the short maturity of the financial
instruments.

INVESTMENTS

     The Company invested $570,000 in the Triway Land Investors, LLC ("Triway").
The investment related to the purchase of real estate property in 2000. 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.

                                       20
<PAGE>

CONCENTRATION OF CREDIT RISK

     Financial instruments that potentially expose the Company to concentrations
of credit risk consist primarily of unsecured accounts receivable from
purchasers of crude oil and natural gas products.

     The Company maintains its cash in bank deposit accounts, which, at times,
may exceed federally insured limits. The Company has not experienced any losses
in such accounts and believes it is not exposed to any significant credit risk
on cash and cash equivalents.

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 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 basis of all of the properties 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

                                       21
<PAGE>

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.

NET INCOME (LOSS) PER COMMON SHARE

     The Company calculates 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 the years ended December 31, 2004 and 2003, respectively,
290,000 and 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 and income per share would have been:

                                                       Years ended December 31,
                                                        2004            2003
                                                     -----------    -----------

Net income - as reported                             $ 4,324,000    $   622,000

Less:
  Total stock based employee compensation
  expense determined under fair value method
  for stock options                                            0              0
                                                     -----------    -----------

Net income - pro forma                               $ 4,324,000    $   622,000
                                                     ===========    ===========

Basic and diluted income per share - as reported     $      0.39    $      0.06
                                                     ===========    ===========
Basic and diluted income per share - pro forma       $      0.39    $      0.06
                                                     ===========    ===========


                                       22
<PAGE>

NOTE 3 - REAL ESTATE INVESTMENTS/DISCONTINUED OPERATIONS

     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 reflected the purchase of $24,988,000 and closing costs incurred of
$496,000. The Property, upon purchase, 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. Further, STP
is a consolidated subsidiary of the Company. 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 was financed with a
5.9% interest rate, twenty-two year straight-line amortization note, and was
guaranteed by JDMD Investments, LLC, a major shareholder of the Company. A loan
of $2,500,000 was financed with a 6% interest rate, interest only note, for a
period of two years, due December 11, 2004, and was guaranteed 50% by JDMD
Investments, LLC and 50% by Diamond Ventures, Inc., an affiliate of The DRD 97
Trust, a major shareholder of the Company. A loan of $1,800,000, from an
affiliate of the DRD 97 Trust, a major shareholder, was 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.
There was $240,000 recorded as a loan fee and was being amortized monthly,
pro-rata over the life of the loans. Remaining closing costs of $156,000 were
capitalized with the purchase price of the Property. Amortization expense on the
above mentioned loan fees ceased as of August 30, 2004, when it was determined
that the criteria had been met to classify the building as an asset held for
sale.

     The Property was leased 100% by a single tenant and used as the tenant's
corporate office. Under the terms of the lease agreement, STP was to receive
annual basic 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 were to be escalated by 10% of the prior years rent. The
Company reported the results from this lease as an operating lease. As such,
total revenue anticipated for the life of the lease was recognized in equal
annual installments. Differences between cash received and revenue recognized
were recorded as deferred rent. Deferred rent recognition ceased as of August
30, 2004, when it was determined that the building met the criteria to be
classified as an asset held for sale. The lease was a bondable, fully triple net
twenty-two year lease. The lease commenced on December 9, 2002 and was scheduled
to expire on December 31, 2024 (excluding unexercised options). Three, five-year
renewal options were available to the tenant. The building had an expected life
of forty years and the Company was using straight-line depreciation over this
forty-year period. Depreciation expense ceased as of August 30, 2004, when it
was determined that the building met the criteria to be classified as an asset
held for sale.

     On August 30, 2004, STP, entered into a Purchase and Sale Agreement ("the
Agreement") with Holualoa Thompson Peak, LLC, an Arizona limited liability
company ("Holualoa") to sell the Company's real estate segment, which consisted
primarily of the Property. The Agreement called for the closing of sale of the
Property by the end of November 2004 at a price of $31,400,000. The transaction
closed on November 9, 2004. Debt service obligations of $23,401,000, which were
inclusive of the $20,000,000, 5.9% loan, the $2,500,000, 6% loan and the
$1,800,000, 10% loan, were paid out of the cash proceeds from the sale of the
Property. Discontinued operations in the consolidated statements of operations
reflect the results of operations of the Property sold in November 2004,
including allocated interest expense for the periods presented. Interest expense
was allocated to discontinued operations based on the outstanding debt
specifically identified above. Net cash proceeds from the November 9, 2004 sale

                                       23
<PAGE>

of the Property to STP, of which the Company owns 80% of the membership
interests in, were $7,468,000. The Company's 80% share of the proceeds was
approximately $5,974,000. The Company has not made any decisions as to the use
of the proceeds of the sale of the Property and is currently evaluating the best
use of these proceeds.

     The Company recognized a gain of $5,326,000, net of tax of $430,000, from
the sale of the Property. The real estate segment has been accounted for as a
discontinued operation and, accordingly, its net liabilities, results of
operations and cash flows are segregated for all periods presented in the
accompanying consolidated financial statements.

     The components of net liabilities of discontinued operations as of December
31, 2004 consist of income taxes payable of $430,000 and accounts payable of
$26,000.

     Following is a summary of the operating results and sale of the
discontinued operations for the years ended December 31, 2004 and 2003.

                                                 Year ended December 31,
                                                    2004         2003
                                                 ----------   ----------

     Revenues                                    $2,070,000   $2,485,000
     Expenses                                     1,647,000    2,072,000
                                                 ----------   ----------
     Income from discontinued operations         $  423,000   $  413,000
                                                 ----------   ----------
     Gain on sale of discontinued operations,
       net of tax of $430,000                    $5,326,000
                                                 ==========

     Had the sale been  completed as of January 1, 2003,  the Company would have
reported the following:

                                                    For the year ended
                                                       December 31,
                                                    2004         2003
                                                 ----------   ----------
                                                       (Unaudited)

     Total revenue                               $1,027,000   $1,472,000
     Net income (loss)                           $ (156,000)  $  281,000
     Basic and diluted net income (loss)
       per share                                 $    (0.01)  $     0.03
     Pro Forma weighted average shares
       outstanding                               11,078,105   10,404,132

     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

     The Company, through its wholly owned subsidiary Stratford American Energy
Corporation ("SAEC"), purchased working interests in 23 oil and gas properties

                                       24
<PAGE>

located in Oklahoma and Texas, effective April 1, 2002. During 2004, the Company
paid $155,000 for the development and completion of six producing properties.
The Company also elected to participate proportionately in the drilling of three
development wells during 2004. The Company prepaid $47,000 in costs. Total
capitalized costs of the SAEC properties and accumulated depletion and
amortization are as follows:

                                                         December 31, 2004
                                                         -----------------

     Oil and gas interests at December 31, 2003             $  783,000
     2004 capitalized costs                                    202,000
     Less accumulated depletion and amortization              (298,000)
                                                            ----------
                                                            $  687,000
                                                            ==========

     The Company recognized depletion expense of $122,000 and $99,000 for the
years ended December 31, 2004 and 2003, respectively and amortization expense of
$1,000 for each of the years ended December 31, 2004 and 2003.

     In addition to the oil and gas interests, acquisition costs of $68,000 are
being amortized equally over a seven-year period, which is the estimated life of
the wells. The Company recognized amortization expense of $9,000 and $10,000 for
the years ended December 31, 2004 and 2003, respectively. Total accumulated
amortization of acquisition costs is $27,000 at December 31, 2004, leaving net
acquisition costs of $41,000 on the books of the Company, which are reported
within other assets in the accompanying audited consolidated balance sheet.

     The Company, through its wholly owned subsidiary SA Oil and Gas Corporation
("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, 2004
                                                         -----------------

     Oil and gas interests at December 31, 2003             $ 3,656,000
     2004 capitalized costs                                      17,000
     Less accumulated depletion and amortization             (3,189,000)
                                                            -----------
                                                            $   484,000
                                                            ===========

     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, 2004 and 2003 and
amortization expense of $16,000 and $20,000 for the years ended December 31,
2004 and 2003, 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, 2004 and
2003. Total accumulated amortization of acquisition costs is $26,000 at December
31, 2004, leaving net acquisition costs of $22,000 on the books of the Company,
which are reported within other assets in the accompanying consolidated balance
sheet.

     Stratford American Resource Corporation originally paid $38,000 for a
nominal working interest in four oil and gas wells. The wells are fully depleted
at December 31, 2004.

     Total net oil and gas interests at December 31, 2004 are $1,171,000. Total
net acquisition costs, relating to the oil and gas properties, are $63,000 at
December 31, 2004.

                                       25
<PAGE>

NOTE 5- FAIR VALUE OF 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.

NOTE 6 - 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.

     The following table summarizes information about stock options outstanding
at December 31, 2004:
<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
--------    --------    -----------    -----------    --------    -----------    --------
<S>         <C>         <C>            <C>            <C>         <C>            <C>
11/09/98     $0.50        100,000          .9          $0.50        100,000       $0.50
01/03/00     $1.25        190,000          .0           1.25        190,000        1.25
                          -------         ---          -----        -------       -----
                          290,000          .4          $0.99        290,000       $0.99
                          =======         ===          =====        =======       =====
</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. The options expired on January 3,
2005. 100,000 options originally granted to certain directors in 1998 and
previously extended expired in 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 in 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, on October 11, 2002,
extended these options with an exercise price of $0.79 for a period of two years
with a new expiration date of October 2004. These options have expired. No
options were extended and no new stock options were granted in 2004.

     At December 31, 2004, the range of exercise prices and weighted average
remaining on contractual life of options was $.50 - $1.25 and .4 years,
respectively.

                                                       Weighted Average
                                                        Exercise Price
                                             Number       Per Share
                                             -------   ----------------
     Outstanding, December 31, 2003          480,000       $ 0.92
       Granted                                     0            0
       Canceled                              190,000            0
       Exercised                                   0            0
                                             -------       ------
     Outstanding, December 31, 2004          290,000       $ 0.99
                                             =======       ======

                                       26
<PAGE>

NOTE 7- SHAREHOLDERS' EQUITY

     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 8 - INCOME TAXES

     The Company incurred federal income tax expense of $88,000, recorded in
discontinued operations, for the year ended December 31, 2004 due to alternative
minimum tax limitations on net operating loss carry forwards applied to income
from discontinued operations, and the gain on sale of discontinued operations
for the year. The Company also incurred state income expense of $359,000, of
which $342,000 is attributable to income from the gain on sale of discontinued
operations for the year and $17,000 is attributable to income from continuing
operations.

     The following carryforwards are available at December 31, 2004, to offset
future taxable income and income taxes as follows:

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

     Net operating loss                   2000-2022      $3,846,000
     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, 2004 consisted of the following:

     Deferred tax asset:
     Allowance for mining interest impairment                   $   369,000
     Net operating loss carryforwards and federal tax credits     1,391,000
     Differences in depreciation and depletion                      133,000
                                                                -----------

     Total deferred tax assets before valuation allowance         1,893,000
     Valuation allowance                                         (1,893,000)
                                                                -----------

     Net deferred tax assets                                    $         0
                                                                ===========

     The valuation allowance for the deferred tax assets as of January 1, 2003
was $3,638,000. The net change in the total valuation allowance for the year
ended December 31, 2004 was a decrease of $1,745,000. The Company believes it is
more likely than not that all or a portion of the net deferred tax asset will
not be utilized.

                                       27
<PAGE>

NOTE 9 - 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:
         2005                                         $    106,000
         2006                                              106,000
         2007                                               87,000
                                                      ------------
         Total                                        $    299,000
                                                      ============

     The lease expires in October 2007. The Company has no options for renewal
under the current lease.

     Rent expense, including base rent and additional charges, was $104,000 and
$119,000 for the years ended December 31, 2004 and 2003, respectively. Rental
expense for each of the two years was reduced by income received from subleases.
(See Note 10)

NOTE 10 - RELATED PARTY TRANSACTIONS

     During 2004, 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 2004 and 2003. At December 31, 2004, $14,000 of these
reimbursements are recorded as related party receivables in the accompanying
consolidated balance sheet.

     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.
In 2004 and 2003 the Company received $24,000 and $4,000, respectively. These
receipts from the sublease were recorded as a reduction in rental expense,
included in general and administrative expense. At December 31, 2004, all of the
sublease payments had been received.

     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, an affiliate of the DRD 97 Trust, a major shareholder
of the Company. On November 9, 2004, the principal amount of $1,800,000, along
with accrued interest due of $5,000, was paid in full to Southwest Holdings, Ltd
as discussed above and in Note 3 of the consolidated financial statements.

NOTE 11 - NET INCOME (LOSS) PER SHARE

     In accordance with the provisions of FASB Statement of Financial Accounting
Standards No. 128 ("Statement 128"), EARNINGS PER SHARE, basic earnings (loss)
per share is computed on the basis of the weighted-average number of common
shares outstanding during the periods. Diluted earnings (loss) per share is
computed based upon the weighted-average number of common shares plus the

                                       28
<PAGE>

assumed issuance of common shares for all potentially dilutive securities. The
computations of basic and diluted net income (loss) per share are as follows:

<TABLE>
<CAPTION>
                                                                Years Ended December 31,
                                                                 2004            2003
                                                             ------------    ------------
<S>                                                          <C>             <C>
Basic earnings (loss) per share:
  Numerator
    Net income (loss) from continuing operations,
      net of income tax                                      $   (156,000)   $    281,000
    Income from discontinued operations, net
      of income tax                                             4,480,000         341,000
                                                             ------------    ------------
  Net income applicable to common shares                     $  4,324,000    $    622,000
                                                             ------------    ------------
Denominator
  Weighted average common shares outstanding                   11,078,105      10,404,132
                                                             ------------    ------------
Basic earnings (loss) per share from:
  Continuing operations                                      $      (0.01)   $       0.03
  Discontinued operations                                            0.40            0.03
                                                             ------------    ------------
  Net income per share applicable to common
    shares - basic                                           $       0.39    $       0.06
                                                             ============    ============
Diluted earnings (loss) per share:
  Numerator
    Net income (loss) from continuing operations,
      net of income tax                                      $   (156,000)   $    281,000
    Income from discontinued operations, net of
      income tax                                                4,480,000         341,000
                                                             ------------    ------------
    Net income applicable to common shares                   $  4,324,000    $    622,000
                                                             ------------    ------------
 Denominator
   Weighted average common shares outstanding                  11,078,105      10,404,132
   Effect of dilutive securities - stock options                        0               0
                                                             ------------    ------------
   Weighted average diluted common shares outstanding          11,078,105      10,404,132
                                                             ------------    ------------
Diluted earnings (loss) per share from:
  Continuing operations                                      $      (0.01)   $       0.03
  Discontinued operations                                            0.40            0.03
                                                             ------------    ------------
Net income per share applicable to common
  shares - diluted                                           $       0.39    $       0.06
                                                             ============    ============
Stock options not included in diluted income per share            290,000         480,000
                                                             ============    ============
</TABLE>

NOTE 12 - COMMITMENTS AND CONTINGENCIES

     The Company has adopted the disclosure provisions of the Financial
Accounting Standards Board Interpretation No. 45, GUARANTOR'S ACCOUNTING AND
DISCLOSURE 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.

                                       29
<PAGE>

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 matters of accounting principles or practices, financial
statement disclosures, or auditing scope or procedures 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, 2004, 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 29, 2005 (the "2005 Proxy Statement"). The 2005 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, 2005, and is expected to be furnished
to shareholders on or about May 30, 2005.

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, or incorporated by reference into, this report.

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

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

          10.20     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

          The following reports on Form 8-K were filed during the fourth quarter
          of 2004:

                                       30
<PAGE>

          On November 10, 2004,  the Company filed a Form 8-K dated November 10,
          2004,  relating  to  the  Press  Release  announcing  that  Scottsdale
          Thompson  Peak,  LLC, a  subsidiary  that the Company  owns 80% of the
          membership  interests  in, sold the office  building  located at 20225
          North Scottsdale Road, Scottsdale, Arizona.

          On November 15, 2004, the Company filed a Form 8-K dated November 9,
          2004, relating to the Purchase and Sale Agreement between Scottsdale
          Thompson Peak, LLC, a subsidiary that the Company owns 80% of the
          membership interests in, and Holualoa Arizona, Inc., pursuant to which
          the office building located at 20225 North Scottsdale Road,
          Scottsdale, Arizona was sold to Holualoa Arizona, Inc. The Form 8-K
          included unaudited pro forma condensed consolidated statements of
          operations for the year ended December 31, 2003 and the nine months
          ended September 30, 2004 and unaudited pro forma condensed
          consolidated balance sheet information as of September 30, 2004.

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, 2004 and December 31, 2003:

     Fee Category                Fiscal 2004 Fees         Fiscal 2003 Fees
     ------------                ----------------         ----------------

     Audit Fees (1)                  $ 82,000                 $ 58,000
     Audit-Related Fees (2)             7,000                        0
     Tax Fees (3)                      44,000                   19,000
     All Other Fees                         0                        0
                                     --------                 --------

     Total Fees                      $133,000                 $ 77,000
                                     ========                 ========
------------
(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 for the fiscal
     years ended December 31, 2004 and December 31, 2003, 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 were billed for professional services rendered in
     connection with the sale of the real estate segment.
(3)  Tax Fees consist of aggregate fees billed for professional services
     rendered in connection with tax preparation, tax consultation, and
     statutory filings for the fiscal years ended December 31, 2004 and December
     31, 2003, respectively.

     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, 2004 and
2003 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.

                                       31
<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 31, 2005             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 31, 2005             By /s/ David H. Eaton
                                       -----------------------------------------
                                       David H. Eaton, Chairman of the Board and
                                       Chief Executive Officer
                                       (Principal Executive Officer)

Date:    March 31, 2005             By /s/ Mel L. Shultz
                                       -----------------------------------------
                                       Mel L. Shultz, President and Director

Date:    March 31, 2005             By /s/ Gerald J. Colangelo
                                       -----------------------------------------
                                       Gerald J. Colangelo, Director

Date:    March 31, 2005             By /s/ Richard H. Dozer
                                       -----------------------------------------
                                       Richard H. Dozer, Director

Date:    March 31, 2005             By /s/ Dale M. Jensen
                                       -----------------------------------------
                                       Dale M. Jensen, Director

Date:    March 31, 2005             By /s/ Mitchell S. Vance
                                       -----------------------------------------
                                       Mitchell S. Vance, Director

Date:    March 31, 2005             By /s/ Daniel E. Matthews
                                       -----------------------------------------
                                       Daniel E. Matthews, Controller, Secretary
                                       & Treasurer


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<PAGE>

                                 EXHIBITS INDEX

Exhibits 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, 10.21, 14.1 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.  Exhibit 10.21 was filed as Exhibit 99.2
to the  Company's  Form 8-K,  which was filed with the  Securities  and Exchange
Commission  on November 15,  2004.  Exhibit 14.1 was filed as Exhibit A with the
Company's  Definitive  Proxy Statement  (Schedule 14A) for its annual meeting of
shareholders  held on June 20,  2004,  which was filed with the  Securities  and
Exchange Commission on April 29, 2004. Exhibit 21.1 was filed with the Company's
Form  10-KSB  for the year  ended  December  31,  2003,  which  was  filed  with
Securities and Exchange Commission on March 31, 2004.

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

                                       33
<PAGE>

 10.9    Acquisition Agreement between Stratford American Car Rental Systems,
         Inc. and Dollar Rent A Car Systems, Inc. dated September 24, 1998
 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
 10.21   Purchase and Sale Agreement, dated August 30, 2004, by and between
         Holualoaholualoa, Holualoa Arizona, Inc. and Scottsdale Thompson Peak,
         LLC
 14.1    Code of Ethics
 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.


                                       34