--------------------------------------------------------------------------------

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                  ------------

                                   FORM 10-QSB

     |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                                 ---------------

                                     0-27159

                            (COMMISSION FILE NUMBER)

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

                                       OR

     |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                                  ------------

                      NATIONAL RESIDENTIAL PROPERTIES, INC.


             (Exact Name of Registrant as Specified in its Charter)

           NEVADA                                             65-0439467
(State or Other Jurisdiction                               (I.R.S. Employer
      of Incorporation)                                  Identification Number)

                                  6915 RED ROAD
                                   SUITE #222
                           CORAL GABLES, FLORIDA 33143
                                 (305) 666-6565

               (Address, including zip code, and telephone number,
                  of registrant's principal executive offices)
                                  ------------

         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 |_|.

         As of January 8, 2004, there were 1,938,566,046 shares of the
Registrant's Common Stock, $.001 par value per share, outstanding.

         Transitional Small Business Disclosure Format (Check one): Yes |_| No X

--------------------------------------------------------------------------------






<PAGE>
                      NATIONAL RESIDENTIAL PROPERTIES, INC.
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

                                TABLE OF CONTENTS





PART I   FINANCIAL INFORMATION.................................................3

  ITEM 1.  Financial Statements................................................3

  ITEM 2.  Management's Discussion and Analysis or Plan of Operation..........22

  RISK FACTORS................................................................35

  ITEM 3.  Controls and Procedures............................................37

PART II   OTHER INFORMATION...................................................39

  ITEM 1.  Legal Proceedings..................................................39

  ITEM 2.  Changes In Securities..............................................39

  ITEM 3.  Defaults Upon Senior Securities....................................40

  ITEM 4.  Submission of Matters to a Vote of Security Holders................40

  ITEM 5.  Other Information..................................................40

  ITEM 6.  Exhibits and Reports on Form 8-K...................................40

SIGNATURES....................................................................42




This report contains forward-looking statements that involve risks and
uncertainties. Such statements are based on current expectations, assumptions,
estimates and projections about the Company and its industry. These
forward-looking statements involve risks and uncertainties. Forward-looking
statements are subject to known and unknown risks, uncertainties and other
factors that may cause actual results, levels of activity, performance,
achievements and prospects to be materially different from those expressed or
implied by such forward-looking statements. The Company undertakes no obligation
to update publicly any forward-looking statements for any reason even if new
information becomes available or other events occur in the future.











                                        2
<PAGE>
                                     PART I
                                     ------
                              FINANCIAL INFORMATION
                              ---------------------


ITEM 1.  FINANCIAL STATEMENTS

             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2003
                                   (UNAUDITED)


                                     ASSETS


 ------------------------------------------------------------------------------
                                                              JUNE 30, 2003
                                                               (UNAUDITED)
 ------------------------------------------------------------------------------

   Cash and cash equivalents                               $         98,847
   Inventory - Real Estate Holdings                               5,173,150
   Escrow receivable                                                462,741
   Fixed assets, net of depreciation                                 32,829
   Loan receivable - others                                          66,604
   Mortgage receivable and other                                     34,079
   Investment securities                                              2,523
   Deposits                                                           6,725
   Loan origination fees, net of amortization                        84,092
                                                           ----------------

 TOTAL ASSETS                                              $      5,961,590
                                                           ================

 ------------------------------------------------------------------------------



















          The accompanying notes are an integral part of the condensed
                       consolidated financial statements.

                                        3
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
                                  JUNE 30, 2003
                                   (UNAUDITED)



        LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)
        ----------------------------------------------------------------

 ----------------------------------------------------------------------------
                                                          JUNE 30, 2003
                                                           (UNAUDITED)
 ----------------------------------------------------------------------------
 ----------------------------------------------------------------------------

 LIABILITIES
     Accounts payable and accrued expenses                $        84,712
     Convertible debentures payable                               199,202
     Notes and mortgages payable                                3,234,533
                                                          ----------------

           TOTAL LIABILITIES                                    3,518,447
                                                          ----------------

 TEMPORARY EQUITY                                               4,417,938
                                                          ----------------

 STOCKHOLDERS' EQUITY (DEFICIT)
     Common Stock, $.001 Par Value;  1,000,000 shares
        authorized and 1,000,000 shares issued and
        outstanding                                                 1,000
     Common Stock Class A Voting, $.001 Par Value; 0
        shares authorized and 0 shares issued and
        outstanding                                                     -
     Additional Paid-in Capital                                 3,606,580
     Deficit                                                   (5,582,375)
                                                          ----------------

           TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                (1,974,795)
                                                          ----------------

 TOTAL LIABILITIES, TEMPORARY EQUITY AND
 STOCKHOLDERS' EQUITY (DEFICIT)                           $     5,961,590
                                                          ================

 ----------------------------------------------------------------------------









          The accompanying notes are an integral part of the condensed
                       consolidated financial statements.

                                        4
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE NINE AND THREE MONTHS ENDED JUNE 30, 2003 AND 2001
                                   (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                              NINE MONTHS ENDED               THREE MONTHS ENDED
                                                       JUNE 30, 2003    JUNE 30, 2002    JUNE 30, 2003   JUNE 30, 2002
------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>             <C>               <C>             <C>
OPERATING REVENUES
   Revenue                                             $   3,564,353   $     155,116     $      21,451   $     21,452
   Cost of sales                                          (4,345,639)        (40,963)                -              -
                                                       --------------  --------------    --------------  -------------
GROSS PROFIT                                                (781,286)        114,153            21,451         21,452
                                                       --------------  --------------    --------------  -------------

OPERATING EXPENSES
   Management fees                                                  -         39,271                 -         13,090
   Professional fees and compensation expenses               482,558         697,808           195,783        145,720
   Advertising                                                 3,845           3,258                -             140
   Travel and automobile expenses                             41,803          18,650            20,296          7,241
   Telephone and utilities                                     7,326           7,679             3,914          1,744
   Real estate taxes and property maintenance                 14,094           9,327             6,032          3,928
   Office expenses                                            15,430          18,788             5,936          6,207
   Miscellaneous                                              12,590           9,810             5,552          1,747
   Depreciation and amortization                              12,444           1,596             6,299            532
                                                       --------------  --------------    --------------  -------------
       TOTAL OPERATING EXPENSES                              590,090         806,187           243,812        180,349
                                                       --------------  --------------    --------------  -------------


LOSS BEFORE OTHER INCOME (EXPENSE)                        (1,371,376)       (692,034)         (222,361)      (158,897)

OTHER INCOME (EXPENSE)
   Unrealized loss on investment securities                         -       (224,547)                -              -
   Amortization of discount on debenture conversions                -       (100,480)                -              -
   Interest expense                                          (14,566)        (16,760)           (4,958)        (5,951)
   Interest income                                               613           2,250               578          1,250
                                                       --------------  --------------    --------------  -------------
       TOTAL OTHER INCOME (EXPENSE)                          (13,953)       (339,537)           (4,380)        (4,701)
                                                       --------------  --------------    --------------  -------------

NET LOSS BEFORE PROVISION FOR
   INCOME TAXES                                        $  (1,385,329)  $  (1,031,571)    $    (226,741)  $   (163,598)
                                                       ==============  ==============    ==============  =============

PROVISION FOR INCOME TAXES                                         -               -                 -              -
                                                       --------------  --------------    --------------  -------------

NET LOSS APPLICABLE TO COMMON SHARES                   $  (1,385,329)  $  (1,031,571)    $    (226,741)  $   (163,598)
                                                       ==============  ==============    ==============  =============

NET LOSS PER BASIC AND DILUTED SHARES                  $     (1.3853)  $     (1.0316)    $     (0.2267)  $   (0.1636)
                                                       ==============  ==============    ==============  =============
WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING                                      1,000,000       1,000,000         1,000,000      1,000,000
                                                       ==============  ==============    ==============  =============

------------------------------------------------------------------------------------------------------------------------
</TABLE>
          The accompanying notes are an integral part of the condensed
                       consolidated financial statements.

                                        5
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE NINE MONTHS ENDED JUNE 30, 2003 AND 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                                                               2003           2002
----------------------------------------------------------------------------------------
<S>                                                        <C>            <C>
CASH FLOW FROM OPERATING ACTIVITIES
   Net loss                                                $ (1,385,329)  $ (1,031,571)
                                                           -------------  -------------
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED IN) OPERATING EXPENSES:
   Amortization of discount on convertible debentures                 -        100,480
   Depreciation and amortization                                 12,444          1,596
   Unrealized loss on investment securities                           -        224,547
       Management compensation                                        -        359,760

CHANGES IN ASSETS AND LIABILITIES
   (Increase) decrease in inventory - real estate holdings    3,750,488     (2,024,516)
   (Increase) in escrow receivable                             (462,741)             -
   Decrease in prepaid expenses and other assets                      -         68,765
   Increase in accounts payable and
   and accrued expenses                                           3,005         52,605
                                                           -------------  -------------
       Total adjustments                                      3,303,196     (1,216,763)
                                                           -------------  -------------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES           1,917,867     (2,248,334)
                                                           -------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Loans to officers - net                                            -       (145,663)
   Loans to / from others                                       246,174              -
   (Increase) decrease in mortgage receivables                   40,931        (46,108)

       NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES      287,105       (191,771)
                                                           -------------  -------------

----------------------------------------------------------------------------------------
</TABLE>
          The accompanying notes are an integral part of the condensed
                       consolidated financial statements.












                                        6
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                                   2003           2002
--------------------------------------------------------------------------------------------
<S>                                                            <C>            <C>
CASH FLOWS FROM FINANCING ACTIVITES
   Proceeds from debentures and common stock issuances - net   $          -   $    460,000
                                                               -------------  -------------
   Loans to others                                                        -        434,945
   Loan origination fees                                            (88,181)             -
   Net change in temporary equity                                         -        155,956
   Net change  in notes and mortgages payable                    (2,499,553)     1,347,694
                                                               -------------  -------------
       NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES       (2,587,734)     2,398,595
                                                               -------------  -------------

NET DECREASE IN
   CASH AND CASH EQUIVALENTS                                       (382,762)       (41,510)


CASH AND CASH EQUIVALENTS -
   BEGINNING OF PERIOD                                              481,609         80,764
                                                               -------------  -------------

CASH AND CASH EQUIVALENTS - END OF PERIOD                      $     98,847   $     39,254
                                                               =============  =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

CASH PAID DURING THE YEAR FOR:
   Interest expense                                            $      2,626   $          -
                                                               =============  =============
SUPPLEMENTAL DISCLOSURE OF NONCASH
   ACTIVITIES:

   ISSUANCE OF COMMON STOCK FOR:

       Convertible debenture conversions                       $          -   $    160,798
                                                               =============  =============

       Accounts payable and accrued expenses - professional
       fees associated with debentures                         $          -   $     73,657
                                                               =============  =============

       Amortization of discount on convertible debentures      $          -   $    100,480
                                                               =============  =============
OTHER:

       Mortgage debt assumed                                   $          -   $    315,000
                                                               =============  =============
       Investments received                                    $          -   $    227,070
                                                               =============  =============
</TABLE>
          The accompanying notes are an integral part of the condensed
                       consolidated financial statements.

                                        7
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                   (UNAUDITED)
                     FOR THE NINE MONTHS ENDED JUNE 30, 2003


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                              CLASS A         ADDITIONAL
                                                    COMMON STOCK            COMMON STOCK       PAID-IN    ACCUMULATED
                                               SHARES         AMOUNT      SHARES     AMOUNT    CAPITAL      DEFICIT      TOTALS

<S>                                         <C>            <C>           <C>        <C>      <C>          <C>          <C>
September 30, 2001, as previously reported  1,095,300,351  $ 1,095,299   1,000,000  $ 1,000  $ 4,607,597  $(2,018,802) $ 3,685,094

Reclassification of shares to temporary equity
       -See Note 10                        (1,094,300,351)  (1,094,299) (1,000,000)  (1,000)  (1,001,017)           -   (2,096,316)

Prior period adjustment, Note 15                        -            -           -        -            -   (1,830,731)  (1,830,731)
                                           --------------- ------------ ----------- -------- ------------ ------------ ------------

September 30, 2001, as restated                 1,000,000        1,000           -        -    3,606,580   (3,849,533)    (241,953)

Net loss, as previously reported                        -            -           -        -            -      (47,655)     (47,655)

Prior period adjustment, Note 15                        -            -           -        -            -     (140,079)    (140,079)
                                           --------------- ------------ ----------- -------- ------------ ------------ ------------

December 31, 2001, as restated                  1,000,000        1,000           -        -    3,606,580   (4,037,267)    (429,687)

Net loss, as previously reported                        -            -           -        -            -   (1,106,453)  (1,106,453)

Prior period adjustment, Note 15                        -            -           -        -            -      426,214      426,214
                                           --------------- ------------ ----------- -------- ------------ ------------ ------------

March 31, 2002, as restated                     1,000,000        1,000           -        -    3,606,580   (4,717,506)  (1,109,926)

Net loss                                                -            -           -        -            -     (163,598)    (163,598)
                                           --------------- ------------ ----------- -------- ------------ ------------ ------------

June 30, 2002                                   1,000,000  $     1,000           -  $     -  $ 3,606,580  $(4,881,104) $(1,273,524)
                                           =============== ============ =========== ======== ============ ============ ============

September 30, 2002                              1,000,000  $     1,000           -  $     -  $ 3,606,580  $(4,197,046) $  (589,466)

Net loss                                                -            -           -        -            -   (1,385,329)  (1,385,329)
                                           --------------- ------------ ----------- -------- ------------ ------------ ------------

June 30, 2003                                   1,000,000  $     1,000           -  $     -  $ 3,606,580  $(5,582,375) $(1,974,795)
                                           =============== ============ =========== ======== ============ ============ ============

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>





          The accompanying notes are an integral part of the condensed
                       consolidated financial statements.


                                        8
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
              STATEMENT OF CHANGES IN TEMPORARY EQUITY (UNAUDITED)
                     FOR THE NINE MONTHS ENDED JUNE 30, 2003


<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                            CLASS A        ADDITIONAL
                                                 COMMON STOCK             COMMON STOCK      PAID-IN   ACCUMULATED
                                             SHARES        AMOUNT       SHARES     AMOUNT   CAPITAL     DEFICIT      TOTALS
                                          -------------- ------------ ----------- -------- ---------- ------------ ------------
<S>                                       <C>            <C>          <C>         <C>      <C>        <C>          <C>
Balance, September 30, 2001, as previously
reported                                              -  $         -           -  $     -  $       -  $         -  $         -
                                          -------------- ------------ ----------- -------- ---------- ------------ ------------
Reclassification of shares to temporary equity
-See Note 10                              1,094,300,351    1,094,299   1,000,000    1,000          -    1,001,017    2,096,316

Prior period adjustment, Note 15                      -            -           -        -          -    1,830,731    1,830,731
                                          -------------- ------------ ----------- -------- ---------- ------------ ------------

Balance, September 30, 2001, as restated  1,094,300,351    1,094,299   1,000,000    1,000          -    2,831,748    3,927,047

Common stock issued for debt

conversion, interest expense and

discount on convertible debentures

for quarter ended December 31, 2001         843,265,695      843,267           -        -   (687,311)     334,935      490,891
                                          -------------- ------------ ----------- -------- ---------- ------------ ------------

Balance, June 30, 2002                    1,937,566,046  $ 1,937,566   1,000,000  $ 1,000  $(687,311) $ 3,166,683  $ 4,417,938
                                          ============== ============ =========== ======== ========== ============ ============

Balance, September 30, 2002               1,937,566,046  $ 1,937,566   1,000,000  $ 1,000  $(687,311) $ 3,166,653  $ 4,417,908

No activity                                           -            -           -        -          -            -            -
                                          -------------- ------------ ----------- -------- ---------- ------------ ------------

Balance, June 30, 2003                    1,937,566,046  $ 1,937,566   1,000,000  $ 1,000  $(687,311) $ 3,166,653  $ 4,417,908
                                          ============== ============ =========== ======== ========== ============ ============

---------------------------------------------------------------------------------------------------------------------------------
</TABLE>



          The accompanying notes are an integral part of the condensed
                       consolidated financial statements.

                                        9
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
         --------------------------------------


         The condensed consolidated unaudited interim financial statements
         included herein have been prepared, without audit, pursuant to the
         rules and regulations of the Securities and Exchange Commission. The
         condensed consolidated financial statements and notes are presented as
         permitted on Form 10-QSB and do not contain information included in the
         Company's annual consolidated statements and notes. Certain information
         and footnote disclosures normally included in financial statements
         prepared in accordance with accounting principles generally accepted in
         the United States of America have been condensed or omitted pursuant to
         such rules and regulations, although the Company believes that the
         disclosures are adequate to make the information presented not
         misleading. It is suggest that these condensed consolidated financial
         statements be read in conjunction with the September 30, 2002 audited
         consolidated financial statements and the accompanying notes thereto.
         While management believes the procedures followed in preparing these
         condensed consolidated financial statements are reasonable, the
         accuracy of the amounts are in some respects dependent upon the facts
         that will exist, and procedures that will be accomplished by the
         Company later in the year.

         These condensed consolidated unaudited financial statements reflect all
         adjustments, including normal recurring adjustments which, in the
         opinion of management, are necessary to present fairly the consolidated
         operations, changes in permanent stockholders equity (deficit), changes
         in temporary equity and cash flows for the periods presented.

         National Residential Properties, Inc. (the "Company"), was originally
         incorporated in the State of Nevada on October 18, 1971, under the name
         of Mister Las Vegas, Inc. On December 15, 1994, the Company merged with
         a privately owned company, National Rehab Properties, Inc., a Florida
         corporation formed on October 1, 1993. The surviving Nevada corporation
         changed its name to National Rehab Properties, Inc. and became
         authorized to conduct business in the State of Florida on August 17,
         1995. On September 13, 2000, the Company changed its name to National
         Residential Properties, Inc.

         The Company's business was residential real estate development and
         building construction services. From 1993 to 1999, the Company's
         business concentrated in investing in and revitalizing single family
         homes in established older residential neighborhoods in urban areas.
         The Company bought either single unit vacant properties and built
         single family homes or it bought abandoned homes and completed all
         renovations to the home followed by a sale of the home. During 1999,
         while retaining its efforts in the renovation of urban single family
         homes as one aspect of the business, the Company entered a second phase
         of business, the development, construction and ownership of multifamily
         housing projects.

                                       10
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
         --------------------------------------------------

         Beginning in the fiscal year ending September 30, 1999, the Company
         initiated a program of acquisition of properties suitable for
         development as multifamily housing or multiple unit single family
         development tracts. Since 1999, the Company has purchased four tracts
         with the intention of building from 60 to 72 apartment units on each
         tract and one twenty acre citrus grove for single family home
         development. In April 2000, the Company acquired 80% of Encore
         Services, Inc.

         On May 4, 2001, the Company's wholly-owned subsidiary, Connecticut
         Acquisition Corp. No. 1, ("Connecticut Acquisition") entered into a
         joint venture to develop a parcel of land located in Hebron,
         Connecticut, (the "Hebron Parcel") as a senior adult community pursuant
         to a land development agreement with Mr. Nathan Kahn and various
         entities controlled by Mr. Nathan Kahn. The objective of this
         development was to either sell developed lots to builders, or erect
         dwellings themselves.

         Mr. Kahn's entities had obtained options to purchase and develop other
         properties, and the Kahn entities advised that they would need
         additional funding to pay for the expenses in connection with the
         obtaining and maintenance of these options.

         The land development agreement called for Connecticut Acquisition to
         fund the initial costs of acquisition and development, and, after
         deduction of expenses from gross revenues, profits would be divided
         50-50 between the parties.

         In contemplation of the financing of this project, on April 12, 2001,
         Connecticut Acquisition, obtained a loan from accredited investors
         evidenced by its 8% Series A Senior Subordinated Convertible Redeemable
         Debentures due April 13, 2003 (the "Connecticut Acquisition
         Debentures"), which were convertible from time to time into shares of
         Connecticut Acquisition's Class A Common Stock. On May 8, 2001,
         following the acquisition of the Hebron Parcel, Connecticut Acquisition
         was merged into the Company. As a result, all rights and obligations of
         Connecticut Acquisition inured to the benefit of and became binding
         upon the Company. Pursuant to the merger, the Connecticut Acquisition
         Debentures were surrendered and canceled, and new debentures, identical
         to the Connecticut Acquisition Debentures, together with accompanying
         conversion rights into authorized but unissued shares of the Company's
         common stock, par value $.001 per share ("NRES Common Stock"), were
         issued by the Company to the holders of the Connecticut Acquisition
         Debentures.

                                       11
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

         Pursuant to an agreement executed on December 26, 2001, made effective
         as of October 31, 2001 and a Statutory Warranty Deed dated October 31,
         2001, the Company sold to Senior Adult Lifestyle, Inc ("Senior Adult
         Lifestyle") an entity which may be deemed an affiliate of the Company
         through common corporate officers, all of the rights, title and
         interest in (i) the Hebron Parcel; and (ii) contracts to purchase
         certain parcels of real property in Watertown, New Milford, Granley and
         East Windsor, Connecticut. As additional consideration for the
         conveyance to Senior Adult Lifestyle. the Company received on February
         1, 2002, 20 million shares of common stock of Genesis Capital
         Corporation of Nevada ("Genesis"), the parent of Senior Adult
         Lifestyles. These shares were based on a value of $0.10 per share, the
         value the stock was trading for in December 2001, for an agreed
         consideration of $2 million. Should the value at the earlier of (a) the
         time the Company sells these shares or (b) the expiration of three
         years from the date of the conveyance fall below $2 million, Genesis
         was required to issue to the Company, additional shares of Genesis
         Common Stock to make up the difference in value. The value of the
         Genesis Common Stock was $.009 ($180,000) on February 1, 2002.

         On October 17, 2001, the Company's other wholly-owned subsidiary, DC
         Power Products Acquisition Corp, ("DC Power"), obtained a loan from
         accredited investors evidenced by its 8% Series A Senior Subordinated
         Convertible Redeemable Debentures due October 17, 2003 (the "DC Power
         Debentures"), which were convertible from time to time into shares of
         DC Power's common stock. DC Power was merged into the Company on
         November 1, 2001. As a result, all rights and obligations inured to the
         benefit of and became binding upon the Company.

         Pursuant to the merger, the DC Power Debentures were surrendered and
         canceled, and new debentures, identical to the DC Power Debentures,
         together with accompanying conversion rights into authorized but
         unissued shares of the Company's common stock ("NRES Common Stock"),
         were issued by the Company to the holders of DC Power's debentures.

         The Company has restated its March 31, 2002 condensed consolidated
         financial statements to reflect certain income and expenses not
         previously recognized. The Company recognized $372,851 of management
         compensation in the March 31, 2002 quarter, income of $804,952 from the
         reclassification of unrealized losses on investment securities, and an
         additional $5,887 in interest expense attributable to the debentures.
         Additionally, there were certain reclassifications of balance sheet
         items that did not effect stockholders' equity (deficit) at March 31,
         2003. For the quarter ended December 31, 2001, the Company is also
         reporting $100,480 of amortization of discount on debenture conversions
         and $73,657 of professional fees and interest associated with the
         debentures. The Company recognized $34,058 of income from the sale of
         inventory in the quarter ended December 31, 2001. The Company has not
         restated a June 30, 2002 condensed consolidated financial statement.

         The Company, in accordance with SFAS 115, reflected the permanent
         decline in its marketable equity securities.

                                       12
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

         The net effect on the above was to decrease the net loss for the three
         months ended March 31, 2002 by $426,214 from $1,106,453, as originally
         reported, to $680,239 as restated. The six months ended year-to-date
         loss was reduced by $286,135 from $1,154,108 as originally reported to
         $867,973 as restated.

         Moreover, the Company has reclassified its balance sheet to reflect the
         temporary equity account from permanent stockholders' equity (See Note
         10) for discussion.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

                  PRINCIPLES OF CONSOLIDATION
                  ---------------------------

         The condensed consolidated financial statements include the accounts of
         the Company and all of its wholly owned subsidiaries. All significant
         intercompany accounts and transactions have been eliminated in
         consolidation.

                  USE OF ESTIMATES
                  ----------------

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

                  REVENUE AND COST RECOGNITION
                  ----------------------------

         Sales of real estate are generally recognized under the full accrual
         method. Under that method, gain is not recognized until the
         collectibility of the sales price is reasonably assured and the
         earnings process is virtually complete. When a sale does not meet the
         requirements for income recognition a gain is deferred until those
         requirements are met.

         The Company recorded the sale of property to Genesis Capital
         Corporation under the cost recovery method. When this method is used,
         no profit is recognized on the sales transaction until the cost of the
         property sold is recovered. (See Note 1)

         Acquisition and other direct costs, interest, and other indirect costs
         related to acquisition and development of lots are capitalized.
         Capitalized costs are allocated based on the relative sales value of
         each lot. The capitalized costs are charged to earnings when the
         relative revenue is recognized.

                                       13
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         ------------------------------------------------------

                  CASH AND CASH EQUIVALENTS
                  -------------------------

         The Company considers all highly liquid debt instruments and other
         short-term investments with an initial maturity of three months or less
         to be cash equivalents.

         The Company maintains cash and cash equivalent balances at several
         financial institutions which are insured by the Federal Deposit
         Insurance Corporation up to $100,000.

                  FIXES ASSETS
                  ------------

         Fixed assets are stated at cost. Depreciation is computed primarily
         using the straight-line method over the estimated useful life of the
         assets.

         Equipment and other                            3 to 5 Years
         Vehicles                                            5 Years

                  INCOME TAXES
                  ------------

         The income tax benefit is computed on the pretax loss based on the
         current tax law. Deferred income taxes are recognized for the tax
         consequences in future years of differences between the tax basis of
         assets and liabilities and their financial reporting amounts at each
         year-end based on enacted tax laws and statutory tax rates.

                  ADVERTISING
                  -----------

         Costs of advertising are expensed as incurred. Advertising costs were
         $3,845 and $3,258 for the nine months ended June 30, 2003 and 2002,
         respectively.

                  EARNINGS (LOSS) PER SHARE OF COMMON STOCK
                  -----------------------------------------

         Historical net income (loss) per common share is computed using the
         weighted average number of common shares outstanding. Diluted earnings
         per share (EPS) includes additional dilution from common stock
         equivalents, such as stock issuable pursuant to the exercise of stock
         options and warrants. Common stock equivalents were not included in the
         computation of diluted earnings per share when the Company reported a
         loss because to do so would be antidilutive for periods presented.

         The following is a reconciliation of the computation for basic and
         diluted EPS:


                                       14
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         ------------------------------------------------------

                                                      June 30,      June 30,
                                                        2003          2002
                                                  -------------- --------------

Net Loss                                           $ (1,385,329)  $ (1,031,571)
                                                  -------------- --------------

Weighted-average common shares outstanding (Basic)    1,000,000      1,000,000

Weighted-average common stock equivalents:
 Stock options                                                -              -
 Warrants                                                     -              -

Weighted-average common shares outstanding (Diluted)  1,000,000      1,000,000


         Options and warrants outstanding to purchase stock were not included in
         the computation of diluted EPS because inclusion would have been
         antidilutive.

         There are no options and warrants outstanding to purchase stock at June
         30, 2003 and 2002.

                  INVESTMENT SECURITIES
                  ---------------------

         Management determines the appropriate classification of investment
         securities at the time they are acquired and evaluates the
         appropriateness of such classifications at each balance sheet date. The
         classification of those securities and the related accounting policies
         are as follows:

         Trading securities: Trading securities are held for resale in
         anticipation of short-term fluctuations in market prices. Trading
         securities, consisting primarily of actively traded equity securities,
         are stated at fair value. Realized and unrealized gains and losses are
         included in income.

         Available-for-sale securities: Available-for-sale securities consist of
         marketable equity securities not classified as trading securities.
         Available-for-sale securities are stated at fair value, and unrealized
         holding gains and losses, net of the related deferred tax effect, are
         reported as a separate component of stockholders' equity unless the
         change in value is deemed permanent.

         Dividends on marketable equity securities are recognized in income when
         declared. Realized gains and losses are included in income. Realized
         gains and losses are determined on the basis of the actual cost of the
         securities sold.

                                       15
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         ------------------------------------------------------

                  FAIR VALUE OF FINANCIAL INSTRUMENTS
                  -----------------------------------

         The carrying amount reported in the condensed consolidated balance
         sheets for cash and cash equivalents, loans receivable, accounts
         payable and accrued expenses approximate fair value because of the
         immediate or short-term maturity of these financial instruments. The
         carrying amount reported for notes and mortgages payable approximates
         fair value because, in general, the fair value of the notes and
         mortgages payable is estimated based on interest rates for the same or
         similar debt offered to the Company having the same or similar
         remaining maturities and collateral requirements.

                  LOAN ORIGINATION FEES
                  ---------------------

         Represent fees in connection with obtaining mortgages on the various
         properties. The loan origination fees are being amortized straight-line
         over a five-year period. Amortization expense for the nine months ended
         June 30, 2003 and 2002 is $4,089 and $0, respectively.

                  RECLASSIFICATIONS
                  -----------------

         Certain amounts for the nine months ended June 30, 2002 have been
         reclassified to conform with the presentation of the June 30, 2003
         amounts. The reclassifications have no effect on net income for the
         nine months ended June 30, 2002.

NOTE 3 - INVENTORY - REAL ESTATE HOLDINGS
         --------------------------------

         Inventory consists of residential single family homes held for resale
         and land held for development and is valued at the lower of cost or
         market value. Cost includes acquisition, renovation and carrying costs
         specifically identified with each unit.

NOTE 4 - MORTGAGES RECEIVABLE AND OTHER
         ------------------------------

         Represents amounts due from individuals who purchased property from the
         Company. Amounts due at June 30, 2003 were $34,079.

NOTE 5 - LOANS RECEIVABLE - OFFICERS
         ---------------------------

         Amounts represent advances to and from the officers of the Company. The
         balance at June 30, 2003 is $-0-. This balance along with other
         advances that occurred in fiscal 2002, were charged to compensation
         expense during the fiscal quarter ended March 31, 2002.

                                       16
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 6 - FIXED ASSETS
         ------------

         Fixed assets consist of the following at June 30, 2003:


         Office Equipment and other    $    20,663
         Vehicles                           31,509
                                            ------
         Subtotal                           52,172
         Accumulated Depreciation          (19,343)
                                       ------------
                             Total     $    32,829
                                       ============

         Depreciation expense was $8,355 and $1,596 for the nine months ended
         June 30, 2003 and 2002, respectively.

NOTE 7 - MORTGAGES AND NOTES PAYABLE
         ---------------------------

         Mortgages and notes payable consist of the following at June 30, 2003:

         The Company has various mortgages and construction loans payable
         aggregating $3,234,533 at March 31, 2003. These amounts are payable at
         various times ranging through 2003 and 2004, bearing interest at
         various rates ranging from 7% through 14% per year. The mortgages and
         construction notes are secured by the land and buildings held for
         development by the Company.

NOTE 8 - CONVERTIBLE DEBENTURES PAYABLE
         ------------------------------

         The Company has convertible debentures outstanding at June 30, 2003 in
         the amount of $199,202. These debentures accrue interest at 8% per
         annum. These debentures mature along with the related interest at
         November 2003. The debentures are convertible at the investors
         discretion pursuant to the convertible debenture agreement.

         Additionally, the Company recognized $100,480 of amortization of the
         discount on the debenture conversions for the nine months ended June
         30, 2002.












                                       17
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 9 - ACQUISITIONS
         ------------

         On February 10, 2000, the Company acquired MAS XV Acquisitions Corp.
         for 1,500,000 shares of its common stock valued at $.19 per share or
         $285,000. Additionally, on April 1, 2000, the Company acquired 80% of
         the Encore Services, Inc. for 250,000 common shares of its stock valued
         at $33,750. The Company restated its September 30, 2000 consolidated
         financial statements and expensed the entire amounts of these
         acquisitions because they were determined to have no value. Both
         companies had no assets or liabilities upon the purchase.

         On May 8, 2001, the Company merged with Connecticut Acquisition Corp.
         No. 1 upon the acquisition of a parcel of land in Hebron, Connecticut.
         This parcel of land was subsequently conveyed on October 31, 2001 to
         Genesis Capital Corporation of Nevada, an entity related to the Company
         through common officers and directors.

         DC Power merged into the Company on November 1, 2001.

NOTE 10 - CONTINGENCY/UNCERTAINTY
          -----------------------

         The Company has become aware that some or all of the changes to its
         capital structure were not validly adopted by the Company's board of
         directors, approved by the Company's shareholders, or filed with the
         Secretary of State of the State of Nevada as required by the laws of
         the State of Nevada. As a result, it appears that the Company never has
         been authorized to issue more than 1,000,000 shares of its common
         stock. All shares of the Company's common stock issued in excess of
         1,000,000 shares appear to have been issued in excess of the Company's
         authorized amount, therefore, these shares have been reclassified to
         temporary equity (See Note 11).

         Additionally, the Company issued common stock above the Company's
         authorized amount and issued shares that at the time may not have been
         in compliance with the registration provisions of Section 5 of the
         Securities Act of 1933, as amended. The full impact of these items were
         unknown at this time. As a result, the Company had reclassified
         $3,927,047 to temporary equity as of September 30, 2001. Subsequent to
         September 30, 2001, the Company issued 843,265,695 shares of stock in
         connection with the conversion of debentures that have been classified
         as temporary equity. This resulted in an increase to temporary equity
         of $490,891 for the nine months ended June 30, 2002. This account acts
         as a reserve for capital that the Company may be required to repay.

         As per Note 15, the Company expects to reclassify certain amounts from
         temporary equity to permanent stockholders' equity after curing any
         over issuances of its common stock.


                                       18
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 11 - TEMPORARY EQUITY
          ----------------

         The Company has recorded on its balance sheet a temporary equity
         account for those securities issued that may not be in compliance with
         the registration provisions of Section 5 of the Securities Act of 1933,
         as amended and for the issuance of common stock issued above its
         authorized amount. All related amounts that were previously included in
         common stock and additional paid-in capital of the permanent
         stockholders' equity (deficit) section have been reclassified to
         temporary equity as their redemption may not be solely within the
         control of the issuer. Temporary equity at June 30, 2003 and 2002, were
         $4,417,938 and $4,417,938, respectively. Substantially all the shares
         issued in connection with the conversion of debentures have been
         reclassified as temporary equity.

NOTE 12 - STOCKHOLDERS' EQUITY (DEFICIT)
          ------------------------------

         As of June 30, 2003 and 2002, there were 1,000,000 shares authorized
         shares, and 1,000,000 shares issued and outstanding of the Company's
         common stock with a par value of $.001.

         The Company issued 843,265,695 shares of common stock for the three
         months ended December 31, 2001, and there have been no issuances of
         common stock since this time period. These shares are recorded in
         temporary equity (See Note 11). All of these shares were issued in
         excess of authorized limits.

         As of June 30, 2003 and 2002, there were 0 shares authorized and 0
         shares issued and outstanding of the Company's Class A Voting common
         stock with a par value of $.001. (See Note 10).

         The shares of common stock issued for the nine months ended June 30,
         2002 relate to the debenture conversions.

NOTE 13 - INCOME TAXES
          ------------

         There was no income tax benefit recognized at June 30, 2003 and 2002.

         The net deferred tax assets in the accompanying condensed consolidated
         balance sheet include benefit of utilizing net operating losses of
         approximately $2,212,418 (at June 30, 2003), however due to the
         uncertainty of utilizing the net operating losses, an offsetting
         valuation allowance has been established.


                                       19
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 14 - LITIGATION
          ----------

         On August 2, 2002, Encore Builders, Inc., the plaintiff, filed suit
         against Conquistador Plaza, Inc., a subsidiary of the Company, in the
         Circuit Court of the Eleventh Judicial Circuit in Miami-Dade County,
         Florida seeking the foreclosure of a mechanic's lien with respect to
         the Conquistador Plaza development. The plaintiff asserts that $504,076
         is due from Conquistador Plaza, Inc. and is seeking damages with
         interest, costs and attorneys fees. The plaintiff was bonded by
         Mountbatten Surety Company, Inc. and the Company intends to vigorously
         defend this claim.

NOTE 15 - PRIOR PERIOD ADJUSTMENT
          -----------------------

         During the three months ended March 31, 2002, the Company has
         recognized $372,851 of management compensation, income of $804,952 from
         the reclassification of unrealized losses on investment securities.,
         and an additional $5,887 in interest expense attributable to the
         debentures. The net effect of all of these prior period adjustments for
         the quarter ended March 31, 2002 was to decrease the net loss for the
         three months ended March 31, 2002 $426,214 from a loss of $(1,106,453),
         as originally stated to ($680,239), as restated. In addition, the net
         effect of all of these prior period adjustments as well as the
         adjustments below for the six months ended March 31, 2002 was to
         decrease the net loss for the three months ended March 31, 2002
         $286,135 from a loss of $(1,154,108), as originally stated to
         ($867,973), as restated.
















                                       20
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             JUNE 30, 2003 AND 2002
                                   (UNAUDITED)

NOTE 15 - PRIOR PERIOD ADJUSTMENT (CONTINUED)
          -----------------------------------

         During the three months ended December 31, 2001, the Company has
         recognized $100,480 of amortization of discounts and $73,657 of fees
         related to the convertible debentures, and recognized an additional
         $34,058 of income from the gain on a sale of property.

         Accordingly, the deficit is restated as follows:

         Deficit, March 31, 2002, as previously reported     ($3,172,910)
         Prior Period Adjustment, September 30, 2001          (1,830,731)
         Prior Period Adjustment, December 31, 2001             (140,079)
         Prior Period Adjustment, March 31, 2002                 426,214
                                                             ------------

         Deficit, March 31, 2002, as restated                ($4,717,506)
                                                             ------------

         There were no restatements for the three months ended June 30, 2002.

         Accordingly, related stockholders' equity (deficit) accounts and
         temporary equity accounts were adjusted to account for this recognition
         (See Notes 10, 11 and 12).





















                                       21
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS AND OTHER
FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS REPORT.

         THE COMPANY CAUTIONS INVESTORS THAT ITS BUSINESS AND FINANCIAL
PERFORMANCE ARE SUBJECT TO SUBSTANTIAL RISKS AND UNCERTAINTIES. IN EVALUATING
THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
INFORMATION SET FORTH IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR
ENDED SEPTEMBER 30, 2002 UNDER THE CAPTION "RISK FACTORS" IN ADDITION TO THE
OTHER INFORMATION SET FORTH HEREIN.

BACKGROUND CAPITALIZATION INFORMATION

         The Company's original Articles of Incorporation (the "ARTICLES")
authorized the Company to issue 1 million shares of the Company's common stock
("NRES COMMON STOCK"). After its incorporation, the following events occurred:
(i) in December of 1994, the Company attempted to effect a 2 for 1 stock split
(the "1994 STOCK SPLIT"); (ii) in January of 1999, the Company attempted to
effect a 1 for 10 reverse stock split (the "1999 REVERSE STOCK SPLIT"); (iii)
between the date of its incorporation and January of 2001, the Company believed
it increased the number of shares it was authorized to issue from 1 million to
40 million shares of NRES Common Stock (the "40 MILLION SHARE INCREASE"); (iv)
in October of 2000, the Company attempted to increase the number of shares the
Company was authorized to issue from 40 million to 250 million shares of NRES
Common Stock (the "250 MILLION SHARE INCREASE"); (v) in January of 2001, the
Company attempted to increase the number of shares it was authorized to issue
from 250 million to 750 million shares of NRES Common Stock and effected a 3 for
1 stock split (the "750 MILLION SHARE INCREASE"); and (vi) in June of 2001, the
Company attempted to increase the number of shares it was authorized to issue
from 750 million to 1.5 billion shares of NRES Common Stock (the "1.5 BILLION
SHARE INCREASE", and together with the 1994 Stock Split, the 1999 Reverse Stock
Split, the 40 Million Share Increase, the 250 Million Share Increase and the 750
Million Share Increase, the "CAPITAL CHANGES"). The Company has since determined
that some or all of the Capital Changes were not validly adopted by the
Company's board of directors, approved by the Company's shareholders or filed
with the Secretary of State of the State of Nevada as required by the laws of
the State of Nevada. As a result, it appears the Company never has been
authorized to issue more than 1 million shares of NRES Common Stock. All shares
of NRES Common Stock issued in excess of 1 million shares appear to have been
issued in excess of the authorized amount.

         Given the foregoing, the Company has attempted to determine the
majority owners of the validly issued shares of NRES Common Stock. The Company
discovered that Richard Astrom and Pamela Gay Astrom, tenants by the entireties,
were issued a substantial block of shares shortly after the Company merged with
National Rehab Properties, Inc. These shares consisted of the majority of the
Company's validly issued outstanding shares. The Company's former transfer
agent's records show that these shares can be traced to such point that the
Company's former transfer agent and the Company severed relations, when they
were still held by Richard and Pamela Astrom, as tenants by the entireties. The
Company's current transfer agent's records confirm that these shares can be
traced from that time to the present, as they are still held by Richard and
Pamela Astrom, as tenants by the entireties, and have not been sold or otherwise
transferred. As such, Richard Astrom and Pamela Gay Astrom, as tenants by the
entireties, appear to hold a majority of the validly issued shares of NRES
Common Stock.

         After making the aforementioned factual findings, the Company proceeded
to retain local counsel in the State of Nevada to determine the effect of the
invalidity of some or all of the Capital Changes and to confirm the foregoing
analysis under Nevada law. The Company believes that Richard and Pamela Astrom,
as the valid owners of a majority of the Company's validly issued shares, can
amend the Articles to increase the Company's

                                       22
<PAGE>
authorized number of shares. The Company also believes that the issuance of NRES
Common Stock in excess of the authorized amount can be cured by the Company's
board of directors. The Company and Richard and Pamela Astrom intend to amend
the Company's Articles and cure and ratify any issuances of shares issued in
excess of the authorized amount after the Company's local counsel renders these
opinions. The Company also intends to file an Information Statement on Schedule
14C reflecting these actions, as appropriate.

RECENT DEVELOPMENTS

     o   On August 2, 2002, Encore Builders filed suit against Conquistador
         Plaza, a subsidiary of the Company, in the Circuit Court of the
         Eleventh Judicial Circuit in Miami-Dade County, Florida seeking
         foreclosure of a mechanic's lien with respect to the Conquistador Plaza
         development. The Company acquired Encore Builders in April of 2000.
         Conquistador Plaza retained Encore Builders to construct the
         Conquistador Plaza development. Encore Builders asserted Conquistador
         Plaza breached the January 30, 2001 construction contract between
         Encore Builders and Conquistador Plaza. Encore Builders asserted that
         $504,076.03 is due from Conquistador Plaza, Inc. and is seeking damages
         with interest, costs and attorneys fees. Encore Builders was bonded by
         Mountbatten Surety Company, Inc. On August 26, 2003, the parties
         stipulated for a full settlement of all claims that existed amongst
         them. As part of the settlement, $55,000 was to be paid for the benefit
         of Encore Builders and $50,000 was to be paid to Mountbatten Surety
         Company, Inc.

     o   The Company concluded that the 1994 Stock Split, the 1999 Reverse Stock
         Split, the 40 Million Share Increase, the 250 Million Share Increase,
         the 750 Million Share Increase and the 1.5 Billion Share Increase may
         not have not been validly adopted by the Company's board of directors,
         approved by the Company's shareholders or filed with the Secretary of
         State of the State of Nevada, as required by the laws of the State of
         Nevada. As such, the Company believes it currently has only 1 million
         shares of NRES Common Stock authorized, a majority of which are owned
         by Richard and Pamela Astrom as tenants by the entireties.

     o   The Company's July 31, 2002 contract to sell the Barcelona Apartments
         property to Antonio Sarmiento fell through. The Company is currently
         continuing its efforts to sell this property. The Company entered into
         an agreement for purchase and sale with Salomon Yuken to sell the
         Barcelona Apartments to Salomon Yuken on January 10, 2003. On May 8,
         2003, the Company and Salomon Yuken entered into an amendment to the
         agreement for purchase and sale. In June 2003, the Company and Salomon
         Yuken entered into a second amendment to the agreement for purchase and
         sale which, among other things, extended the closing date to October
         31, 2003. A $100,000 deposit has been paid to the Company by Salomon
         Yuken. The closing date was subsequently extended to January 2004.

OVERVIEW

     o   National Residential Properties, Inc. was incorporated on October 18,
         1971, in the State of Nevada under the name of Mister Las Vegas, Inc.
         At the time of its incorporation, the Company was authorized to issue 1
         million shares of its common stock.

     o   Pursuant to a letter agreement executed on November 15, 1994, Richard
         Astrom, the then-president of National Rehab Properties, Inc., a
         Florida corporation formed on October 1, 1993, purchased 200,000 of the
         235,000 issued and outstanding shares of NRES Common Stock from the
         Company's then controlling stockholders. At this time the Company was
         authorized to issue 1 million shares of NRES Common Stock. On December
         15, 1994, the Company's board of directors approved the 1994 Stock
         Split, giving Richard Astrom 400,000 of the issued and outstanding
         shares of NRES Common Stock.

                                       23
<PAGE>
     o   On December 15, 1994, the Company entered into an agreement of merger
         with National Rehab Properties, Inc. On May 15, 1995, the merger became
         effective and National Rehab Properties, Inc. merged with and into the
         Company, with National Rehab Properties, Inc. remaining as the
         surviving entity. Pursuant to the agreement of merger, each share of
         National Rehab Properties, Inc.'s common stock was converted into one
         share of NRES Common Stock and each share of NRES Common Stock before
         the merger remained as one share of NRES Common Stock. At the time of
         the merger, Richard Astrom owned 1,000 shares of National Rehab
         Properties, Inc.'s common stock. After the merger, Richard Astrom and
         members of his family held 401,000 shares of the issued and outstanding
         shares of NRES Common Stock. The surviving entity subsequently changed
         its name to National Rehab Properties, Inc. and became authorized to
         conduct business in the State of Florida on August 17, 1995.

     o   In January of 1999, the Company attempted to effect the 1999 Reverse
         Stock Split.

     o   Between the date of its incorporation and January of 2001, the Company
         attempted to increase the number of shares the Company was authorized
         to issue from 1 million to 40 million shares of Common Stock pursuant
         to the 40 Million Share Increase.

     o   On June 17, 1999, pursuant to a joint action by written consent of the
         Company's shareholders and board of directors, the Company was given
         the authority to amend its Articles of Incorporation to authorize 2
         million shares of Class A Common Stock per share and to issue 1 million
         shares of its newly authorized Class A Common Stock to Christopher
         Astrom.

     o   In April of 2000, the Company acquired 80% of Encore Services, Inc.
         ("ENCORE SERVICES"). Encore Services served as the Company's general
         construction contractor, but was subsequently replaced by Encore
         Builders, Inc. ("ENCORE BUILDERS"), a former subsidiary (through March
         21, 2002) of Vacation Ownership Marketing, Inc. Vacation Ownership
         Marketing, Inc. ("VACATION OWNERSHIP") is an affiliate of the Company.
         Encore Builders was the general construction contractor for the
         Company's Conquistador Plaza project in Miami, Florida. Since the time
         Encore Builders replaced Encore Services as the general construction
         contractor of the Company's Conquistador Plaza project, to the time the
         Company severed its relationship with Encore Services in March of 2002,
         Encore Services has been inactive.

     o   In October of 2000, the Company changed its name to National
         Residential Properties, Inc. (the "NATIONAL RESIDENTIAL NAME CHANGE").

     o   In October of 2000, the Company attempted to effect the 250 Million
         Share Increase by filing a Certificate of Change in Number of
         Authorized Shares with the Nevada Secretary of State to increase its
         authorized number of shares from 40 million shares, to 250 million
         shares.

     o   In January of 2001, the Company attempted to effect the 750 Million
         Share Increase.

     o   On April 12, 2001, the Company's wholly-owned subsidiary, Connecticut
         Acquisition Corp. No. 1 ("CONNECTICUT ACQUISITION") obtained a loan
         from accredited investors evidenced by its 8% Series A Senior
         Subordinated Convertible Redeemable Debentures due April 12, 2003 (the
         "CONNECTICUT ACQUISITION DEBENTURES"), which were convertible from time
         to time into shares of Connecticut Acquisition's Class A common stock.
         On May 8, 2001, Connecticut Acquisition merged with and into the
         Company, with the Company remaining as the surviving entity. As a
         result, all rights and obligations of Connecticut Acquisition inured to
         the benefit of and became binding upon the Company. Pursuant to the
         merger, the Connecticut Acquisition Debentures were surrendered and
         canceled, and new debentures, identical to the Connecticut Acquisition
         Debentures (the "NRES CONNECTICUT

                                       24
<PAGE>
         DEBENTURES"), but convertible into authorized and unissued shares of
         NRES Common Stock, were issued by the Company to the holders of the
         Connecticut Acquisition Debentures.

     o   In June of 2001, the Company filed a Certificate of Amendment with the
         Nevada Secretary of State attempting to effect the 1.5 Billion Share
         Increase.

     o   On October 17, 2001, the Company's wholly-owned subsidiary, DC Power
         Products Acquisition Corp. ("DC POWER"), a Florida corporation,
         obtained a loan from accredited investors evidenced by its 8% Series A
         Senior Subordinated Convertible Redeemable Debentures due October 17,
         2003 (the "DC POWER DEBENTURES"), which were convertible from time to
         time into shares of DC Power's common stock. On November 1, 2001, DC
         Power merged with and into the Company with the Company remaining as
         the surviving entity. As a result, all rights and obligations of DC
         Power inured to the benefit of and became binding upon the Company.
         Pursuant to the merger, the DC Power Debentures were surrendered and
         canceled, and new debentures, identical to the DC Power Debentures (the
         "NRES DC POWER DEBENTURES" and together with the NRES Connecticut
         Debentures, the "NRES DEBENTURES"), but convertible into authorized and
         unissued shares of NRES Common Stock, were issued by the Company to the
         holders of the DC Power Debentures.

     o   The Company's Articles of Incorporation, as amended, currently provide
         that the Company is authorized to issue up to 1.5 billion shares of
         NRES Common Stock. However, the Company concluded that the 1994 Stock
         Split, the 1999 Reverse Stock Split, the 40 Million Share Increase, the
         250 Million Share Increase, the 750 Million Share Increase and the 1.5
         Billion Share Increase may not have been validly adopted by the
         Company's board of directors, approved by the Company's shareholders or
         filed with the Secretary of State of the State of Nevada, as required
         by the laws of the State of Nevada. As such, the Company believes it
         currently has only 1 million shares of NRES Common Stock authorized, a
         majority of which are owned by Richard and Pamela Gay Astrom, as
         tenants by the entireties. As such, all references to shares of NRES
         Common Stock do not reflect the Capital Changes referenced above
         (including any stock splits).

     o   It has come to the Company's attention that, as a result of the
         conversion of the NRES Debentures into NRES Common Stock and the
         decrease in the price of NRES Common Stock, investors were entitled to
         more shares than authorized. As a result, the Company, as of December
         19, 2003, has 1,938,566,046 shares of NRES Common Stock issued, which
         exceeds the number of authorized shares. Under the state law of Nevada,
         it may be possible that the transactions for shares in excess of the
         number of authorized shares will not be viewed as valid and the Company
         may be responsible for taking corrective action or compensating the
         stockholders.

     o   The Company currently is a land development company that purchases
         zoned, but undeveloped real property, develops architectural plans for
         the real property, obtains building permits for the real property and
         subsequently sells the real property when it is ready for development.
         The Company has the potential to realize profit with these activities
         because developers who purchase the real property will not need to
         delay obtaining construction financing until they receive a building
         permit.

OPERATING HISTORY

         From 1993 until 1999, the Company's business concentrated on investing
in and revitalizing single family homes in established older residential
neighborhoods in urban areas. The Company either bought single unit vacant
properties and built single family homes on them, or bought abandoned homes
which the Company then renovated and sold. During 1999, while retaining its
efforts in the renovation of urban single family homes

                                       25
<PAGE>
as one aspect of its business, the Company entered a second phase of business:
the development, construction and ownership of multifamily housing projects.

     Connecticut Properties

         On May 4, 2001, the Company's wholly-owned subsidiary, Connecticut
Acquisition, entered into a land development agreement with a Mr. Nathan Kahn
and various companies controlled by him (the "KAHN ENTITIES") to develop a
parcel of land located in Hebron, Connecticut (the "HEBRON PARCEL") as a senior
adult community. Thereafter, Connecticut Acquisition and the Kahn Entities hoped
to continue to develop the Hebron Parcel with a view toward either selling
developed lots to builders or erecting dwellings themselves. In addition, the
Kahn Entities had obtained options to purchase and develop other properties, and
the Kahn Entities advised they would need additional funding to pay their
expenses, such as engineering reports, zoning studies, and the like, in
connection with the obtaining and maintenance of these options.

         The land development agreement called for Connecticut Acquisition to
advance funds to the Kahn Entities earmarked for a specific option and a
specific set of itemized expenses related to a specific property and for each
option in question to serve as collateral for the funds advanced by Connecticut
Acquisition. If the advance is not timely repaid, that option, and all attendant
rights thereto, revert to, and become the property of, Connecticut Acquisition.

         The land development agreement provided that Connecticut Acquisition
would fund the initial costs of acquisition and development, and, after
deduction of expenses from gross revenues, profits would be divided 50-50
between Connecticut Acquisition and the Kahn Entities. On April 12, 2001, in
contemplation of the financing of this project, Connecticut Acquisition obtained
a loan from accredited investors evidenced by the Connecticut Acquisition
Debentures.

         From the proceeds of the sale of the Connecticut Acquisition Debentures
approximately (a) $160,000 was to be used by Connecticut Acquisition to acquire
the Hebron Parcel (together with a mortgage in the amount of $315,000 which
Connecticut Acquisition would assume) and (b) $680,000 was to be used by
Connecticut Acquisition to pay the expenses to be incurred with the development
of the other properties.

         On May 8, 2001, following the acquisition of the Hebron Parcel by
Connecticut Acquisition, Connecticut Acquisition merged with and into the
Company. As a result of the Merger, (a) the rights and obligations of
Connecticut Acquisition with respect to the land development agreement inured to
the benefit of and became binding upon the Company, and (b) the Connecticut
Acquisition Debentures were surrendered and canceled and the NRES Connecticut
Debentures, which were convertible into NRES Common Stock, were issued by the
Company to the holders of the Connecticut Acquisition Debentures.

         Pursuant to an agreement executed on December 26, 2001, made effective
as of October 31, 2001 and a statutory warranty deed dated October 31, 2001, the
Company sold all the rights, title and interest in (i) the Hebron Parcel and
(ii) contracts to purchase certain parcels of real property in Watertown, New
Milford, Granby and East Windsor, Connecticut to Senior Adult Lifestyle, Inc., a
subsidiary of Genesis Capital Corporation of Nevada ("GENESIS"), which may be
deemed an affiliate of the Company. The agreement contemplated that the Company
would assume two mortgages having an aggregate principal balance of $315,000 and
be issued 20 million shares of restricted Genesis common stock ("GENESIS COMMON
STOCK") based on a value of $.10 per share, which value was determined by the
average bid price of Genesis Common Stock during the week prior to the October
31, 2001 effective date. While the agreed upon consideration was $2 million, the
net effect of this transaction was to transfer $1.685 million in Genesis Common
Stock after deducting the aggregate principal balance on the mortgages. The
value of the assets sold has not been appraised by any independent party.

                                       26
<PAGE>
         On February 1, 2002, the Company received the 20 million shares of
Genesis Common Stock. If, at the earlier of (a) the expiration of three years
from the date of the conveyance, or (b) the time the Company has sold all of the
shares of Genesis Common Stock, the market value or gross sale proceeds realized
by the Company for the sale of the Genesis Common Stock is less than $2 million,
Genesis must issue the Company additional shares of Genesis Common Stock in an
amount based on the closing bid price of Genesis Common Stock as quoted on the
OTC Bulletin Board the day before the date of such additional shares are issued
to make up the difference between the market value or gross sale proceeds and $2
million. The value of the Genesis Common Stock on February 1, 2002 was $180,000.
The ability of the Company to realize $2 million from the sale of these assets
is dependent upon a number of factors, including, without limitation: (i) the
Company's ability to sell shares of Genesis Common Stock into the public markets
in accordance with the rules of the SEC; (ii) the trading volume of Genesis
Common Stock at the time or times the Company sells stock into the markets;
(iii) the operating results of Genesis and the market reaction to such operating
results; (iv) the number of shares of Genesis Common Stock tradable on the OTC
Bulletin Board; and (v) other factors affecting the market price of, and market
for, Genesis Common Stock. There can be no assurance the Company will realize $2
million from the development or sale of these assets, or that it will have a
fair market value of $2 million. Further, Genesis and the Company may be deemed
affiliates of one another and, therefore, there can be no assurance that the
terms of sale, including the value assigned to the parties by the assets, would
be the same as, or similar to, the terms to which unrelated parties would agree
in an arm's-length transaction.

     Conquistador Plaza

         In April 2000, the Company acquired 80% of the outstanding shares of
Encore Services, a general construction contractor. The remaining shares were
held by Braulio Gutierrez who, until March 2002, was a director of the Company
as well as a director and officer of Vacation Ownership, which may be deemed an
affiliate of the Company.

         Encore Builders, a subsidiary of Vacation Ownership whose president was
a director of the Company, was the primary construction company responsible for
construction projects at the Company's properties. However, the first of these
projects, the Conquistador Plaza project, was subject to substantial delays due
to the inability of Encore Builders to meet completion schedules. The delays in
construction caused the Company to commence financing construction loan interest
from its own resources, rather than from construction loan proceeds, and to
terminate Encore Builders as the project's contractor. In March of 2002, the
Company returned the shares of Encore Services, the Company's wholly-owned
inactive company.

         On April 18, 2002, the Company's subsidiary, Conquistador Plaza, Inc.
("CONQUISTADOR PLAZA") received a notice of default from its lender. The notice
cited violations of loan covenants by Conquistador Plaza, specifically relating
to the proceeds of the construction loan being insufficient to complete
construction of the Conquistador Plaza development. The notice of default also
cited the termination of work on the project for a period of more than 20 days.
As a consequence of the defaults, the lender accelerated and declared due and
payable Conquistador Plaza's entire indebtedness of $3,205,317.89, and advised
Conquistador Plaza that the lender would take action to protect its interest if
Conquistador Plaza did not return the entire balance by May 19, 2002. Although
the Company is not liable on the Conquistador Plaza loan, the Company has
invested substantial funds in the Conquistador Plaza development and would lose
its investment were the lender to foreclose on the lender's mortgage. In order
to repay the lender, Conquistador Plaza entered into a contract to sell the
Conquistador Plaza project. Litigation with Encore Builders is described in more
detail in "Legal Proceedings". The Company entered into a contract dated June
24, 2002, to sell this property to Shamrock at the Gables LLC for $3.5 million.
This transaction was completed on October 8, 2002.

                                       27
<PAGE>
CURRENT OPERATIONS

     Overview

         From 1999 until 2002, the Company's business focused on residential
real estate development and building construction services, and in particular on
acquiring properties suitable for development as multifamily housing or multiple
unit single family development tracts. During this time period, the Company
purchased four parcels of land for apartment construction and one 20-acre citrus
grove for subdivision development. These properties are described below in
detail along with the status of each project in light of the transition in the
Company's business plan.

     Granada Grand Apartments

         This property is in the Hazelton subdivision in Miami, Florida and was
purchased with the intention of constructing a 60-unit apartment building on it.
The land was purchased for $800,000. The Company intended for Encore Builders to
handle the construction of the building and obtained a mortgage commitment from
First Housing Development Corporation of Florida and was due to close on the
mortgage, but one day prior to closing, Encore Builders' construction
performance bond was revoked. Encore Builders attempted unsuccessfully to get
rebonded (including performing a merger with the Company's affiliate, Vacation
Ownership). In December of 2001, the Company entered into a contract with G&F
Corp. to sell the property as a vacant parcel. Although resale was not the
original goal of the purchase, it allowed the Company to realize a profit on the
purchase and sale of Granada Grand. The Company sold the five lots of real
property to G&F Corp. for $1,805,500 in cash on July 24, 2002. Mortgages and
closing expenses totaled $801,870. G&F Corp. assigned the purchase contract to
M.E.D. of Miami, LLC before closing on July 24, 2002. The Company received
$1,003,360 after satisfaction of the mortgages on this property and closing
costs. The Company never built on the property. The purchase price was
determined through arms-length negotiations.

     Eagle Trace Subdivision

         This property is a 20 acre citrus grove in Vero Beach, Florida that the
Company successfully rezoned to a single family development. The Company
completed construction of 62 single-family lots in 2002 and sold the property to
WBS Management & Acquisition Corp on July 30, 2003 pursuant to a Vacant Land
Contract dated as of May 29, 2003. The purchase price for the property was
$1,980,000 and was determined through arms-length negotiations.

     Barcelona Apartments

         On this property, located in Miami, Florida and purchased in 2000, the
Company intended to construct 70 rental apartments. The Company's July 31, 2002
contract to sell this property to Antonio Sarmiento fell through. The Company is
currently continuing its efforts to sell this property. The Company entered into
an agreement for purchase and sale with Salomon Yuken to sell the Barcelona
Apartments to Salomon Yuken on January 10, 2003. On May 8, 2003, the Company and
Salomon Yuken entered into an amendment to the agreement for purchase and sale.
In June 2003, the Company and Salomon Yuken entered into a second amendment to
the agreement for purchase and sale which, among other things, extended the
closing date to October 31, 2003. A $100,000 deposit has been paid to the
Company by Salomon Yuken. The closing date was subsequently extended to January
2004.

     Residences at Bay Harbor

         The Bay Harbor property, located on Bay Harbor Island, Florida, was
purchased by the Company in 2000 for $850,000. The Company intended to construct
a 15-story, 60 unit apartment building on the Bay

                                       28
<PAGE>
Harbor property and intended for Encore Builders to handle the construction.
Immediately after closing the acquisition of the land, the Company applied for a
building permit, but to this date, the permit has not been obtained due to
various neighborhood objections to construction. The initial business plan
called for the building to be sold as a condominium project for $18 million,
with construction costs at approximately $12 million. Due to the Company's
relations with Encore Builders and the difficulties with the building permit,
the Company chose not to construct the building and instead, on December 17,
2001, chose to resell the land for $2.2 million to Dennis Almandares, an
independent third party. The transaction contemplated by this agreement did not
close, and the Company subsequently entered into a purchase and sale agreement
dated as of May 20, 2002 to sell this property to Gateway Mortgage Bankers, Inc.
for $2.3 million. The Company expected to close this transaction in September of
2002 or upon the issuance of a building permit by the city building department
for a 15-story building but was unable to obtain the required building permit.
Subsequently, the Company filed a complaint against the Town of Bay Harbor.

     Other Properties

         On July 31, 2001, the Company sold a property located at 3104 NW 61st
Street in Miami, Florida for $92,000. The Company received $29,953 after
satisfaction of the mortgage on this property and closing costs.

         On August 2, 2002, the Company sold a property located at 1521 NW 84th
Street in Miami, Florida for $95,000. The Company received $5,500 after
satisfaction of the mortgage on this property and closing costs.

         On November 1, 2002, the Company sold a vacant lot property located at
3102 NW 61st Street in Miami, Florida for $20,000.

         On November 1, 2002, the Company sold a vacant lot property located at
3000 NW 93rd Street in Miami Florida for $20,000. The sale was financed with a
purchase money mortgage.

RESULTS OF OPERATIONS

         The following is a discussion of the consolidated financial condition
and results of operations of the Company for the three and nine months ended
June 30, 2003 and 2002, which should be read in conjunction with, and is
qualified in its entirety by, the consolidated financial statements and notes
thereto included elsewhere in this report.

         For the three and nine months ended June 30, 2003, the Company incurred
net losses of $226,741 and $1,385,329, respectively, compared to net losses of
$163,598 and $1,031,571 for the comparable 2002 periods. The net loss in 2002 is
primarily attributable to the Company's sale of the Conquistador Plaza
Apartments at a loss and the payment of interest and legal fees.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002

REVENUES

         Total revenues remained unchanged at $21,451 for the three months ended
June 30, 2003, as compared to $21,452 for the three months ended June 30, 2002.
The primary source of revenues for both quarterly periods was rent generated
from the Barcelona Apartments.

                                       29
<PAGE>
OPERATING EXPENSES

     Management Fees

         Management fees totaled $0 and $13,090 for the quarterly periods ended
June 30, 2003 and June 30, 2002, respectively. This decrease in management fees
was primarily due to the Company's determination to eliminate management
feeexpenses in favor of paying its officers compensation.

     Advertising

         Advertising expenses totaled $0 for the three months ended June 30,
2003, as compared to $140 for the three months ended June 30, 2002. This
decrease in advertising expenses was attributable to the Company had already
executed agreements for the sale of the properties it held.

     Travel and Automobile Expenses

         Travel and automobile expenses for the three months ended June 30,
2003, were $20,296 as compared to $7,241 for the three months ended June 30,
2002. This 180% increase is primarily due to the fact that meetings relating to
the Company's business and financing opportunities were more regional in nature
and required less air travel..

     Telephone and Utilities

         Telephone and utilities increased from $1,744 for the quarterly period
ended June 30, 2002, to $3,914 for the quarterly period ended June 30, 2003.
This 124% increase is primarily due to additional communications expenditures
related to increased business activity.

     Miscellaneous Expenses

         Miscellaneous expenses increased from $1,747 for the quarterly period
ended June 30, 2002, to $5,552 for the quarterly period ended June 30, 2003.
This 218% increase was the result of sales related activity and expenses.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2003 AND JUNE 30, 2002

REVENUES

         Total revenues for the nine months ended June 30, 2003, increased to
$3,564,353 for the nine months ended June 30, 2003, as compared to $155,116 for
the nine months ended June 30, 2002. The primary sources of revenues for the
nine months ended June 30, 2003, were the sale of the Conquistador Plaza
Apartments.

OPERATING EXPENSES

     Management Fees

         Management fees for the nine months ended June 30, 2002, totaled
$39,271 as compared to $0 for the nine months ended June 30, 2003. This decrease
in management fees is primarily related to the Company's determination to
eliminate management fees and pay its officers compensation.

                                       30
<PAGE>
     Professional Fees and Compensation Expenses

         Professional fees and compensation expenses totaled $697,808 and
$482,558 for the nine months ended June 30, 2002 and June 30, 2003,
respectively. This 31% decrease in professional fees and compensation expenses
is primarily due to the Company's determination during its 2002 fiscal year to
forgive certain loans to its officers and treat the expense as compensation.

     Travel and Automobile Expenses

         Travel and automobile expenses increased from $18,650 for the nine
months ended June 30, 2002, to $41,803 for the nine months ended June 30, 2003.
This 124% increase is primarily due increased travel by the Company's officers
to Vero Beach in anticipation of a sale of the Eagle Trace property.

     Real Estate Taxes and Property Maintenance

         Real estate taxes and property maintenance expenses totaled $14,094 for
the nine months ended June 30, 2003, as compared to $9,327 for the nine months
ended June 30, 2002. This 51% increase in real estate taxes and property
maintenance expenses is attributable to the Company's holding real estate for
over one year.

DEPRECIATION AND AMORTIZATION

         Depreciation and amortization for the nine months ended June 30, 2003,
totaled $12,444 as compared to $1,596 for the nine months ended June 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES

         To date, the Company has financed its operations primarily through
mortgage debt and the sale of NRES Common Stock issued through converting the
NRES Debentures. At June 30, 2003, the Company had $98,847 in cash and cash
equivalents, an increase of $59,593 from June 30, 2002. This increase in cash
and cash equivalents is attributable to the sale and mortgaging of the Company's
properties. The Company decreased its real estate holdings $3,750,488 in the
nine month period ended June 30, 2003, compared to real estate acquisitions of
$2,024,516 in the comparable 2002 period, as the Company continued at a
diminished rate its business plan to develop, construct and own multifamily
housing.

         Net cash provided by investing activities was $287,105 for the nine
months ended June 30, 2003, as compared to $191,771 used in the nine months
ended June 30, 2002. Net cash used in financing activities was $2,587,734 for
the nine months ended June 30, 2003, as compared to $2,398,595 provided by
financing activities during the nine months ended June 30, 2003. This decrease
in net cash provided by financing activities is attributable to the fact that
the Company did not receive proceeds from the sale of debentures.

         The Company had stockholders' equity of $1,000 at June 30, 2003. The
Company's determination that it has issued shares in excess of its authorized
amount resulted in the Company's determination that all shares issued in excess
of 1 million would be reclassified as temporary equity. The Company believes
that when considered together with anticipated income from the sale of real
property, it has sufficient cash resources to maintain operations for a period
of at least twelve months. The Company's cash requirements will largely depend
upon the availability of real estate acquisition opportunities and the costs to
continue funding its real estate development projects. There can be no assurance
that funds required by the Company for these purposes, or to meet its operating
requirements, will be available or, if they are, that they will be available on
acceptable terms and at such times as the Company requires. See "Outlook", below
for a discussion on possible limits on the Company's ability to raise capital.

                                       31
<PAGE>
OUTLOOK

         The Company invested substantial funds in its existing projects, but
only realized material profits from these projects upon the sale of the real
estate. While the Company entered into agreements to sell certain of its
remaining properties, it cannot guarantee these transactions will close or that
the sales will occur in a timely fashion. Further, the Company faces litigation
with respect to the Conquistador Plaza project resulting from the termination of
the project's contractor, a former subsidiary of the Company whose president was
a director of the Company. The Company terminated the project's contractor
because of its inability to meet completion schedules. The delays in
construction caused the Company to commence financing construction loan interest
from its own resources, rather than from construction loan proceeds.

         The Company's ability to meet its continuing operating expenses largely
depends on its ability to continue to raise capital through (i) the sale of debt
or equity, (ii) through construction and permanent mortgage financing, (iii)
through the completion and sale, or sale prior to completion, of the Company's
real estate projects and (iv) through the sale of land purchased, but not
developed, by the Company. In the likely event the Company is forced to sell its
remaining property prior to completion or the time such property appreciates
substantially, should such increase occur, the Company's profit, if any, from
its real estate activities would be materially adversely affected. There can be
no assurance the Company will be able to raise additional capital on a debt or
equity basis, or obtain mortgage financing, complete any of its projects under
development, or sell any completed development projects (should they be
completed) or land purchased for resale or development at a profit.

         From time to time the Company has entered into agreements with
unrelated third parties for the sale of property. However, these agreements
contain customary contingencies, such as financing or governmental approval
contingencies, which the Company believes are sufficiently material as to make
uncertain the ability of the Company to complete these sales.

         The Company's operations are principally based in the residential real
estate market in South Florida. This market has historically been both cyclical
and seasonal. The Company experiences generally higher sales in the second and
third fiscal quarters. Therefore, the results of any interim period is not
necessarily indicative of the results that might be expected during a full
fiscal year.

         Section 5 of the Securities Act of 1933, as amended (the "SECURITIES
ACT") prohibits the public sale of securities absent an effective registration
statement being filed with the SEC, unless an exemption from registration
applies. On April 12, 2001, Connecticut Acquisition issued the Connecticut
Acquisition Debentures and on October 17, 2001, DC Power issued the DC Power
Debentures. The Connecticut Acquisition Debentures were exchanged for the NRES
Connecticut Debentures and the DC Power Debentures were exchanged for the NRES
DC Power Debentures. Together, the NRES Connecticut Debentures and the NRES DC
Power Debentures are referred to as the "NRES DEBENTURES." The shares of NRES
Common Stock underlying the converted portion of the NRES Debentures were sold
by the holders of the NRES Debentures. These two series of transactions were
performed in a manner thought to be exempt from the registration requirements of
Section 5 of the Securities Act. However, the requirements of the exemptions
relied on do not appear to have been satisfied. The Company is thereby exposed
to possible litigation under Section 12(a)(1) of the Securities Act. Section 13
of the Securities Act provides that no action shall be maintained for offering
or selling securities in violation of Section 5 unless that action is brought
within one year of the date of the violation. If actions by the holders of NRES
Common Stock received upon conversion of the NRES Debentures are barred by this
statute of limitations, the Company expects to reclassify certain amounts from
temporary equity to permanent stockholder equity (after curing any
overissuances).

                                       32
<PAGE>
         While one year has passed from the initial placement of the NRES
Debentures, it appears that approximately $1,103,500 of principal, $19,400 in
interest, $144,943 in bookkeeping fees, $168,020 in investor fees, $258,434 in
professional fees and $30,000 in fees for the right to borrow funds (a total of
$1,724,297) were converted by the investors of the NRES Connecticut Debentures
during the period beginning on May 16, 2001 and ending on July 13, 2001. The
Company's records, however, are incomplete as they pertain to the NRES
Connecticut Debentures and although the Company believes it has been able to
accurately calculate the aggregate amount converted and the amount of capital
raised, the Company has estimated the exact breakdown of various fees and debt
relating to the NRES Connecticut Debentures that have been converted.
Additionally, $160,798 of principal (out of a total amount of $460,000 funded),
$4,922 of interest paid and $68,735 in bookkeeping fees (a total of $234,455)
was converted during the period beginning on November 5, 2001 and ending on
August 2, 2002 ($199,202 remains payable). The holders of the NRES Connecticut
Debentures received a total of approximately 590,442,628 shares of NRES Common
Stock with an average price of $.00266 per share through conversions and the
holders of the NRES DC Power Debentures received a total of approximately
716,365,695 shares of NRES Common Stock with an average price of $.000327 per
share through conversions. All shares of NRES Common Stock issued upon
conversion of the NRES Debentures were sold by holders of the NRES Debentures
following conversion. This occurred during the period beginning on May 16, 2001
and ending on July 13, 2001 for the NRES Connecticut Debentures and beginning on
November 5, 2001 and ending on August 2, 2002 for the NRES DC Power Debentures.
The closing market prices during this time ranged from $.0036 to $.0076 per
share and $.0001 to $.0017 per share, respectively. As of the date of this
report, there have been no actions filed against the Company based upon a
violation of Section 5. Because the statute of limitations has almost run, it is
unlikely that a large portion of these holders of NRES Common Stock will file an
action against the Company. However, any such action maintained against the
Company could have a substantial impact on the Company and capital resources.
The ramifications of this may entail a possible rescission offer to the
stockholders affected within the past year. Other possible ramifications include
an enforcement action by the SEC.

         As of the date of this report, the Company has not received $540,000 in
additional proceeds from the sale of the NRES DC Power Debentures and has
$199,202 in NRES DC Power Debentures outstanding. The Company has no plans to
issue additional NRES Debentures for any amounts not yet received and has no
plans to permit outstanding NRES Debentures to be converted.

         In October of 2000, the Company issued debentures pursuant to a merger
with 2217 Acquisition Inc., a Nevada corporation. These debentures were also
converted into NRES Common Stock. Because these debentures were all converted
into NRES Common Stock and sold over one year ago, it is unlikely that a Section
5 action could be maintained against the Company for offering these debentures
or the underlying NRES Common Stock.

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. The Company may have
violated the federal proxy rules by either (i) not obtaining the requisite
shareholder approval to effect these changes or (ii) not providing shareholders
with an Information Statement on Schedule 14C. As such, it appears the Company
currently has only 1 million shares of NRES Common Stock authorized, and the
majority of the validly issued shares are held by Richard and Pamela Astrom as
tenants by the entireties. The Company believes a majority of the Company's
validly issued and outstanding shares and the board of directors can cure and
ratify the overissuances of stock and the aforementioned changes in capital
structure. Until that time, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount. The Company also
believes the issuance of

                                       33
<PAGE>
Class A common stock to Christopher Astrom was not authorized as an amendment to
the Company's Articles of Incorporation was never filed with the Secretary of
State of the State of Nevada. The Company believes the recipient of the
unauthorized shares, Christopher Astrom, may have a claim against the Company
for damages, but it is unlikely that Christopher Astrom will file a claim
against the Company as he is an officer, director and principal shareholder of
the Company. Also, as discussed below, the Company's board of directors and the
holders of a majority of its validly issued shares intend to authorize the
creation of Class A common stock and issue shares to Christopher Astrom.

         It has come to the Company's attention that, as a result of the
conversion of the debentures issued by the Company into NRES Common Stock,
coupled with the decrease in the trading price of NRES Common Stock, investors
were entitled to more shares of NRES Common Stock than is authorized under the
Company's Articles of Incorporation. As a result, as of January 8, 2004, the
Company has 1,938,566,046 shares of NRES Common Stock issued, which exceeds the
number of shares authorized. As stated above, the Company believes the holders
of a majority of the Company's validly issued and outstanding shares and the
board of directors can cure and ratify the overissuances of stock. If this
cannot be accomplished, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount in an amount equal to
1,937,566,046 shares (the number of shares issued in excess of the amount
authorized) multiplied by the price each such share was issued for (which ranged
from approximately $.0001 to $5.4 per share). The overissuance, together with
the Company's inability to increase its authorized number of shares, has
eliminated the Company's ability to raise capital through issuances of publicly
registered securities. The Company believes it will not be able to continue
trading NRES Common Stock or increase its capital resources through selling
publicly registered securities until the overissuance is cured and the Company
increases the authorized number of shares of NRES Common Stock. The Company may
also have violated other provisions of Nevada law with respect to the duties of
officers and directors to the Company and by not having sufficient shares
available upon the conversion of debentures issued by the Company.

















                                       34
<PAGE>
                                  RISK FACTORS

         IN ADDITION TO OTHER INFORMATION IN THIS REPORT, YOU SHOULD CONSIDER
THE FOLLOWING RISK FACTORS CAREFULLY. THESE RISKS MAY IMPAIR THE COMPANY'S
OPERATING RESULTS AND BUSINESS PROSPECTS AS WELL AS THE MARKET PRICE OF THE
COMPANY'S COMMON STOCK.

RISKS RELATED TO LEGAL UNCERTAINTIES

     The Company Believes It Has Violated Nevada Corporate Law

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. As such, it appears the
Company currently has only 1 million shares of NRES Common Stock authorized, and
the majority of the validly issued shares are held by Richard and Pamela Astrom
as tenants by the entireties. The Company believes a majority of the Company's
validly issued and outstanding shares and the board of directors can cure and
ratify the overissuances of stock and the aforementioned changes in capital
structure. Until that time, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount. The Company also
believes the issuance of Class A common stock to Christopher Astrom was not
authorized as an amendment to the Company's Articles of Incorporation was never
filed with the Secretary of State of the State of Nevada. The Company believes
the recipient of the unauthorized shares, Christopher Astrom, may have a claim
against the Company for damages, but it is unlikely that Christopher Astrom will
file a claim against the Company as he is an officer, director and principal
shareholder of the Company. Also, as discussed below, the Company's board of
directors and the holders of a majority of its validly issued shares intend to
authorize the creation of Class A common stock and issue shares to Christopher
Astrom.

         It has come to the Company's attention that, as a result of the
conversion of the debentures issued by the Company into NRES Common Stock,
coupled with the decrease in the trading price of NRES Common Stock, investors
were entitled to more shares of NRES Common Stock than is authorized under the
Company's Articles of Incorporation. As a result, as of January 8, 2004, the
Company has 1,938,566,046 shares of NRES Common Stock issued, which exceeds the
number of shares authorized. As stated above, the Company believes the holders
of a majority of the Company's validly issued and outstanding shares and the
board of directors can cure and ratify the overissuances of stock. If this
cannot be accomplished, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount in an amount equal to
1,937,566,046 shares (the number of shares issued in excess of the amount
authorized) multiplied by the price each such share was issued for (which ranged
from approximately $.0001 to $5.4 per share). The overissuance, together with
the Company's inability to increase its authorized number of shares, has
eliminated the Company's ability to raise capital through issuances of publicly
registered securities. The Company believes it will not be able to continue
trading NRES Common Stock or increase its capital resources through selling
publicly registered securities until the overissuance is cured and the Company
increases the authorized number of shares of NRES Common Stock. The Company may
also have violated other provisions of Nevada law with respect to the duties of
officers and directors to the Company and by not having sufficient shares
available upon the conversion of debentures issued by the Company.

                                       35
<PAGE>
     The Company May Face Litigation For Issuing Securities in Violation of
     Section 5 of the Securities Act.

         Section 5 of the Securities Act prohibits the public sale of securities
absent an effective registration statement being filed with the SEC, unless an
exemption from registration applies. All shares of NRES Common Stock issued upon
conversion of the NRES Debentures were sold by holders of the NRES Debentures
following conversion. This occurred during the period beginning on May 16, 2001
and ending on July 13, 2001 for the NRES Connecticut Debentures and beginning on
November 5, 2001 and ending on August 2, 2002 for the NRES DC Power Debentures.
In October of 2000, the Company issued debentures pursuant to a merger with 2217
Acquisition Inc., a Nevada corporation. These debentures were also converted
into NRES Common Stock. These transactions were performed in a manner thought to
be exempt from the registration requirements of Section 5 of the Securities Act.
However, the requirements of the exemptions relied on do not appear to have been
satisfied. As of the date of the filing of this report, because there have been
no actions filed against the Company based upon a violation of Section 5 and
because the statute of limitations has run, it is unlikely that these holders of
NRES Common Stock will file an action against the Company. However, any such
action maintained against the Company could have a substantial impact on the
Company and capital resources. The ramifications of this may entail a possible
rescission offer to the stockholders affected within the past year. Other
possible ramifications include an enforcement action by the SEC.

         As of the date of this report, the Company has not received $540,000 in
additional proceeds from the sale of the NRES DC Power Debentures and has
$199,202 in NRES DC Power Debentures outstanding. The Company has no plans to
issue additional NRES Debentures for any amounts not yet received and has no
plans to permit outstanding NRES Debentures to be converted.

     The Company May Have Violated the Federal Proxy Rules

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. The Company may have
violated the federal proxy rules by either (i) not obtaining the requisite
shareholder approval to effect these changes or (ii) not providing shareholders
with an Information Statement on Schedule 14C. As such, it appears the Company
has only 1 million shares of NRES Common Stock authorized. Until the Company's
board of directors and shareholders cure and ratify the overissuances of stock,
the 40 Million Share Increase, the 250 Million Share Increase, the 750 Million
Share Increase and the 1.5 Billion Share Increase and comply with the federal
proxy rules in doing so by properly obtaining shareholder approval, the Company
may be liable to the holders of the NRES Common Stock issued in excess of the
authorized amount. The Company still may be subject to an enforcement action for
possible violations of this and other provisions of the federal securities laws.

     The Company May Not be Able to Raise Additional Capital

         On December 6, 2001, the Company filed an Information Statement on
Schedule 14C with the SEC to increase the number of shares of authorized NRES
Common Stock from 1.5 billion shares to 5 billion shares, among other things.
The Company plans to seek stockholder approval to cure and ratify the Capital
Changes and provide a related information statement on Schedule 14C to its
stockholders shortly after the Company is satisfied it has resolved any of the
SEC's comments. Pending resolution of this matter, the Company will not be able
to realize any proceeds from the sale of the NRES Debentures, other debt, or
equity (other than proceeds from mortgages on properties). Even if the Company
were able to increase its authorized capital, there can be no assurance that the
Company will be able to raise additional capital on a debt or equity basis, or
to obtain mortgage financing, to complete any of its projects under development
(should they be completed), or land purchased for resale or development at a
profit.

                                       36
<PAGE>
     The Company May Be In Default of the NRES Debentures

         It appears the Company is or will be in default under the terms of the
NRES Debentures because, among other things, the Company has no plans to
register additional NRES Common Stock to be issued upon conversion of the NRES
Debentures that are currently outstanding and has no plans to complete the
issuance of the NRES Debentures. Given the foregoing, the Company could face
litigation by the holders of the NRES Debentures seeking to enforce the
Company's obligations thereunder. This would likely have a substantial negative
effect on the Company's capital resources and would also negatively affect the
Company's liquidity.

OTHER RISKS



     The Company's Stock Price Has Declined Significantly and May Not Recover

         The trading price of NRES Common Stock has declined significantly since
approximately October 2001. The market for NRES Common Stock is essentially
non-existent and there can be no assurance of a change in the immediate future.

     Risks Related to Real Estate and Related Investments

         The Company is subject to the risks associated with ownership,
operation and financing of real estate. These risks include, but are not limited
to, liability for environmental hazards, changes in general or local economic
conditions, changes in interest rates and the availability of construction and
permanent mortgage financing which may render the acquisition, sale or
refinancing of a property difficult or unattractive and which may make debt
service burdensome, changes in real estate and zoning laws, bonding
requirements, permitting requirements, changes in income taxes, real estate
taxes or federal or local economic or rent controls, floods, earthquakes and
other acts of nature and other factors beyond the Company's control. The
illiquidity of real estate investments generally may impair the Company's
ability to respond promptly to changing circumstances.

         Under federal, state and local environmental laws, ordinances and
regulations, the Company may be liable for removal or remediation costs, as well
as other costs (such as fines or injuries to persons and property) where its
employees may have arranged for removal, disposal or treatment of hazardous or
toxic substances. In addition, environmental laws impose liability for release
of asbestos-containing materials into the air, and third parties can seek
recovery from the Company for personal injury associated with those materials.

ITEM 3.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         Based on their evaluation of the Company's disclosure controls and
procedures conducted as of the end of the period covered by this report on Form
10-QSB, Richard Astrom, the Company's Chief Executive Officer, and Christopher
Astrom, the Company's Chief Financial Officer, have concluded that they are the
only individuals involved in the Company's disclosure process. The Company has
no formal procedures in place for processing and assembling information to be
disclosed in the Company's periodic reports. The Company's system is designed so
that information is retained by the Company and relayed to counsel and the
Company's accountants as it becomes available. Though the Company has had
difficulty implementing its disclosure controls and procedures in the past, the
Company's principal executive officer and principal financial officer believe
that as of the end of the period being reported, the Company's disclosure
controls and procedures are effective to ensure that information required to be
disclosed by the Company in the reports that it files or

                                       37
<PAGE>
submits under the Exchange Act is recorded, processed, summarized and reported,
within the required time periods.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

         No changes in the Company's internal control over financial reporting
have come to management's attention during the Company's last fiscal quarter
that have materially affected, or are likely to materially affect, the Company's
internal control over financial reporting.













































                                       38
<PAGE>
                                    PART II
                                    -------
                                OTHER INFORMATION
                                -----------------

ITEM 1.  LEGAL PROCEEDINGS

         On February 4, 2002, O.M. Investments, Inc. ("O.M. INVESTMENTS") filed
suit against the Company in the Circuit Court for Miami-Dade County seeking
foreclosure on the Company's Barcelona Apartments property. O.M. Investments
sought to foreclose on a purchase money second mortgage executed and delivered
on December 13, 2000 with respect to the Barcelona Apartments property that
allegedly was in default. O.M. Investments sought $100,000 plus interest on this
mortgage amount as well as reasonable attorney's fees. A final judgment of
foreclosure was entered on April 8, 2002. The Company paid $114,437.75 on July
10, 2002 and O.M. Investments subsequently filed an acknowledgement that full
payment and satisfaction had been received.

         On August 2, 2002, Encore Builders filed suit against Conquistador
Plaza, a subsidiary of the Company, in the Circuit Court of the Eleventh
Judicial Circuit in Miami-Dade County, Florida seeking foreclosure of a
mechanic's lien with respect to the Conquistador Plaza development. Conquistador
Plaza retained Encore Builders to construct the Conquistador Plaza development.
Encore Builders asserted Conquistador Plaza breached the January 30, 2001
construction contract between Encore Builders and Conquistador Plaza. Encore
Builders asserted that $504,076.03 is due from Conquistador Plaza, Inc. and is
seeking damages with interest, costs and attorneys fees. Encore Builders was
bonded by Mountbatten Surety Company, Inc. On August 26, 2003, the parties
stipulated for a full settlement of all claims that existed amongst them. As
part of the settlement, $55,000 was to be paid for the benefit of Encore
Builders and $50,000 was to be paid to Mountbatten Surety Company, Inc.

         On December 13, 2002, the Company filed an Amended Complaint against
the Town of Bay Harbor Islands and the Director of the Town of Bay Harbor
Islands, Building and Zoning Department in the Circuit Court of the 11th
Judicial Circuit for Miami-Dade County, Florida regarding (i) an application by
the Company for zoning approval for a planned residential development overlay
district and (ii) approval from the Town of Bay Harbor for the development of
the Residences at Bay Harbor. Subsequent to the filing of this case, the Company
filed a related complaint in the United States District Court for the Southern
District of Florida. The federal claim was dismissed with prejudice on May 20,
2003. In July 2003, the Company filed a Second Amended Complaint amending its
complaint to add state law counts that were previously asserted by the Company
in its federal complaint.

         In the ordinary course of business, the Company and its subsidiaries
are involved in legal proceedings incidental to their operations. The Company
and its subsidiaries are not currently involved in any legal proceedings that
management believes would have a material adverse effect on the operations or
financial condition of the Company and its subsidiaries taken as a whole. See,
however, the discussion under Item 2, "Management's Discussion and Analysis or
Plan of Operation," under the subheading, "Operating History", with respect to
the foreclosure proceedings on the Company's Conquistador Plaza project.

ITEM 2.  CHANGES IN SECURITIES

INCREASES IN AUTHORIZED SHARES

o    At the time of its incorporation, the Company was authorized to issue 1
     million shares of NRES Common Stock.

o    Since the time of its incorporation, the Company believed it had effected
     the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million Share
     Increase, the 250 Million Share Increase, the 750 Million Share Increase
     and the 1.5

                                       39
<PAGE>
     Billion Share Increase. These changes in capital structure appear to have
     not been validly adopted by the Company's board of directors, approved by
     the Company's shareholders or filed with the Secretary of State of the
     State of Nevada, as required by the laws of the State of Nevada. As such,
     it appears the currently has only 1 million shares of NRES Common Stock
     authorized, and the majority of the validly issued shares are held by
     Richard and Pamela Astrom as tenants by the entireties. The Company
     believes a majority of the Company's validly issued and outstanding shares
     and the board of directors can cure and ratify the overissuances of stock,
     the 40 Million Share Increase, the 250 Million Share Increase, the 750
     Million Share Increase and the 1.5 Billion Share Increase. Until that time,
     the Company may be liable to the holders of the NRES Common Stock issued in
     excess of the authorized amount. All references to shares of Common Stock
     in this report take into account the 1 for 10 reverse stock split and the 3
     for 1 stock split discussed above.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         See the discussion in Part I, Item 2 and "RISK FACTORS - Risks Related
to Legal Uncertainties" regarding the Company's inability to provide NRES Common
Stock to the NRES Debenture holders upon conversion of the NRES Debentures,
which items are incorporated into this Item 3 by this reference.

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

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits:

<TABLE>
<CAPTION>
     Exhibit
     Number                                             Description
     -------                                            -----------
<S>  <C>        <C>
     3.1*       Articles of Incorporation of the Company.
     3.2***     Certificate of Amendment to Articles of Incorporation of the Company.
     3.4*       Bylaws of the Company.
     4.1**      8% Series SPB Senior Subordinated Convertible Redeemable Debentures due November 3, 2002
     4.2**      8% Series SPC Senior Subordinated Convertible Redeemable Debentures due April 12, 2003
     4.3**      8% Series SPD Senior Subordinated Convertible Redeemable Debentures due October 17, 2003
    10.1**      Securities Subscription Agreement dated as of October 10, 2000 by and between 2217 Acquisition Inc. and Louvre
                Investors LLC, Yellow Stream Company LLC and Carlsbad LLC.
    10.2**      Assignment and Assumption Agreement dated as of November 3, 2000 by and between 2217 Acquisition Inc. and National
                Residential Properties, Inc.
    10.3**      Securities Subscription Agreement dated as of April 12, 2001 by and between Connecticut Acquisition Corp. No. 1 and
                Louvre Investors LLC, Yellow Stream Company LLC and Carlsbad Capital LLC.
    10.4**      Assignment and Assumption Agreement dated as of April 19, 2001 by and between Connecticut Acquisition Corp. 1 and
                National Residential Properties, Inc.
    10.5**      Securities Subscription Agreement dated as of October 17, 2001 by and between DC Power Products Acquisition Corp.
                and Equity Planners LLC, Sea Lion Investors LLC and Myrtle Holdings LLC.

                                       40
<PAGE>
     Exhibit
     Number                                             Description
     -------                                            -----------

    10.6**      Assignment and Assumption Agreement dated as of November 5, 2001 by and between DC Power Acquisition Corp. and
                National Residential Properties, Inc.
    31.1        Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)
    31.2        Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)
    32.1        Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350
</TABLE>

*        Previously filed.

**       Filed as an exhibit to the Company's quarterly report on Form 10-QSB
for the period ended June 30, 2002, filed with the Securities and Exchange
Commission on January 8, 2004.

***      Filed as an exhibit to the Company's annual report on Form 10-KSB for
the period ended September 30, 2000, filed with the Securities and Exchange
Commission on January 16, 2001.

         (b) Reports on Form 8-K:

         None.
































                                       41
<PAGE>
                                   SIGNATURES

In accordance with 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.

                              NATIONAL RESIDENTIAL PROPERTIES, INC.



Date: January 8, 2004       By:  /s/ Richard Astrom
                                 ----------------------------------------
                              Richard Astrom
                              President, Chief Executive Officer and Director


Date: January 8, 2004       By:  /s/ Christopher Astrom
                                 --------------------------------------------
                              Christopher Astrom
                              Vice President, Chief Financial Officer, Secretary
                              and Director

































                                       42