<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

         For the fiscal year ended December 31, 2003

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

         For the transition period from _________ to__________.

                        Commission file number 000-30601

                          WHY USA FINANCIAL GROUP, INC.
                 (Name of small business issuer in its charter)

            NEVADA                                        80-0040096
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

             8301 CREEKSIDE, UNIT 101, BLOOMINGTON, MINNESOTA 55437
               (Address of principal executive offices) (Zip code)

                    Issuer's telephone number: (952) 841-7050


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

                                      NONE

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

                   COMMON STOCK - PAR VALUE: $0.001 PER SHARE
                                (Title of class)

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

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

The issuer's revenues for its most recent fiscal year were: $ 5,120,493

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average bid and asked prices per
share on March 18, 2004 was approximately $ 3,195,000.

As of March 18, 2004, the issuer had outstanding 63,892,760 shares of its common
stock, $0.001 par value.

                                       1
<PAGE>

                                TABLE OF CONTENTS


PART I

   Item 1.    Description of Business..........................................3

   Item 2.    Description of Property..........................................8

   Item 3.    Legal Proceedings................................................9

   Item 4.    Submission of Matters to a Vote of Security Holders..............9



PART II

   Item 5.    Market for Common Equity and Related Stockholder
              Matters ........................................................10

   Item 6.    Management's Discussion and Analysis of Financial Condition
              and Results of Operations.......................................12

   Item 7.    Financial Statements............................................16

   Item 8.    Changes in and Disagreements with Accountants...................47

   Item 8A    Controls and Procedures ........................................48



PART III

   Item 9.    Directors, Executive Officers, Promoters, Control Persons;
              Compliance With Section 16(a) of the Exchange Act...............49

   Item 10.   Executive Compensation..........................................50

   Item 11.   Security Ownership of Certain Beneficial Owners and Management
              and Related Stockholder Matters.................................51

   Item 12.   Certain Relationships and Related Transactions..................52

   Item 13.   Exhibits and Reports on Form 8-K................................53

   Item 14.   Principal Accountant Fees and Services..........................54



SIGNATURES....................................................................55


                                       2
<PAGE>

                               GENERAL INFORMATION
                                     PART I

      SAFE HARBOR STATEMENT REGARDING FORWARD LOOKING STATEMENTS UNDER THE
                PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995


This Form 10-KSB contains statements which constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"). These statements appear in a number of places in this Form
10-KSB and include statements regarding the intent, belief or current
expectations of WHY USA Financial Group, Inc., the "Company" with respect to (i)
the Company's financing plans, (ii) trends affecting the Company's financial
condition or results of operations, (iii) the impact of competition, and (iv)
the expansion of certain operations. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that the actual results may differ materially from
those in the forward-looking statements as a result of various factors. The
information contained in this Form 10-KSB, including, without limitation, the
information under "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Description of Business" identifies important
factors that could cause or contribute to such differences.


ITEM 1. DESCRIPTION OF BUSINESS

Introduction
------------

WHY USA Financial Group, Inc. (the "Company"), a Nevada corporation, is engaged
in the business of providing real estate and mortgage financial services
primarily for transactions involving sales, purchases or financing of
residential properties. Our business is conducted through three wholly-owned
subsidiaries, Discover Mortgage Corporation and TCS Mortgage, Inc. which operate
in the mortgage brokerage and mortgage banking business; and WHY USA North
America Inc. which operates in the real estate franchise business. Our primary
mission is to develop and provide professional residential real estate and
mortgage banking services and support both to our network of franchise real
estate brokers and their customers and to new home, resale home and refinancing
mortgage borrowers dealing directly with our mortgage lending offices.


Background
----------

The Company was incorporated in Utah in 1980 and in 1983 was reorganized as a
Nevada corporation. Prior to acquiring our real estate franchise subsidiary and
our initial Minneapolis mortgage brokerage business in December 1999, the
Company was an inactive public company under a former name with no assets, which
had not been engaged in active operations for many years.

The Company acquired both its real estate business, WHY USA North America, Inc.
and its initial mortgage brokerage business, Northwest Financial LTD., through
its 1999 reorganization merger. Incident to this merger, the former shareholders
of these two subsidiaries acquired a substantial majority of the outstanding
common stock of the Company through stock exchange and purchase transactions.
This reorganization was effected as a reverse merger for financial statement and
operational purposes, and WHY USA North America, Inc and Northwest Financial
Ltd. became wholly-owned subsidiaries of the Company. Northwest Financial Ltd.
transferred its operations to Discover Mortgage Corporation in the first quarter
of 2002.

                                       3
<PAGE>

Acquisition Strategy and Transactions
-------------------------------------

Since our reorganization was completed in late 1999, a principal element of our
business strategy has been to expand our business through acquisitions of
established businesses in our industry. The primary goal of our acquisition
strategy is to enable us to become a national presence in our industry over the
coming years, which we believe will provide considerable economies of scale in
our operations due to increases in our revenue base whenever we complete an
acquisition. Moreover, we believe we will be able to access more favorable terms
from financial institutions providing our mortgage funding as our lending
transactions increase.

During 2001 through 2003, we conducted a number of acquisition transactions
including:
         i)       completion of acquisitions of three Arizona mortgage lending
                  companies;
         ii)      acquiring a significant Minneapolis mortgage broker.
         iii)     acquiring a significant San Diego mortgage banker/broker.

This acquisition activity is described as follows:

AMERICA'S CASHLINE CORPORATION ("Cashline") - In February 2001 we completed
acquiring all of the outstanding capital stock of Cashline, which conducted
business from Scottsdale, AZ primarily dealing with subprime mortgage lending
transactions. Consideration given by us to acquire Cashline consisted of 600,000
shares of our common stock and cash in the amount of approximately $500,000. By
the summer of 2001, it became clear to us that this Cashline acquisition had
resulted in a substantial loss to us, that the former owners of Cashline had
misrepresented its business and financial position significantly, and that
Cashline was basically insolvent. Accordingly, we terminated any further
business operations or activities of Cashline and rescinded this transaction in
order to recover the common stock we issued in the transaction. The recission of
the common stock was recorded in 2002.

VALLEY FINANCIAL AND MORTGAGEBANC - In June, 2001 we acquired two affiliated
Arizona mortgage lenders, Valley Financial Funding LLC ("Valley") and First
National MortgageBanc, LLC ("MortgageBanc"), which were engaged in residential
mortgage lending and originations primarily in the Phoenix, AZ vicinity. Assets
acquired by us in this transaction included significant mortgage broker and
banker licenses, leased office facilities in Arizona, considerable office
furniture and equipment, and perceived substantial goodwill related to their
established and ongoing businesses.

We did not expend any cash to acquire Valley and MortgageBanc, since they were
acquired through stock exchange agreements whereby we agreed to issue an
aggregate of 830,000 shares of our common stock for all of the outstanding
capital stock of Valley and MortgageBanc, plus warrants to purchase up to
1,000,000 additional shares at exercise prices ranging from $1 to $5 per share,
and stock options for 450,000 shares exercisable at $1 per share.

While consolidating the business of Valley and MortgageBanc into our overall
mortgage origination business, we discovered they had misrepresented
significantly their current and projected mortgage origination revenues. There
were also substantial material omissions in the financial statements provided to
us during our acquisition negotiations which resulted in Valley and MortgageBanc
having material business losses rather than the substantial profits they had
represented to us. Moreover, we were unable to obtain marketable title to
material real estate assets in Arizona, which were represented on their
financial statements to be owned by them.

We continued to operate Valley and MortgageBanc for about 16 months, during
which we committed significant resources toward attempting to attain
profitability in Arizona. We were unable to improve the business enough to
realize future profitability, and accordingly we terminated our Arizona mortgage
origination business in late 2002. Valley and MortgageBanc incurred operating
losses of approximately $212,000 in 2002.

                                       4
<PAGE>

At the time of termination we had issued a total of 694,999 of the agreed
830,000 shares of our common stock. When we formally rescinded the Valley and
MortgageBanc acquisition, we were relieved of substantial liabilities relating
to their subsidiary operations, and also allowed to cancel and rescind 611,666
shares of common stock of our Company issued incidental to these two
acquisitions. Business conducted by us in Arizona through our Valley and
MortgageBanc acquisitions constituted approximately 17% of revenues in 2002.

DISCOVER MORTGAGE CORP. - From November 2001 through January 2002, we negotiated
to acquire Discover Mortgage Corp. ("Discover") a Minnesota corporation engaged
in mortgage lending in the Minneapolis, St. Paul metropolitan area and certain
other regions of Minnesota and Wisconsin. Discover has its main office in
suburban Minneapolis and three branch offices in Duluth MN, St. Cloud MN and La
Crosse, WI. Discover has a broad mortgage origination business ranging from
jumbo mortgages, to prime borrowers, to small difficult-to-place mortgages for
subprime or nonconforming customers. Discover is a HUD approved mortgage broker
who generated in excess of $250 million of loan originations in 2002, resulting
in profitable revenues exceeding $3.9 million. In 2003, Discover generated
approximately $277 million of loan originations resulting in profitable revenues
approximating $4,749,000.

Consideration given by us for Discover was limited to equity without requiring
any cash outlay from us for this acquisition. We agreed to issue two times the
net worth of Discover as of December, 2001 based on a common share price of $.30
per share, which resulted in a total of 1,177,140 common shares. In addition,
the former shareholders of Discover were issued an additional 12,000,000 common
shares related to Discover earnings in 2002 and their release of certain
override and severance terms for which we were liable.

The agreement to acquire Discover was executed and closed in early February
2002, after which Discover became a wholly-owned subsidiary of our company. For
accounting and operational purposes, the effective date of the Discover
acquisition was January 1, 2002. We entered into employment agreements to retain
the services of the principal former owners and executive officers of Discover.
During 2003 one of the former owners and executive officers terminated his
employment agreement with Discover in a private transaction sold all of his
common stock in the Company to Daryl Dinkla, Bruce Clausen, Don Riesterer and
James Kylstad. The remaining individual continues to be in charge of conducting
and providing mortgage lending services for Discover. They also completed
integrating the personnel and operations of Northwest Financial, Ltd., our prior
suburban Minneapolis Mortgage loan originator, into the structure and policies
of Discover.

Assets acquired by us incident to the Discover acquisition include active
mortgage broker licenses, leased office facilities, considerable computer and
other office equipment, furniture and substantial goodwill derived from the
ongoing, profitable and growing business of Discover.

During 2002, revenues from Discover business constituted approximately 84.4% of
our total revenues from continuing operations.

TCS MORTGAGE, INC. - On December 31, 2003 we acquired one hundred percent of the
outstanding equity securities of TCS Mortgage, Inc. ("TCS"), a California
corporation. TCS is a mortgage banker and broker with offices in San Diego,
California and Las Vegas, Nevada. TCS has its corporate office in San Diego. TCS
has a broad mortgage origination business ranging from jumbo mortgages, to prime
borrowers, to small difficult-to-place mortgages for subprime or nonconforming
customers. TCS is a HUD approved mortgage banker who generated in excess of $298
million of loan originations in 2002, resulting in profitable revenues of
approximately $5.6 million. In 2003, TCS generated approximately $316 million of
loan originations resulting in profitable revenues of approximately $5.9
million.

Consideration for the shares in TCS was financed through a promissory note from
Quality Investments in the original principal amount of $1.3 million, the
issuance of $300,000 of debentures and the issuance of warrants to purchase
1,309,321 shares of the Company's common stock at $.20 per share. The stock
purchase warrants have been valued at $10,000.

                                       5
<PAGE>

On December 31, 2003, TCS became a wholly-owned subsidiary of our Company. For
accounting and operational purposes, the effective date of the TCS acquisition
was December 31, 2003. We have entered into employment agreements to retain the
services of the principal former executive officers of TCS, and they continue to
be in charge of conducting and providing mortgage banking and broker services
for TCS.

Assets acquired by us incident to the TCS acquisition include active mortgage
broker licenses, leased office facilities, considerable computer and other
office equipment, furniture and substantial goodwill derived from the ongoing
growing business of TCS.

Assuming on a pro forma basis that TCS had been owned by us during all of 2002
and 2003, its revenues would have constituted approximately 53.6% and 54.5% of
our total pro forma revenues for 2003 and 2002, respectively.


Future Acquisition Policy
-------------------------

We intend to continue seeking and evaluating acquisition targets of perceived
profitable companies which can be readily integrated into our business model and
operations.


Sale of Real Estate Businesses
------------------------------

We sold our WHY USA real estate business offices in Phoenix, AZ. and Janesville,
WI. We had acquired these two locations from former WHY USA franchisees to be
operated directly by us. We realized that becoming involved in the direct
operations of real estate sales offices diverted our attention materially from
our more important overall WHY USA franchise management and administration.


WHY USA Franchise Program
-------------------------

Through our WHY USA franchise system we offer independent real estate brokers
and agents a unique proprietary real estate management and marketing program.
Our WHY USA national franchise system, which is registered in 41 states, was
developed in the 1980's by an Arizona company. Its operations were moved to
Wisconsin in the 1990's and we acquired this franchise program incidental to our
1999 reorganization. This business is owned and operated by us under a
wholly-owned subsidiary, WHY USA North America, Inc. a Wisconsin corporation.
Our WHY USA franchise operations are headquartered in suburban Minneapolis.

The WHY USA franchise is available to qualified licensed real estate brokers and
their agents, who must enter into a WHY USA Franchise Agreement in order to
conduct business under the WHY USA name and proprietary operational system. WHY
USA provides a unique, confidential plan for operating a real estate office,
consisting of a number of successful listing, selling, marketing and management
techniques developed over the years and supported by training programs,
copyrighted marketing methods, and educational materials.

The initial franchise fee for a WHY USA real estate office is $19,990 for a
designated territory. Franchisees also pay ongoing transaction fees to us based
on the lesser of $100 per transaction or 6% of commission revenues, providing
they must pay at least a monthly minimum of $400. Transactions are defined as
any closing or rental as a listing or selling agent, any referral or advance
fees received from a client, and any consulting, assistance or materials
purchase fees related to leasing or selling a property. The estimated initial
investment to commence business as a WHY USA franchisee is approximately $50,000
including the initial franchise fee. We provide substantial initial and ongoing
support to our franchisees including, assistance with locating an office,
provision of a confidential comprehensive Operations Manual, a training seminar
for new franchisees, training and promotional videos and brochures, sample
marketing materials, continuing advisory assistance regarding operations,
supplemental marketing and advertising materials, and advice regarding Internet
access capabilities and procedures.

                                       6
<PAGE>

The basic WHY USA method for listing real property offers the selling owner two
options, the first being a "for sale by owner" plan and the other being a full
service listing of the property for a discounted commission of 5.9%. Under the
for sale by owner option, the seller pays a flat fee of $990 for which the WHY
USA franchise office provides signage, professional real estate forms, and
general advice regarding the sale of the property. The full listing option has a
further option to reduce commissions by paying a set nonrefundable fee. The
property owner also retains the right to sell the property to a friend, relative
or acquaintance without paying anything more than the $990 flat fee amount.

We currently have 64 WHY USA franchisees, having a total of 71 WHY USA offices
with about half located in Minnesota and nearby Midwestern states, a few in
California and the rest spread across the country. We currently do not have a
material presence in Eastern and Southern states, although our future marketing
plan includes directing substantial efforts toward certain states such as
California and Florida. We estimate that our current franchisees include more
than 350 licensed real estate agents who in the aggregate generate between 250
and 275 monthly real estate transactions.

Our revenues from real estate franchise operations in 2003 constituted
approximately 7.2% of our total operating revenues, and in 2002 such revenues
were 12.2% of total operating revenues.


Mortgage Lending Services
-------------------------

Our mortgage origination services are conducted from our wholly-owned Discover
Mortgage subsidiary in suburban Minneapolis and our wholly-owned TCS Mortgage
subsidiary in San Diego, California. Mortgage origination revenues and fees
constituted approximately 92.8% of our total operating revenues in 2003 and
87.8% of total operating revenues in 2002. Assuming the acquisition of TCS as of
January 1, 2002, our mortgage origination revenues, on a proforma basis, in 2003
and 2002 would have been 95.8% and 93.5%, respectively. Our mortgage loan
officers typically act as brokerage agents and process their mortgage loan
applications through one of a number of banking or other lending institutions
which provide the actual funding. We normally pay for the credit report,
property appraisal and processing expenses of the mortgage loan. We do not
service any of the mortgage loans we originate.


Marketing
---------

We expend considerable financial and personnel resources toward conducting an
ongoing advertising and marketing program to promote our WHY USA franchise brand
awareness and develop customer loyalty, as well as to assist our real estate
franchisees in obtaining new prospective customers. Our franchise marketing
program focuses primarily on support of existing WHY USA franchisees, including
marketing activities such as advertising in selected general print and other
media, placing ads in certain industry periodicals, providing on-site training
and technical assistance to our franchisees, preparation of professional
brochures, videos and other sales materials portraying the services and
advantages of WHY USA franchises, participation in selected industry trade
shows, and maintaining a WHY USA Internet website.

Marketing of our mortgage lending services is conducted by our loan officers who
rely principally on leads and referrals developed by them personally or through
our telemarketers. While the implementation of the recent "do not call"
legislation has caused some concern, the Company has found that by purchasing
scrubbed lists from third party providers it has been able to mitigate any
liability for fines back to the provider of the scrubbed lists. The use of
purchased scrubbed lists has also resulted in a higher quality leads for
marketing and sales purposes.

                                       7
<PAGE>

Incidental to our mortgage origination business in Minnesota, we also have an
experienced telemarketing center in Sebeka, Minnesota which was established in
1998 solely to develop leads to target customers seeking initial mortgage loans
or refinancing. Our telemarketing center is equipped with modern telemarketing
equipment.

We believe that our telemarketing center has been very effective as a marketing
tool for our mortgage lending services in Minnesota and we intend to expand it
in order to develop leads and serve our various loan officers in all other areas
where we offer our mortgage lending services.


Personnel
---------

As of January 1, 2004, we employed 85 people and retained the services of 4
independent contractors. WHY USA Financial Group employed 2 executives. WHY USA
North America, the franchise division, employed 1 executive, 1 manager and 2
administrative personnel. Northwest Financial Ltd, the telemarketing division,
employed 1 manager and 5 telemarketers. Discover Mortgage employed 1 executive,
36 loan officers, 4 processors and 5 administrative personnel. TCS Mortgage
employed 5 executives, 6 processors/funders, 5 administrative personnel, 11 loan
officers and 4 loan officer/contractors. None of our employees belong to a labor
union. We consider our employee relations to be good.


ITEM 2.  DESCRIPTION OF PROPERTY

The Company's executive headquarters and its real estate franchise subsidiary
are located in Bloomington, Minnesota in a leased office facility of
approximately 2,300 square feet, which is being leased from a related party on a
month-to-month basis at $4,500 per month.

During 2002, the Company's Minneapolis mortgage lending operations, other than
from Discover Mortgage were conducted from office spaces of 1,500 square feet in
a building in Minneapolis owned and leased to us by a related party on a
month-to-month basis at $1,500 per month. The entire building of 11,000 square
feet was purchased by us in early 2003 and our Discover Mortgage subsidiary
moved to this building during 2003. Prior to moving to this building Discover
conducted its business from a 5,200 square foot office space located in suburban
Minneapolis at $8,400 monthly under a written lease which expired in June, 2003.

The Company's telemarketing center is located in Sebeka, Minnesota in 1,500
square feet of office space in a building owned by a related party. These
telemarketing facilities are being leased on a month-to-month basis at $500 per
month, and the Company believes this monthly rental rate is comparable to
similar office rental in that locale.

TCS conducts it's primary operations from an 8,900 square feet leased facility
in San Diego, California under an operating lease which expires in May 2004. TCS
also leases office space for its Nevada location on a month to month basis.
Monthly lease payments for the San Diego and Las Vegas locations total
approximately $19,800 per month.

In December 2003 the company purchased 2 commercial office buildings in
Woodbury, Minnesota, from an affiliated party. These buildings are located on 3
acres and each contains 8,800 square feet of rentable space. The buildings are
currently 97% leased to third party tenants. The company is actively marketing
these buildings for sale, and fully intends to resell the properties in 2004.

The Company's mortgage origination business is principally directed at the
single family mortgage market and the Company operates through its subsidiaries
as a mortgage banker and broker. The Company currently sells in the secondary
market all loans along with the attendant servicing rights that are funded by
the Company. The Company is not exposed to market or interest rate risk because
all loans are pre-sold at the time of funding, subject only to trailing closing
documents which are generally provided within 15 days of funding.

                                       8
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

The Company is not subject to any significant legal proceedings that may have a
material effect on it business, financial conditions or results of operations.


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

There are no submissions of matter subject to a vote of security holders during
the fourth quarter of our fiscal year end December 31, 2003.


                                       9
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


The Company's common stock is traded publicly and quoted over-the-counter on the
NASD Electronic Bulletin Board under the symbol "WUFG". Since the inception of
trading of the Company's common stock, trading has been sporadic much of the
time and characterized by low volume from time to time. Trading prices also have
fluctuated widely, and there is no assurance a more stable and regular trading
market will occur in the future. The table below sets forth the high and low bid
prices for the Company's common stock for each quarterly period since inception
of trading on the NASD Electronic Bulletin Board in January 2001. Bid quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.


            YEAR           QUARTER       HIGH BID          LOW BID
            ----           -------       --------          -------

            2001            First           $1.38           $.75
                            Second          $1.00           $.60
                            Third           $ .95           $.51
                            Fourth          $1.00           $.36

            2002            First           $ .50           $.18
                            Second          $ .35           $.06
                            Third           $ .21           $.05
                            Fourth          $ .12           $.05

            2003            First           $ .10           $.05
                            Second          $ .11           $.04
                            Third           $ .09           $.04
                            Fourth          $ .06           $.02

            2004            First           $ .10           $.04


As of March 31, 2004, the Company had approximately 1,658 shareholders of record
holding common stock of the Company. The Company has not paid any cash dividends
on its common stock since its inception, and does not anticipate declaring any
cash dividends in the foreseeable future.


Options and 2000 Stock Option Plan
----------------------------------

Effective July 20, 2000 our Board of Directors adopted the 2000 Stock Option
Plan. This plan provides for the grant of options to purchase shares of common
stock to our key employees, directors and advisors. The aggregate number of
shares of common stock that can be awarded under the plan is 4,500,000. The plan
permits the Board to grant qualified options with an exercise price of not less
than the fair market value on the date of grant, and non-qualified options at an
exercise price of not less than eighty-five percent (85%) of the fair market
value of the Company's underlying shares of common stock on the date of the
grant. The plan permits the Board to grant options with a term of up to ten
years for certain qualified options and not more than five years for options
granted to a person holding 10% or more of our stock. However, we do not intend
to issue any options with a term longer than ten years. Options will be used by
us to attract and retain certain key individuals and to give such individuals a
direct financial interest in our future success and profitability. There are
currently 3,600,000 outstanding options to purchase shares under the 2000 Stock
Option Plan.

                                       10
<PAGE>

Recent Sales of Unregistered Securities
---------------------------------------

Following are all sales of unregistered securities by the Company in 2003 and
2002, the Company relied upon the Section 4(2) exemption under the Securities
Act of 1933, as amended:

During the year ended December 31, 2003 the Company issued 1,550,000 shares of
its restricted common stock valued at $0.10 per share to the CEO of the Company
for compensation, and to a consultant of the Company for investment banking
services. The Company also issued 857,000 shares of its restricted common stock
valued at $0.05 per share to various employees of the Company for compensation.

In December 2003 the Company acquired two commercial office buildings in
Woodbury, Minnesota from a related entity owned by its Chairman, Donald
Riesterer. The Company acquired this property for $2,000,000 by assumption of
notes payable for $415,075 and $462,246, issuance of new notes for $500,000 and
$150,000, to replace existing previous debts of the related party, the issuance
of 2,189,650 shares of stock to Mr. Riesterer valued at $0.18525 per share
(substantially in excess of the market value of the common stock at the time of
the acquisition), and the payment of costs associated with the transaction.

In January 2003 the Company acquired a Minneapolis office building from an
entity owned by its Chairman, Donald Riesterer. The Company paid $925,000 to Mr.
Riesterer for this building, including $650,000 which was applied against an
existing contract for debt and 1,000,000 shares of its restricted stock valued
at $.275 per share (substantially in excess of the market value of the common
stock at the time of the acquisition). As part of the contract for debt the bank
required a personal guarantee of the President of Discover Mortgage and the
Chairman. The Company valued these guarantees at $27,500 and issued 100,000
shares of its restricted stock as consideration for the guarantees.

During the year ended December 31, 2002 the Company sold 3,813,247 shares of its
restricted common stock valued at approximately $0.10 per share and, 842,000
shares of its restricted common stock valued at $0.06 per share through private
placements.

During the year ended December 31, 2002 the Company issued 1,492,570 shares of
its restricted common stock valued at approximately $0.10 per share to various
officers of the Company for compensation. The Company also issued 100,000 shares
of its restricted common stock at $0.10 per share to a consultant of the Company
for appraisal services.

During the year ended December 31, 2002 the Company issued 36,666 shares of its
restricted common stock as a result of warrant conversions at $0.20 per share.

In December 2002 the Company accounted for the issue of 12,000,000 shares of its
restricted common stock to former shareholders of its Discover Mortgage
subsidiary, in consideration for satisfaction of the earnout term of its merger
with Discover Mortgage and release of certain severance and override
liabilities. All of these shares were valued at $.07 per share. Exemption for
this transaction is claimed under Section 4(2) of the Securities Act of 1933, as
amended, and all certificates issued for these 12,000,000 common shares were
legended to restrict any further transfer or other disposition thereof unless
registered under applicable securities law or exempt from such registration.

In June 2002 the Company satisfied certain note and accounts payable owed to its
Chairman, Donald Riesterer, in the total amount of $258,864 by issuing him
2,428,250 shares of restricted common stock of the company based on a value of
$.10 per share, and one WHY USA real estate franchise for a Wyoming location
value at $16,000.

In February 2002 the Company entered into a Business Combination Agreement to
acquire all of the outstanding capital stock of Discover Mortgage. Consideration
for this acquisition was the issue of 1,177,140 shares of restricted common
stock of the Company valued at $0.30 per share.

                                       11
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS

The Company believes that through its restructuring in 2002, and with its
acquisitions of Discover Mortgage and TCS Mortgage it has reached the size and
scope of business that it will continue to see growth in revenues and cash
flows. In addition, with improving economics of scale, additional skill sets,
improving margins and the sale of selected assets the Company expects to report
operating income in 2004. However, the Company has incurred significant losses,
and as of December 31, 2003 had an accumulated deficit of approximately $6.3
million. The Company intends to expend considerable financial and management
resources on sales and marketing, development of additional financial services,
strategic acquisitions or alliances, and expanded operations to support
larger-scale business operations. Accordingly, the Company may continue
incurring losses incident to future growth. There can be no assurance that the
Company's revenues will increase to the levels necessary to achieve
profitability or generate cash from operations in the future.

The Company's prospects must also be considered in light of the risks,
difficulties, and expenses frequently encountered by companies in their early
stage of development, particularly companies in rapidly changing markets such as
ours. To address these risks, the Company must, among other things, maintain
existing, and develop new relationships with mortgage lenders, real estate
brokers and franchisees, and potential residential customers in the general
public; implement and successfully execute its business and marketing strategy;
continue to develop and upgrade transaction-processing systems; provide quality
customer service; respond to competitive developments; and attract, retain and
motivate qualified personnel. There can be no assurance the Company will be
successful in addressing such risks, and the failure to do so would harm the
Company's business, financial condition, and results of operations. The
Company's current and future expense levels are based on its planned operations
and estimates of future revenues. Revenue and operating results generally depend
upon the volume and timing of mortgages originated and real estate closings
completed, which are rather difficult to forecast. The Company may be unable to
adjust spending in a timely manner to compensate for any unexpected revenue
shortfalls. Any significant shortfall of revenue would have an immediate adverse
effect on the Company's business. In view of the changing nature of both the
financial services industry and the overall national economy, the Company is
unable to accurately forecast its revenue. Accordingly, we believe that
period-to-period comparisons of our operating results are not very meaningful
and should not be relied upon as an indication of future performance.

The Company's material sources of revenue in order of priority are from: (1)
mortgage origination and related mortgage lending fees, (2) WHY USA franchise
fees/royalties received from our franchisees based on their ongoing business,
and (3) new franchise sales.


Results of Discontinued Operations
----------------------------------

There were no revenues from discontinued operations in 2003 compared to $899,384
in 2002, in which revenue consisted mainly of our former Arizona mortgage
origination business.

There were no expenses for discontinued operations in 2003 compared to
$1,214,611 in 2002. The Company had no discontinued operations in 2003,
therefore there was no loss from discontinued operations in 2003 compared to
$315,227 in 2002. The Company currently has no plans to discontinue any of its
operations.


                                       12
<PAGE>

Results of Continuing Operations
--------------------------------

REVENUES -- Our revenues from continuing operations increased 9.6% in 2003 to
$5,120,493 compared to $4,670,721 in 2002, this increase was due primarily to
the successful integration of Discover Mortgage into our company, and it's
growth. Our WHY USA real estate franchise sales and services revenues decreased
to $367,203 in 2003 from $568,102 in 2002, this 35% decrease was due to less new
franchise sales in 2003. The Company expended substantial efforts improving its
franchise support systems in 2003 and is well positioned to increase new sales
in 2004.

COST OF SERVICES -- The direct cost of services related to our mortgage lending
revenues represents 71.7% of such revenues in 2003 compared to 65% of such
revenues in 2002. This increase is due to increased competitive pressures on
pricing and wages. The direct cost of services related to our franchise
operations was 26% in 2003 compared to 16% in 2002. This increase was due
primarily to fewer new franchise sales in 2003.

GENERAL AND ADMINISTRATIVE -- General and administrative expenses decreased to
$1,586,211 in 2003 from $1,726,188 in 2002, this 8.1% decrease was due primarily
to reduced costs in support staff, and continuing economies of scale. As a
percentage of revenues, general and administrative expenses were 31% of revenues
in 2003 compared to 37% of revenues in 2002. This decrease represents a
continuing trend of reducing general and administrative expenses as a percent of
revenues.

SALES AND MARKETING -- Our sales and marketing expenses increased 93% in 2003 to
$311,622 from $161,187 in 2002, this increase was due primarily to marketing
costs related to our expanding mortgage lending operation. These costs
represented 6.1% of revenues in 2003 and 3.5% of revenues in 2002. The Company
considers this to be modest compared to industry standards.

DEPRECIATION -- Depreciation expense in 2003 was $52,648 compared to $39,531 in
2002, this increase was due to increased property and equipment, primarily
related to mortgage lending operations, including the building acquired by
Discover Mortgage during January 2003.

AMORTIZATION AND IMPAIRMENT COSTS -- Amortization and impairment expenses were
$1,034,198 in 2003 compared to $388,896 in 2002. The substantial increase, in
this non-cash expense category, is primarily due to the decrease in carrying
value of its franchise division and certain prepaid assets based on performance.
This impairment was recognized in accordance with the requirements of SFAS 142.

LOSS FROM CONTINUING OPERATIONS -- Loss from continuing operations increased to
$1,426,216 in 2003 from $398,791 in 2002. This substantial increase was
primarily due to the impairment charges note above.


Results of Total Operations
---------------------------

NET OPERATING LOSS -- Net operating loss from combined discontinued and
continuing operations increased to $1,426,216 in 2003 from $714,018 in 2002.
This increase in operating loss is primarily due to the impairment charges noted
above.

NET INCOME (LOSS) - We experienced a net loss of $1,237,178 in 2003 compared to
a net income of $380,115 in 2002. This substantial difference was due primarily
to increases in amortization and impairment, direct costs of services, sales and
marketing and interest expense, as well as the recognition of approximately
$376,000 in non-operating gains from abandonment of discontinued subsidiaries in
2002. Management does not foresee any additional future adverse adjustments to
amortization and impairment expenses, and expects to realize substantial
economies of scale and improvement in operating margins due to its recent
acquisition of TCS Mortgage.


                                       13
<PAGE>

Liquidity and Capital Resources
-------------------------------

Since inception of our brokerage and real estate franchise operations in 1999,
we have funded our development, acquisition and operational activities primarily
through private placements of our common stock, advances from related parties,
and debt instruments. We may have to raise additional capital or secure
additional debt to support our ongoing operations and planned expansion
activities. There is no assurance that we will be able to obtain additional
capital or debt at terms acceptable to the Company.

Our cash position as of December 31, 2003 was $881,185 compared to $321,639 in
2002. This substantial increase was due primarily to our recent acquisition of
TCS Mortgage.

The Company grew its assets substantially during 2003 to $7,905,350 compared to
$3,860,376 at year end 2002. This asset growth was accomplished through the
purchase of three office buildings in metropolitan Minneapolis (from our
Chairman), and the acquisition of TCS Mortgage in San Diego, California. The
Company is currently negotiating for the sale of two of these buildings and the
third is being used as the headquarters of Discover Mortgage.

The acquisition of TCS Mortgage substantially completes the Company's
acquisition strategy in the mortgage banking industry. TCS completes the
Company's required skill sets and it anticipates that revenues related to
mortgage services will grow in 2004.

The Company intends to reduce its level of debt in 2004 through the proceeds
from sale of the buildings discussed above. These assets were capitalized at the
previous owner's cost basis due to the accounting treatment of assets acquired
from related parties as required by SEC Regulation S-X.

The Company believes it has sound relations with its lenders, and is currently
considering opportunities to refinance existing debt obligations, which if
adopted are expected to improve overall earnings in future years.

Net cash used in our continuing operations in 2003 was $129,685 compared to net
cash provided of $595,080 in 2002. This considerable decrease was primarily due
to the net loss from continuing operations and a substantial decrease in
accounts payable and accrued liabilities.

Cash flows provided by discontinued operations in 2003 was $189,038 compared to
cash used of $229,386 in 2002. The substantial improvement was primarily due to
no losses being generated from discontinued operations in 2003.

Net cash provided by investing activities increased to $519,786 in 2003 compared
to cash used of $409,003 in 2002. This substantial improvement was primarily due
to the purchase of TCS Mortgage.

Net cash used by financing activities was $19,593 in 2003 compared to net cash
provided of $277,699 in 2002. This difference is primarily due to the Company
not selling any stock for cash in 2003, and modest loan costs and debt
repayment.

Cash at the end of the year for 2003 was $881,185 compared to $321,639 at the
end of the year for 2002. This substantial increase was due primarily to the
purchase of TCS Mortgage, and the continuing cash flows from Discover Mortgage.


Impact of Inflation
-------------------

Inflation has not had any effect on the development or operations of the Company
since the inception of our current business in late 1999, as such we do not
believe that inflation will have any material effect in the foreseeable future.
Any future significant increase in inflation, however may adversely affect our
business due to the relationship between inflation rates and interest rates,
such that an increase in inflation rates will typically result in an increase in
interest rates, including interest rates for residential mortgage and real
estate transactions.

                                       14
<PAGE>

Impact of Terrorism
-------------------

Terrorist activities and resulting military and other actions could adversely
affect our business and the price of our common stock.

Terrorist attacks in New York and Washington, D.C. in September of 2001
disrupted commerce and caused major instability in financial markets throughout
the United States. The continued threat of terrorism within the United States,
military action and heightened security measures in response to the threat may
cause significant disruption to commerce throughout the country and instability
in our financial markets. To the extent that the disruptions result in a general
decrease in mortgage originations, mortgage refinancing, the sale of real estate
franchises, or a general decline in economic conditions, our business results
from operations and stock price could be materially and adversely affected. We
are unable to predict whether the threat of terrorism or the responses to it
will result in any long-term commercial disruptions or if the threat or
responses will have any long-term material adverse effect on our business,
results of operations, financial condition, or the price of our common stock.


Seasonality
-----------

The Company's business is marginally subject to seasonal fluctuations due to a
general national decrease in residential real estate transactions during the
winter months, particularly towards the year-end holiday season.


Income Taxes
------------

Due to its losses, the Company has paid no income taxes in any reported period.
As of December 31, 2003, the Company had approximately $6 million of net
operating loss carry forwards. Because of the uncertainty of future
profitability, a valuation allowance equal to the deferred tax asset has been
recorded.


Recent Accounting Pronouncements
--------------------------------

In May 2003, the Financial Accounting Standards Board ("FASB") issued Statement
No. 150, "ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF
BOTH LIABILITIES AND EQUITY" ("SFAS 150"). SFAS 150 establishes standards for
how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). SFAS 150 is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. The
adoption of this Statement did not have an effect on the consolidated financial
statements.

In January 2003, FASB issued Interpretation No. 46 (FIN 46), "Consolidation of
Variable Interest Entities." FIN 46 is effective for variable interest entities
created after January 31, 2003. FIN 46 is an interpretation of Accounting
Research Bulletin No. 51, "Consolidated Financial Statements." FIN 46 requires a
variable interest entity to be consolidated by a company if that company is
subject to a majority of the risk of loss from the variable interest entity's
activities or entitled to receive a majority of the entity's residual returns or
both. In December 2003, FASB published a revision to FIN 46 ("46R") to clarify
some of the provisions of FIN 46 and to exempt certain entities from its
requirements. The adoption of this interpretation did not have an impact on our
financial condition or results of operations.

In December 2002, the FASB issued Statement No. 148, "Accounting for Stock Based
Compensation - Transition and Disclosure - an amendment of FASB Statement No.
123" ("SFAS 148"), which provides alternative methods of transition for a
voluntary change to the fair value method of accounting for stock based employee
compensation. The standard amends the disclosure requirement of SFAS 123 to
require prominent disclosure in both annual and interim financial statements


                                       15
<PAGE>

about the method of accounting for stock based employee compensation and the
effect of the method used on the reported results.

During June 2002, the FASB issued SFAS NO. 146, "Accounting for Costs Associated
with Exit or Disposal Activities", ("SFAS 146"). Such standard requires costs
associated with exit or disposal activities (including restructurings) to be
recognized when the costs are incurred, rather than at a date of commitment to
an exit or disposal plan. SFAS 146 nullifies Emerging Issues Task Force ("EITF")
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." Under SFAS 146, a liability related to an exit or disposal
activity is not recognized until such liability has actually been incurred
whereas under EITF Issue No. 94-3 a liability was recognized at the time of a
commitment to an exit or disposal plan. The provisions of this standard are
effective for disposal activities initiated after December 31, 2002. The costs
for the discontinuance of the Company's subsidiaries have been incurred prior to
December 31, 2002, therefore no accruals exist for future costs, and the
Company's 2002 financial statements are in compliance with SFAS 146 for 2002 and
prior years.

During April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
NO. 4, 44, and 64 Amendment of FASB Statement No. 13, and Technical
Corrections", ("SFAS 145"). Such standard requires any gain or loss on
extinguishments of debt to be presented as a component of continuing operations
(unless specific criteria is met) whereas SFAS 4 required that such gains and
losses be classified as an extraordinary item in determining net income. We have
adopted SFAS 145, and included our gains from the relief of liabilities on the
abandonment of our mortgage subsidiaries which is an extinguishment of debt to
our continuing operations.

In June 2001, the FASB adopted SFAS No. 141 ("SFAS 141") "Business
Combinations", SFAS No. 142 ("SFAS 142) "Goodwill and Other Intangible Assets"
and in August 2001, SFAS No. 144 ("SFAS 144") "Accounting for the Impairment or
Disposal of Long-Lived Assets." The Company's accounting procedures have been
amended to adapt these statements at the earliest date the statement's became
effective. The Company's franchise costs do not meet the criteria of being
classified as goodwill as they represent contractual or other legal rights over
the control of future economic benefits, as such they will continue to be
amortized over twelve years.


ITEM 7.  FINANCIAL STATEMENTS

The Company's audited financial statements for the years ended December 31, 2003
and 2002 begins on the next page.

                                       16
<PAGE>



                          INDEPENDENT AUDITORS' REPORT



Board of Directors and Stockholders
WHY USA Financial Group, Inc.
Minneapolis, Minnesota



We have audited the accompanying consolidated balance sheet of WHY USA Financial
Group, Inc., (a Nevada Corporation), as of December 31, 2003 and the related
consolidated statements of operations, stockholder's equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

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







April 1, 2004                                       PKF
San Diego California                                Certified Public Accountants
                                                    A Professional Corporation


                                       17
<PAGE>


                             Randy Simpson CPA, P.C.
                            11775 South Nicklaus Road
                                Sandy, Utah 84092
                           Fax & Phone (801) 572-3009



Board of Directors and Stockholders
WHY USA Financial Group, Inc.
Minneapolis, Minnesota



                          INDEPENDENT AUDITORS' REPORT

I have audited the accompanying consolidated statements of operations,
stockholder's equity and cash flows of WHY USA Financial Group, Inc., (a Nevada
Corporation), for the year ended December 31, 2002. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.

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

In my opinion, based on my audit, the financial statements referred to above
present fairly, in all material respects, the consolidated results of operations
and cash flows of WHY USA Financial Group, Inc. for the year ended December 31,
2002 in conformity with generally accepted accounting principles.




Randy Simpson CPA, P.C.
A Professional Corporation



March 15, 2003
Sandy, Utah


                                       18
<PAGE>


                          WHY USA FINANCIAL GROUP, INC.
                           Consolidated Balance Sheet

                                                                    December 31,
                                   ASSETS                               2003
                                                                    ------------
Current Assets:
  Cash                                                               $  881,185
  Mortgage loans held for resale                                      1,817,929
  Accounts receivable, net                                              225,417
                                                                     -----------

      Total current assets                                            2,924,531

Property and equipment - net                                          1,761,294
Franchise acquisition costs - net                                       700,000

 Other assets
  Deposits\prepaid assets\ notes receivable                             184,499
  Goodwill                                                            2,335,026
                                                                     -----------

                 Total assets                                        $7,905,350
                                                                     ===========


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

                                       19
<PAGE>

                          WHY USA FINANCIAL GROUP, INC.
                           Consolidated Balance Sheet



                                                                    December 31,
               LIABILITIES AND STOCKHOLDERS' EQUITY                     2003
                                                                    ------------

Current Liabilities:
  Accounts payable                                                  $   319,006
  Accrued expenses and deferred revenue                                 563,523
  Warehouse lines payable                                             1,768,765
  Current portion of mortgage notes payable                           1,401,663
  Current portion of capital lease                                        3,495
  Liabilities payable in stock - officer                                 69,000
  Income taxes payable                                                  200,000
                                                                    ------------

         Total current liabilities                                    4,325,452

Mortgage on building                                                    753,651
Promissory note for TCS Mortgage acquisition                          1,300,000
Debentures issued in TCS acquisition                                    300,000
Capital leases                                                           16,380
                                                                    ------------

         Total long term liabilities                                  2,370,031
                                                                    -----------



Stockholders' Equity:
  Preferred stock: no par value, authorized
   50,000,000, no shares issued and outstanding                              --
  Common stock: $.001 par value, authorized
   250,000,000; 63,892,760 shares issued
   and outstanding at December 31, 2003                                  63,893
  Additional Paid-in Capital                                          7,410,055
  Accumulated Deficit                                                (6,264,081)
                                                                    ------------

      Total stockholders' equity                                      1,209,867
                                                                    ------------

      Total liabilities and stockholders' equity                    $  7,905,350
                                                                    ============




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

                                       20
<PAGE>
<TABLE>

                                    WHY USA FINANCIAL GROUP, INC.
                                Consolidated Statement of Operations
                           For Two Years Ended December 31, 2003 and 2002

                                                                     2003               2002
                                                                -------------      -------------
<S>                                                             <C>                <C>
Revenue from continuing operations:
   Mortgage lending services                                    $  4,753,290       $  4,102,619
   Real estate franchise sales and services                          367,203            568,102
                                                                -------------      -------------

      Total revenue from continuing operations                     5,120,493          4,670,721

Operating expenses:
   Direct cost of services:
   Mortgage lending                                                3,407,220          2,665,987
   Real estate activities                                             93,912             91,199
   General and administrative                                      1,586,211          1,726,188
   Sales and marketing costs                                         311,622            161,187
   Depreciation                                                       52,648             39,531
   Amortization of acquisition costs                                 224,481            238,896
   Impairment of franchise acquisitions and prepaid assets           809,717            150,000
                                                                -------------      -------------

      Total operating expenses from continuing operations          6,485,811          5,072,988
                                                                -------------      -------------

Other:
   Interest income (expense), net                                    (60,898)             4,476
   Income tax benefit - operations                                        --             (1,000)

Loss from Continuing Operations:                                  (1,426,216)          (398,791)

Discontinued operations:
   Revenues                                                               --            899,384
   Cost of discontinued operations                                        --         (1,214,611)
                                                                -------------      -------------

         Loss from discontinued operations                                --           (315,227)
                                                                -------------      -------------

                  Net operating loss                              (1,426,216)          (714,018)
                                                                -------------      -------------

Non-operating gain from abandonment of
  discontinued subsidiaries:
   Common stock returned to Company                                       --            928,166
   Other abandonment gains - net                                     189,038            165,967
                                                                -------------      -------------

                                                                     189,038          1,094,133
                                                                -------------      -------------


         Net income (loss)                                      $ (1,237,178)      $    380,115
                                                                =============      =============

Basic weighted average shares outstanding                         59,804,986         58,196,110
                                                                =============      =============
Basic net income(loss) per common share:                        $      (.021)      $       .006
                                                                =============      =============
Diluted weighted average shares outstanding                       59,804,986         58,196,110
                                                                =============      =============
Diluted net income (loss) per common share                      $      (.021)      $       .006
                                                                =============      =============
</TABLE>

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

                                                 21
<PAGE>
<TABLE>

                                                   WHY USA FINANCIAL GROUP, INC.
                                          Consolidated Statement of Stockholders' Equity
                                          For Two Years Ended December 31, 2003 and 2002


                                              Common            Common        Additional                             Total
                                              Stock             Stock           Paid-In         Accumulated       Stockholders'
                                              Shares            Amount          Capital           Deficit            Equity
                                            ------------     -----------      ------------      -----------        -----------
<S>                                         <C>              <C>               <C>               <C>               <C>
Balances at January 1, 2002                 37,517,903       $    37,518       $ 6,176,918       ($4,657,929)      $ 1,556,507

Discover Mortgage Corporation
acquisition, 1,177,140 shares
valued at $.30 per share                     1,177,140             1,177           351,963                --           353,140


Common Stock sold at approximately
$.10 per share private placement             3,813,247             3,813           369,045                --           372,858


Common stock issued at approximately
$.10 per share for services
by officers                                  1,492,570             1,493           170,964                --           172,457


Common Stock issued at $.10 per
share for services by an appraiser             100,000               100             9,900                --            10,000


Warrant conversions at $.20 per
share                                           36,666                37             7,296                --             7,333


Conversion of Arizona franchise
acquisition note and accrued
interest at $.10 per share                   2,428,250             2,428           240,399                --           242,827


Common stock sold at $.06 per
share private placement                        842,000               842            49,678                --            50,520


Cancellation of common stock
given in acquisition of America
Cashline Corporation at its
original issuance value of $1.00
per share                                     (600,000)             (600)         (599,400)               --          (600,000)


Cancellation of common stock given
in acquisition of First National
MortgageBanc LLC and Valley Financial
Funding LLC valued at its original
value of $.70 per share                       (611,666)             (612)         (427,553)               --          (428,165)


Acquisition, for earn-out in 2002
and release of overrides valued
at $.07 per share                           12,000,000            12,000           828,000                --           840,000


Net income for the year ended
December 31, 2002                                                                                    380,115           380,115
                                        ---------------------------------------------------------------------------------------
Balances at December 31, 2002               58,196,110       $    58,196       $ 7,177,210       ($4,277,814)      $ 2,957,592
                                        ---------------------------------------------------------------------------------------

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

                                                                22
<PAGE>


                                                   WHY USA FINANCIAL GROUP, INC.
                                         Consolidated Statements of Stockholders' Equity
                                         For Two Years Ended December 31, 2003 and 2002

                                              Common            Common        Additional                             Total
                                              Stock             Stock           Paid-In         Accumulated       Stockholders'
                                              Shares            Amount          Capital           Deficit            Equity
                                            ------------     -----------      ------------      -----------        -----------
Balance forward
at December 31, 2002                         58,196,110      $    58,196      $ 7,177,210       ($4,277,814)      $ 2,957,592

Common stock issued to the
Chairman of the Board for his
ownership interest in an office
building and land and to an officer
for his personal guarantee of the
building loan, valued at $.275 per
share. The facility is utilized as
the principal office of Discover
Mortgage                                      1,100,000            1,100          301,400                --           302,500

Due to the sale of the Discover
Mortgage building being a related
party transaction, the value of the
office building and land is recorded
in the financial statements at the
Chairman's cost basis of $417,000
The difference between the cost basis
and the purchase consideration of
$925,000 has been recorded as a
distribution                                         --               --         (274,000)         (234,000)         (508,000)

Common stock issued for compensation
to CEO and to a consultant for
investment banking services
at $.10 per share                             1,550,000            1,550          153,450                --           155,000

Common stock issued to the Chairman
of the Board for his ownership interest
in two office buildings and land located
in Woodbury, MN, which were transferred to
Discover Mortgage, valued at
approximately $.18 per share                  2,189,650            2,190          403,445                --           405,635

Due to the sale of the two office
buildings being a related party
transaction, the value of the office
building and land is recorded in the
financial statements at the Chairman's
cost basis of $1,081,466. The difference
between the cost basis and the purchase
consideration of $2,000,000 and has been
recorded as a distribution                           --               --         (403,445)         (515,089)         (918,534)

Warrants issued in TCS
acquisition                                          --               --           10,000                --            10,000

Common stock issued for
compensation at $.05 per share
to employees                                    857,000              857           41,995                --            42,852

Net loss for the year ended
December 31, 2003                                    --               --               --        (1,237,178)       (1,237,178)
                                            ----------------------------------------------------------------------------------
Balances at December 31, 2003                63,892,760      $    63,893      $ 7,410,055       ($6,264,081)      $ 1,209,867
                                            ----------------------------------------------------------------------------------


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

                                                                23
<PAGE>
<TABLE>

                                         WHY USA FINANCIAL GROUP, INC.
                                     Consolidated Statement of Cash Flows
                                For Two Years Ended December 31, 2003 and 2002

                                                                                       2003              2002
                                                                                   ------------      ------------
<S>                                                                                <C>               <C>
CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:

     Net loss from continuing operations                                           $(1,426,216)      $  (398,791)

     Adjustments to reconcile net loss from continuing operations to net cash
     flow from (used in) continuing operations:
         Common stock for compensation and liabilities                                 197,849           129,457
         Forgiveness of notes receivable                                                80,000                --
         Bad debts expense on accounts receivable                                       40,000                --
         Depreciation and amortization of franchise
           acquisitions cost and prepaid assets                                        277,129           278,427
         Amortization of loan fees                                                       4,585                --
         Loss on disposal of assets                                                      1,520                --
         Impairment of franchise acquisitions costs and
           prepaid assets                                                              809,717           150,000

     Changes in Continuing Operating Assets and Liabilities (net of acquired
     working capital components):
         Decrease in accounts receivable                                                71,717            73,767
         Decrease in other assets                                                       78,062                --
         Increase (decrease) in accounts payable/accrued
           liabilities                                                                (348,490)          362,220
         Increase in warehouse line payable                                             84,442                --
                                                                                   ------------      ------------
     Net Change to Operating Assets and Liabilities                                   (114,269)          435,987

                                                                                   ------------      ------------
NET CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS                                  (129,685)          595,080

CASH FLOWS FROM DISCONTINUED OPERATIONS:
     Loss form discontinued operations                                                      --          (315,227)
     Depreciation and amortization                                                          --             1,562
     Other abandonment gains - non cash                                                189,038            90,779
     Debt and franchise payments                                                            --            (6,500)
                                                                                   ------------      ------------
CASH FLOWS PROVIDED BY (USED IN) DISCONTINUED OPERATIONS                               189,038          (229,386)

CASH FLOWS FROM IN INVESTING ACTIVITIES
     Cash working capital of Discover Mortgage acquired                                     --          (119,215)
     Cash of TCS Mortgage acquired                                                     595,291                --
     Capital expenditures - computers and office improvements                         (259,680)          (23,788)
     Bank overdraft                                                                      4,175                --
     Officer advances                                                                       --           (86,000)
     Deposit for building (purchased) returned                                         180,000          (180,000)
                                                                                   ------------      ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                    519,786          (409,003)

CASH FLOWS FROM FINANCING ACTIVITIES
     Common stock issued for cash and warrant exercises                                     --           430,711
     Payment of loan costs                                                             (13,966)               --
     Expenses advanced (repaid) to related parties                                          --          (132,812)
     Capital lease borrowings                                                           19,273                --
     Payment of debt and capital leases                                                (24,900)          (20,200)
                                                                                   ------------      ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                    (19,593)          277,699

Net Increase (Decrease) in Cash                                                        559,546           234,390
Cash at Beginning of Year                                                              321,639            87,249
                                                                                   ------------      ------------
CASH AT END OF YEAR                                                                $   881,185       $   321,639
                                                                                   ============      ============
</TABLE>

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

                                                      24
<PAGE>
<TABLE>

                                         WHY USA FINANCIAL GROUP, INC.
                                     Consolidated Statement of Cash Flows
                                For Two Years Ended December 31, 2003 and 2002


                                                             Year Ended        Year Ended
                                                              December           December
                                                              31, 2003           31, 2002
                                                             -----------        ---------
<S>                                                            <C>              <C>
Cash paid during the year for:

  Interest                                                     $        --      $1,073,925
                                                               ===========      ==========

  Income Taxes                                                 $        --      $1,073,925
                                                               ===========      ==========


Supplemental disclosure of non cash investing
and financing activities:

Issued 1,177,140 shares of common stock for Discover
Mortgage Corporation - Goodwill $1,016,570, fixed
assets $54,447 and deposits $2,908 (Working Capital
Component is an investing activities)                          $        --      $1,073,925
                                                               ===========      ==========

Note Receivable for sale of subsidiary $175,000
net of fixed assets sold $4,562 franchise costs
$96,250 and liabilities assumed $22,539                        $        --      $   96,727
                                                               ===========      ==========

Issued 2,428,250 shares to an officer to satisfy a
$150,000 franchise acquisition note, accrued interest
and accrued commissions                                        $        --      $  242,827
                                                               ===========      ==========

Common stock issued to pay compensation liabilities
previously accrued                                             $        --      $  148,146
                                                               ===========      ==========

Issued 1,100,000 shares of common stock, valued at
$.275 per share as follows:1,000,000 shares for
acquisition of corporate offices of Discover, and a
director received 100,000 shares for his personal
guarantee of the debt (classified as loan costs
in balance sheet)                                              $   275,000      $       --
                                                               ===========      ==========

Debt for acquisition of Discover Corporate Offices
from the Chairman of the Board                                 $   650,000      $       --
                                                               ===========      ==========

The Discover headquarters have been recorded at
the sellers cost basis of $417,000 in accordance
with SEC Regulation S-X. The excess of purchase
consideration over the sellers cost basis has been
recorded to stockholders equity as a distribution
See Note 3                                                     $   508,000      $       --
                                                               ===========      ==========

Incurred acquisition debt of $1,300,000 from
Quality Investments and issued $300,000 in
debentures and 1,309,321 stock warrants exercisable
at $.20 per share, valued at $10,000 for acquisition
of TCS Mortgage, Inc. for $1,610,000 total
consideration, fair market value of TCS net assets
was $291,544, therefore goodwill in this
amount was recorded                                            $ 1,318,456      $       --
                                                               ===========      ==========

Issuance of mortgages and notes payable for the
acquisition of two buildings in Minneapolis                    $ 1,527,321      $       --
                                                               ===========      ==========

Issuance of 2,189,650 shares of common stock, valued at
$0.18525 per share, and additional costs of $67,044            $   472,679      $       --
                                                               ===========      ==========

The two buildings located in Minneapolis have been
recorded at the sellers cost basis of $1,081,466 in
accordance with SEC Regulation S-X. The excess of
purchase consideration over the sellers cost basis has
been recorded to stockholders equity as a distribution
See Note 3                                                     $  918,534       $       --
                                                               ===========      ==========

</TABLE>

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


                                                      25
<PAGE>

                          WHY USA FINANCIAL GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - ACCOUNTING POLICIES AND COMPANY HISTORY

Accounting Presentation and Organization
----------------------------------------

The consolidated financial statements of the Company include the accounts of the
Company and its wholly-owned subsidiaries. The results of operations of the
acquired subsidiaries have been included in the consolidated statements of
operations and cash flows of the Company since the dates of their acquisition.
Intercompany account balances and transactions have been eliminated in
consolidation. Prior year amounts have been reclassified to conform to the
current year presentation. The accrual basis of accounting is utilized for all
entities.

The consolidated financial statements of the Company include the parent Company,
WHY USA Financial Group (Company), Discover Mortgage Corporation (Discover),
acquired effective January 1, 2002, Northwest Financial Ltd. (Northwest), which
operates a call center for mortgage loan originating, WHY USA North America,
Inc. (WHY USA N.A.), a real estate franchisor, and TCS Mortgage, Inc. (TCS),
which was acquired effective December 31, 2003. The consolidated statement of
operations for the year ended December 31, 2003 does not include the operations
of TCS. The consolidated balance sheet includes the assets and liabilities of
TCS as of December 31, 2003. TCS is a mortgage banker and broker with its own
line of credit; Discover has acted principally as a mortgage broker in
Minnesota.

TCS operates in the San Diego and southern California mortgage markets, with a
presence in Las Vegas, Nevada. TCS is also licensed in Utah, Minnesota and
Wisconsin. Discover operates four offices in Minnesota, and also engages in
originating residential mortgage loans.

Northwest conducted loan originations through its Minneapolis office until
April, 2002 when its mortgage loan staff was transferred to Discover. Its
operations are now limited to a call center in Sebeka, Minnesota which generates
mortgage loan leads for Discover.


Discontinued Operations
-----------------------

The Company discontinued and abandoned five unprofitable subsidiaries which were
located in Arizona, Wisconsin and Pennsylvania in 2002. Mortgage lending
operations were ceased at its mortgage loan operations of First National
MortgageBanc LLC (First National) and Valley Financial Funding LLC (Valley),
located in Phoenix. The operations of the Scottsdale Arizona WHY USA real estate
franchisee was sold at a loss to its former operating staff, and the Advantage
Realty WHY USA, Inc. real estate business in Janesville, Wisconsin was sold for
a note receivable at a profit. The Pennsylvania mortgage operations, which were
not significant, were also terminated in 2002

Both First National and Valley were acquired on June 1, 2001 in a stock exchange
acquisition accounted for as a purchase acquisition. The former owners of Valley
and National were to earn additional shares based upon mortgage loan volume
generated over various time periods in 2001 and 2002. The shares for the earn
outs were never issued. The Company has rescinded and placed stop transfers on
all the shares issued in Valley and First National acquisitions. The Company
believes that there was a material misstatement in the financial statements of
these entities at the time of their acquisition, which allowed the Company to
rescind the transaction.

The operations of First National and Valley were never profitable from the date
of their acquisition in June, 2001 through their termination in late November,
2002. The operations of Valley were consolidated into First National in January
2002. First National's sales were $734,896 in 2002 and it incurred a loss of
$269,359 prior to its abandonment. The Company maintained a liability of
$189,038 for any actions of the creditors of First National and Valley and the
resolution of a terminated operating lease of its Rock Valley, Arizona, real
estate subsidiary, which the Company had cosigned. The company recorded a gain


                                       26
<PAGE>

of $189,038 in December 2003 as a result of the resolution of the operating
lease dispute and the settlement of all claims arising from the Company's
involvement in the acquisition of First National and Valley.

Advantage Realty of Janesville, Inc. ("Advantage") was sold by the Company for a
$175,000 note on March 1, 2002. A gain of $3,505 was recorded on the sale and
will be handled on the modified cash recovery method of accounting. The Company
had previously acquired this franchise from a former franchisee in the WHY USA
system. In 2002, Advantage had sales of $15,993 and a loss of $9,413. The
purchaser has made three payments totaling $17,219 in early 2003 on the note and
paid $10,000 in April, 2004 towards the note. The note was scheduled for
quarterly payments of $5,667 and bears interest of 6%. The Company will record
the remaining payments as interest and as a reduction of the carrying value of
the note until it reaches zero, at which point the remaining gain of $100,000
will be realized.


Estimates
---------

Estimates are utilized in the preparation of the Company's financial statements
to conform to accounting principles generally accepted in the United States of
America. The most significant estimates are the allowance for doubtful accounts,
depreciation and amortization methods, and estimates of the realization of
franchise value. The amounts which ultimately will be disbursed or realized may
differ from the estimates in the financial statements.


Cash Equivalents and Concentration of Risk
------------------------------------------

The Company maintains only corporate checking accounts, money market and savings
accounts at banks. It has not purchased or sold any significant short-term
investments in 2003 or 2002. The Company has no significant maturity dates with
respect to its accounts. Both Discover Mortgage and TCS Mortgage have
significant uninsured balances with a bank in their respective states. Discover
has an uninsured balance of $121,179 and TCS has an uninsured balance of
$195,291 as of December 31, 2003. The Company has never experienced an uninsured
banking loss. The Company believes that its banks' are stable and the risk of
loss is not significant.

Debt covenants related to the acquisition of TCS require the consolidated group
to maintain aggregate cash or cash equivalents balance of $500,000 at all times.
TCS has a collateral security deposit of $15,307 for its warehouse loan.
Discover has a collateral security deposit of $150,000 on its mortgage for the
purchase of the building which is being used as its headquarters. The collateral
security deposit is being released back to the Company at a rate of $25,000 per
quarter from January 2004, provided all the covenants of the mortgage continue
to be satisfied.


Brokered Loan Fees
------------------

Loan fees include direct origination fees and brokered loan fees. Deferred
origination fees and expenses are recognized at the time a loan is sold, and
servicing released. Brokered loan fees represent fees received by TCS and
Discover for placing a loan with a lender, whereby no further obligation exists.
The loan fee is recognized at the time the borrower and lender sign final loan
documents and the loan is funded.


Accounts and Notes Receivable, Allowances and Fair Market Value
---------------------------------------------------------------

In accordance with Financial Accounting Standard No. 107, the Company's
receivables and notes represent credit risks associated with real estate
transactions originating with its franchisees. The Company extends credit as a
result of its franchise agreements with its franchisees. The franchisee's
ability to repay is generally predicated upon their ability to earn income from
their real estate transactions. Franchisees are generally paid a commission on


                                       27
<PAGE>

real estate transactions and must then remit a portion of that income to the
Company. The Company is subject to a geographic concentration of risk in the
Midwestern states. The Company has an allowance for doubtful accounts of
approximately $85,000 at December 31, 2003. Bad debts totaled $54,973 in 2003
and $18,732 in 2002. The Company has experienced no credit losses in its
mortgage lending operations.


Financial Instruments
---------------------

The carrying amount reported in the balance sheet for cash, mortgage loans held
for sale, accounts receivable, other assets, accounts payable, accrued expenses
and deferred revenue, warehouse lines payable, mortgage notes payable,
promissory notes, debentures and capital leases approximate fair value due to
the maturity of these financial instruments and the terms of each of these
obligations.


Property and Equipment Capitalization Policies
----------------------------------------------

Depreciation is charged against earnings, utilizing both straight line and
accelerated methods (double declining balance method) over the estimated useful
lives of the related assets as follows:

         Buildings                                               39 Years
         Improvements                                         10-15 Years
         Computers, Copiers, Telephone Systems                  3-5 Years
         Office Furniture                                      7-10 Years
         Software                                               0-3 Years


Property and equipment is stated on the basis of cost. Maintenance and repairs
are charged to expense. Renewals and betterments, which substantially extend the
useful life of property, are capitalized. Accumulated allowances for
depreciation of furniture, equipment, and leasehold improvements retired, or
otherwise disposed of, are eliminated from the accounts on disposition. Profits
and losses resulting from such disposition are included in income.


Franchise Amortization and Impairment of Long Term Assets
---------------------------------------------------------

The franchise acquisition fees include the $1,994,589, paid for the system in
the initial WHY USA North America acquisition, and $200,000 related to the
acquisition of the Arizona franchisee rights. The total cost is being amortized
over 12 years using the straight-line method starting in the year of
acquisition. The Company will monitor its real estate franchising operations to
determine whether it can recover the value of its unamortized franchise costs.

The Company recorded an impairment loss of $651,050 in 2003 to reflect an
impairment on the initial WHY USA North America acquisition. The impairment loss
is equal to the amount by which the carrying value of these assets exceeded
their estimated fair market value as of December 31, 2003. The Company recorded
an impairment loss of $150,000 in 2002 to reflect the impairment loss in the
Arizona franchise, which was attributable to the cessation of the Rock Valley,
Arizona, real estate business. The impairment loss recorded in the prior year is
equal to the amount by which the carrying value of the asset exceeded its fair
market value.

Accumulated amortization of franchise acquisition fees totals $693,539 at
December 31, 2003, excluding the impairment of $651,050 recognized in 2003, and
$150,000 recognized in 2002.

                                       28
<PAGE>

The Company recorded an impairment loss of $158,667 in 2003 to reflect an
impairment in the carrying value of prepaid assets. The prepaid assets were
initially capitalized at a cost of $280,000 and were being amortized over 5
years. As of December 31, 2003, management could not foresee any future
projected cash flows being generated from this asset, therefore the carrying
value of this asset has been reduced to zero. Accumulated amortization of the
prepaid asset totals $121,333 at December 31, 2003, excluding the impairment of
$158,667. Accumulated amortization of the prepaid asset recognized at 2002
totaled 65,333.


Loan Acquisition Costs
----------------------

Loan acquisition costs are being amortized over five years using the
straight-line method.


Mortgage Loans Held for Re-Sale
-------------------------------

TCS funds on a pre-sold basis, subject to trailing documentation; generally five
days or less, a portion of its residential mortgage loans. Mortgage loans held
for sale are stated at the lower of cost or market in the aggregate. Cost is
determined on an individual loan basis and includes nonrefundable fees and
direct costs associated with the origination of loans. Market is determined by
outstanding commitments and prevailing market prices. Gains represent the
difference between the market price and the cost of the loan and are recognized
when the loan is sold. The risk of the loans declining in value below cost is
minimal, however should it occur TCS would reduce its carrying value to fair
market value.


Deferred Revenues and Liability
-------------------------------

The Company holds an annual conference for its franchisees. Expenses and
revenues related to the conference are deferred and realized at the time the
conference is held.


Advertising
-----------

Advertising costs are charged to operations when incurred. Advertising expense
for the years ended December 31, 2003 and 2002 approximated $44,800 and $36,300,
respectively.


Reclassifications
-----------------

Certain prior year amounts on the statement of financial condition, statement of
operations and the statement of cash flows have been reclassified to conform to
the current year's presentation.


Revenue Recognition
-------------------

Revenue from mortgage loan originations are recognized at the time the mortgage
loan closes or is funded. Gain on sale of servicing mortgage loans represents
service release premiums on loans originated in house. The gain is recognized
when the funded loan is sold and the proceeds are received. The majority of
revenue receivables are collected within five business days. Real estate
transaction fees are recognized at the closing of a real estate transaction by a
franchisee. The Company does not service a loan portfolio and resells all of the
loans it originates.

In accordance with Financial Accounting Standard No. 45, the Company defers the
recognition of new franchise sales until the commencement of operations by the
new franchisee. The new franchisee opens his real estate sales office in his
"protected" territory and receives training and marketing support, real estate
documents and other sales aids from the Company. These activities generally


                                       29
<PAGE>

occur within the time frame of one month. All costs, services and conditions
related to new franchise sales have been incurred or performed prior to the
recognition of income from new franchise sales.


Retirement Plans, Severance or Bonus Plans
------------------------------------------

Discover maintains a 401-K Plan ("Plan") for the benefit of its employees. This
defined contribution plan matches or contributes up to $1,000 per employee per
year based upon a 25% matching ratio of employee contributions to the Plan.
Eligible employees may contribute up to 15% of their annual compensation. The
Company will match up to 20% of the first $5,000 of an employee's contribution.
The Company's contributions for the years ended December 31, 2003 and 2002 were
$7,373 and $8,633, respectively. Current year contributions are reduced from
prior years due to employee forfeitures.


Stock Based Compensation
------------------------

In December 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 148 "Accounting for Stock-Based
Compensation Transition and Disclosure an Amendment of FASB Statement No. 123"
(SFAS 148). SFAS 148 amends SFAS 123, "Accounting for Stock-Based Compensation"
(SFAS 123), to provide alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation. It also amends the disclosure provisions of SFAS 123 to
require prominent disclosure about the effects on reported net income of an
entity's accounting policy decisions with respect to stock-based employee
compensation. Finally, SFAS 148 amends APB Opinion No. 28, Interim Financial
Reporting, to require disclosure about those effects in interim financial
information. At December 31, 2003, the Company has stock-based employee
compensation plans, which are described more fully below. The Company accounts
for those plans under the recognition and measurement principles of APB Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB No. 25), and related
Interpretations. No stock-based employee compensation cost is reflected in net
income, as all options granted under those plans had an exercise price equal to
the market value of the underlying common stock on the date of grant. Certain
options had been repriced during 2001 however this repricing did not result in
compensation adjustments as the new exercise price continued to exceed the fair
value of the underlying stock.

Under SFAS 148, the fair value of each option granted during the year ended
December 31, 2003 was estimated on the measurement date utilizing the then
current fair value of the underlying shares less the exercise price discounted
over the average expected life of the options of four to ten years, with an
average risk-free interest rate of 4.75% to 5.00%, price volatility of 80
percent and no dividends. No options were granted during 2002.

Had compensation cost for all awards been determined based on the fair value
method as prescribed by SFAS 123, no changes in reported net income (loss) and
net income (loss) per common share would have been recognized. Accordingly, no
table presenting proforma amounts has been presented.

On July 20, 2000, the Company's Board of Directors approved a stock option plan
(the "Option Plan") for its officers, directors, employees and consultants.
Options granted under the plan may or may not qualify as incentive stock options
under the Internal Revenue Service Code. The term of the plan is for ten years,
and allows the administrator to designate whether the options granted are
qualified or non-qualified. Generally, option price will determine the
designation as to whether the options are qualified or non-qualified. On July
20, 2000, 2,475,000 options were granted to officers and directors at $1.00 per
share, and expire ten years thereafter. The Company recognized no compensation
expense, as the Company's common stock was not trading at the time, and has
generally traded at amounts less than $1.00 in 2001, since the Company's stock


                                       30
<PAGE>

has been trading. The Company reduced the exercise price of all options to $.50
per share in November, 2001 based on the decline of the Company's stock to less
then $.50 per share. The Company utilizes the intrinsic method of measuring
compensation for options granted. No compensation has been reflected in the
financial statements for the granting of options. The Company's stock is very
thinly traded rendering most measurement models of stock options unreliable in
measuring fair market value. The time to expiration of the option would indicate
there is some value associated with the stock options. However, the measurement
of fair market value of the Company's options will prove difficult until a
market with a larger volume develops for the Company's common stock to insure
that the options exercised may be ultimately redeemed in the market. The options
are for restricted securities, which generally are discounted from current
market prices at 10% - 50% of current market values. The following tables set
out the options granted to date, and a comparative table for prior year amounts.

<TABLE>

                                    WHY USA FINANCIAL GROUP, INC.
                                       Options Granted to Date
                                  For Year Ended December 31, 2003

            Options                                    Option                           Option
 Date    Outstanding at       2003          2003   Outstanding at   Options  Option   Expiration
Granted   12/31/2002        Granted      Forfeited   12/31/2003     Vested    Price    Month/Yr
-------   ----------        -------      ---------   ----------     ------    -----    --------

<S>        <C>              <C>            <C>       <C>          <C>        <C>       <C>
July-00    750,000             -              -        750,000      750,000  $  0.50   July-10
July-00    100,000             -              -        100,000      100,000  $  0.50   July-10
July-00    200,000             -              -        200,000      200,000  $  0.50   July-10
July-00    100,000             -              -        100,000      100,000  $  0.50   July-10
July-00     75,000             -           25,000       50,000       50,000  $  0.50   July-10
 May-01    750,000             -              -        750,000      500,000  $  0.50   July-10
 May-01    100,000             -              -        100,000       66,000  $  0.50   July-10
June-01    100,000             -              -        100,000      100,000  $  0.20    May-11
 Oct-01    250,000             -           166,666      83,334       83,334  $  0.50    Oct-11
 May-03       -              200,000          -        200,000      200,000  $  0.20    May-07
 May-03       -            2,000,000          -      2,000,000    2,000,000  $  0.15    May-13
June-03       -            3,600,000          -      3,600,000    3,466,666  $  0.20   June-13
         ------------------------------------------------------------------
Totals   2,425,000         5,800,000       191,666   8,033,334    7,616,000
         ==================================================================

</TABLE>
<TABLE>

                               WHY USA FINANCIAL GROUP, INC.
                                  Options Granted to Date
                           For the year ended, December 31, 2002

             Options                                    Options                          Option
 Date     Outstanding at     2002           2002     Outstanding at   Options  Option  Expiration
Granted     12/31/2001      Granted      Forfeited     12/31/2002     Vested    Price    Month/Yr
-------     ----------      -------      ---------     ----------     ------    -----    --------
<S>        <C>                 <C>      <C>             <C>          <C>       <C>       <C>
July-00    750,000             -              -          750,000      500,000  $  0.50   July-10
July-00    750,000             -          750,000              0            0      N/A       N/A
July-00    300,000             -          200,000        100,000      100,000  $  0.50   July-10
July-00    300,000             -          100,000        200,000      200,000  $  0.50   July-10
July-00    300,000             -          200,000        100,000      100,000  $  0.50   July-10
July-00     75,000             -              -           75,000       50,000  $  0.50   July-10
 May-01    300,000             -          200,000        100,000      100,000  $  0.20    May-11
 May-01    750,000             -              -          750,000      250,000  $  0.50    Oct-11
June-01    100,000             -              -          100,000       33,333  $  0.50   July-10
Sept-01    150,000                        150,000              0            0      N/A       N/A
Sept-01    150,000                        150,000              0            0      N/A       N/A
Sept-01    150,000                        150,000              0            0      N/A       N/A
 Oct-01    250,000             -              -          250,000       83,333  $  0.50   July-10
            -----------------------------------------------------------------
Totals   4,325,000             -        1,900,000      2,425,000    1,416,666
         ====================================================================
</TABLE>

                                       31
<PAGE>

Stock Warrants
--------------

The Company has issued stock warrants to 103 holders for 6,261,748 shares. The
warrants are exercisable at the following prices and terminate on the dates
shown.


                                   Exercise Price   Termination Date
                                   --------------   ----------------

         1,448,501 shares          $0.50             August 31, 2005
         1,000,000 shares          $0.50             June 30, 2005
         3,813,247 shares          $0.10             June 30, 2005
         ----------------

         6,261,748 shares
         ================

In addition to the above warrants, during December 2003 the Company issued
warrants to the shareholders/debenture holders of TCS Acquisition, LLC, in
connection with the acquisition of TCS Acquisition, LLC. The warrants are
exercisable at the following price and terminate on the date shown.

                                         Exercise Price   Termination Date
                                         --------------   ----------------

                     1,309,321 shares        $0.20       December 31, 2008


During the year ended December 31, 2003 the Company agreed to pay Quality
Investments a loan termination fee as follows: $27,300 for each month any
principal remains outstanding on the loan. The lender may elect, at his
discretion, to accept warrants in lieu of the termination fee. The warrants
shall equal 2.167% of the then outstanding shares of common and preferred stock
of the Company, including outstanding warrants, convertible debentures, options
or any other common stock obligations to issue shares. The Company has
63,892,760 shares, 8,033,334 options and 7,571,069 warrants, for a total of
79,497,163 share equivalents outstanding at December 31, 2003. The amount due at
December 31, 2003 would require that 1,722,704 warrants be issued on an annual
basis or 143,559 warrants per month. In the event that the loan is not paid off
by December 31, 2004, the termination equivalents escalate to 3.3% of
outstanding stock, including warrants, convertible debentures, options and any
other stock obligations.

The termination dates may be extended or the option price lowered at the
discretion of the Board of Directors.

During the year ended December 31, 2003 the Company agreed to pay to Douglas
Larson, a lender, a termination fee as follows: For each month or partial month
hereafter that any principal, interest or other amount remains unpaid under the
Douglas Larson loan, the Company shall issue to Douglas Larson, each month,
warrants for 167,000 shares of the Company's common stock at $.05 per share.

The warrants described above for the Quality Investment loan and the Doug Larson
loan contain an anti-dilution clause, which requires an increase in the warrants
for any shares outstanding in excess of 60,000,000. The Company had 63,892,760
shares outstanding at December 31, 2003, requiring an additional 6.5% in
warrants to be issued, or 177,835 shares per month or 2,134,020 per year for
both the Quality Investments loan of $1,300,000 and the Doug Larson loan of
$500,000.


Earnings Per Share
------------------

Basic net income (loss) per share excludes dilution and is computed by dividing
net income (loss) by the weighted average number of common shares outstanding
during the reported periods. Diluted net income (loss) per share reflects the
potential dilution that could occur if stock options and other commitments to
issue common stock were exercised.

                                       32
<PAGE>

As of December 31, 2003, options and warrants outstanding to purchase 15,604,403
common shares were anti-dilutive and have been excluded from the diluted
earnings per share computation. During 2002 the Company had outstanding options
and warrants totaling 8,686,748 common shares which were not included in the
diluted net income per share for 2002 as the exercise price of the options and
warrants were in excess of the actual share price at December 31, 2002, such
that the exercise of these options and warrants is not economically feasible.


Recent Accounting Pronouncements
--------------------------------

In May 2003, the Financial Accounting Standards Board ("FASB") issued Statement
No. 150, "ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF
BOTH LIABILITIES AND EQUITY" ("SFAS 150"). SFAS 150 establishes standards for
how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). SFAS 150 is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. The
adoption of this Statement did not have an effect on the consolidated financial
statements.

In January 2003, FASB issued Interpretation No. 46 (FIN 46), "Consolidation of
Variable Interest Entities." FIN 46 is effective for variable interest entities
created after January 31, 2003. FIN 46 is an interpretation of Accounting
Research Bulletin No. 51, "Consolidated Financial Statements." FIN 46 requires a
variable interest entity to be consolidated by a company if that company is
subject to a majority of the risk of loss from the variable interest entity's
activities or entitled to receive a majority of the entity's residual returns or
both. In December 2003, FASB published a revision to FIN 46 ("46R") to clarify
some of the provisions of FIN 46 and to exempt certain entities from its
requirements. The adoption of this interpretation did not have an impact on the
consolidated financial statements.

In December 2002, the FASB issued Statement No. 148, "Accounting for Stock Based
Compensation - Transition and Disclosure - an amendment of FASB Statement No.
123" ("SFAS 148"), which provides alternative methods of transition for a
voluntary change to the fair value method of accounting for stock based employee
compensation. The standard amends the disclosure requirement of SFAS 123 to
require prominent disclosure in both annual and interim financial statements
about the method of accounting for stock based employee compensation and the
effect of the method used on the reported results.

During June 2002, the FASB issued SFAS NO. 146, "Accounting for Costs Associated
with Exit or Disposal Activities" ("SFAS 146"). Such standard requires costs
associated with exit or disposal activities (including restructurings) to be
recognized when the costs are incurred, rather than at a date of commitment to
an exit or disposal plan. SFAS 146 nullifies Emerging Issues Task Force ("EITF")
Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." Under SFAS 146, a liability related to an exit or disposal
activity is not recognized until such liability has actually been incurred
whereas under EITF Issue No. 94-3 a liability was recognized at the time of a
commitment to an exit or disposal plan. The provisions of this standard are
effective for disposal activities initiated after December 31, 2002. The costs
for the discontinuance of the Company's subsidiaries have been incurred prior to
December 31, 2002, therefore no accruals exist for future costs, and the
Company's 2002 consolidated financial statements are in compliance with SFAS 146
for 2002 and prior years.

                                       33
<PAGE>

During April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64 Amendment of FASB Statement No. 13, and Technical
Corrections." Such standard requires any gain or loss on extinguishments of debt
to be presented as a component of continuing operations ( unless specific
criteria is met) whereas SFAS No. 4 required that such gains and losses be
classified as an extraordinary item in determining net income.

The Company has adopted SFAS 145, and included our gains from the relief of
liabilities on the abandonment of our mortgage subsidiaries which is an
extinguishment of debt to our continuing operations.

In June 2001, the FASB adopted SFAS No. 141 ("SFAS 141") "Business
Combinations", SFAS No. 142 ("SFAS 142) "Goodwill and Other Intangible Assets"
and in August 2001, SFAS No. 144 ("SFAS 144") "Accounting for the Impairment or
Disposal of Long-Lived Assets." The Company's accounting procedures have been
amended to adapt these statements at the earliest date the statement's became
effective. The Company's franchise costs do not meet the criteria of being
classified as goodwill as they represent contractual or other legal rights over
the control of future economic benefits, as such they will continue to be
amortized over twelve years. The Company is expending marketing expenses to
enlarge its franchise base through new franchises; however more franchisees have
closed than opened between 2003 and 2002. The Company's franchise transaction
revenues have declined to $316,879 from $359,305. The historical cost value of
the Company's franchises is declining as the Company amortizes to expense
approximately 8.5 % of its historical cost each year. The Company believes that
its WHY USA franchise would sell at some multiple of its transaction fees,
however the continuing losses after amortization would have some impact on a
future buyer's perception of the value of the franchise system. The Company has
sold its Arizona real estate franchise which it operated at a loss prior to its
sale. The sale price also created a loss. The negative impact of these
activities, the lack of new franchise sales in Arizona, and the abandonment of
the Valley and First National mortgage operations in Phoenix, Arizona has given
the Company reason to reevaluate its carrying value of its Arizona franchise
costs. Given the impact of the previously discussed factors the value of the
Arizona franchise was reduced by $21,325 at the end of 2003 and $150,000 at the
end of 2002. The Company recorded an impairment loss of $651,050 in 2003 to
reflect an impairment on the initial WHY USA North America acquisition. The
impairment loss is equal to the amount by which the carrying value of these
assets exceeded their estimated fair market value as of December 31, 2003.

The Company's goodwill is attributable to the acquisitions of Discover and TCS.
Discover has been profitable since its acquisition. The Company issued 1,177,140
shares in the first quarter of 2002 for all of the outstanding stock of
Discover. In February 2003 the Company issued 12,000,000 shares for the earnout
performance of Discover and reflected goodwill of $1,016,570 associated with the
commitment to issue these shares at December 31, 2002. The principal former
owners of Discover also terminated various compensation and severance pay
arrangements in connection with the share issuance.

Goodwill was recognized on the acquisition of TCS based on the excess of the
purchase price paid for TCS over the fair value of the assets and liabilities
acquired. The Company has recognized $1,318,456 in goodwill on the acquisition
of TCS. The allocation of the purchase price of $1,610,000 for the acquisition
of TCS Mortgage, Inc., was as follows:

Cash                                                         $  595,291
Accounts Receivable                                              65,355
Mortgage loans for resale                                     1,817,929
Equipment, net of depreciation                                   31,949
Deposits and prepaid assets                                      61,898
         Goodwill                                             1,318,456
                  Minus assumed liabilities                  (2,280,878)
                                                             -----------
                          Total Purchase Price               $1,610,000
                                                             ===========

NOTE 2 - INCOME TAXES

The Company has lost money from its inception, the only profitable entity to
date has been Discover Mortgage Corporation and now TCS Mortgage, Inc. Prior to
its acquisition, Discover Mortgage was taxed as a Sub S Corporation, with its
shareholders being responsible for its income taxes. Prior to its acquisition,


                                       34
<PAGE>

TCS Mortgage, Inc. was party to a tax sharing agreement with its former Parent
and would file a consolidated tax return. This income tax provisions as acquired
by the Company in the TCS Mortgage acquisition are based on the amounts that TCS
Mortgage would have paid had it filed a separate return.

Due to the losses incurred in both the current year and in prior years, the
Company has not paid income tax in any reported period. As of December 31, 2003,
the Company had approximately $6 million of net operating loss carry forwards,
compared to approximately $4 million of net operation loss carry forwards in
2002. Because of the uncertainty of future profitability, a valuation allowance
equal to the deferred tax asset has been recorded in 2003 and 2002.

For the year ended December 31, 2003 the Company had no taxable non-operating
income as compared to 2002, where the Company had taxable non-operating income
due to recovery of previously issued shares of the Company's restricted stock.


NOTE 3 - WAREHOUSE LINES OF CREDIT, MORTGAGE NOTES PAYABLE AND TCS ACQUISITION
DEBT

Discover has a line of credit with Wells Fargo Bank, N.A. which is as follows at
December 31, 2003:

Discover Mortgage has available a $100,000
unsecured revolving line of credit with
Wells Fargo Bank N.A. with interest payable
at prime plus 3.75% per annum.  The interest
rate at December 31, 2003 was 7.75%                           $   84,442
                                                              ==========

TCS's warehouse line payable as of December 31, 2003 consists of the following:

Warehouse loan agreement with a bank, which
allows the Company to fund loans through a
$9,500,000 line of credit provided by the
bank. The Company pays all fees associated
with the line of credit. The Company also
pays the bank interest on loans while in the
line of credit at LIBOR plus 4.43%. This
loan is guaranteed by an officer of TCS.                      $1,684,323
                                                              ==========

During 2002 the Company abandoned its capital leases which were attributable to
its discontinued operations. The Company has no other lines of credit,
guarantees or other financial instruments outstanding at December 31, 2003.


Mortgage Notes Payable
----------------------

The Company acquired an office building located in suburban Minneapolis valued
at $925,000 from its Chairman of the Board on January 31, 2003. The land and
building has been recorded in the financial statements at $417,000 which
represents the Chairman's cost basis in accordance with SEC Regulation S-X,
which requires that assets purchased from a stockholder for an amount in excess
of the stockholder's historical cost basis be recorded at the stockholder's
historic cost basis.

The value of $925,000 has been allocated as follows:

Land                                                  $100,000
Building                                              $317,000
Stockholders' equity, recorded as a distribution      $508,000
                                                      --------
                                                      $925,000
                                                      ========

                                       35
<PAGE>

The Company obtained a mortgage from a bank in the amount of $650,000, and
issued 1,000,000 shares the Company's restricted common stock to the Chairman as
consideration for the building. Additionally, the president of Discover
guaranteed the building loan. The debt incurred in the acquisition is as
follows:

Note payable to Commerce Bank, N.A. (secured
by a Building) in monthly installments of
principal and interest of $6,067 including
interest at 7.5% per annum with all unpaid
principal due February 2008. This loan is
guaranteed by an officer of the Company.                       $   627,993

The Company acquired two office buildings located adjacent to each other in
Woodbury, MN valued at $2,000,000 from its Chairman of the Board on December 31,
2003. The Company assumed two building mortgages from a bank in the amounts of
$462,246 and $415,075, and executed two new loans in the amounts of $500,000 and
$150,000 and issued 2,189,650 shares of the Company's restricted common stock to
its chairman.

The land and building has been recorded in the financial statements at
$1,081,466 which represents the Chairman's cost basis in accordance with SEC
Regulation S-X, which requires that assets purchased from a stockholder for an
amount in excess of the stockholder's historical cost basis be recorded at the
stockholder's historic cost basis.

The value of $2,000,000 has been allocated as follows:

Land                                                  $  800,000
Building                                              $  281,466
Stockholders' equity, recorded as a distribution      $  918,534
                                                      ----------
                                                      $2,000,000
                                                      ==========

The details of the debt incurred in the acquisition of these two buildings is
detailed as follows:

Note payable to First Federal Bank, (secured
by a Building) in monthly installments of
principal and interest of $4,000 including
interest at 8.5% per annum with all unpaid
principal due September 2004. This loan is
guaranteed by an officer of the Company.                           415,075

Note payable to First Federal Bank, (secured
by a Building) in monthly installments of
principal and interest of $4,275 including
interest at 8.25% per annum with all unpaid
principal due September 2004. This loan is
guaranteed by an officer of the Company.                           462,246

Note payable to Douglas Larson, (secured by a
Building) principal, interest and "termination fee"
(See Note 1) due June 2004.  Interest payable at
prime plus 3% to 7%. Additionally, the Company
is required to maintain certain financial covenants.               500,000
(See Note 1)

Note payable to James Murphy, (secured by a
building) interest due monthly. Interest payable
at 7.5% the note is due January 1, 2005.                           150,000
                                                               -----------


Total mortgage notes payable                                     2,155,314

Less current maturities                                          1,401,663
                                                               -----------

Long term liability for buildings                              $   753,651
                                                               ===========

                                       36
<PAGE>


The future principal repayments due under the mortgage notes payable for the
years ending as of December 31, are as follows:


                   2004                              $      1,401,663
                   2005                                       178,528
                   2006                                        30,743
                   2007                                        33,129
                   2008                                       511,251
                                                     ----------------
                                                     $     2,155,314
                                                     ================


Acquisition of TCS Mortgage, Quality Investments Promissory Note and Debentures
-------------------------------------------------------------------------------

The Company acquired TCS for $1,610,000 on December 31, 2003. As a result, the
consolidated statement of operations does not include the activity of TCS for
2003. The Company purchased TCS for cash, convertible debentures and warrants.
The 1,309,321 warrants, issued at $.20 per share, have a five-year life and a
total value of $10,000. The Company borrowed $1,300,000 from Quality
Investments, Inc., and issued $300,000 in debentures to the members of TCS
Acquisition, LLC for the acquisition of TCS. The loan payable is due June 30,
2005 with a 12 month extension for a fee of 1 point.


Quality Investments, Inc. - $1,300,000 Loan
-------------------------------------------

This loan is secured by all assets of the Company and its wholly-owned
subsidiaries. Interest rate is prime plus 3% or 7%, currently at (March 31,
2004). This loan requires a continual cash balance of $500,000 for the Company.
The loan requires approval for all expenditures exceeding $10,000. The Company
agrees to pay Quality Investments a termination fee of $27,300 for each month
any principal remains outstanding on the loan. The lender may elect, at his
discretion, to accept warrants in lieu of the termination fee. The warrants
shall equal 2.167% of the then outstanding shares of common and preferred stock
of the Company, including outstanding warrants, convertible debentures, options
or any other common stock obligations to issue shares. The Company has
63,892,760 shares, 8,033,334 options and 7,571,069 warrants, for a total of
79,497,163 share equivalents at December 31, 2003. The amount due at December
31, 2003 would require that 1,722,704 warrants be issued on an annual basis or
143,559 warrants per month. In the event that the loan is not paid off by
December 31, 2004, the termination equivalents escalate to 3.3% of outstanding
stock including warrants, convertible debentures, options and any other stock
obligations.


Convertible Debentures - $300,000
---------------------------------

The $300,000 convertible debentures ("debentures")are due on November 30, 2006.
These debentures are interest bearing at a rate of 7.5% per annum payable one
month in arrears. Notwithstanding the foregoing, interest payments may be
deferred until the maturity date, provided that interest payments are not
deferred to the extent of positive earnings before interest, taxes, depreciation
and amortization ("EBITDA"). The Company also has the right to pay accrued
principal and interest via an issue of restricted shares of the Company's common
stock provided that the average closing price of the Company's common stock
exceed $0.20 for ten consecutive trading days prior to the date of payment. The
holders of the debentures also have the option to convert the debentures into
shares of common stock at anytime subject to 30 days notice to the Company. The
debentures are convertible into common stock at an amount of $0.20 per common
share.

Presented below are the unaudited pro forma condensed consolidated balance sheet
for 2002, and the unaudited pro forma consolidated statement of operations for
2003 and 2002 as if TCS had been acquired January 1, 2002.

                                       37
<PAGE>
<TABLE>

                                              WHY USA FINANCIAL GROUP, INC.
                                Unaudited Pro Forma Condensed Consolidated Balance Sheet
                                                    December 31, 2002

                                                   WHY USA
                                               Financial Group    TCS Mortgage       Pro Forma          Pro Forma
                                                (Historical)      (Historical)      Adjustments        Consolidated
                                               -------------      -------------     -------------      -------------
<S>                                            <C>                <C>               <C>                <C>
Current Assets                                 $    593,419       $  5,600,818      $         --       $  6,194,237
Property and Equipment - Net                         92,407             52,274                --            144,681
Other Assets(i)                                   4,493,006          1,368,862                --          5,861,868
                                               -------------      -------------     -------------      -------------
Total Assets                                      5,178,832          7,021,954                --         12,200,786
                                               -------------      -------------     -------------      -------------

Current Liabilities                                 902,784          5,279,258                --          6,182,042
Long Term Liabilities(ii)(iii)                    1,600,000              5,436         1,455,716          3,061,152
                                               -------------      -------------     -------------      -------------
Total Liabilities                                 2,502,784          5,284,694         1,455,716          9,243,194
                                               -------------      -------------     -------------      -------------

Investment in Subsidiaries                         (281,544)                --           281,544                 --
Common Stock                                         58,196             10,000           (10,000)            58,196
Additional Paid In Capital                        7,177,210          1,585,000        (1,585,000)         7,177,210
Accumulated Deficit                              (4,277,814)           142,260          (142,260)        (4,277,814)
                                               -------------      -------------     -------------      -------------
Total Shareholders' Equity                        2,676,048          1,737,260        (1,455,716)         2,957,592
                                               -------------      -------------     -------------      -------------

Total Liabilities and Shareholders Equity      $  5,178,832       $  7,021,954      $         --       $ 12,200,786
                                               =============      =============     =============      =============


(i)      Other assets for WHY USA Financial Group, includes goodwill of
         $1,318,456 as recognized per the actual transaction in 2003.
(ii)     Long term liabilities for WHY USA Financial Group, includes notes and
         debentures of $1,600,000 as recognized per the actual transaction in
         2003.
(iii)    Pro forma adjustments includes an adjustment of liabilities of
         $1,455,716, to reflect the total elimination of all equity acquired in
         TCS Mortgage. This amount represents the difference between net assets
         as at December 31, 2003 and 2002 being $281,544 and $1,737,260
         respectively.
</TABLE>

                                                      38
<PAGE>
<TABLE>

                                         WHY USA FINANCIAL GROUP, INC.
                           Unaudited Pro Forma Consolidated Statement of Operations
                                         Year Ended December 31, 2003

                                       WHY USA
                                    Financial Group    TCS Mortgage        Pro Forma         Pro Forma
                                     (Historical)      (Historical)       Adjustments       Consolidated
<S>                                 <C>                <C>                <C>               <C>
Revenue:
    Mortgage Lending                $  4,753,290       $  5,811,777       $         --      $ 10,565,067
    Real Estate Franchise                367,203                 --                 --           367,203
    Rental and Other Income                   --             97,339                 --            97,339
                                    -------------      -------------      -------------     -------------
Total Revenue                          5,120,493          5,909,116                 --        11,029,609
                                    -------------      -------------      -------------     -------------

Operating Expenses:
    Direct Cost of Services
        Mortgage lending               3,407,220          3,735,357                 --         7,142,577
        Real estate activities            93,912                 --                 --            93,912
        General and
          administrative               1,586,211          1,837,350                 --         3,423,561
        Sales and marketing              311,622            159,386                 --           471,008
        Depreciation                      52,648             36,599                 --            89,247
        Amortization of
          acquisition costs              224,481                 --                 --           224,481
        Impairment of
          franchise
          acquisitions and
          prepaid assets                 809,717                 --                 --           809,717
                                    -------------      -------------      -------------     -------------
Total operating expense                6,485,811          5,768,692                 --        12,254,503
                                    -------------      -------------      -------------     -------------

Other
    Interest income(expense)             (60,898)           100,435                 --            39,537
    Income tax expense                        --           (100,000)           100,000                --
                                    -------------      -------------      -------------     -------------
                                         (60,898)               435            100,000            39,537
                                    -------------      -------------      -------------     -------------

Income (Loss) from Continuing
  Operations                          (1,426,216)           140,859            100,000        (1,185,357)
                                    -------------      -------------      -------------     -------------

    Discontinued Operations              189,038                 --                 --           189,038

                                    -------------      -------------      -------------     -------------
Net income (loss)                   $ (1,237,178)      $    140,859       $    100,000      $   (996,319)
                                    =============      =============      =============     =============


Pro forma earnings per share information for 2003:

Basic weighted average shares outstanding                                                     59,804,986
                                                                                            =============

Pro forma basic net loss per common share:                                                  $      (.017)
                                                                                            =============

(1) TCS Mortgage, Inc. accrued income tax expense during the period of $100,000.
Had TCS Mortgage actually been part of the Registrant during the period no
income tax provision would have been made. The Registrant has a net operating
loss available to offset all of the taxable income generated by TCS.
</TABLE>

                                       39
<PAGE>

Purchase accounting-reflects the allocation of the purchase price of $1,610,000
by Registrant for this acquisition of TCS Mortgage, Inc., as follows:

Cash                                                $   595,291
Accounts Receivable                                      65,355
Mortgage loans for resale                             1,817,929
Equipment, net of depreciation                           31,949
Deposits and prepaid assets                              61,898
Goodwill                                              1,318,456
                  Minus assumed liabilities          (2,280,878)
                                                    ------------
                          Total Purchase Price      $ 1,610,000
                                                    ============

<TABLE>

                                         WHY USA FINANCIAL GROUP, INC.
                           Unaudited Pro Forma Consolidated Statement of Operations
                                         Year Ended December 31, 2002

                                        WHY USA
                                   Financial Group     TCS Mortgage         Pro Forma        Pro Forma
                                     (Historical)      (Historical)        Adjustments      Consolidated
                                    -------------      -------------      -------------     -------------
<S>                                 <C>                <C>                <C>               <C>
Revenue:
    Mortgage Lending                $  4,102,619       $  5,494,891       $         --      $  9,597,510
    Real Estate Franchise                568,102                 --                 --           568,102
    Rental and Other Income                   --            101,774                 --           101,774
                                    -------------      -------------      -------------     -------------
Total Revenue                          4,670,721          5,596,665                 --        10,267,386
                                    -------------      -------------      -------------     -------------

Operating Expenses:
    Direct Cost of Services
        Mortgage lending               2,665,987          3,637,313                 --         6,303,300
        Real estate activities            91,199                 --                 --            91,199
        General and
          administrative               1,726,188          1,424,094                 --         3,150,282
        Sales and marketing              161,187                 --                 --           161,187
        Depreciation                      39,531             33,177                 --            72,708
        Amortization of
          acquisition costs              238,896                 --                 --           238,896
        Impairment of
          franchise
          acquisitions and
          prepaid assets                 150,000                 --                 --           150,000
                                    -------------      -------------      -------------     -------------
Total operating expense                5,072,988          5,094,584                 --        10,167,572
                                    -------------      -------------      -------------     -------------

Other
    Interest income                        4,476             23,586                 --            28,062
    Income tax expense                    (1,000)           (57,928)            57,128            (1,800)
                                    -------------      -------------      -------------     -------------
                                           3,476            (34,342)            57,128            26,262
                                    -------------      -------------      -------------     -------------

Income (Loss) from Continuing
  Operations                            (398,791)           467,739             57,128           126,076
                                    -------------      -------------      -------------     -------------

    Discontinued Operations              778,906                 --                 --           778,906

                                    -------------      -------------      -------------     -------------
Net income                          $    380,115       $    467,739       $     57,128      $    904,982
                                    =============      =============      =============     =============
</TABLE>

                                                      40
<PAGE>

Pro forma earnings per share information for 2002:

Basic weighted average shares outstanding                   58,196,110
                                                            ==========

Pro forma basic net earnings per common share:              $    0.016
                                                            ==========

Diluted weighted average shares outstanding                 59,281,610
                                                            ==========

Pro forma basic net earnings per common share:              $    0.015
                                                            ==========


NOTE 4 - OPERATING AND CAPITAL LEASE OBLIGATIONS

Operating Leases
----------------

The Company leases its corporate office space from it Chairman of the Board.
Additionally, WHY USA N.A. also shares the same office space. The combined
monthly payment is $4,500 with $2,000 per month attributable to WHY USA N.A. and
$2,500 per month to the Company. The lease terminates in May, 2006 with respect
to WHY USA N.A. and in September 2006 with respect to the Company. Northwest
leases its call center from the Company's Chairman of the Board at $500 per
month on a month to month lease. Discover leases office space for three of its
offices. The combined monthly lease payments are $4,800. The lease terms of the
Discover offices are short term with termination dates of April 2004, December
2004, and February 2005. TCS leases its office space under an operating lease
ending in May, 2004 at approximately $18,000 per month.

The Company also leases various motor vehicles, copiers, and other office
equipment under both capital and operating leases. The future minimum operating
and capital lease commitments are as follows:

    Year Ending December 31,                       Operating           Capital
    ------------------------                      -----------        ----------
                  2004                            $   194,234       $   6,311
                  2005                                 87,082           6,311
                  2006                                 51,108           6,311
                  2007                                  1,875           6,311
                  2008                                    -             2,106
                  Thereafter                              -               -
                                                  -----------       ---------
                  Total minimum lease payments    $   334,299          27,350
                                                  ===========
                  Less interest portion                                (7,475)
                                                                    ----------
                                                                    $  19,875
                                                                    =========

Rent expense for the above leases for the years ended December 31, 2003 and 2002
was approximately $118,000 and $177,000, respectively.


Lease Income
------------

The Company leases two office buildings in Woodbury, Minnesota and a portion of
its Minneapolis office space to various tenants, which require them to pay a
monthly base rent. Combined monthly rental payments are $14,118 and lease terms
range from six months to three years. The leases expire at various dates through
June 2007.

                                       41
<PAGE>

The future rental income for the leases are as follows for the years ending
December 31:

            2004                    $  97,173
            2005                       28,684
            2006                        6,600
            2007                        3,300
                                    ---------

                                    $ 135,757
                                    =========

NOTE 5 - PROPERTY AND EQUIPMENT

The Company's property and equipment by significant category are as follows:

                             Cost              Accumulated         Net Book
Category                  December 31,2003     Depreciation          Value
--------                  ----------------     ------------          -----

Land                      $    100,000(i)       $       -          $  100,000

Office buildings               317,000(i)           7,451             309,549

Office buildings and land,
  expected to be resold      1,081,466(ii)              -           1,081,466

Building Improvements          133,508               3,603            129,905

Office computers,
  Equipment and furnishings    657,246             516,872            140,374
------------------------------------------------------------------------------

Totals                    $  2,289,220          $  527,926         $1,761,294
==============================================================================


(i)      In January 2003 the Company acquired a Minneapolis office building from
         an entity owned by its Chairman, Donald Riesterer. The purchase
         consideration for this building was $925,000.

         The land and building has been recorded in the financial statements at
         a cost of $417,000 which represents the Chairman's cost basis in
         accordance with SEC Regulation S-X, which requires that assets
         purchased from a stockholder for an amount in excess of the
         stockholder's historical cost basis be recorded at the stockholder's
         historic cost basis. (See Note 3)

(ii)     In December 2003 the Company acquired two commercial office buildings
         in Woodbury, Minnesota from a related entity owned by its Chairman,
         Donald Riesterer. The purchase consideration for these properties was
         $2,000,000.

         The land and building has been recorded in the financial statements at
         a cost of $1,081,466 which represents the Chairman's cost basis in
         accordance with SEC Regulation S-X, which requires that assets
         purchased from a stockholder for an amount in excess of the
         stockholder's historical cost basis be recorded at the stockholder's
         historic cost basis. (See Note 3)

                                       42
<PAGE>

NOTE 6 - RELATED PARTY TRANSACTIONS

Donald Riesterer, Chairman of the Company owns two properties currently being
rented to the Company, the Sebeka call center at $500 per month on a
month-to-month basis and the offices of WHY USA Financial Group and WHY USA
North America for a combined rental of $4,500 per month.

In June 2002 the Company satisfied certain note and accounts payable owed to a
third party, and assumed by its Chairman, Donald Riesterer, in the total amount
of $258,864 by issuing him 2,428,250 shares of restricted common stock of the
company based on a value of $.10 per share, and one WHY USA real estate
franchise for a Wyoming location value at $16,000.

In January 2003 the Company acquired a Minneapolis office building of 11,000
square feet from an entity owned by its Chairman, Donald Riesterer, to be used
as the main headquarters of its Minnesota based mortgage brokerage business. The
Company paid $925,000 to Mr. Riesterer for this building, including $650,000
which was applied against an existing contract for debt and 1,000,000 shares of
its restricted stock valued at $.275 per share (substantially in excess of the
market value of the common stock at the time of the acquisition). This purchase
was financed through a 7.5% mortgage from a local commercial bank requiring
payments of $6,067 monthly. The bank required the personal guarantee of the
president of Discover Mortgage Company and the Chairman of the Board and has
valued these guarantees at $27,500 which are being amortized over the five year
life of the loan.

The land and building has been recorded in the financial statements at a cost of
$417,000 which represents the Chairman's cost basis in accordance with SEC
Regulation S-X, which requires that assets purchased from a stockholder for an
amount in excess of the stockholder's historical cost basis be recorded at the
stockholder's historic cost basis.

In December 2003 the Company acquired two commercial office buildings in
Woodbury, Minnesota from a related entity owned by its Chairman, Donald
Riesterer. These buildings are located on 3 acres and each building has
approximately 8,800 square feet of rentable space. The Company acquired this
property for $2,000,000 by assumption of notes payable for $415,075 and
$462,246, issuance of new notes for $500,000 and $150,000, to replace existing
previous debts of the related party, the issuance of 2,189,650 restricted common
shares of stock to Mr. Riesterer, and the payment of costs associated with the
transaction.

The land and building has been recorded in the financial statements at
$1,081,466 which represents being the Chairman's cost basis in accordance with
SEC Regulation S-X, which requires that assets purchased from a stockholder for
an amount in excess of the stockholder's historical cost basis be recorded at
the stockholder's historic cost basis.

In December 2003, the Company acquired 100% of the outstanding membership
interest in TCS Acquisition, LLC, a California limited liability company which
owns 100% of TCS Mortgage, Inc. At the time of acquisition, director and CEO,
James B. Kylstad held approximately a 16% ownership interest in TCS Acquisition,
LLC.


NOTE 7 - CONTINGENCIES

The Company is a party to three pending legal proceedings that have arisen in
the ordinary course of business, however the Company does not believe that any
of these proceedings will have a material impact on the business, financial
conditions or results of operations.


NOTE 8 - OPERATING SEGMENTS

The Company operates in two segments which are the real estate franchise and
mortgage origination/brokering segments. The Company's operations are conducted
within the United States of America and are located primarily in Minnesota and
Southern California.

                                       43
<PAGE>

The Company's accounting policies for both of the segments are the same as those
described in the summary of significant accounting policies. Management
evaluates segment performance based on segment profit or loss before income
taxes and nonrecurring gains and losses. Transfers between segments are
accounted for at market value.

Presented below is the reconciliation of segment information to the condensed
consolidated balance sheet for 2003, the reconciliation of segment information
to the consolidated statement of operations for 2003, and the reconciliation of
segment information to the unaudited pro forma statement of operations for 2003
as if TCS had been acquired January 1, 2003.

<TABLE>

                                              WHY USA FINANCIAL GROUP, INC.
                                        Reconciliation of Segment Information to
                                          Condensed Consolidated Balance Sheet
                                                    December 31, 2003


                                                                   Mortgage
                                               Real Estate       Origination/      Corporate        Consolidated
                                                Franchise         Brokerage          Entity            Total
                                               ------------      ------------     ------------      ------------
<S>                                            <C>               <C>              <C>               <C>
Current Assets                                 $    74,253       $ 2,849,193      $     1,085       $ 2,924,531
Property and Equipment - Net                        18,229         1,735,428            7,637         1,761,294
Other Assets                                       737,764         1,236,563        1,245,198         3,219,525
                                               ------------      ------------     ------------      ------------
Total Assets                                   $   830,246       $ 5,821,184      $ 1,253,920       $ 7,905,350
                                               ------------      ------------     ------------      ------------

Current Liabilities                            $   252,396       $ 2,694,544      $ 1,378,512       $ 4,325,452
Long Term Liabilities                                                620,031         1,750,000        2,370,031
                                               ------------      ------------     ------------      ------------
Total Liabilities                                  252,396         3,314,575        3,128,512         6,695,483
                                               ------------      ------------     ------------      ------------

Investment in Subsidiaries                              --                --               --                --
Common Stock                                            --                --           63,893            63,893
Additional Paid In Capital                       2,026,400         2,329,708        3,053,947         7,410,055
Accumulated Deficit                             (1,448,550)          176,901       (4,992,432)       (6,264,081)
                                               ------------      ------------     ------------      ------------
Total Shareholders' Equity                         577,850         2,506,609       (1,874,592)        1,209,867
                                               ------------      ------------     ------------      ------------

Total Liabilities and Shareholders Equity      $   830,246       $ 5,821,184      $ 1,253,920       $ 7,905,350
                                               ============      ============     ============      ============
</TABLE>

                                                           44
<PAGE>
<TABLE>

                                         WHY USA FINANCIAL GROUP, INC.
                                   Reconciliation of Segment Information to
                                     Consolidated Statement of Operations
                                         Year Ended December 31, 2003



                                      Real Estate       Mortgage          Corporate        Consolidated
                                       Franchise        Brokerage           Entity            Total
                                     ------------      ------------      ------------      ------------
<S>                                  <C>               <C>               <C>               <C>
Revenue:
    Mortgage Lending                 $        --       $ 4,753,290       $        --       $ 4,753,290
    Real Estate Franchise
      Sales and Services                 367,203                --                --           367,203
                                     ------------      ------------      ------------      ------------
Total Revenue                            367,203         4,753,290                --         5,120,493
                                     ------------      ------------      ------------      ------------

Operating Expenses:
    Direct Cost of Services
        Mortgage lending                      --         3,407,220                --         3,407,220
        Real estate activities            93,912                --                --            93,912
        General and
          administrative                 205,099           806,583           574,529         1,586,211
        Sales and marketing              132,029            99,593            80,000           311,622
        Depreciation                       8,367            42,609             1,672            52,648
        Amortization of
          acquisition costs              168,481                --            56,000           224,481
        Impairment of franchise
          acquisitions and
          prepaid assets                 651,050                --           158,667           809,717
                                     ------------      ------------      ------------      ------------
Total operating expense                1,258,938         4,356,005           870,868         6,485,811
                                     ------------      ------------      ------------      ------------

Other
    Interest income (expense)             (5,077)          (47,721)           (8,100)          (60,898)
    Income tax expense                        --                --                --                --
                                     ------------      ------------      ------------      ------------
                                          (5,077)          (47,721)           (8,100)          (60,898)
                                     ------------      ------------      ------------      ------------

Income (Loss) from Continuing
  Operations                            (896,812)          349,564          (878,968)       (1,426,216)
                                     ------------      ------------      ------------      ------------

    Discontinued Operations                   --                --           189,038           189,038

                                     ------------      ------------      ------------      ------------
Net income (loss)                    $  (896,812)      $   349,564       $  (689,930)      $(1,237,178)
                                     ============      ============      ============      ============

</TABLE>

                                                      45
<PAGE>

<TABLE>

                                         WHY USA FINANCIAL GROUP, INC.
                                   Reconciliation of Segment Information to
                           Unaudited Pro Forma Consolidated Statement of Operations
                                 (as if TCS had been acquired January 1, 2003)
                                         Year Ended December 31, 2003


                                                          Mortgage
                                      Real Estate       Origination/       Corporate          Consolidated
                                       Franchise          Brokerage          Entity              Total
                                     -------------      -------------      -------------      -------------
<S>                                   <C>               <C>                <C>                <C>
Revenue:
    Mortgage Lending                 $         --       $ 10,565,067       $         --       $ 10,565,067
    Real Estate Franchise
      Sales and Services                  367,203                 --                 --            367,203
    Rental and Other Income                    --             97,339                 --             97,339
                                     -------------      -------------      -------------      -------------
Total Revenue                             367,203         10,662,406                 --         11,029,609
                                     -------------      -------------      -------------      -------------

Operating Expenses:
    Direct Cost of Services
        Mortgage lending                       --          7,142,577                 --          7,142,577
        Real estate activities             93,912                 --                 --             93,912
        General and
          administrative                  205,099          2,643,933            574,529          3,423,561
        Sales and marketing               132,029            258,979             80,000            471,008
        Depreciation                        8,367             79,208              1,672             89,247
        Amortization of
          acquisition costs               168,481                 --             56,000            224,481
        Impairment of franchise
          acquisitions and
          prepaid assets                  651,050                 --            158,667            809,717
                                     -------------      -------------      -------------      -------------
Total operating expense                 1,258,938         10,124,697            870,868         12,254,503
                                     -------------      -------------      -------------      -------------

Other
    Interest income (expense)              (5,077)            52,714             (8,100)            39,537
    Income tax expense                         --                 --                 --                 --
                                     -------------      -------------      -------------      -------------
                                           (5,077)            52,714             (8,100)            39,537
                                     -------------      -------------      -------------      -------------

Income (Loss) from Continuing
  Operations                             (896,812)           590,423           (878,968)        (1,185,357)
                                     -------------      -------------      -------------      -------------

    Discontinued Operations                    --                 --            189,038            189,038

                                     -------------      -------------      -------------      -------------
Net income (loss)                    $   (896,812)      $    590,423       $   (689,930)      $   (996,319)
                                     =============      =============      =============      =============
</TABLE>

                                                      46
<PAGE>


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

On March 24, 2003 the Company filed a Form 8K for Changes in Registrant's
Certifying Accountant as the Company was informed by its independent auditor,
Randy Simpson, CPA ("Simpson"), that he has not been approved for registration
with the PCAOB as per the requirements of the Sarbanes-Oxley Act of 2002
("Act")and, as a result, would not be able to continue to act as Registrant's
independent auditor. Effective March 19, 2004, Simpson resigned its position as
Registrant's independent auditor.

Simpson last reported on the Company's financial statements as of March 15,
2003. The report, which covered the two fiscal years ended December 31, 2002,
was an unqualified report. The change of independent accountants was ratified by
the Board of Directors of Registrant on March 19, 2004.

During the two fiscal years ended December 31, 2002 and the subsequent interim
period through March 19, 2004:

         o        there were no disagreements between the Company and Simpson on
                  any matter of accounting principles or practices, financial
                  statement disclosure, or auditing scope or procedure, which,
                  if not resolved, to Simpson's satisfaction, would have caused
                  it to make reference to the subject matter of the disagreement
                  in connection with its report;

         o        There have been no reportable events (as defined in Regulation
                  S-K Item 304(a)(1)(v).

During the two fiscal years ended December 31, 2002 and the subsequent interim
period through March 19, 2004, Simpson did not advise Company that:

         o        the internal controls necessary for the Company to develop
                  reliable financial statements do not exist;

         o        any information had come to their attention which had led them
                  to no longer be able to rely on management's representation,
                  or that had made Simpson unwilling to be associated with the
                  financial statements prepared by management;

         o        the scope of any audit needed to be expanded significantly or
                  that more investigation was necessary;

         o        there was any information which the accountants concluded
                  would materially impact the fairness and reliability of either
                  (i) a previously issued audit report or the underlying
                  financial statements, or (ii) the financial statements issued
                  or to be issued covering the fiscal period(s) subsequent to
                  the date of the most recent financial statements covered by an
                  audit report (including information that, unless resolved to
                  the accountant's satisfaction, would prevent it from rendering
                  an unqualified audit report on those financial statements.

                                       47
<PAGE>

The Company has requested that Simpson furnish it with a letter addressed to the
SEC stating whether or not it agrees with the above statements. A copy of such
letter, dated March 24, 2004, was filed as Exhibit 16.1 to the Form 8-K.

The Registrant has engaged PKF, Certified Public Accountants, A Professional
Corporation ("PKF") as its new independent accountant on March 19, 2004. Prior
to March 19, 2004, the Registrant had not consulted with PKF regarding (i) the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Registrant's financial statements, and no written report or oral advice was
provided to the Registrant by PKF concluding there was an important factor to be
considered by the Registrant in reaching a decision as to an accounting,
auditing or financial reporting issue; or (ii) any matter that was either the
subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of
Regulation S-K and the related instructions to Item 304 of Regulation S-K, or a
reportable event, as that term is defined in Item 304(a)(1)(iv) of Regulation
S-K.


ITEM 8A.  CONTROLS AND PROCEDURES.

Within 90 days of the filing date of this report, we carried out an evaluation,
under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and procedures. Based upon
that evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in the reports that we file
under the Exchange Act is accumulated and communicated to management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure. There have been no significant
changes in our internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our evaluation, including any
significant actions regarding any deficiencies. We intend to review our controls
and procedures regularly with our management and Board of Directors.


                                       48
<PAGE>

                                    PART III

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

Officers and Directors
----------------------

The names and ages of all directors and executive officers of the Company along
with their respective positions, term of office as a director, is as follows:

Name                   Age    Positions Held                  Director Since
--------------------   ----   -----------------------------   --------------

Donald Riesterer        37    Chairman of the Board of        Dec. 31, 1999
                              Directors

James B. Kylstad        52    Chief Executive                 March 1, 2001
                              Officer and Director

Bruce Clausen           41    Vice President, Director
                              and President of Discover
                              Mortgage                        May 13, 2002

Mike Peterson           37    Chief Financial Officer         May 13, 2003


Each of the above individuals will serve as a director until the next annual
meeting of the shareholders or until a successor is elected and shall qualify.
Executive officers serve at the discretion of the Board of Directors.


Biographical Information for Officers and Directors
---------------------------------------------------

DONALD L. RIESTERER, is the Chairman of the Board of Directors, and founder of
the Company. He is also the President, and principal owner of Northwest
Investment Trust, Inc. Mr Riesterer has served as Vice-President/Sales and
Marketing for Display Carousels Inc. from 1993 through 1996, a marketing firm,
and as district manager of a financial service firm, Primerica Financial Service
where he was employed from 1991 to 1993. He is a licensed real estate agent, a
life/health insurance agent, and a loan originator in several states.

JAMES B. KYLSTAD, became a director and CEO of the Company on February 1, 2001.
Mr. Kylstad served as Chief Operating Officer and Director of the Bank of
Southern California from 1981-1983. From 1983 through July of 1994 he was the
Executive Vice President and Director of TCS Enterprises, Inc., a public company
which was active in real estate services and mortgage banking. In July of 1994
he became the Chairman and CEO of American Home Capital Corporation, the
successor to TCS Enterprises and held these positions until January 2001. He has
been a licensed California Real Estate Broker for over 20 years and has service
on numerous boards and committees.

BRUCE CLAUSEN, is a director and Vice President of the Company, and President of
Discover Mortgage, a subsidiary of the company, since 1995. From 1993 to 1995 he
was the Vice-President of Mercantile Mortgage Company of Minneapolis, which
packaged mortgage loans to be sold in bulk to investors; and from 1987 to 1993
he was Branch Manager of ITT Finance, a consumer loan company.

MIKE PETERSON, has been the CFO since May 2003. For the three years prior to
joining the Company he was an auditor with Berc & Fox, a CPA firm. He obtained
his Bachelor of Science in Accounting from the University of Minnesota in 1999.

                                       49
<PAGE>

Audit Committee Financial Expert
--------------------------------

We do not have an audit committee. The SEC rules provide that audit committee
financial experts do not have any additional duties, obligations or liabilities
and are not considered experts for purposes of the Securities Act of 1933.


Code of Ethics
--------------

We have adopted a code of ethics that applies to the principal executive officer
and principal financial and accounting officer. We will provide to any person
without charge, upon request, a copy of our code of ethics. Requests may be
directed to our principal executive offices at 8301 Creekside, Unit 101,
Bloomington, Minnesota 55437.


Compliance with Section 16(a) of the Act
----------------------------------------

To the best of the Company's knowledge and belief, none of its directors,
officers or principal shareholders failed to file any reports or forms required
under the Securities Exchange Act of 1934.


ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth certain information paid by the Company to
management for the fiscal years ended December 31, 2003, 2002 and 2001.

<TABLE>
                                   SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------------------------------
                                                              Long Term Compensation
                           ------------------------------- ---------------------------
                                 Annual Compensation            Awards & Options
                           ------------------------------- ---------------------------

                                          Annual        Other      Restricted    Securities
 Name and Principal                      Salary &     Compensa-      Stock       Underlying
 Position                     Year     Commissions     tion (1)      Awards     Options/SAR's
 -------------------------------------------------------------------------------------------------
<S>                            <C>      <C>          <C>         <C>            <C>
 Donald Riesterer              2003     $ 150,000    $ 23,696        -0-        1,100,000(4)
 Chairman                      2002     $ 150,000    $ 28,344        -0-            -0-
 & Director                    2001     $ 127,604    $  7,440        -0-            -0-

 James B. Kylstad(*)           2003     $ 100,000    $ 17,393    750,000(2)     1,000,000(4)
 Chief Executive               2002     $ 100,000    $  7,828    750,000(2)         -0-
 Officer & Director            2001     $  50,000    $  4,000        -0-          750,000(3)

 Bruce Clausen                 2003     $ 156,378    $ 25,200        -0-          100,000(4)
 Vice President &              2002     $ 118,185    $ 25,200        -0-            -0-
 Director; President           2001         -0-         -0-          -0-            -0-
 Of Discover Mortgage
 Subsidiary

 Mike Peterson (**)            2003     $ 27,774      $  3,966        -0-           -0-
 Chief Financial               2002        -0-          -0-          -0-            -0-
 Officer                       2001        -0-          -0-          -0-            -0-

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

(*) James B. Kylstad was the acting Chief Financial Officer from March to May
2003.
(**) Mike Peterson commenced employment with the Company in June 2003, as Chief
Financial Officer.

1)       Included payments of automobile, cell phone and health insurance
         expenses.
2)       These shares were valued at $0.10 per share, which was above the market
         value of such common shares on the date of the stock award.
3)       Granted under the Company's Incentive Stock Option Plan, adopted in
         July 2000, whereby options vest over a 3 year period, and are
         exercisable at $0.50 per share and expire 10 years from the date of the
         grant.
4)       Granted under the Company's Incentive Stock Option Plan adopted in July
         2000, whereby options vest upon grant, and are exercisable at $0.20 per
         share and expire 10 years from the date of the grant.

                                       50
<PAGE>

During 2003 our Chairman and CEO were granted options to purchase 1,100,000 and
1,000,000 shares of our restricted common stock. These options vested upon grant
and expire 10 years from the date of grant. There were no exercises of any
outstanding stock options of the Company by any officers or directors of the
Company during such 2003 fiscal year. The following table contains certain
information on option values held by the named executive officers at the end of
fiscal year 2003:


                                                       Value of the
                             Number of Securities      Unexercised
                             Underlying Unexercised    In-The-Money
                             Options/SARs at           Options/SARs at
                             FY-End ($)                FY-End ($)
                             Exercisable/              Exercisable/
                             Unexercisable             Unexercisable
                             ---------------------------------------

Don Riesterer                1,850,000/0                $ 0/$0
James Kylstad                1,750,000/0                $ 0/$0


Compensation of Directors
-------------------------

No director of the Company was compensated in 2002 for services rendered in his
or her role as a director. In January 2003 the Company adopted a compensation
policy for its directors providing for them to each receive 1,000 restricted
common shares of the company for each director's meeting attended by them. The
Company did not begin the granting of these shares in 2003.


Recent Stock Options
--------------------

In June 2003 the Company granted stock options to the management personnel for
the purchase of an aggregate of 3,600,000 common shares exercisable at $.20 per
share anytime during their 10-year term, all of which were fully vested upon
their date of grant. Of these stock options, Donald Riesterer received
1,100,000, James Kylstad received 1,000,000, and Bruce Clausen received 100,000.
The remaining 1,400,000 stock options were granted to various employees and
consultants of the Company.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth, as of March 15, 2004 the beneficial ownership of
Common Stock by each person who is known by the company to own beneficially more
than 5% of the issued and outstanding Common Stock and the shares of Common
Stock owned by each director, each executive officer and all officers and
directors as a group. Each person has sole voting and investment power as to all
shares unless otherwise indicated.

             Name of                           Amount of         Percent
         Beneficial Owner (1)               Beneficial Owner    of Class
         -------------                      ----------------    ---------
         Donald Riesterer (2)                   12,393,386       18.9%
         James Kylstad (3)                       5,800,000        8.8%
         Bruce Clausen (4)                       7,229,190       11.3%
         Mike Peterson                             150,000        0.2%
                                                ----------      -------
         All directors and officers
         as a group of four persons.            25,572,576      37.28%
                                                ----------      -------

(1)      The address of each person in the above table is 8301 Creekside Circle,
         #101 Bloomington, MN 55437.
(2)      Includes 345,486 shares owned by Northwest Investment Trust which is
         controlled by Mr. Riesterer and 1,850,000 stock options which are
         exercisable.
(3)      Includes 1,750,000 shares vested under stock options.
(4)      Includes 100,000 shares vested under a stock option.

                                       51
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Donald Riesterer, Chairman of the Company owns two properties currently being
rented to the Company, the Sebeka call center at $500 per month on a
month-to-month basis and the offices of WHY USA Financial Group and WHY USA
North America for a combined rental of $4,500 per month.

In June 2002 the Company satisfied certain note and accounts payable owed to a
third party and assumed by its Chairman, Donald Riesterer, in the total amount
of $258,864 by issuing him 2,428,250 shares of restricted common stock of the
company based on a value of $.10 per share, and one WHY USA real estate
franchise for a Wyoming location value at $16,000.

In January 2003 the Company acquired a Minneapolis office building of 11,000
square feet from an entity owned by its Chairman, Donald Riesterer, to be used
as the main headquarters of its Minnesota based mortgage brokerage business.
Since 1999, the Company's mortgage lending operations, except for Discover, has
been conducted from part of this facility under a lease with Mr. Riesterer.
During 2003 the Company moved its main office for Discover to this building. The
Company paid $925,000 to Mr. Riesterer for this building, including $650,000
which was applied against an existing contract for debt and 1,000,000 shares of
its restricted stock valued at $.275 per share (substantially in excess of the
market value of the common stock at the time of the acquisition). This purchase
was financed through a 7.5% mortgage from a local commercial bank requiring
payments of $6,067 monthly. The bank required the personal guarantee of the
president of Discover Mortgage Company and the Chairman of the Board and has
valued these guarantees at $27,500 which are being amortized over the five year
life of the loan. The Company has derived a substantial savings from this
transaction since Discover was previously paying over $8,000 monthly rent, other
mortgage lending operations of the Company previously paid $2,000 monthly to
rent part of the building, and the Company is receiving approximately $2,000
monthly in rental payments from third parties leasing spaces in this building.

The land and building has been recorded in the financial statements at $417,000
which represents the Chairman's cost basis in accordance with SEC Regulation
S-X, which requires that assets purchase from a stockholder for an amount in
excess of the stockholder's historical cost basis be recorded at the
stockholder's historical cost basis.

In December 2003 the Company acquired two commercial office buildings in
Woodbury, Minnesota from a related entity owned by its Chairman, Donald
Riesterer. These buildings are located on 3 acres and each building has
approximately 8,800 square feet of rentable space. The Company acquired this
property for $2,000,000 by assumption of notes payable for $415,075 and
$462,246, issuance of new notes for $500,000 and $150,000 to replace existing
previous debts of the related party, the issuance of 2,189,650 shares of
restricted common stock to Mr. Riesterer, and the payment of costs associated
with the transaction. The buildings are currently 97% leased to third party
tenants.

The land and building has been recorded in the financial statements at
$1,081,466 which represents the Chairman's cost basis in accordance with SEC
Regulation S-X, which requires that assets purchased from a stockholder for an
amount in excess of the stockholder's historical cost basis be recorded at the
stockholder's historical cost basis.

In December 2003, the Company acquired 100% of the outstanding membership
interest in TCS Acquisition, LLC, a California limited liability company which
owns 100% of TCS Mortgage, Inc. At the time of acquisition, director and CEO,
James B. Kylstad held approximately a 16% ownership interest in TCS Acquisition,
LLC.

                                       52
<PAGE>
<TABLE>


ITEM 13.          EXHIBITS AND REPORTS ON 8-K

  (a)  Index to Exhibits

  Exhibit No.        Description                                    Location
  ----------         ------------                                   ---------
<S>                                                                     <C>
    2.1              Reorganization between the Black Butte             (1)
                       Petroleum, Inc. and Triam Ltd. dated
                       March 23, 1983
    2.2              Acquisition Agreement between Triam Ltd            (1)
                       and Northwest Financial Ltd., dated
                       December 16, 1999
    2.3              Acquisition Agreement Addendum, dated
                       December 20, 1999                                (1)
    2.4              Stock Purchase Agreement dated September
                       24, 1999 between Northwest Financial
                       Group, Inc.,WHY USA NA, and
                       its selling shareholders                         (1)
    2.5              Addendum to Stock Purchase Agreement,
                       dated December 30, 1999 including Assignment     (1)
                       to Donald Riesterer
    2.6              Share Exchange Agreement - Cashline
                       transaction, dated February 8, 2001              (3)
    2.7              Business Combination Agreement
                       to acquire Discover Mortgage Corp. effective
                       January 1, 2002                                  (2)
    3.1.1            Articles of Triam Ltd., dated January 6, 1983      (1)
    3.1.2            Amendment to Articles of Incorporation,
                       March 4, 1983                                    (1)
    3.1.3            Amendment to Articles of Incorporation,
                       filed March 29,1983                              (1)
    3.1.4            Articles of Merger, filed on November 9, 1999      (1)
    3.1.5            Amendment to Articles of Incorporation,
                       Jan. 10, 2000                                    (1)
    3.2              Bylaws                                             (1)
    10.2             Stock Option Plan                                  (2)
    10.3             Sample Option Agreement                            (4)
    10.4             Assignment and Assumption Agreement between
                       Northwest Investment Trust and the Company
                       Re: Cashline                                     (4)
    10.5             Assignment and Assumption Agreement between        (4)
                       Northwest Investment Trust and the Company
                       Re: Alliance West
    10.6             Franchise Purchase Agreement, dated March 31, 2001 (4)
    31.1             Certification of Chief Executive Officer pursuant
                       to Section 302 of the Sarbanes-Oxley Act of 2002  filed herewith
    32.1             Certification of Chief Financial Officer pursuant
                       to Section 302 of the Sarbanes-Oxley Act of 2002  filed herewith
                       Certifications of Chief Executive Officer and
                       Chief Financial Officer pursuant to 18 U.S.C.
                       ss.1350, as adopted pursuant to Section 906
                       of the Sarbanes-Oxley Act of 2002                 filed herewith
</TABLE>

(1) Filed with the Company's initial Filing on Form 10-SB on May 10, 2000.
(2) Filed with the Company's Form 10-SB/A No. 1 on August 28, 2000.
(3) Filed with the Company's Report on 8-K dated February 21, 2002.
(4) Filed with the Company's Annual Report on 10-KSB on April 16, 2001.

                                       53
<PAGE>

(b) Reports on Form 8-K

We have filed five reports on Form 8-K since fiscal year ended December 31,
2002. These reports, dated (May 2, 2003, May 23, 2003, December 15, 2003,
January 15, 2004 (subsequently amended on March 5, 2004) and March 24, 2004, and
disclosed the following information respectively:

1.       Certifications filed by the registrant as an addendum to its annual
         report on Form 10-KSB for the fiscal year ended December 31, 2002;

2.       Effective May 13, 2003, WHY USA Financial Group, Inc. entered into a
         conditional business combination agreement with Home Services
         International Inc., a Nevada corporation. This agreement provided for a
         stock exchange which required the shareholders of WHY USA Financial
         Group, Inc. to exchange all of their common stock for preferred shares
         of Home Services International Inc., on the basis of one preferred
         share in Home Services International Inc., for each 39 common shares of
         WHY USA Financial Group Inc. This conditional combination agreement was
         never completed and all such agreements have now expired;

3.       Certifications by the registrant as an addendum to its quarterly report
         on Form 10-QSB for the quarter ended September 30, 2003;

4.       Acquisition or disposition of assets and Financial statements and
         exhibits, being The acquisitions of 100% of the capital stock,
         otherwise known as membership interests, of TCS Acquisition LLC
         (TCS);and

5.       Changes in registrant's certifying accountant.


Item 14. Principal accountant fees and services

Our board of directors has selected PKF, Certified Public Accountants, A
Professional Corporation ("PKF") as independent accountants to audit our books,
records and accounts for the fiscal year 2003. PKF was engaged March 19, 2004 as
described in our Form 8K filed March 24, 2004. Accordingly no fees were paid to
PKF for audit or any other professional services during 2003.


Pre-Approval Policies and Procedures
------------------------------------

We have implemented pre-approval policies and procedures related to the
provision of audit and non-audit services. Under these procedures, our board of
directors pre-approves both the type of services to be provided by PKF and the
estimated fees related to these services.


                                       54
<PAGE>


                                   SIGNATURES

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


      Date:  May 14, 2004                WHY USA FINANCIAL GROUP, INC.


                                        By:      /s/ Donald Riesterer
                                                 --------------------------
                                                 Donald Riesterer, Chairman


                                        And:     /s/ James B. Kylstad
                                                 --------------------------
                                                 James B. Kylstad, CEO


                                        And:     /s/ Bruce Clausen
                                                 --------------------------
                                                 Bruce Clausen, Vice President


                                        And:      /s/ Mike Peterson
                                                 --------------------------
                                                 Mike Peterson, CFO


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


      Date: May 14, 2004             By:    /s/ Donald Riesterer
                                            -----------------------
                                            Donald Riesterer
                                            Chairman of the Board and Director


      Date: May 14, 2004             And:   /s/ James B. Kylstad
                                            -----------------------
                                            James B. Kylstad
                                            Chief Executive Officer and Director


      Date: May 14, 2004             And:   /s/ Bruce Clausen
                                            -----------------------
                                            Vice President and Director


      Date: May 14, 2004             And:   /s/ Mike Peterson
                                            -----------------------
                                            Mike Peterson
                                            Chief Financial Officer


                                       55