|UNITED STATES OF AMERICA          
|----------------------------------
|SECURITIES AND EXCHANGE COMMISSION
|Washington, D.C. 20549            
|                                  
|FORM 10-QSB                       
|                                  

|(Mark One)                                                        
|------------------------------------------------------------------
|                                                                  
|x                                                                 
|                                                                  
|For the quarterly period ended March 31, 2005                     
|                                                                  
|o                                                                 
|                                                                  
|For the transition period from _______________ to ________________
|                                                                  
|Commission File Number:  333-120428                               
|                                                                  

|
|

|NATIONWIDE FINANCIAL SOLUTIONS, INC.                  
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)
|                                                      
|NEVADA                                                
|(State or Other Jurisdiction of                       
|Incorporation or Organization)                        

|                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3231 S. Country Club Way, Suite 102Tempe, Arizona  85282(Address of Principal Executive Offices)
        Registrants Telephone Number, Including Area Code:(480) 820-9766
|                                                                                                                                                                          

|Indicate by
check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding twelve 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 ninety days.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                
|YesoNox                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                
|Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                
|YesoNox                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                
|The number of shares of common stock outstanding as of May 31, 2005:    10,823,428 shares.                                                                                                                                                                                                                                                                      

|1
|-



|NATIONWIDE FINANCIAL SOLUTIONS, INC.
   QUARTERLY REPORT ON FORM 10-QSB        
        FOR THE THREE MONTHS ENDED
        MARCH 31, 2005
      INDEX
|-----------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                     

|                                  | Page
      Number
|--------------------------------- | -----------------
|                                  |                  
|                                 
|Part I - Financial Information    |                  
|                                  |                  
|Item
      1.                     |                  
|                                  |                  
|                                  |                  
|                                  |                  
|                                  |                  
|                                  |                  
|                                  |                  
|                                  |                  
|                                  |                  
|                                  |                  
|Item
      2.                     |                  
|                                  |                  
|Item
      3.                     |                  
|                                  |                  
|Part
      II - Other Information |                  
|                                  |                  
|Item
      6.                     |                  
|                                  |                  
|                                  |                  

|2
|-



|PART I


Item 1.      Financial Statements
(unaudited)
|------------------------------------------------------

|NATIONWIDE FINANCIAL SOLUTIONS, INC.CONDENSED STATEMENTS OF OPERATIONS
      (unaudited)
|----------------------------------------------------------------------------------------
|                                                                                        

|                                                                                    | Three Months Ended 
    March 31, |            | Nine Months Ended 
    March 31, |  
|----------------------------------------------------------------------------------- | --------------------------------- | ---------- | -------------------------------- | -
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   | 2005       |                                  |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|REVENUES                                                                            | $                                 | 91,894     |                                  | $
|                                                                                    |                                   |            |                                  |  
|COST OF REVENUES                                                                    |                                   | 36,005     |                                  |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|GROSS PROFIT                                                                        |                                   | 55,889     |                                  |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|OPERATING EXPENSES:                                                                 |                                   |            |                                  |  
|Sales and marketing                                                                 |                                   | 197,062    |                                  |  
|General and administrative                                                          |                                   | 349,270    |                                  |  
|                                                                                    |                                   |            |                                  |  
|Total operating expenses                                                            |                                   | 546,332    |                                  |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|OPERATING LOSS                                                                      |                                   | (490,443   | )                                |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|NON-OPERATING INCOME (EXPENSE):                                                     |                                   |            |                                  |  
|Interest income                                                                     |                                   | 574        |                                  |  
|Interest expense                                                                    |                                   | (2,724     | )                                |  
|Gain on forgiveness of accrued interest                                             |                                   |           |                                  |  
|                                                                                    |                                   |            |                                  |  
|Non-operating (expense) income, net                                                 |                                   | (2,150     | )                                |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|LOSS BEFORE BENEFIT FROM
      INCOME TAXES                                         |                                   | (492,593   | )                                |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|BENEFIT FROM INCOME TAXES:                                                          |                                   |            |                                  |  
|Current                                                                             |                                   |           |                                  |  
|Deferred                                                                            |                                   |           |                                  |  
|                                                                                    |                                   |            |                                  |  
|Benefit from income taxes                                                           |                                   |           |                                  |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|NET LOSS                                                                            | $                                 | (492,593   | )                                | $
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|NET LOSS PER COMMON SHARE -  
      Basic and diluted                               | $                                 | (0.05      | )                                | $
|                                                                                    |                                   |            |                                  |  
|                                                                                    |                                   |            |                                  |  
|WEIGHTED AVERAGE NUMBER OF 
      COMMON  SHARES OUTSTANDING 
  
Basic and diluted |                                   | 10,823,428 |                                  |  
|                                                                                    |                                   |            |                                  |  

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

|3
|-



|NATIONWIDE FINANCIAL SOLUTIONS, INC.
      CONDENSED BALANCE SHEETS 
      (unaudited)
|--------------------------------------------------------------------------------------
|                                                                                      

|                                                                                                                                           | March 31,
      2005 |            | June 30,
      2004 |  
|------------------------------------------------------------------------------------------------------------------------------------------ | -------------------- | ---------- | ------------------- | -
|                                                                                                                                           |                      |            |                     |  
|                                                                                                                                           |                      |            |                     |  
|ASSETS                                                                                                                                     |                      |            |                     |  
|                                                                                                                                           |                      |            |                     |  
|CURRENT ASSETS:                                                                                                                            |                      |            |                     |  
|Cash and cash equivalents                                                                                                                  | $                    | 47,014     |                     | $
|Income tax refund receivable                                                                                                               |                      | 61,889     |                     |  
|Prepaid expenses                                                                                                                           |                      | 78,746     |                     |  
|Loans receivable, including accrued interest  ISI (related party)                                                                         |                      |           |                     |  
|                                                                                                                                           |                      |            |                     |  
|Total current assets                                                                                                                       |                      | 187,649    |                     |  
|                                                                                                                                           |                      |            |                     |  
|DEPOSITS                                                                                                                                   |                      | 9,351      |                     |  
|PROPERTY AND EQUIPMENT, net                                                                                                                |                      | 284,458    |                     |  
|                                                                                                                                           |                      |            |                     |  
|                                                                                                                                           |                      |            |                     |  
|TOTAL ASSETS                                                                                                                               | $                    | 481,458    |                     | $
|                                                                                                                                           |                      |            |                     |  
|                                                                                                                                           |                      |            |                     |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                                                                             |                      |            |                     |  
|                                                                                                                                           |                      |            |                     |  
|CURRENT LIABILITIES:                                                                                                                       |                      |            |                     |  
|Accounts payable                                                                                                                           | $                    | 86,598     |                     | $
|Income taxes payable                                                                                                                       |                      |           |                     |  
|Accrued liabilities                                                                                                                        |                      | 126,037    |                     |  
|Accrued rent - Shalimar (related party)                                                                                                    |                      |           |                     |  
|Unearned income                                                                                                                            |                      | 26,095     |                     |  
|Notes payable                                                                                                                              |                      | 53,396     |                     |  
|Notes payable  Shalimar (related party)                                                                                                   |                      |           |                     |  
|Convertible notes payable                                                                                                                  |                      |           |                     |  
|                                                                                                                                           |                      |            |                     |  
|Total current liabilities                                                                                                                  |                      | 292,126    |                     |  
|                                                                                                                                           |                      |            |                     |  
|NOTES PAYABLE                                                                                                                              |                      | 55,988     |                     |  
|NOTES PAYABLE  Shalimar (related party)                                                                                                   |                      |           |                     |  
|                                                                                                                                           |                      |            |                     |  
|                                                                                                                                           |                      |            |                     |  
|TOTAL LIABILITIES                                                                                                                          |                      | 348,114    |                     |  
|                                                                                                                                           |                      |            |                     |  
|COMMITMENTS                                                                                                                                |                      |            |                     |  
|                                                                                                                                           |                      |            |                     |  
|STOCKHOLDERS EQUITY (DEFICIT):                                                                                                            |                      |            |                     |  
|Preferred stock, $.0001 par value; 10,000,000 shares 
   authorized; none issued or outstanding                                            |                      |           |                     |  
|Common stock, $.0001 par value; 60,000,000 shares 
   authorized; 10,823,428 and 1,000,028 shares 
   issued and outstanding, respectively |                      | 1,082      |                     |  
|Additional paid-in capital                                                                                                                 |                      | 1,404,018  |                     |  
|Accumulated deficit                                                                                                                        |                      | (1,271,756 | )                   |  
|                                                                                                                                           |                      |            |                     |  
|Total stockholders equity (deficit)                                                                                                       |                      | 133,344    |                     |  
|                                                                                                                                           |                      |            |                     |  
|                                                                                                                                           |                      |            |                     |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                                                                       | $                    | 481,458    |                     | $
|                                                                                                                                           |                      |            |                     |  

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

|4
|-



|NATIONWIDE FINANCIAL SOLUTIONS, INC.
      CONDENSED STATEMENTS OF CASH FLOWS 
      (unaudited)
|------------------------------------------------------------------------------------------------
|                                                                                                

|                                                                            
|----------------------------------------------------------------------------
|                                                                            
|March 31,                                                                   
|                                                                            
|                                                                            
|                                                                            
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       
|Net loss                                                                    
|Adjustments to reconcile net loss to
 net cash used by operating activities:
|Depreciation and amortization                                               
|Employee compensation paid with common shares                               
|Gain on forgiveness of accrued interest                                     
|Changes in operating assets and liabilities:                                
|Prepaid expenses                                                            
|Income tax refund receivable                                                
|Due from officer                                                            
|Accrued interest receivable- ISI (related party)                            
|Accounts payable                                                            
|Income taxes payable                                                        
|Accrued liabilities                                                         
|Accrued rent Shalimar (related party)                                      
|Unearned income                                                             
|Deferred income taxes                                                       
|                                                                            
|Net cash used by operating activities                                       
|                                                                            
|                                                                            
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       
|Purchases of property and equipment                                         
|Loan principal repayments from ISI (related party)                          
|                                                                            
|Net cash provided by investing activities                                   
|                                                                            
|                                                                            
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       
|Proceeds from issuance of debt                                              
|Proceeds from issuances of convertible notes                                
|Principal repayments of long-term debt                                      
|Proceeds from issuances of common stock                                     
|                                                                            
|Net cash provided by financing activities                                   
|                                                                            
|                                                                            
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                        
|                                                                            
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                              
|                                                                            
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                    
|                                                                            
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                            
|                                                                            
|Cash paid for interest                                                      
|                                                                            
|Cash paid for taxes                                                         
|                                                                            
|                                                                            
|SUMMARY OF NON-CASH FINANCING ACTIVITIES:                                   
|Issuance of common shares for finders fee                                  
|                                                                            
|Issuance of common shares upon conversion of notes                          
|                                                                            
|Issuance of common shares as severance                                      
|                                                                            
|Gain on forgiveness of interest                                             
|                                                                            

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

|5
|-



|NATIONWIDE FINANCIAL SOLUTIONS, INC.NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTSFOR THE THREE AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004(unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                    

|1. | ORGANIZATIONAL HISTORY AND NATURE OF BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In March 2004, NB Acquisitions, Inc. (NBA), a privately-held, non-operating shell
  company with no assets or liabilities, previously organized and incorporated on September 21,
  2001 under the laws of the State of Nevada, entered into a share exchange agreement (the Agreement)
  with National Interest Solutions, Inc. (NIS), a privately-held operating company
  previously organized and incorporated on October 24, 2001 under the laws of the State of Arizona.
  For legal purposes, the Agreement constituted an acquisition by NBA of NIS as NBA acquired all of
  the then outstanding shares of NISs common stock. Shortly thereafter, in April 2004, NBA
  changed its legal name to Nationwide Financial Solutions, Inc. (NFS).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| | For accounting purposes, the preceding Agreement did not constitute a business combination given that
  NBA was merely a shell company with no economic substance. Instead, the Agreement constituted a recapitalization
  of NIS whereby NIS would merely grant NBA a minority ownership interest in exchange for it gaining
  access to NBAs assembled shareholder base, thereby potentially facilitating any prospective
  capital raising efforts. Accordingly, the accompanying financial statements solely reflect the historical
  operations and related financial results of NIS. Immediately after the related July 28, 2004 issuance
  by NBA of 8,253,400 shares of its common stock to the former shareholders of NIS as per the Agreement,
  the former shareholders of NIS and NBA owned 89.2% and 10.8%, respectively, of the then issued and
  outstanding common shares of the legally merged entity (hereinafter, the Company).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | The Company is, as was NIS, a debt resolution company retained by individuals with significant unsecured
  debt that may be experiencing financial difficulties. Through its fee-based debt resolution program,
  the Company attempts to assist its clients in eliminating part or all of their unsecured debt. All
  of the Companys business operations are conducted from a single leased facility in Tempe, Arizona.
  The Company remains, as was NBA, a Nevada corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|
|

|2. | SUBSTANTIAL DOUBT AS TO THE COMPANYS ABILITY TO CONTINUE AS A GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company incurred substantial operating and net losses, as well as negative operating cash flow,
  during its fiscal year ended June 30, 2004. The Company additionally had working capital and
  stockholders deficits at June 30, 2004. In recognition of the preceding, the Companys
  independent certified public accountants included an explanatory paragraph in their audit report
  on the Companys financial statements for the fiscal year ended June 30, 2004 that expresses
  substantial doubt as to the Companys ability to continue as a going concern. Going concern
  contemplates the realization of assets and the satisfaction of liabilities in the normal course of
  business during the subsequent twelve month period.                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the three and nine month periods ended March 31, 2005, the Company continued to incur substantial
  operating and net losses, as well as negative operating cash flows. The Company also continued to
  have a working capital deficit at March 31, 2005. As a result of the preceding, substantial doubt
  remains as to the Companys ability to continue as a going concern. The Companys accompanying
  interim condensed financial statements do not include any adjustments that might result from the
  outcome of this financial uncertainty. Although there can be no assurance of such, management continues
  to believe that it will be able to timely procure, should such become necessary, debt and/or equity
  financing sufficient to meet the Companys cash needs over the next twelve months.

|6
|-



|NATIONWIDE FINANCIAL SOLUTIONS, INC.
    NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
    FOR THE THREE AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 (continued)
    (unaudited)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                               

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Preparation of Interim Condensed Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The accompanying interim condensed financial statements have been prepared by the Companys management,
  without audit, in accordance with accounting principles generally accepted in the United States of
  America and pursuant to the rules and regulations of the United States Securities and Exchange Commission
  (SEC). In the opinion of management, the accompanying interim condensed financial statements
  contain all adjustments (consisting solely of normal recurring adjustments, unless otherwise noted)
  necessary to present fairly, in all material respects, the Companys financial position, results
  of operations and cash flows for the interim fiscal periods presented. Certain information and note
  disclosures normally included in annual financial statements prepared in accordance with accounting
  principles generally accepted in the United States of America have been condensed or omitted in these
  interim financial statements pursuant to the SECs rules and regulations, although the Companys
  management believes that the disclosures are adequate to make the information presented not misleading.
  The financial position, results of operations and cash flows for the interim periods disclosed herein
  are not necessarily indicative of future financial results. These interim condensed financial statements
  should be read in conjunction with the annual financial statements and accompanying notes included
  in the Companys Form SB-2 initial public offering registration statement which was declared
  effective by the SEC on April 21, 2005.

| | Basis of Presentation                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                       
| | These interim condensed financial statements solely reflect the accounts, balances and activity of
  the Company as it has not had, and continues not to have, any legal subsidiaries.
| |                                                                                                                                                                                       

| | Fiscal Year-End                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The Companys fiscal year-end is June 30th. References herein to a fiscal year refer to the calendar year in which such fiscal year ends.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The preparation of financial statements in conformity with accounting principles generally accepted
  in the United States of America requires management to make certain estimates, judgments and assumptions
  that affect the reported amounts and timing of revenue and expenses, the reported amounts and classification
  of assets and liabilities, and disclosure of contingent assets and liabilities. These estimates and
  assumptions are based on the Companys historical results as well as managements future
  expectations. The Companys actual results could vary materially from managements estimates,
  judgments and assumptions.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

| | Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Historically, the Company had classified lead acquisition costs as costs of revenues. During the nine
  months ended March 31, 2005, the Company determined that these lead acquisition costs, which are
  solely incurred in connection with new client prospecting, would be more appropriately classified
  as selling and marketing costs. The financial statements for all prior fiscal periods have been conformed
  for comparability.

|7
|-



|NATIONWIDE FINANCIAL SOLUTIONS, INC.NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTSFOR THE THREE AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 (continued)(unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Cash equivalents consist of highly liquid debt instruments with maturity dates of three months or less
  at their respective dates of purchase. The Company maintains its cash and cash equivalents with high
  quality financial institutions thereby minimizing any associated credit risks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Property and equipment are recorded at cost. Cost includes expenditures for major additions and improvements.
  Maintenance and repairs which do not extend the useful life of the related property or equipment
  are charged to operations as incurred. The provision for related depreciation has been computed using
  the straight-line method over the following estimated useful lives: telephone equipment - three to
  seven years; computer hardware and software - three years; and office furniture and equipment - five
  to seven years. The provision for related amortization is computed using the straight-line method
  over the shorter of the estimated useful lives of the leasehold improvements, being five years, or
  the contractual life of the underlying operating lease. The net book value of property and equipment
  sold or retired is removed from the asset and related depreciation and amortization accounts with
  any resulting net gain or loss included in the determination of net loss.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Impairment of Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Management, on at least a quarterly basis, evaluates each of the Companys long-lived assets for
  impairment by comparing the related estimated future cash flows, on an undiscounted basis, to their
  net carrying value. If impairment is indicated, the net carrying value of the asset is reduced to
  its net realizable value, being the related estimated future cash flows on an appropriately discounted
  basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Deferred Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Deferred income tax assets and liabilities are recognized for the expected future income tax benefits
  or consequences, based on enacted laws, of temporary differences between tax and financial statement
  reporting. Deferred tax assets are then reduced by a valuation allowance for the amount of any tax
  benefits that more likely than not, based on current circumstances, are not expected to be realized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Fair Value of Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company has financial instruments, none of which are held for trading purposes. The carrying values
  reported for financial instruments classified as current assets and liabilities materially approximated
  their respective fair values at each applicable balance sheet date due to their immediate or short-term
  maturity. The carrying value reported for the non-current portions of notes payable materially approximated
  their fair value at each applicable balance sheet date as the stated rates of interest reflected
  then prevailing market rates of interest.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Companys clients consist of individuals with significant unsecured debt that may be experiencing
  financial difficulties, thereby making the collection of any receivable highly doubtful. The Company
  initially assesses each new client a non-refundable set-up fee for file creation, debt analysis,
  budget formulation, and initial creditor contacts. This set-up fee, which is based on a percentage
  of the clients total unsecured debt accepted into the Companys debt resolution program,
  is fully earned by the Company upon its completion of                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|8
|-



|NATIONWIDE FINANCIAL SOLUTIONS, INC.NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTSFOR THE THREE AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 (continued)(unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Revenue Recognition (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | the above services and is typically paid by the client in equal monthly installments over a subsequent
  six-month period. Upon completion of the above set-up services, the Company has no further obligations
  to the client.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | If and when, a client subsequently accumulates a previously agreed-upon cash balance in a designated
  savings account, access to which the Company is granted via a power-of-attorney, the Company commences
  formal negotiations with each of the clients creditors with the objective of convincing them
  to accept a lump partial payment in full and complete satisfaction of the entire unpaid balance.
  If and when, the Company is successful in obtaining a legally-binding settlement with a creditor
  on behalf of a client, the Company then assesses the client a settlement fee. This earned settlement
  fee, which is based on a previously agreed to percentage of any reduction obtained in the pay-off
  balance, is typically realized by the Company immediately in its entirety via an electronic debit
  made directly against the clients savings account. In certain limited cases, the Company realizes
  an earned settlement fee in monthly installments over an agreed-upon time period.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company conservatively recognizes each set-up and settlement fee earned on a cash basis upon receipt.
  Any payment received by the Company in advance of its complete performance of a related client service
  is reflected in the balance sheet as unearned income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Advertising Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company expenses all advertising costs as incurred. Selling and marketing expenses include advertising
  costs incurred by the Company of $62,259 and $2,955 for the three month periods ended March 31, 2005
  and 2004, respectively, and $121,291 and $21,402 for the nine month periods ended March 31, 2005
  and 2004, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Net Loss Per Common Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Net loss per common share - basic and diluted has been computed by dividing net loss by the weighted
  average number of common shares outstanding during the respective fiscal period. For the three and
  nine month periods ended March 31, 2005 and 2004, the potentially dilutive effects of any then outstanding
  convertible notes and stock purchase warrants were excluded from the computation of net loss per
  common sharediluted as the effect of their inclusion would have been anti-dilutive. The Company
  had potentially dilutive securities or other contracts outstanding aggregating 291,132 and 436,698
  during the three and nine month periods ended March 31, 2005, respectively, and 6,000,168 and 6,000,168
  during the three and nine months ended March 31, 2004, respectively.                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Segment Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Companys chief operating decision makers consist of members of senior management that work
  together to allocate resources to, and assess the performance of, the Companys business. Senior
  management currently manages the Companys business, assesses its performance, and allocates
  its resources as a single operating segment. To date, the Companys services have been exclusively
  marketed to customers residing within the United States of America.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|9
|-



|NATIONWIDE FINANCIAL SOLUTIONS, INC.NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTSFOR THE THREE AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 (continued)(unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                 
|   | Recently Issued Accounting Standards Not Yet Adopted                                                                                                                            
|   |                                                                                                                                                                                 
|   | There are no recently issued applicable accounting standards with pending adoption dates that management
  anticipates will have material impacts upon its financial statements.

|
|

|4. | LOANS RECEIVABLE  ISI (related party)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company is related to Infinity Southwest, Inc. (ISI) through common management control
  by Stephen G. Luke, the Companys Chief Executive Officer, President and Chairman of the Board
  of Directors. During the fiscal year ended June 30, 2004 and prior thereto, the Company made periodic
  loans to ISI. These loans were unsecured, accrued interest at a stated five percent rate, and were
  repayable upon demand by the Company. Mr. Luke provided the Company with a written personal guarantee
  of repayment which was secured by all of his personal assets. As of February 2, 2005, ISI had repaid
  these loans, as well as all accrued interest thereon, in full. The Company and Mr. Luke had previously
  agreed to discontinue the above loan program as of December 2003.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5. | PROPERTY AND EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Property and equipment, net, consists of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                                                 | March 31,
      2005 |         | June 30,
      2004 |  
| | ----------------------------------------------- | -------------------- | ------- | ------------------- | -
| |                                                 |                      |         |                     |  
| | Telephone equipment                             | $                    | 87,520  |                     | $
| | Computer hardware and software                  | $                    | 64,982  |                     | $
| | Office Furniture and equipment                  | $                    | 29,408  |                     | $
| | Leasehold improvements                          | $                    | 172,435 |                     | $
| |                                                 |                      |         |                     |  
| | Total property and equipment                    | $                    | 354,345 |                     | $
| | Less: Accumulated depreciation and amortization | $                    | (69,887 | )                   | $
| | Property and equipment, net                     | $                    | 284,458 |                     | $
| |                                                 |                      |         |                     |  

|
|

|6. | NOTES PAYABLE                                                                                                                                                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company is financing with an unrelated entity the premium of its directors and officers indemnification
  insurance policy. The note is unsecured, accrues interest at a stated rate of 7.25% per annum, and
  requires monthly payments of principal and interest aggregating $3,166 through June 23, 2005. As
  of March 31, 2005, the remaining balance on the note was $9,384.
|   |                                                                                                                                                                                                                                                                                                                                                                                       
|   | On February 18, 2005, the Company obtained $100,000 in debt financing from an unrelated entity. The
  note is unsecured, accrues interest at the prime rate plus one percent (6.75% at March 31, 2005),
  and requires monthly payments of principal and interest aggregating $4,491 from April 18, 2005 through
  March 18, 2007.                                                    

|10
|--



|NATIONWIDE FINANCIAL SOLUTIONS, INC.NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTSFOR THE THREE AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 (continued)(unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                

|7. | NOTES PAYABLE - SHALIMAR (related party)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company is related to Shalimar Office, LLC (Shalimar) through common management control
  by Stephen G. Luke, the Companys Chief Executive Officer, President and Chairman of the Board
  of Directors. During the fiscal year ended June 30, 2004, Shalimar procured leasehold improvements
  and equipment from unrelated vendors on the Companys behalf in exchange for three notes payable.
  The actual costs incurred by Shalimar were passed through to the Company and structured as installment
  notes payable. These notes are unsecured, accrue interest at stated rates of 6.00% per annum, and
  require monthly payments of principal and interest aggregating $4,421 through May 1, 2009. As
  of January 24, 2005, the Company had repaid these loans, as well as all accrued interest thereon,
  in full. The Company also leases its current facility from Shalimar (see Note 10 - Commitments).

|
|

|8. | CONVERTIBLE NOTES PAYABLE                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In July 2004, the unrelated holders of the Companys then outstanding convertible notes payable
  elected to convert pursuant to their original conversion terms the $450,000 aggregate principal balance.
  In connection with such conversion, the holder waived its right to $4,945 in accrued interest, thereby
  resulting in the Companys corresponding recognition of a non-operating gain.

|
|

|9. | STOCKHOLDERS EQUITY (DEFICIT)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Preferred Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company has ten million shares of $.0001 par value preferred stock authorized for issuance. As
  of March 31, 2005, the Company had neither issued nor assigned any rights to these preferred shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the nine months ended March 31, 2005, the Company issued 975,000 shares of its common stock
  to an unrelated entity at a weighted average price of $0.97 per share, thereby resulting in its receipt
  of $950,000 in aggregate cash proceeds. The Company additionally issued 5,000 shares of its common
  stock to an ex-employee as $5,000 in severance.                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Finders Fee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On January 27, 2004 the Company retained an unrelated individual to identify potential sources
  of debt and/or equity financing. During the nine months ended March 31, 2005, this individual was
  the source of $450,000 in convertible debt financing (see Note 8 - Convertible Notes Payable)
  and $950,000 in equity financing (see Note 9 - Stockholders Equity (Deficit) - Common
  Stock). Upon becoming the source of an aggregate of one million dollars in financings, the Company
  became obligated to retroactively compensate this individual with a ten percent finders fee.
  As of December 31, 2004, the Company had issued this individual 140,000 shares of its common
  stock in full settlement of $140,000 in finders fees earned.

|11
|--



|NATIONWIDE FINANCIAL SOLUTIONS, INC.NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTSFOR THE THREE AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 (continued)(unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                

|9. | STOCKHOLDERS EQUITY (DEFICIT) (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 2004 Stock Option Plan (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On October 1, 2004, the Company adopted a stock option plan (Plan) that provides for
  the potential future grant to employees, officers, directors and consultants of stock options to
  purchase up to an aggregate of 3,000,000 shares of the Companys common stock. Stock options
  granted may take the form of incentive stock options, within the meaning of Section 422A
  of the United States Internal Revenue Code of 1986, and non-qualified options. Incentive
  stock options may only be granted to employees, whereas non-qualified options may be granted to any
  eligible recipient. The Plan is administered by the Companys Board of Directors, which will
  solely determine those individuals who are to receive stock options, the number of shares of common
  stock that may be purchased under each granted option, each options exercise price per share
  of common stock, and the time period during which the options may be partially or fully exercised.
  The exercise price of any incentive stock option must equal or exceed the fair market value of a
  share of the Companys common stock as of the option grant date. The Companys Board of
  Directors may assign any exercise price it deems appropriate to a non-qualified stock option. No
  stock options have been granted to date.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Common Stock Purchase Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | As of March 31, 2005, the Company had the following common stock purchase warrants outstanding:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |  | Number
      Of 
      Common
      Shares |  |   |      |  |                   |  | 
| |  | ------------------------------------------ |  | - | ---- |  | ----------------- |  | 
|
| |  |                                            |  |   |      |  |                   | 
| |  | 72,783                                     |  | $ | 4.00 |  | June 30, 2005     |  | 
| |  | 72,783                                     |  | $ | 4.00 |  | June 30, 2005     |  | 
| |  | 72,783                                     |  | $ | 6.00 |  | December 31, 2007 |  | 
| |  | 72,783                                     |  | $ | 6.00 |  | December 31, 2007 |  | 
| |  |                                            |  |   |      |  |                   |  | 
| |  | 291,132                                    |  |   |      |  |                   |  | 

|10. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                
|    | Operating Lease  Shalimar (related party)                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                
|    | On April 1, 2004, the Company began leasing its premises from Shalimar, a related party (see Note 7).
  The lease is non-cancelable, has a five-year term, and currently requires the Company to make monthly
  rent payments of $7,693, which payments will increase annually by five percent.
|    |                                                                                                                                                                                                                                                                                                
|    | Future minimum lease payments required under the above operating lease, excluding certain related ancillary
  costs described below, are as follows for the fiscal years ending June 30:                                                                                                       
|    |                                                                                                                                                                                                                                                                                                

| |  | 2005 (remaining three months) | $ | 24,234  |  | 
| |  | ----------------------------- | - | ------- |  | 
| |  | 2006                          |   | 98,149  |  | 
| |  | 2007                          |   | 103,056 |  | 
| |  | 2008                          |   | 108,209 |  | 
| |  | 2009                          |   | 84,163  |  | 
| |  |                               |   |         | 
| |  | Total                         | $ | 417,811 |  | 
| |  |                               |   |         | 

| | The above operating lease additionally requires the Company to pay for certain related ancillary costs,
  principally parking, common area maintenance and property taxes. These ancillary costs, which are
  variable in nature, have approximated, and are expected to continue to approximate $12,000 per fiscal
  year.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12
|--



|NATIONWIDE FINANCIAL SOLUTIONS, INC.
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 (continued)(unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                  

|10. | COMMITMENTS AND CONTINGENCIES (continued)                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                 
|    | Operating Lease  Shalimar (related party) (continued)                                                                                                                                                          
|    |                                                                                                                                                                                                                 
|    | Total rent expense incurred was $24,234 and $68,087 for the three and nine months ended March 31, 2005,
  respectively, and $3,519 and $15,644 for the three and nine months ended March 31, 2004, respectively.

|
|

|11. | EMPLOYEES 401(K) PLAN                                                                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Company maintains a 401(K) retirement plan for its employees. Any matching of employee contributions
  is solely at the discretion of management. The Company incurred contribution expenses for the three
  and nine months ended March 31, 2005 of $5,032 and $11,693, respectively. The Company incurred no
  contribution expenses for the three and nine months ended March 31, 2004.

|
|

|12. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | On April 13, 2005, the Company received a loan from Stephen Luke, its Chief Executive Officer, President
  and Chairman of the Board of Directors, in the amount of $250,000. The note is unsecured, accrues
  interest at a stated rate of 18.00% per annum, initially requires monthly interest only payments
  of $3,750 through March 31, 2008, and subsequently requires monthly payments of interest and principal
  aggregating $6,442 through April 30, 2013.     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | On April 13, 2005, the Company received a loan from Darren Dierich, its Chief Financial Officer, in
  the amount of $35,000. The note is unsecured, accrues interest at a stated rate of 10.00% per annum,
  and requires monthly payments of interest and principal aggregating $3,066 through March 31, 2006.                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | On April 25, 2005, the Company procured a $200,000 revolving line of credit facility with a major commercial
  bank. The facility expires on April 24, 2006 and all borrowings under the facility will accrue interest
  at the banks prime rate. The Company is required to maintain a collateralizing $200,000 certificate
  of deposit with the bank that will earn interest at a stated rate of 3.2% per annum. At May 31, 2005,
  the Company had borrowed $175,000.

|13
|--



|Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations

Introduction
General:
This discussion of our financial condition and results of operations should be read together with the
(i) unaudited condensed financial statements and accompanying notes for the three and nine month
interim periods ended March 31, 2005 and 2004 contained elsewhere in this Form 10-QSB and (ii) the
audited financial statements and accompanying notes for the fiscal years ended June 30, 2004 and
2003 contained in our final amendment to a Form SB-2 registration statement, filed on April 5, 2005 which is available at www.sec.gov.
Organizational History and Nature of Business:
In March 2004, NB Acquisitions, Inc. (NBA), a privately-held, non-operating shell
company with no assets or liabilities, previously organized and incorporated on September 21,
2001 under the laws of the State of Nevada, entered into a share exchange agreement (the Agreement)
with National Interest Solutions, Inc. (NIS), a privately-held operating company
previously organized and incorporated on October 24, 2001 under the laws of the State of Arizona.
For legal purposes, the Agreement constituted an acquisition by NBA of NIS as NBA acquired all of
the then outstanding shares of NIS common stock. Shortly thereafter, in April 2004, NBA
changed its legal name to Nationwide Financial Solutions, Inc. (NFS).
For accounting purposes, the preceding Agreement did not constitute a business combination given that
NBA was merely a shell company with no economic substance. Instead, the Agreement constituted a recapitalization
of NIS whereby NIS would grant NBA a minority ownership interest in exchange for it gaining access
to NBAs assembled shareholder base, thereby potentially facilitating any prospective capital
raising efforts. Accordingly, the accompanying interim condensed financial statements solely reflect
the historical operations and related financial results of NIS. Immediately after the related July
28, 2004 issuance by NBA of 8,253,400 shares of its common stock to the former shareholders of NIS
as per the Agreement, the former shareholders of NIS and NBA owned 89.2% and 10.8%, respectively,
of the then issued and outstanding common shares of the legally merged entity (hereinafter, we,
us, and our).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14
|--



|We are, as was NIS, a debt resolution company retained by individuals with significant unsecured debt
that may be experiencing financial difficulties. Through our fee-based debt resolution program, we
attempt to assist our clients in eliminating part or all of their unsecured debt. All of our business
operations are conducted from a single leased facility in Tempe, Arizona. We remain, as was NBA,
a Nevada corporation.
Our Major Business Disruption; Resulting and Continuing Going Concern Uncertainty:
On September 23, 2003, the month-to-month rented leased premises from which we then conducted
all of our operations were destroyed by a fire, the cause of which local fire department inspectors
have subsequently concluded as being indeterminable. Although immaterial in their then aggregate
book value, substantially all of the physical assets we used in our business, including our telephone
equipment, computer hardware and software, and furnishings, were destroyed in the fire. Substantially
all of our client files and related data also were destroyed in the fire. As a result of the fire
and the absence of any applicable insurance coverage, our business operations were substantially
halted and we were forced over the ensuing weeks to dismiss the vast majority of our employees. During
October 2003, our business activities were substantially limited to salvaging efforts at the
destroyed facility and the setting up of critical remedial operations at employee residences, and
later within temporary facilities rented from an unrelated party.
Upon establishing minimal basic operations, we proceeded to contact existing clients and to resume
related debt resolution operations. However, despite our best efforts, our overall business and related
operations remained substantially impaired through March 2004. On April 1, 2004, we relocated
all of our operations into newly leased facilities and proceeded in our attempts to restore our operations
to pre-fire levels. By our fiscal year ended June 30, 2004, we were successful in substantially
restoring our day-to-day operations to pre-fire levels although we continued to experience certain
adverse effects from the fire, principally significantly declining revenues as a result of the loss
of momentum in the acquisition of new clients. As a typical client engagement results in our periodic
receipt of related earned fees over several quarters, if not years, any disruption in the replenishment
and growth of our client portfolio will adversely impact our revenues for an extended period of time,
and, as a result, our ability to leverage our fixed costs and thereby generate profits.
As a result of the foregoing, we incurred substantial operating and net losses, as well as negative
operating cash flow, during our fiscal year ended June 30, 2004, and, had working capital and
stockholders deficits at June 30, 2004. In recognition of the preceding, our independent
certified public accountants included an explanatory paragraph in their audit report on our financial
statements for the fiscal year ended June 30, 2004 that expresses substantial doubt as to our
ability to continue as a going concern. Going concern contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business during the subsequent fiscal year.
Our business continued to suffer during the nine months ended March 31, 2005 from the residual adverse
effects on our revenues, as explained above. During such time, we continued to incur significant
operating costs, the majority of which were substantially fixed in nature and necessary to our maintaining
of a basic operational infrastructure. As a result, we incurred substantial operating and net losses,
as well as negative operating cash flows, for the nine month period ended March 31, 2005, and, had
a working capital deficit at March 31, 2005. As a result of the preceding, substantial doubt remains
as to our ability to continue as a going concern. Our accompanying interim condensed financial statements
do not include any adjustments that might result from the outcome of this financial uncertainty.
Although there can be no assurance of such, we remain confident that we will be able to timely procure,
should such become necessary, any debt and/or equity financing required to meet our cash needs over
the next twelve months.
As a result of proceeds received by us from issuances of shares of our common stock and the conversion
of previously outstanding notes payable and accrued interest thereon into shares of our common stock,
we had positive stockholders equity at March 31, 2005.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15
|--



|Our Current Efforts at Restoring Our Revenues and Financial Condition
  Our ability to continue as a going concern remains contingent upon us:
|----------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                              

| |  | significantly growing our active client base,                                                     
| | - | --------------------------------------------------------------------------------------------------
| |   |                                                                                                   
| |  | reversing the current downward trend in our revenues,                                             
| |   |                                                                                                   
| |  | improving upon our current cash position and regaining a positive working capital position, and   
| |   |                                                                                                   
| |  | internally generating cash flows sufficient to support our ongoing operations and required growth.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Although not yet evident in our accompanying financial statements, our overall business has continued
to show significant signs of improvement, as addressed in greater detail within our Results of Operations
discussion below. We received 5,229 consumer inquiries into our debt resolution program between January 1,
2005 and March 31, 2005, up significantly from the 167 inquiries received in December 2004.
We principally attribute these increased inquiries to recently deployed radio advertising. During
the latter half of December 2004 and into January 2005, we piloted advertising in a small
geographic test market within one state from which we realized significant inquiries into our debt
resolution program. The success of the pilot program encouraged us to more recently expand our advertising
to include certain nationally syndicated programs, from which we have realized further significant
increases in the overall rate of consumer inquiries. While we cannot provide any assurance that these
increased inquiries will ultimately be realized in increased active clients, and thus increased revenues,
we are very encouraged by the preceding developments and believe that the post-fire downward trend
in our revenues may shortly be coming to an end. To the extent that we are successful in completely
regaining our pre-fire momentum in the acquisition of new clients, we believe that we will once again
be able, as we were during our fiscal year ended June 30, 2003, to fully leverage our fixed
operating costs and realize positive operating results and cash flows.
Since March 31, 2005, our cash and working capital positions have been strengthened by our receipt
on May 13, 2005 of an aggregate of $285,000 in debt financing from our Chief Executive and Financial
Officers. Despite the preceding cash infusions, we remain in need of additional long-term debt and/or
equity financing in order to ensure that we will be able to continue as a going concern through at
least March 31, 2006. While our cash position approximated $0.3 million at May 31, 2005, our
current operating budget for the twelve months ending March 31, 2006 approximates $1.8 million.
Given the continuing uncertainty regarding our prospective revenues, we currently are unable to reliably
forecast our revenues for the corresponding twelve months ending March 31, 2006. However, we
do not currently anticipate that our revenues for the twelve months ending March 31, 2005 will
be sufficient to fully negate the preceding $1.5 million cash differential between our current
cash position and our forecasted cash needs.
In anticipation of some degree of cash shortfall during the twelve months ending March 31, 2006,
we currently are exploring certain potential sources of funding. We currently are in discussions
with a capital institution regarding their providing us with a long-term equity line of credit and
are in discussions with an unrelated party for long-term debt financing. We can provide no assurance
that we will ultimately be successful in timely procuring at acceptable terms external debt and/or
equity financing sufficient to cover any cash shortfall. To the extent that we were to be unsuccessful,
our business would likely be materially harmed, the effects from which we may not recover.

|16
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|Critical Accounting Policy
Our clients consist of individuals with significant unsecured debt that may be experiencing financial
difficulties, thereby making the collection of any receivable by us highly doubtful. We initially
assess each new client a non-refundable set-up fee for file creation, debt analysis, budget formulation,
and initial creditor contacts. This set-up fee, which is based on a percentage of the clients
total unsecured debt accepted by us into our debt resolution program, is fully earned by us upon
our completion of the above services and is typically paid by the client in equal monthly installments
over a subsequent six-month period. Upon completion of the above set-up services, we have no further
obligations to the client.
A critical accounting policy is distinguished from other significant accounting policies, as set forth
in Note 3 to our accompanying interim condensed financial statements, by the fact that it requires
management to make certain underlying accounting estimates and assumptions regarding matters that
are inherently subject to a higher than usual degree of uncertainty, and, as a result, are more susceptible
to prospective material changes. We have assessed each of our significant accounting policies and
have concluded that only our accounting policy for Cash Basis Revenue recognition would reasonably constitute a critical
accounting policy.
If and when, a client subsequently accumulates a previously agreed-upon cash balance in a designated
savings account, access to which we are granted via a power-of-attorney, we commence formal negotiations
with each of the clients creditors with the objective of convincing them to accept a lump partial
payment in full and complete satisfaction of the entire unpaid balance. If and when, we are successful
in obtaining a legally-binding settlement with a creditor on behalf of a client, we then assess the
client a settlement fee. This earned settlement fee, which is based on a previously agreed to percentage
of any reduction obtained in the pay-off balance, is typically realized by us immediately in its
entirety via an electronic debit made directly against the clients savings account. In certain
limited cases, we subsequently realize an earned settlement fee in monthly installments over an agreed-upon
time period.
We conservatively recognize each set-up and settlement fee earned on a cash basis upon our subsequent
receipt of related client payments. Any payment received by us in advance of our complete performance
of a related client service is reflected in our balance sheet as unearned income.
Our Results of Operations
Revenues:
We principally attribute the continuing declines in our revenues, including those experienced during
the three and nine months ended March 31, 2005, to our inability to date to regain the momentum we
lost in the acquisition of new clients as a result of the September 23, 2003 fire. Our post-fire
efforts to regain, and ultimately grow, our overall client base have been, and continue to be, impaired
by an increasingly competitive marketplace and our inability to conduct more extensive broad-based
media advertising given our limited working capital. While we are unable to precisely determine the
extent to which the increased competitive presence has contributed to our revenue declines, we believe
that the adverse impact of such competition has been significant.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|17
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|As a matter of additional background, immediately prior to the fire, we had 1,185 active clients in
our debt resolution program, up from 941 at June 30, 2003. Reflecting the post-fire progression
of these accounts through our debt resolution program, our active clients remained relatively stable
numbering 1,188 and 1,216 at September 30, 2003 and December 31, 2003, respectively. However,
as our post-fire recruitment of new active clients was insufficient to offset those clients completing
and exiting our debt resolution program, our active clients declined to 879, 820 and 633 at March 31,
2004, June 30, 2004 and September 30, 2004, respectively. Subsequently, as a result of
our initial piloting of radio advertising in certain geographical markets during the latter half
of December 2004, we were successful in increasing our active clients to 721 at December 31,
2004. Our active clients subsequently grew to 733 at March 31, 2005.
Cost of Revenues; Gross Profit:
Our cost of revenues consists of the direct costs incurred by us in the servicing of client accounts.
Certain of these costs are substantially fixed in nature, principally being the wages and benefits
of our client engagement personnel and allocated charges for basic telephone service, technology,
rent, utilities, and depreciation and amortization. Our other direct costs are more variable in nature;
principally being debt settlement commissions earned by our client engagement personnel and allocated
charges for long distance telephone service and postage.
As a matter of background, immediately prior to the fire, we had eleven personnel directly engaged
in the servicing of client accounts, up from nine at June 30, 2003. So as to curtail our operating
costs during the recovery period, we immediately terminated the majority of our client engagement
personnel after the fire, thereby reducing such personnel to three at September 30, 2003. We
further reduced our client engagement personnel to two at December 31, 2003, and maintained
such level at March 31, 2004. Subsequently, we increased our client engagement personnel to
four at June 30, 2004 and nine at September 30, 2004. As a result of subsequent attrition,
our client engagement personnel numbered six at December 31, 2004, which level we maintained
through March 31, 2005.
Our gross margins were 60.8% and 58.5% during the three months ended March 31, 2005 and 2004, respectively.
We attribute this modest improvement to the incremental rent and other facility related expenses
incurred since our April 1, 2004 move into a new facility and the net additions in client service
personnel, as cited above, being more than offset by the non-recurrence of certain pre-move expenses
incurred during the comparative fiscal 2004 interim period, principally new stationary costs and
the postage and telephone costs incurred in connection with advising clients of our imminent relocation.
Our gross margins were 22.1% and 71.0% during the nine months ended March 31, 2005 and 2004, respectively.
We principally attribute this substantial decline in our gross margin to our diminished ability to
leverage our fixed cost components given the significant decline in our revenues and, to a significantly
lesser extent, the net additions in client service personnel, as cited above, including the incremental
fixed cost incurred with the hiring of a salaried client services supervisor.
Selling and Marketing Expenses:
Our selling and marketing expenses consist of the costs incurred by us in the solicitation and acquisition
of new clients. Certain of these costs are substantially fixed in nature, principally being the wages
and benefits of our selling and marketing personnel and allocated charges for basic telephone service,
technology, rent, utilities, and depreciation and amortization. Our other costs are more variable
in nature, principally being lead acquisition and media advertising costs and allocated charges for
long distance telephone service.
As a matter of background, immediately prior to the fire, we had twenty-one personnel engaged in selling
and marketing activities, up from seven at June 30, 2003. So as to curtail our operating costs
during the recovery period, we immediately terminated four selling and marketing personnel after
the fire, thereby reducing such personnel to seventeen at September 30, 2003. Shortly thereafter,
we terminated sixteen additional selling and marketing personnel, thereby reducing such personnel
to one at December 31, 2003 and March 31, 2004. Subsequently, in an attempt to regain the
loss momentum in new client acquisitions, we aggressively hired selling
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18
|--



|and marketing personnel, resulting in twenty-five such personnel at June 30, 2004. However, as
a result of subsequent high-than-anticipated attrition, our selling and marketing personnel declined
to eight at September 30, 2004. We then once again aggressively hired selling and marketing
personnel bringing their number up to seventeen at December 31, 2004. As a result of subsequent
normal attrition, our sales and marketing personnel declined to fourteen at March 31, 2005.
We principally attribute the significant increases in our selling and marketing expenses for the respective
fiscal 2005 interim periods to our deployment of radio advertising, our utilization of more-expensive
temporary staffing services to prospectively screen potential new hires, and incremental lead acquisition
costs. Based upon the favorable results from certain limited piloting of radio advertising in December
2004, we subsequently launched a radio advertising campaign in fourteen states targeting potential
candidates for our debt resolution program. Based on the resulting inquiries received, we mailed
out program enrollment applications to 1,431 potential clients. While this radio advertising campaign
has been successful in significantly increasing the number of inquiries into our debt resolution
program, we cannot estimate how many of these inquiries will ultimately result in new clients. To
a significantly lesser extent, we incurred incremental rent and other facility related charges since
our April 1, 2004 move and increased telephone and depreciation expenses.
General and Administrative Expenses:
Our general and administrative expenses consist of the costs incurred by us in the general administration
of corporate matters. Certain of these costs are substantially fixed in nature, principally being
the wages and benefits of our executive, managerial and administrative support staff, insurance premiums,
professional service fees, maintenance, and allocated charges for rent, utilities, technology, basic
telephone service, and depreciation and amortization. Our other costs are more variable in nature,
principally being office supplies, repairs, transfer agent fees and allocated charges for long distance
telephone service.
Immediately prior to the fire, we had six personnel directly engaged in
general and administrative activities, up from three at June 30, 2003. To curtail our
operating costs during the recovery period, we immediately terminated four general and administrative
personnel after the fire, thereby reducing such personnel to two at September 30, 2003 and December 31,
2003. Subsequently, we progressively replenished our general and administrative personnel, resulting
in their numbers growing to four at March 31, 2004, and then seven at June 30, 2004. We
subsequently maintained this general level, with six and seven general and administrative personnel
at September 30, 2004 and December 31, 2004, respectively. The level of our general and
administrative personnel subsequently remained unchanged at seven through March 31, 2005.
We primarily attribute the increases in our general and administrative expenses for the respective
fiscal 2005 interim periods to net additions in general and administrative personnel, as outlined
above, and to the legal, accounting and other professional fees incurred in connection with our Form SB-2
registration statement for selling shareholders, from which we received no proceeds. To a significantly
lesser extent, we incurred incremental rent and other facility related charges since our April 1,
2004 move and increased insurance premiums, transfer agent fees, and depreciation expenses.
Interest Income:
Our interest income for the respective fiscal 2005 and 2004 interim periods principally resulted from
interest earned on loans advanced to Infinity Southwest, Inc. (ISI), a related company
through common management control by Stephen G. Luke, our Chief Executive Officer, President and
Chairman of the Board of Directors. During the fiscal year 2004, as well as prior thereto, we made
periodic loans to ISI. The loans were unsecured, accrued interest at a stated five percent rate,
and were repayable upon demand by us. Mr. Luke had provided us with a written personal guarantee
of repayment which was secured by all of his personal assets. We and Mr. Luke agreed to discontinue
the above loan program as of December 2003. As of February 2, 2005, ISI had repaid these loans,
as well as all accrued interest thereon, in full. To a significantly lesser extent, we earned interest
on excess funds maintained in a money market account during the respective interim periods.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|19
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|Interest Expense:
  Our interest expense for the respective fiscal 2005 and 2004 interim periods principally resulted from
interest expense incurred by us on borrowings we obtained from Shalimar Offices, LLC (Shalimar),
a related company through common management control by Mr. Luke, from which we also lease our current
facility. During fiscal year 2004, Shalimar procured leasehold improvements and equipment from unrelated
vendors on our behalf in exchange for three notes payable. The actual costs incurred by Shalimar
were passed through to us and structured as installment notes payable. These notes were unsecured,
accrued interest at a stated six percent rate, and required monthly payments of principal and interest
aggregating $4,421 through May 1, 2009. During January 2005, we repaid these loans, as well
as all accrued interest thereon, in full. To a significantly lesser extent, we also incurred during
the fiscal 2005 interim periods interest expense in connection with our financing of an insurance
policy premium.
Gain on Forgiveness of Accrued Interest:
During the nine months ended March 31, 2005, the holder of our then outstanding convertible notes elected
to convert the $450,000 aggregate principal balance into 450,000 shares of our common stock.
Benefit From Income Taxes:
As we had previously exhausted our federal net operating loss credits as of December 31, 2004, we were
unable to realize any further federal income tax benefits in connection with our pre-tax loss for
the three months ended March 31, 2005. Our results for the nine months ended March 31, 2005 reflect
our utilization of then available federal net operating loss carrybacks. Although the state of Arizona
does not permit the application of net operating loss carrybacks, it does allow for net operating
loss carryforwards, which we estimate amounted to $288,407 at March 31, 2005 and which expire at
various dates 2007 through 2009.
Net Losses:
In summary, we principally attribute our continuing net losses to the business disruptions and costs
that emanated from the September 23, 2003 fire, and, in particular, the loss of momentum in
the acquisition of new clients.
Our Liquidity and Capital Resources
Overview
Prior to the September 23, 2003 fire, we were able to finance our operations and capital expenditure
needs with cash generated from our operating activities. However, as a result of the adverse financial
effects emanating from the business disruptions experienced by us as a result of the fire, we have
subsequently needed to seek external financing.
We initially procured $450,000 in operating capital through our issuance of convertible notes during
our fiscal year ended June 30, 2004, which notes were subsequently converted during the nine
months ended March 31, 2005 into 450,000 shares of our common stock. Additionally, during our fiscal
year ended June 30, 2004, we were able to procure certain needed leasehold improvements and
equipment through Shalimars purchase of such on our behalf, in exchange for which we issued
Shalimar $228,670 in notes payable. Subsequently, during the nine months ended March 31, 2005, we
procured an additional $950,000 in operating capital through our issuance of 975,000 shares of our
common stock at a weighted average price of $0.97 per share. In connection with the preceding issuances
of convertible notes and common shares, we incurred a ten percent finders fee obligation to
an unrelated individual which we settled through our issuance of 140,000 shares of our common stock
during the nine months ended March 31, 2005.
More recently, on February 18, 2005, we obtained $100,000 in debt financing from an unrelated entity.
The note is unsecured, accrues interest at the prime rate plus one percent (6.75% at March 31, 2005),
and requires monthly payments of principal and interest aggregating $4,491 from April 18, 2005 through
March 18, 2007. On April 13, 2005, we received a loan from Stephen Luke, our Chief Executive Officer,
President and Chairman of the Board of
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|20
|--



|Directors, in the amount of $250,000. The note is unsecured, accrues interest at a stated rate of 18.00%
per annum, initially requires monthly interest only payments of $3,750 through March 31, 2008, and
subsequently requires monthly payments of interest and principal aggregating $6,442 through April
30, 2013. Additionally, on April 13, 2005, we received a loan from Darren Dierich, our Chief Financial
Officer, in the amount of $35,000. The note is unsecured, accrues interest at stated rate of 10.00%
per annum, and requires monthly payments of interest and principal aggregating $3,066 through March
31, 2006.
On April 25, 2005, we procured a $200,000 revolving line of credit facility with a major commercial
bank. The facility expires on April 24, 2006 and all borrowings under the facility will accrue interest
at the banks prime rate. We are required to maintain a collateralizing $200,000 certificate
of deposit with the bank that will earn interest at a stated rate of 3.2% per annum. As of May 31,
2005, we had borrowed $175,000.

Our monthly burn rate (both fixed and variable expenses) is approximately
$102,000, and our available cash will only be sufficient to fund our operations
for approximately two months. Because of our tight cash flow, we will need to
seek additional financing immediately. However, we do not have any committments
for financing or other plans in place to obtain financing, and additional
financing may not be available on acceptable terms or at all.

At March 31, 2005, we had negative working capital of $104,477, inclusive of the current portion of
outstanding notes payable to unrelated parties of $53,396. At March 31, 2005, our non-current debt
obligations aggregated $55,988. Our related principal repayment obligations at March 31, 2005 were
as follows by fiscal years ending June 30th: 2005 - $20,664; 2006 - $49,414; 2007 - $39,306; Thereafter
- none.
At March 31, 2005, our facility operating lease with Shalimar constituted our sole off-balance sheet
obligation, which is required to be excluded from our balance sheet by accounting principles generally accepted in the United States. This lease, which we entered into on April 1, 2004, is non-cancelable,
has a five-year term, and currently requires us to make monthly rent payments of $8,078, which payments
will increase annually by five percent. We determined what the rent payments and major terms of the lease would be based on our review of lease terms for
unrelated tenants leasing similar office space in our geographical area.
Our related minimum lease payment obligations at March 31,
2005 were as follows: by fiscal years ending June 30th: 2005 - $24,234; 2006 - $98,149; 2007 - $103,056; 2008 - $108,209; 2009 - $84,163; Thereafter - none.
This lease additionally requires us to pay for certain related ancillary costs, principally parking,
common area maintenance and property taxes. These ancillary costs, which are variable in nature,
have approximated, and are expected to continue to approximate $12,000 per fiscal year.
Cash Flows
Operating Activities
Our operating activities during the nine months ended March 31, 2005 utilized net cash in excess of
our net loss primarily as a result of the incremental cash outlays made by us to settle certain previously
accrued for income tax obligations associated with our pre-tax earnings for the fiscal year ended
June 30, 2003, to reduce the overall levels in our accrued liabilities given our receipt of
the external financing discussed below, and to prepay certain prospective employee benefits, advertising
costs, and facility-related costs. Additionally, although our net loss was diminished by the accrued
benefits of such, we had not yet realized in cash as of March 31, 2005 the income taxes refundable
to us as a result of our pre-tax loss for the six months ended December 31, 2004. Partially offsetting
the preceding adverse cash flow effects principally were the positive cash flow effects of adding
back increased non-cash depreciation amortization and employee compensation expenses to our net loss
for the nine months ended March 31, 2004, the receipt of accrued interest income from ISI, and increased
accounts payable.
Investing Activities
Our investing activities provided us with a net cash inflow during the nine months ended March 31,
2005 principally due to our receipt of loan repayments by ISI. Slightly offsetting the preceding
were our cash outlays for purchases of equipment. Our investing activities provided us with a net
cash flow during the nine months ended March 31, 2004 principally due to loan repayments by ISI,
offset in part by our cash outlays for the purchase of equipment.
Financing Activities
Our financing activities provided us with a net cash inflow during the nine months ended March 31,
2005 as a result of our receipt of proceeds from issuances of common shares and a note payable in
private placements, offset in part by principal repayments of our notes to Shalimar. In the comparable
nine months ended March 31, 2004, we received proceeds from our issuance of convertible notes to
an unrelated entity.
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----------------------------------------------------------------------------------------------------------------------

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|Planned Capital Expenditures
  We currently have the following planned capital expenditures for the next twelve months ending March
31, 2006, which we currently anticipate funding with available working capital or vendor financing:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                       

| | Computer hardware and software     | $ | 9,000  |  | 
| | ---------------------------------- | - | ------ |  | 
| | Telephone equipment                |   | 1,000  |  | 
| | Furniture                          |   | 3,000  |  | 
| | Leasehold improvements             |   | 1,000  |  | 
| |                                    |   |        | 
| | Total planned capital expenditures | $ | 14,000 |  | 

|                                                                                                                                                                                                                                                                                                                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Other Matters
Seasonal and Inflationary Influences
To date, we have not been materially impacted by seasonal or inflationary influences.
Recently Issued Accounting Standards With Pending Adoptions
There are no recently issued applicable accounting standards with pending adoption dates that we anticipate
will have material impacts upon our financial statements.

|CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS


The Companys Form 10-KSB, any
Form 10-QSB or any Form 8-K of the Company or any other written or oral statements made by
or on behalf of the Company may contain forward-looking statements which reflect the
Companys current views with respect to future events and financial performance. The
words believe, expect, anticipate,
intends, estimate, forecast, project, and
similar expressions identify forward-looking statements. All statements other than
statements of historical fact are statements that could be deemed forward-looking
statements, including any statements of the plans, strategies and objectives of management
for future operations; any statements concerning proposed new products, services,
developments or industry rankings; any statements regarding future economic conditions or
performance; any statements of belief; and any statements of assumptions underlying any of
the foregoing. Such forward-looking statements are subject to risks and
uncertainties set forth from time to time in the Companys SEC reports and are
generally set forth below and particularly discussed in the Companys Form SB-2 filed
on April 5, 2005.


Readers are cautioned not to place
undue reliance on such forward-looking statements as they speak only of the Companys
views as of the date the statement was made. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.


Risk
Factors


You
should consider the following discussion of risks as well as other information regarding
our operations. The risks and uncertainties described below are not the only ones.
Additional risks and uncertainties not presently known to us or that we currently deem
immaterial also may impair our business operations.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | We
have incurred losses in the past and cannot assure you that we will be profitable in the
future.
| | - | ---------------------------------------------------------------------------------------------------

| |  | We
have received a going concern opinion from our auditors indicating we may not be able to
continue as a going concern.
| | - | ------------------------------------------------------------------------------------------------------------------------

| |  | Our
planned advertising campaign may not be successful, thereby reducing our working capital
and resulting in operating losses.
| | - | -------------------------------------------------------------------------------------------------------------------------------

| |  | Our
strategy of managed growth will put a significant strain on our resources.
| | - | ------------------------------------------------------------------------------

| |  | We
depend on key personnel and could be adversely affected by the loss of their services
because of the limited number of qualified people in our industry. Any such loss of
services could reduce our operations and therefore our revenue.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Our
executive officers and directors own a majority of our common stock.
| | - | ------------------------------------------------------------------------

| |  | There
is no trading market for common stock.
| | - | --------------------------------------------

| |  | Because
our common stock will be classified as penny stock, any future trading would
be limited.
| | - | --------------------------------------------------------------------------------------------------

|22
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|ITEM
        3. CONTROLS AND PROCEDURES
      (a)           Under
        the supervision and with the participation of our management, including
        our principal executive officer and principal financial officer, we conducted
        an evaluation of the design and operation of our disclosure controls and
        procedures, as such term is defined under Rules 13a-14(c) and 15d-14(c)
        promulgated under the Securities Exchange Act of 1934, as amended (the
        Exchange Act), as of the period covered by this report (March
        31, 2005). Based on that evaluation, our principal executive officer and
        our principal financial officer concluded that the design and operation
        of our disclosure controls and procedures were effective to ensure that
        information required to be included in our Securities and Exchange Commission
        reports is recorded, processed, summarized and reported within the time
        periods specified in the Commissions rules and forms.
      (b)           In
        addition, there have been no changes in our internal control over financial
        reporting identified in connection with the elevation that occurred during
        the last fiscal quarter that have materially affected, or that are reasonably
        likely to materially affect, our internal control over financial reporting.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART II  OTHER
INFORMATION


Item 6.     Exhibits and Reports on
Form 8-K
|--------------------------------------------------------------------------

| | (a) | Exhibits:
| | --- | ---------

| | 10.12 | Promissory
Note dated February 18, 2005 to Pursuit Holdings, LLC
| | ----- | ----------------------------------------------------------------

| | 10.13 | Promissory
Note dated April 13, 2005 to Stephen Luke
| | ----- | ----------------------------------------------------

| | 10.14 | Promissory
Note dated April 13, 2005 to Darren Dierich
| | ----- | ------------------------------------------------------

| | 10.15 | Promissory
Note dated April 25, 2005 to J.P. Morgan Chase
| | ----- | ---------------------------------------------------------

| | 31.1 | Rule
13a-14(a)/15d-14(a) Certification of Principal Executive Officer
| | ---- | ---------------------------------------------------------------------

| | 31.2 | Rule
13a-14(a)/15d-14(a) Certification of Principal Financial Officer
| | ---- | ---------------------------------------------------------------------

| | 32 | Section
1350 Certifications
| | -- | ---------------------------

| | (b) | Reports
on Form 8-K:
| | --- | --------------------

| | None.
| | -----

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Signatures   In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  Nationwide Financial Solutions, Inc. (Registrant)   Date: June 8, 2005By:/s/Stephen G. LukeStephen G. LukeChief Executive Officer    Date: June 8, 2005By:/s/Darren R. DierichDarren R. DierichChief Financial Officer     24