UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington D. C. 20549

                                 FORM 10-QSB

 ( X )      Quarterly report pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934.

                For the quarterly period ended March 31, 1999.


 (    )     Transition report pursuant to Section 13 or 15(d) of the Exchange
Act for the transition period from _____
      ____________ to ____________ .



                      Commission File Number: 333-06328

                Sterling Financial Services of Florida I, Inc.
            (Exact Name of Registrant as Specified in Its Charter)

          Florida
65-0716464
(State of Incorporation)                                          (I.R.S.
Employer I.D. No)

                239 Halliday Park Drive, Tampa, Florida 33612
                   (Address of Principal Executive Offices)


                                (813) 932-2228
             (Registrant's Telephone Number, Including Area Code)



Check whether the registrant:  (1) has filed all reports required to be filed by
Section by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.

                                YES ( ) NO (X)

Indicate the number of shares outstanding of each of the issuer's classes of
stock as of September 30, 1999

                             1,000 Common Shares


Transitional Small Business Disclosure Format:

                                YES ( ) NO (X)



                                       1
<PAGE>







                Sterling Financial Services of Florida I, Inc.

                             INDEX TO FORM 10-QSB


PART I.    FINANCIAL INFORMATION



Item 1.    Financial Statements (unaudited)

           Balance Sheets as of March 31, 1999 and December 31, 1998..........3

           Statements of Operations for the three-months ended March 31,
           1999 and 1998......................................................4

           Statement of Stockholders' Deficit for the three-months ended  March
           31, 1999...........................................................5

           Statements of Cash Flows for the three-months ended March 31,
           1999 and 1998......................................................6

           Notes to Financial Statements .....................................7

Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations (including Year 2000 Issue and Cautionary
           Statement).........................................................9


PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings ................................................12
Item 2.    Changes in Securities ............................................12
Item 3.    Defaults Upon Senior Securities ..................................12
Item 4.    Submission of Matters to a Vote of Securities Holders ............12
Item 5.    Other Information.................................................13
Item 6.    Exhibits and Reports on Form 8-K..................................13

Signatures                                                                   13
















                                     -2-



                                       2
<PAGE>




          STERLING FINANCIAL SERVICES OF FLORIDA I, INC.
                          BALANCE SHEETS

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

                                           March 31,      December
ASSETS                                       1999        31, 1998
------                                    (Unaudited)
                                           ---------     ----------

Cash and cash equivalents                $   519,402    $1,282,906
                                           ---------     ----------
Receivables:
Finance - net                              2,240,084     1,485,697
Mobile home floor plan                       420,486       182,007
Affiliate                                    166,544       257,278
Interest and fees                             43,218         8,920
                                          ----------     ---------
     Total receivables                     2,870,332     1,933,902
                                           ---------     ----------

Inventories                                 835,625        433,597
                                           ---------     ----------

Investment in and advances to
Parkwood Estates Mobile Home Park, L.C.     636,095        602,178
                                           ---------     ----------

Property and equipment - net                280,900        254,541
                                           ---------     ----------

Other assets:
Deferred debt issuance costs - net          564,833        514,999
Repossessed mobile homes                     62,569         85,417
                                           ---------     ----------
    Total other assets                      627,402        600,416
                                           ---------     ----------

TOTAL                                    $ 5,769,756   $ 5,107,540
                                           =========     ==========

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES:
Secured notes payable                    $ 6,842,000   $ 5,974,000
Accrued and other liabilities                46,084         56,334
                                           ---------     ----------
  Total liabilities                        6,888,084     6,030,334
                                           ---------     ----------

STOCKHOLDERS' DEFICIT
Common stock, no par value, 10,000
shares authorized, 1,000 shares issued        1,000          1,000
and outstanding
Deficit                                  (1,119,328)
                                                          (923,794)
                                           ---------     ----------
  Total stockholders' deicit             (1,118,328)      (922,794)
icit
                                           ---------     ----------

TOTAL                                    $ 5,769,756   $ 5,107,540
                                           =========     ==========


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

See accompanying notes.

                                     -3-



                                       3
<PAGE>



               STERLING FINANCIAL SERVICES OF FLORIDA I, INC.
                          STATEMENTS OF OPERATIONS
                                 (Unaudited)


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



                                             Three-Months      Three-Months
                                               Ended              Ended
                                              March 31,          March 31,
                                                1999               1998
                                             ------------      -----------

REVENUES:
Mobile home sales                          $     354,700
Interest and fee                                 153,709           24,341
Rental                                            30,230           19,180
Other                                                333            2,364
                                           --------------     ------------
      Total revenues                             538,972           45,885
                                           --------------     ------------


OPERATING EXPENSES:
Cost of mobile homes sold                        277,420
Management fees - Related Party                  158,396           48,701
Interest                                         205,969           58,849
Occupancy and equipment                           29,748           45,268
Professional fees                                 10,000            4,250
Equity in loss of Parkwood
Estates Mobile Home Park, L.C.                    11,686
Other                                             41,287           35,418
                                           --------------     ------------
    Total operating expenses                     734,506          192,486
                                           --------------     ------------

NET LOSS                                   $     195,534          146,601
                                           ==============     ============

LOSS PER COMMON SHARE                      $      195.53           146.60
                                           ==============     ============


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

See accompanying notes.








                                     -4-



                                       4
<PAGE>




           STERLING FINANCIAL SERVICES OF FLORIDA I, INC.
                 STATEMENT OF STOCKHOLDERS' DEFICIT

                             (Unaudited)

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

                                        Common Stock
                            Shares      Amount         Deficit         Total
                            --------  -----------     ----------      --------

Balances, December 31, 1998  1,000        1,000     $ (923,794)    $ (922,794)

Net loss for three-months
ended                                                 (195,534)      (195,534)
   March 31, 1999
                            --------  -----------    -----------   -----------
Balances, March 31, 1999      1,000   $    1,000     (1,119,328)   $(1,118,328)
                            ========  ===========    ===========   ===========


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


See accompanying notes.





























                                     -5-


                                       5
<PAGE>



               STERLING FINANCIAL SERVICES OF FLORIDA I, INC.
                          STATEMENTS OF CASH FLOWS

                                (Unaudited)

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

                                                Three-Months    Three-Months
                                                  Ended            Ended
                                                 March 31,        March 31,
                                                   1999             1998
                                                -----------     -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                        $ (195,534)    $    (146,601)

Adjustments to reconcile net loss to net cash
used in
   operating activities:
    Depreciation                                     6,619             6,446
    Amortization of deferred debt issuance          37,166            12,561
costs
    Equity in loss of Parkwood Estates              11,686
Mobile Home Park, L.C.
    Management fees - Related Party                157,889
    Increase in inventories                      (402,028)
    Increase in interest and fee receivables      (34,298)
    Increase (decrease) in accrued  and           (10,250)             6,578
other liabilities
                                                -----------     -------------

NET CASH USED IN OPERATING ACTIVITIES            (428,750)         (121,016)
                                                -----------     -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of property and equipment              (32,978)          (31,066)
 Advances to Parkwood Estates Mobile Home         (45,603)
Park, L..C.
 Proceeds from sales of repossessed mobile         82,008
homes
 Finance and floor plan receivables            (1,254,859)         (219,818)
originated and purchased
 Repayments of finance and floor plan              202,833            51,128
receivables
                                                -----------     -------------

NET CASH USED BY INVESTING ACTIVITIES           (1,048,599)        (199,756)
                                                -----------     -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of secured notes          868,000          589,000
payable
  (Increase) decrease in affiliate                (67,155)              250
receivables
  Cash paid for deferred debt issuance costs      (87,000)          (51,300)
                                                -----------     -------------

NET CASH PROVIDED BY FINANCING ACTIVITIES         713,845           537,950
                                                -----------     -------------

NET CHANGE IN CASH AND CASH EQUIVALENTS          (763,504)          217,178

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD  1,282,906           816,433
-----------------------------------------------------------     -------------

CASH AND CASH EQUIVALENTS, END OF PERIOD        $ 519,402      $  1,033,611
                                               ===========     =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION - Interest paid                   $ 168,803      $     46,288
                                               ===========     =============

-----------------------------------------------------------------------------
See accompanying notes.


                                    -6-




                                       6
<PAGE>


                STERLING FINANCIAL SERVICES OF FLORIDA I, INC.
                        NOTES TO FINANCIAL STATEMENTS
                                 (Unaudited)

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

NOTE A - FORMATION AND OPERATIONS OF THE COMPANY

Sterling  Financial Services of Florida I, Inc, (the "Company") was incorporated
under the laws of the state of  Florida  on  January  3,  1997.  The  Company is
primarily in the  business of  originating  and  purchasing  retail  mobile home
installment  sales  contracts  created  in  connection  with  the  financing  of
manufactured  homes. The Company also owns and rents mobile homes located in the
Halliday Village Mobile Home Park ("Halliday") and has a 25% ownership  interest
in a mobile home park located in Hillsborough County,  Florida (see Note E). The
Company's  operations are located in Tampa, Florida and substantially all of its
customers are Florida residents.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The  accompanying  unaudited  financial  statements  of the  Company  have  been
prepared in accordance with generally accepted accounting principals for interim
financial  information  and the  instructions  to Form  10-QSB  and Rule 10-1 of
Regulation  S-X  of  the  Securities  and  Exchange   Commission   (the  "SEC").
Accordingly,  these  financial  statements  do not include all of the  footnotes
required  by  generally  accepted  accounting  principals.  In  the  opinion  of
management,  all  adjustments  (consisting of normal and recurring  adjustments)
considered  necessary  for a fair  presentation  have been  included.  Operating
results for the three months ended March 31, 1999 are not necessarily indicative
of the results  that may be expected for the year ended  December 31, 1999.  The
accompanying  financial  statements  and the notes should be read in conjunction
with the  Company's  audited  financial  statements as of and for the year ended
December 31, 1998 contained in its Form 10-KSB.

Use of Estimates

The preparation of financial  statements in accordance  with generally  accepted
accounting  principals  requires  that  management  make certain  estimates  and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements.  The  reported  amounts  of the  revenues  and  expenses  during the
reporting  period  may  be  affected  by  the  estimates  and  assumptions  that
management is required to make.  Estimates from  management that are critical to
the accompanying financial statements include the appropriate level or allowance
for credit losses which can be significantly impacted by future industry, market
and economic  trends and conditions.  Actual results could differ  significantly
from management's estimates.

Loss Per Common Share

Loss per  common  share is based on the  weighted  average  number of common and
common equivalent  shares  outstanding  during the period.  The weighted average
number of such shares  outstanding for the three-months ended March 31, 1999 and
1998 was 1,000.

Reclassifications

Certain   amounts  in  the  March  31,  1998  financial   statements  have  been
reclassified to conform with the March 31, 1999 presentation.


NOTE C - SECURED NOTES PAYABLE

Secured  notes  payable (the  "Notes")  bear  interest at 10.5%,  with  interest
payable  monthly,  and mature on June 30, 2002. The Notes are secured by a first
lien on any assets acquired with the proceeds and may be prepaid in whole or

                                    -7-



                                       7
<PAGE>

in part at any time without premium or penalty.  The Company had registered $9.9
million of Notes, and as of March 31, 1999 was continuing to offer the remaining
$3,058,000 of Notes for sale. The offering terminated on June 30, 1999, at which
time the  Company had sold  $9,818,000  of such notes  (representing  99% of the
offering).   The  notes  were  being  offered  on  a  "best-efforts"   basis  by
broker-dealers,  who are  members  of the  National  Association  of  Securities
Dealers, Inc.


NOTE D - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
                   ACTIVITIES

During the three-months ended March 31, 1999,  approximately  $59,000 of finance
receivables were reclassified to repossessed mobile homes when certain customers
of the Company defaulted on their receivables.


NOTE E - RELATED PARTY TRANSACTIONS

Sterling Financial Services,  Inc. ("SFS"), a related party by virtue of Anthony
Sutter's  ownership of SFS (Mr.  Sutter is the Company's  President and majority
stockholder),  manages the Company and provides all services in connection  with
the origination,  purchase and servicing of receivables.  As  consideration  for
these  services,  the Company pays SFS for all of its expenses  plus 20% of such
expenses.   Management   fees  expensed  under  this   arrangement   during  the
three-months  ended March 31, 1999 and 1998  approximated  $158,000 and $49,000,
respectively.  With respect to the former,  the Company had effectively  prepaid
these amounts at December 31, 1999 by advancing SFS approximately $227,000 as of
such date.  Accordingly,  during the quarter  ended March 31, 1999,  the Company
reduced their  receivable from SFS for the  aforementioned  management fees, and
reflected  this  transaction as non-cash in the  accompanying  statement of cash
flows.  As of March 31,  1999,  the  Company  had  remaining  advances to SFS of
approximately $69,000; such amount is expected to be expensed as management fees
in the second quarter of 1999.

During the quarter  ended March 31,  1999,  the Company  advanced  approximately
$67,000 to Anthony  Sutter  and/or his  affiliates.  With the  exception  of the
advance  to  SFS  (see  preceding  paragraph)  which  is  non-interest  bearing,
affiliate  receivables  bear  interest at 12.9.%,  are  unsecured and contain no
specified repayment terms as to principal and/or accrued interest.

The Company  rents  certain lot space for mobile home rental units it owns,  and
prior to April 1998 certain office space for its administrative operations, from
Halliday, a related party by virtue of Anthony Sutter's ownership.  In May 1998,
SFS  began to pay the rent on the  administrative  space  and  accordingly,  the
related  rent  expense is  included in SFS  expenses  on which the Company  pays
management fees as discussed above. Total rent paid under these arrangements for
the three-months ended March 31, 1999 and 1998 approximated $22,000 and $26,000,
respectively.

During the  three-months  ended  September  30,  1998,  the Company  purchased a
twenty-five  percent  interest  in  Parkwood  Estates  Mobile  Home  Park,  L.C.
("Parkwood") for approximately  $561,600;  such entity was formed in August 1998
for the purpose of purchasing,  selling and leasing Parkwood Estates Mobile Home
Park. The remaining 75% interest is owned by Anthony Sutter. In addition to such
investment,  the Company has agreed to loan  Parkwood up to $350,000 to fund its
cash flow needs. Advances under this arrangement accrue interest at a fixed rate
of 12.9%,  are unsecured and have no specified  repayment  terms as to principal
and/or  interest.  At March 31,  1999,  the Company had  advanced  approximately
$100,000 to Parkwood.

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





                                    -8-



                                       8
<PAGE>


Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

OVERVIEW

The following  discussion and analysis  should be read in  conjunction  with the
balance sheet as of December 31, 1998 and the financial statements as of and for
the three-months ended March 31, 1999 and 1998 included with this Form 10-QSB.

The Company is primarily in the business of originating  and  purchasing  retail
mobile home installment sales contracts created in connection with the financing
of manufactured  homes.  The Company also owns and rents mobile homes located in
the Halliday  Village  Mobile Home Park  ("Halliday"),  and has a 25%  ownership
interest  in Parkwood  Estates  Mobile Home Park,  L.C.  ("Parkwood")  which was
formed in 1998 for the purpose of purchasing,  and leasing  Parkwood Mobile Home
Park in  Hillsborough  County,  Florida (the "Park").  Halliday and Parkwood are
related to the Company by virtue of Anthony Sutters's  majority ownership in the
Company,  Halliday and Parkwood.  The Company's operations are located in Tampa,
Florida and substantially all of its customers are Florida residents.

Readers are referred to the  Cautionary  Statement  at page 12, which  addresses
forward-looking statements made by the Company.

RESULTS OF OPERATIONS

During the three  months  ended March 31, 1999 and 1998,  the Company  generated
revenues of approximately $539,000 and $46,000,  respectively.  This represented
an  increase  of  approximately  1000% or $493,000  and  resulted  substantially
because the Company experienced  significant growth in revenue generating assets
in 1998 and during the first quarter of 1999. This increase was made possible by
proceeds  received  from the sale of the Notes since  December 31, 1997 when the
Company was considered to be in the development stage. Because of the relatively
small amount of revenues generated during the three-months ended March 31, 1998,
this analysis does not include any additional discussion on such revenues.

Revenues  generated  during  the  three-months  ended  March 31,  1999  resulted
substantially  from sales of mobile  homes,  and  interest  and fee  revenues of
approximately $355,000 and $154,000, respectively. The Company generated margins
of  approximately  22% on  sales of  mobile  homes;  substantially  all of which
occurred at the Park,  and  management  believes  that sales of such homes,  and
related costs of sales, will continue to represent a significant  portion of the
Company's  revenues and expenses for the  foreseeable  future.  Interest and fee
revenues  consisted  substantially of interest earned on finance  receivables of
approximately  $106,000,  interest earned on cash  equivalents of  approximately
$12,000  and  interest   earned  on  mobile  home  floor  plan   receivables  of
approximately $21,000 (interest income on cash equivalents occurs because of the
lag time between the receipt of proceeds from sale of the Notes and the date the
funds were  invested in finance  and/or  other  interest  bearing  receivables).
Interest earned on finance receivables  increased  significantly  because of the
related increase in finance  receivables in 1998 and during the first quarter of
1999.  In  addition  to  interest  and  fee  revenues,   the  Company  generated
approximately $30,000 of rental revenues from the rental of its mobile homes.

Operating  expenses  during  the three  months  ended  March  31,  1999 and 1998
approximated $735,000 and $192,000,  respectively.  This represented an increase
of  approximately  280% or $543,000  and resulted  substantially  because of the
aforementioned  growth  in 1998 and the first  quarter  of 1999.  The  Company's
revenues grew at a faster pace than its expenses  because  certain  expenses are
fixed and therefore did not increase  significantly.  In addition to the cost of
mobile homes sold discussed  above,  significant  operating  expenses arose from
management  fees charged by SFS and interest paid on the Notes.  Management fees
approximated  $158,000  for the three months ended March 31, 1999 as compared to
approximately $49,000 for the corresponding period of the preceding fiscal year.
This increase of  approximately  220% or $109,000  resulted because SFS required
additional personnel and expenses to originate and service the Company's finance
and  mobile  home  floor plan  receivables,  as well as to manage the  Company's
operations.

                                    -9-




                                       9
<PAGE>

Interest  expense  increased  from  approximately  $59,000 for the quarter ended
March 31, 1998 to  approximately  $206,000 for the quarter ended March 31, 1999.
This represented an increase of approximately $147,000 or 250%. Interest expense
arose from  interest  on the Notes of  approximately  $169,000  and  $46,000 and
amortization  of  deferred  debt  issuance  costs of  approximately  $37,000 and
$13,000,  for the  respective  quarters  ended  March  31,  1999 and  1998  (the
amortization  costs represent  non-cash  expenses and arise from commissions and
other costs incurred to sell the Notes).  The  significant  increase in interest
expense  resulted  from the  corresponding  increases  in the Notes and  related
deferred debt issuance costs.

Occupancy and equipment expenses declined from approximately  $45,000 during the
quarter ended March 31, 1998 to  approximately  $30,000 during the quarter ended
March 31, 1999. This decline resulted  partially  because the Company was paying
rent expense of  approximately  $2,200 a month to Halliday  until April 1998, at
which  time such  expenses  were paid to SFS in  accordance  with the  Servicing
Agreement between the entities.  Accordingly,  rent expenses subsequent to April
1998 are effectively included in management fees paid to SFS. In addition, March
31, 1998 occupancy  expense  included  repairs and maintenance of  approximately
$12,000  arising from costs  incurred on mobile home  rentals;  no such expenses
were  incurred  during the quarter  ended March 31,  1999.  With  respect to the
Company's rental homes, the Company rents lot space from Halliday. In connection
therewith,  the Company  paid lot rent of  approximately  $22,000 and $19,000 to
Halliday during the quarters ended March 31, 1999 and 1998, respectively.

 The March 31, 1999  results of  operations  also  included  recognition  of the
Company's loss of approximately $12,000 in Parkwood.  This amount represents 25%
(the  Company's  ownership  percentage)  of the total loss generated by Parkwood
during such quarter.

There  were no other  individual  expenses  of  significance  for  either of the
quarters ending March 31, 1999 or 1998.
 .
The net  losses  for the  respective  quarters  ended  March  31,  1999 and 1998
approximated $196,000 and $147,000,  respectively;  such losses occurred because
the Company's  interest  bearing  assets did not generate  sufficient  income to
cover expenses arising  substantially  from management fees and interest expense
on the Notes.


LIQUIDITY AND CAPITAL RESOURCES

Operating activities used cash of approximately $429,000 and $121,000 during the
respective  quarters ended March 31, 1999 and 1998,  respectively.  The increase
was  attributable  to the purchase of mobile home  inventories  having a cost of
approximately  $402,000,  which  mobile  homes  are being  sold at the Park.  In
addition,  cash of  approximately  $27,000 and $121,000 (net losses adjusted for
revenues and expenses which did not affect cash) was used to fund the respective
net losses for the quarters ended March 31, 1999 and 1998.

Investing  activities used cash of approximately  $1,049,000 and $200,000 during
the  respective  quarters  ended  March 31,  1999 and  1998.  This  increase  of
approximately  $849,000  or  425%  resulted  primarily  from  increased  lending
activity made possible by proceeds received from the sale of the Notes. Net cash
(originations  less  repayments)  invested in finance and floor plan receivables
approximated  $1,052,000  during the quarter ended March 31, 1999 as compared to
$169,000  for the quarter  ended March 31,  1998 (an  increase of  approximately
$883,000  or 525%).  The  Company is  attempting  to limit its  exposure to risk
resulting  from  interest  rate spread by  investing  funds in interest  bearing
receivables as proceeds are received from the Notes since the cost of such Notes
is significantly higher than the yield on cash and cash equivalents.

In  addition,  during the quarter  ended March 31,  1999,  the Company  advanced
approximately  $46,000 to Parkwood.  This advance  resulted from an  arrangement
between  the  Company  and  Parkwood,  whereby  the  Company  has agreed to loan
Parkwood  up to  $350,000  to fund its cash  flow  needs.  Advances  under  this
arrangement  accrue interest at a fixed rate of 12.9%, are unsecured and have no
specified repayment terms for the principal and/or accrued interest.




                                    -10-




                                       10
<PAGE>

The  above  investment   outlays  for  the  quarter  ended  March  31,  1999  of
approximately  $929,000 were partially offset by proceeds received from sales of
repossessed mobile homes of approximately $82,000.

Cash  used by  operating  and  financing  activities  was  funded  by  financing
activities  which  generated  net cash  inflows of  approximately  $714,000  and
$538,000 for the respective quarters ended March 31, 1999 and 1998. Cash inflows
from financing  activities  resulted from net proceeds received from the sale of
Notes  (principal  amount less cash paid for deferred  debt  issuance  costs) of
approximately  $781,000 and $538,000 for the respective quarters ended March 31,
1999 and 1998. Through June 30, 1999 (the termination date of the offering), the
Company was offering subscriptions for a maximum of 9,900 Notes in the principal
amount of $1,000  each.  The Notes bear simple  interest at 10.5%  (interest  is
payable monthly) and are payable in full on June 30, 2002. As of March 31, 1999,
the Company had sold  $6,842,000 of Notes;  subsequently  through June 30, 1999,
additional  Notes  of  $2,976,000  were  sold.  Accordingly,  the  Company  sold
$9,818,000  of Notes or  approximately  99% of the Notes  offered to the public.
Because debt issuance costs  approximated 10% of the Notes sold, net proceeds to
the Company approximated  $8,800,0000 in total. The Notes are secured by a first
lien on the assets acquired with proceeds  generated from their sale, and may be
prepaid in whole or in part at any time.

The only other cash used by  financing  activities  resulted  from  advances  of
approximately  $67,000 to Anthony Sutter and/or his  affiliates.  These advances
are  unsecured,  bear  interest  at 12.9%  per annum and  contain  no  specified
repayment terms as to principal or interest.

The net impact of the above  operating,  investing and financing  activities was
that cash and cash equivalents  increased by  approximately  $217,000 during the
quarter ended March 31, 1998 and decreased by approximately  $764,000 during the
quarter ended March 31, 1999.

The Company  believes that it will be able to satisfy its cash  requirements for
the  foreseeable  future  if it does not  expand  its  business  by  originating
additional  finance  receivable   contracts  and/or  making  other  investments.
However,  in order for the  Company to  continue  to expand its dealer  base and
portfolio of finance  receivable  contracts,  and to ultimately pay the Notes in
full, the Company will have to generate  significant cash from operations and/or
secure additional  capital  resources (i.e. other debt or equity).  No assurance
can be given that the Company will generate  profitable results of operations or
that additional capital resources will be available,  or available on reasonable
terms. Also, if the Company is unable to originate finance receivable  contracts
in an  amount  and at a pace  that  approximates  the  amount  and the pace that
capital is raised  through the issue of the Notes,  the  interest  earned on the
capital  raised will not be  sufficient to cover the cost of the interest on the
Notes.

YEAR 2000 ISSUE

Many software applications and operational programs written in the past were not
designed to recognize  calendar dates beginning in the Year 2000. The failure of
such  applications  or systems to properly  recognize the dates beginning in the
Year 2000 could result in  miscalculations or system failures which could result
in an adverse effect on the Company's operations.

The Company does not  currently  utilize any critical  date  sensitive  systems.
Although many of the Company's transactions rely on date sensitive calculations,
such calculations are currently being performed either manually or using off the
shelf  spreadsheet  programs.  However,  the  Company is  currently  involved in
installing  a  new  PC  based  server  and  accounting  application,   which  is
represented to be Year 2000 compliant.

The Company has not incurred  any costs to date related to Year 2000  compliance
nor does it believe that its cost of conversion  will be significant  because of
the  installation  of new  systems  that are  represented  to be fully Year 2000
compliant. The Company believes the costs to transition its remaining systems to
Year 2000 compliance  will not have a material effect on its financial  position
or results of operations.

The Company has not deferred any information  technology projects to address the
Year 2000 issue. In addition to internal Year 2000 activities,  the Company will
communicate with others with which their systems interface or on which they rely
to determine the extent to which those companies are addressing  their Year 2000
compliance. There

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                                       11
<PAGE>


can be no assurance that there will not be an adverse effect on the Company,  if
third  parties,  such as utility  companies  or mobile  home  suppliers,  do not
convert their  systems in a timely  manner and in a way that is compatible  with
the Company's systems.  However,  management believes that ongoing communication
with, and assessment of, these third parties will minimize these risks. Although
the Company  anticipates  minimal business  disruption will occur as a result of
Year 2000 issues, possible consequences include, but are not limited to, loss of
electric power,  inability to process transactions or engage in similar business
activities.

To date,  the Company has not  established a contingency  plan for possible Year
2000 issues. Where needed, the Company will establish contingency plans based on
assessment of outside risks and actual testing experience with suppliers.  It is
not  anticipated  that a  contingency  plan will need to be  developed as manual
processes  mitigate outside risks. The cost of the conversion and the completion
dates are based on management's best estimates and may be updated, as additional
information becomes available.

CAUTIONARY STATEMENT

This Form 10-QSB, press releases and certain information  provided  periodically
in writing or orally by the Company's  officers or its agents contain statements
which constitute forward-looking statements within the meaning of Section 27A of
the Securities Act, as amended and Section 21E of the Securities Exchange Act of
1934. The words expect,  anticipate,  believe, goal, plan, intend,  estimate and
similar  expressions and variations thereof if used are intended to specifically
identify  forward-looking  statements.  Those  statements  appear in a number of
places in this  Form  10-QSB  and in other  places,  particularly,  Management's
Discussion and Analysis of Financial  Condition and Results of  Operations,  and
include statements  regarding the intent,  belief or current expectations of the
Company,  its directors or its officers with respect to, among other things: (i)
the Company's liquidity and capital resources;  (ii) its financing opportunities
and plans and (iii) its future performance and operating results.  Investors and
prospective investors are cautioned that any such forward-looking statements are
not guarantees of future  performance and involve risks and  uncertainties,  and
that  actual  results  may  differ   materially  from  those  projected  in  the
forward-looking  statements  as a result of various  factors.  The factors  that
might cause such differences  include,  among others: (i) any material inability
of  the  Company  to  successfully   identify,   consummate  and  integrate  the
acquisition of finance receivables at reasonable and anticipated costs, (ii) any
material  inability of the Company to successfully  develop its products;  (iii)
any adverse effect or limitations caused by governmental  regulations;  (iv) any
adverse  effect on the  Company's  continued  positive  cash flow and ability to
obtain  acceptable  financing  in  connection  with its  growth  plans;  (v) any
increased  competition  in  business;  (vi)  any  inability  of the  Company  to
successfully  conduct  its  business  in new  markets;  and  (vii)  other  risks
including  those  identified in the Company's  filings with the SEC. The Company
undertakes  no  obligation  to  publicly  update or revise the  forward  looking
statements made in this Form 10-QSB,  to reflect events or  circumstances  after
the date of this Form  10-QSB or to  reflect  the  occurrence  of  unanticipated
events.

                        PART  II. - OTHER INFORMATION

Item 1. Legal Proceedings

      NONE

Item 2. Changes in Securities

      NONE

Item 3. Defaults Upon Senior Securities

      NONE

Item 4. Submission of Matters to a Vote of Securities Holders

      NONE

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Item 5. Other Information

      NONE


Item 6. Exhibits and Reports on Form 8-K

      NONE


                                  SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.





----------------------------              --------------------------------
Date                                      Anthony A. Sutter, President and
                                          Chief Accounting Officer

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