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

                                  Form 10-KSB/A

[X] Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended September 30, 2001

[_] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the transition period from ___________ to ____________

Commission File Number: 1-11883

                                 EMB CORPORATION
                  --------------------------------------------
                 (Name of small business issuer in its charter)

            Hawaii                                        95-3811580
 ------------------------------              ----------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

         5075 Warner Avenue, Suite B, Huntington Beach, California 92649
         ---------------------------------------------------------------
                    (Address of principal executive offices)

Issuer's telephone number: (714) 377-2118

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

     Title of each class          Name of each exchange on which registered
     -------------------          -----------------------------------------
            N/A                                      N/A

Securities registered under Section 12(g) of the Exchange Act: Common Stock, no
par value

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

The issuer's revenues for its most recent fiscal year: $9,253,502

The aggregate market value of voting stock held by non-affiliates of the
registrant as of January 7, 2002: Common stock, no par value: $1,266,315

The number of shares of the registrant's common stock outstanding as of January
7, 2002: 20,897,569

Documents incorporated by reference: Not Applicable

     Transitional Small Business Disclosure Format: Yes [ ] No [X]

<PAGE>


                           FORWARD-LOOKING STATEMENTS

     This annual report contains forward-looking statements. In some cases, you
can identify forward-looking statements by terms such as "may," "will,"
"should," "could," "would," "expects," "plans," "anticipates," "believes,"
"estimates," "projects," "predicts," "potential" and similar expressions
intended to identify forward-looking statements. These statements reflect our
current views with respect to future events and are based on assumptions and
subject to risks and uncertainties. These risks, uncertainties and other factors
may cause our actual results, performances or achievements to be materially
different from those expressed or implied by our forward-looking statements. Our
forward-looking statements in this annual report include, but are not limited
to, statements relating to:

     o    our anticipated business strategy;

     o    the market opportunity for our systems, including anticipated growth
          of our industry and expected demand for our products;

     o    our plans for hiring additional personnel;

     o    our estimates regarding our future capital requirements and needs for
          additional financing; and

     o    any of our other plans, objectives, expectations and intentions
          contained in this prospectus that are not historical facts.

     You should read this annual report completely and with the understanding
that our actual future results may be materially different from what we expect.
We will not update these forward-looking statements, even though our situation
may change in the future. We qualify all of our forward-looking statements by
these cautionary statements.

     Our forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different. Such factors include, among others, the risk and other factors set
forth in the section "Risk Factors" as well as the following:

     o    changes in general economic and business conditions;

     o    changes in current pricing levels;

     o    reductions in sales to any of our significant customers or in customer
          capacity generally;

     o    our ability to hire and retain qualified personnel;

     o    changes in our sales mix to lower margin financial products;

     o    increased competition; and

     o    our ability to keep up with technological change and changes in
          customer demands.

     If one or more of these risks or uncertainties materialize, or if
underlying assumption prove incorrect, our actual results may vary materially
from those expected, estimated or projected. Because of these uncertainties, you
should not place undue reliance on forward-looking statements.

                                       2
<PAGE>


                                     PART II

Item 6. Management's Discussion and Analysis or Plan of Operation.
------------------------------------------------------------------

     Except for historical information, the materials contained in this
Management's Discussion and Analysis are forward-looking (within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934) and involve a number of risks and uncertainties. These
include the Company's historical losses, the need to manage its growth, general
economic downturns, the present turmoil relating to the September 11, 2001
attacks on the United States and our country's response thereto, intense
competition in the financial services and mortgage banking industries,
seasonality of quarterly results, and other risks detailed from time to time in
the Company's filings with the Securities and Exchange Commission. Although
forward-looking statements in this Annual Report reflect the good faith judgment
of management, such statements can only be based on facts and factors currently
known by the Company. Consequently, forward-looking statements are inherently
subject to risks and uncertainties, actual results and outcomes may differ
materially from the results and outcomes discussed in the forward-looking
statements. Readers are urged to carefully review and consider the various
disclosures made by the Company in this Annual Report, as an attempt to advise
interested parties of the risks and factors that may affect the Company's
business, financial condition, and results of operations and prospects.

Overview

     During the fiscal year ending September 30, 2001, the Company abandoned its
plans to enter the energy-related marketplace. Following a change of management
in July 2001, new management determined that it would be in the best interests
of the Company and its shareholders to return to the financial services sector.
In July 2001, it acquired Saddleback Investment Services, Inc., dba American
National Mortgage. In September 30, 2001, it acquired First Guaranty Financial
Corporation.

     At the time of its acquisition, American Naitonal was not actively doing
business. Nevertheless, it was deemed to be an attractive candidate for
acquisition because of the numerous state licenses and its approved lending
status with government lending institutions. Since its acquisition, American
National has recommenced doing business, expanded its retail staff and begun to
implement a plan for aggressive expansion in those states in which it is
presently licensed to do business. Much of the anticipated growth of the
operations of American National will be focused on lending to the burgeoning
Hispanic communities in California and other southwestern states.

     The Company's acquisition of First Guaranty Financial Corporation was
deemed appropriate because of First Guaranty's strong performance in the
wholesale mortgage banking sector of the mortgage industry. Prior to its
acquisition, First Guaranty had been experiencing a rapid expansion of its
business. Additionally, First Guaranty was deemed to be a good candidate for
acquisition because of its high profitability based upon mortgage fundings. In
short, it was, and continues to be, a well-run business operation. While First
Guaranty was acquired at the end of the Company's and First Guaranty's fiscal
years, First Guaranty has continued its aggressive growth strategies in the
ensuing months following the fiscal year that is the subject of this Annual
Report.

     Beginning in July 2001, the Company entered into several business
transactions that altered the composition of the Company. On July 23, 2001, the
Company acquired all of the outstanding capital stock of Saddleback Investment
Services, Inc., dba American National Mortgage. On July 26, 2001, the Company
disposed of its other two subsidiaries, EMB Mortgage Corporation and
Ameritelecon, Inc. Finally, on September 30, 2001, the Company acquired all of
the capital stock of First Guaranty Financial Corporation in exchange for 5
million shares of the Company's common stock. As a result of this exchange of
stock and the other transaction, the Company's acquisition of First Guaranty was
accounted for as a "Reverse Acquisition". Accordingly, for accounting purposes,
First Guaranty was treated as the continuing reporting entity and "Accounting
Acquirer" that acquired the Company.

                                       3
<PAGE>


Results of Operations

REVENUES

     Revenues increased by $5,435,127, or 142%, to $9,253,502 for the year ended
September 30, 2001, compared to $3,818,375 for the year ended September 30,
2000. The growth in revenues is primarily attributable to the expansion and
growth of First Guaranty's mortgage lending operations. First Guaranty, as did
most of the mortgage industry, benefited greatly from the decline in interest
rates over the last twelve months. Typically, as interest rates fall, the
refinance market heats up expanding the market of interested borrowers beyond
those borrowing for the purchase of their primary residence. First Guaranty
benefited from this market upturn, as they had the capacity in terms of people
and infrastructure to accommodate the additional business.

Costs and Expenses.

     Commissions are paid to loan agents on funded loans. Commissions increased
by $943,724 or 185%, for the year ended September 30, 2001, and to $1,451,840
from $508,116 for the year ended September 30, 2000. This increase is primarily
related to the increased revenues discussed above.

Salaries and Wages.

     Salaries and wages totaled $1,961,234 in fiscal 2001 compared to $935,304
in the year ended September 30, 2000, an increase of $1,025,930, or 109%. The
increase is directly related to the expansion of First Guaranty's operations.

General and Administrative Expenses.

     General and administrative expenses totaled $2,838,838 for the year ended
September 30, 2001, compared to $1,414,737 for the year ended September 30,
2000. This increase of $1,424,101, or 100%, can be primarily attributed to the
business growth of the operating subsidiaries, namely First Guaranty, as
additional personnel, office space, and other administrative costs are required
to handle the expansion. In addition, the Company incurred costs at the
corporate level related to professional services for items relating to the
reporting requirements associated with being a publicly-traded company and for
consulting fees paid with respect to computer and Internet technologies matters
and administrative matters.

Interest Expense.

Interest expense was $2,723,615 as of September 30, 2001, compared to $1,041,548
as of September 30, 2000. This increase is associated with the growth of First
Guaranty and is composed primarily of interest on the warehouse line of credit
of First Guaranty.

Net Profits.

The Company realized net profits (after provision for income tax) of $265,537 in
the fiscal year ended September 30, 2001 compared to a net loss of $16,055 for
the year ended September 30, 2000, or $0.02 and ($0.00) per share respectively.

                                       4
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES.

In the year ended September 30, 2001, operating activities provided net cash of
$500,862 as compared to September 30, 2001 when net cash of $264,989 was used in
operating activities. For the earlier period, the Company incurred a net loss
from operations while in the current period it realized an operating profit. Net
cash provided by investing activities was $97,032 for the year ended September
30, 2001. Net cash provided by investing activities was $167,580 for the year
ended September 30, 2000. The sole component of the cash provided by investing
activities for the period ended September 30, 2001 was cash received from the
acquisition of business. Net cash used by financing for the period ended
September 30, 2001 totaled $80,477 and consisted of principal paid on a note
payable. In the year ended September 30, 2000, net cash was provided by
financing in the amount of $61,229, which was composed of principal paid on a
note payable and cash contributed to equity.

     Our consolidated financial statements have been prepared assuming the
Company will continue as a going concern. Because the Company has incurred
significant losses from operations in the years prior to the acquisition of
First Guaranty and American National, it has an accumulated deficit of
$7,134,276 with total liabilities exceeding total assets by $5,292,375. As a
result it will require additional financing to meet its cash requirements. Our
auditors included an explanatory paragraph in their report raising substantial
doubt about its ability to continue as a going concern. Cash requirements depend
on several factors, including but not limited to, the pace at which all
subsidiaries continue to grow and generate positive cash flow, as well as the
ability to obtain additional services for common stock or other non-cash
consideration.

     If capital requirements vary materially from those currently planned, the
Company may require additional financing sooner than anticipated. At present,
there are no firm commitments for any additional financing, and there can be no
assurance that any such commitment can be obtained on favorable terms, if at
all. Management plans to continue its growth plans to generate revenues
sufficient to meet its cost structure. Management believes that these actions
will afford the Company the ability to fund its daily operations and service its
remaining debt obligations primarily through the cash generated by operations;
however, there are no assurance that management's plans will be successful. No
adjustments have been made to the carrying value of assets or liabilities as a
result of these uncertainties.

Item 7. Financial Statements.
-----------------------------

Information with respect to this Item is set forth in "Index to Financial
Statements".


                                       5
<PAGE>


                                    PART III

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

     (a)  Exhibits:

        Exhibit
        Number                          Description
        ------                          -----------

         3.1      Restated Articles of Incorporation of EMB Corporation are
                  incorporated by reference to Exhibit 3(i) to the Registrant's
                  registration statement on Form 10-SB (No. 1-11883), filed with
                  the Commission on June 28, 1996 (the "Form 10-SB").

         3.1.a    Certificate of Designation of Rights, Privileges, Preferences
                  and Restrictions of Series D Convertible Preferred Stock of
                  EMB Corporation, dated September 12, 2001, filed with the
                  State of Hawaii, Department of Commerce and Consumer Affairs
                  on September 18, 2001, which was filed with the Securities and
                  Exchange Commission on October 15, 2001, as Exhibit 3.1.a to
                  the Company's Current Report on Form 8-K, is hereby
                  incorporated by this reference.

         3.1.b    Certificate of Designation of Rights, Privileges, Preferences
                  and Restrictions of Series E Convertible Preferred Stock of
                  EMB Corporation, dated September 12, 2001, filed with the
                  State of Hawaii, Department of Commerce and Consumer Affairs
                  on September 18, 2001, which was filed with the Securities and
                  Exchange Commission on October 15, 2001, as Exhibit 3.1.b to
                  the Company's Current Report on Form 8-K, is hereby
                  incorporated by this reference.

         3.2      The Bylaws of the Registrant are incorporated by referenced to
                  Exhibit 3(ii) of Form 10-SB of the Registrant.

         10.10    Amended and Restated Purchase Agreement, dated September 21,
                  2001, by and between the Company, William R. Parker and
                  Saddleback Investment Services, Inc., which was filed with the
                  Securities and Exchange Commission on January 14, 2002, as
                  Exhibit 10.10 to the Company's Annual Report on Form 10-KSB,
                  is hereby incorporated by this reference.

         10.11    Secured Promissory Note of EMB Corporation dated July 24,
                  2001, which was filed with the Securities and Exchange
                  Commission on August 8, 2001, as Exhibit 10.11 to the
                  Company's Current Report on Form 8-K dated July 23, 2001, is
                  hereby incorporated by this reference.

         10.12    Amended and Restated Security Agreement, dated September 21,
                  2001, by and between EMB Corporation and William R. Parker,
                  which was filed with the Securities and Exchange Commission on
                  January 14, 2002, as Exhibit 10.12 to the Company's Annual
                  Report on Form 10-KSB, is hereby incorporated by this
                  reference.

         10.13    Amended and Restated Collateral Agent Agreement, dated
                  September 21, 2001, by and among EMB Corporation, William R.
                  Parker and the Collateral Agent, which was filed with the
                  Securities and Exchange Commission on January 14, 2002, as
                  Exhibit 10.13 to the Company's Annual Report on Form 10-KSB,
                  is hereby incorporated by this reference.

                                       6
<PAGE>


         10.14    Purchase Agreement, dated July 26, 2001, by and between EMB
                  Corporation and William V. Perry, which was filed with the
                  Securities and Exchange Commission on August 10, 2001, as
                  Exhibit 10.14 to the Company's Current Report on Form 8-K
                  dated July 26, 2001, is hereby incorporated by this reference.

         10.15    Purchase Agreement, dated July 26, 2001, by and between EMB
                  Corporation and David Berman, which was filed with the
                  Securities and Exchange Commission on August 10, 2001, as
                  Exhibit 10.15 to the Company's Current Report on Form 8-K
                  dated July 26, 2001, is hereby incorporated by this reference.

         10.16    Settlement Agreement, dated June 26, 2001, by and among, EMB
                  Corporation, e-Net Financial.Com Corporation (now known as
                  Anza Capital, Inc.), AMRES Holding LLC, Vincent Rinehart and
                  Williams de Broe, which was filed with the Securities and
                  Exchange Commission on September 11, 2001, as Exhibit 10.16 to
                  the Company's Quarterly Report on Form 10-QSB/A for the period
                  ended June 30, 2001, is hereby incorporated by this reference.

         10.16.a  Promissory Note dated June 27, 2001, executed by EMB
                  Corporation in favor of Williams de Broe, which was filed with
                  the Securities and Exchange Commission on September 11, 2001,
                  as Exhibit 10.16a to the Company's Quarterly Report on Form
                  10-QSB/A for the period ended June 30, 2001, is hereby
                  incorporated by this reference.

         10.16.b  Promissory Note dated June 27, 2001, executed by e-Net
                  Financial.com Corporation (now known as Anza Capital, Inc.) in
                  favor of EMB Corporation (later terminated), which was filed
                  with the Securities and Exchange Commission on September 11,
                  2001, as Exhibit 10.16b to the Company's Quarterly Report on
                  Form 10-QSB/A for the period ended June 30, 2001, is hereby
                  incorporated by this reference.

         10.16.c  Promissory Note dated June 27, 2001, executed by e-Net
                  Financial.com Corporation (now known as Anza Capital, Inc.) in
                  favor of EMB Corporation (later terminated), which was filed
                  with the Securities and Exchange Commission on September 11,
                  2001, as Exhibit 10.16c to the Company's Quarterly Report on
                  Form 10-QSB/A for the period ended June 30, 2001, is hereby
                  incorporated by this reference.

         10.16.d  Redeemable Convertible 10% Promissory Note dated June 28, 2001
                  executed by e-Net Financial.com Corporation (now known as Anza
                  Capital, Inc.) in favor of EMB Corporation, which was filed
                  with the Securities and Exchange Commission on September 11,
                  2001, as Exhibit 10.16d to the Company's Quarterly Report on
                  Form 10-QSB/A for the period ended June 30, 2001, is hereby
                  incorporated by this reference.

                                       7
<PAGE>


         10.17    Settlement Agreement, dated July 24, 2001, by and between the
                  Company and Ben Campbell, which was filed with the Securities
                  and Exchange Commission on September 11, 2001, as Exhibit
                  10.17 to the Company's Quarterly Report on Form 10-QSB/A for
                  the period ended June 30, 2001, is hereby incorporated by this
                  reference.

         10.18    Settlement Agreement, dated July 24, 2001, by and between the
                  Company and Kenneth Quist, which was filed with the Securities
                  and Exchange Commission on September 11, 2001, as Exhibit
                  10.18 to the Company's Quarterly Report on Form 10-QSB/A for
                  the period ended June 30, 2001, is hereby incorporated by this
                  reference.

         10.19    Agreement for Consulting Services, dated July 16, 2001, by and
                  between the Company and Belvidere Network Enterprises, which
                  was filed with the Securities and Exchange Commission on
                  September 11, 2001, as Exhibit 10.19 to the Company's
                  Quarterly Report on Form 10-QSB/A for the period ended June
                  30, 2001, is hereby incorporated by this reference.

         10.20    Agreement of Consulting Services, dated August 1, 2001, by and
                  between the Company and Castle Gate Group, Ltd., which was
                  filed with the Securities and Exchange Commission on September
                  11, 2001, as Exhibit 10.20 to the Company's Quarterly Report
                  on Form 10-QSB/A for the period ended June 30, 2001, is hereby
                  incorporated by this reference.

         10.21    Redeemable Convertible 10% Promissory Note dated April 10,
                  2001 executed by the Company in favor of James Saunders, which
                  was filed with the Securities and Exchange Commission on
                  September 11, 2001, as Exhibit 10.20 to the Company's
                  Quarterly Report on Form 10-QSB/A for the period ended June
                  30, 2001, is hereby incorporated by this reference.

         10.22    Purchase Agreement by and between EMB Corporation, FGFC
                  Holdings, Inc. and First Guaranty Financial Corporation dated
                  September 30, 2001, which was filed with the Securities and
                  Exchange Commission on October 15, 2001, as Exhibit 10.22 to
                  the Company's Current Report on Form 8-K dated September 30,
                  2001, is hereby incorporated by this reference.

         10.23    Secured Promissory Note of EMB Corporation dated September 30,
                  2001, which was filed with the Securities and Exchange
                  Commission on October 15, 2001, as Exhibit 10.23 to the
                  Company's Current Report on Form 8-K dated September 30, 2001,
                  is hereby incorporated by this reference.

         10.24    Security Agreement by and between EMB Corporation and FGFC
                  Holdings, Inc. dated September 30, 2001, which was filed with
                  the Securities and Exchange Commission on October 15, 2001, as
                  Exhibit 10.24 to the Company's Current Report on Form 8-K
                  dated September 30, 2001, is hereby incorporated by this
                  reference.

         10.24    Collateral Agreement by and among EMB Corporation, FGFC
                  Holdings, Inc. and the Collateral Agent, dated September 30,
                  2001, which was filed with the Securities and Exchange
                  Commission on October 15, 2001, as Exhibit 10.25 to the
                  Company's Current Report on Form 8-K dated September 30, 2001,
                  is hereby incorporated by this reference.

                                       8
<PAGE>


         21.1     Description of the subsidiaries of the Registrant, which was
                  filed with the Securities and Exchange Commission on January
                  14, 2002, as Exhibit 21.1 to the Company's Annual Report on
                  Form 10-KSB, is hereby incorporated by this reference.

         99.1     Articles of Incorporation of First Guaranty Financial
                  Corporation, dated June 10, 1988, filed with the California
                  Secretary of State on June 13, 1988, which was filed with the
                  Securities and Exchange Commission on October 15, 2001, as
                  Exhibit 99.1 to the Company's Current Report on Form 8-K dated
                  September 30, 2001, is hereby incorporated by this reference.

         99.2     Certificate of Amendment to Articles of Incorporation of First
                  Guaranty Financial Corporation, dated September 28, 2001,
                  filed with the California Secretary of State on October 10,
                  2001, which was filed with the Securities and Exchange
                  Commission on October 10, 2001, as Exhibit 99.2 to the
                  Company's Current Report on Form 8-K dated September 30, 2001,
                  is hereby incorporated by this reference.

         99.3     Certificate of Determination of Rights, Privileges,
                  Preferences and Restrictions of Series A Convertible Preferred
                  Stock of First Guaranty Financial Corporation, dated September
                  28, 2001, filed with the California Secretary of State on
                  October 10, 2001, which was filed with the Securities and
                  Exchange Commission on October 10, 2001, as Exhibit 99.3 to
                  the Company's Current Report on Form 8-K dated September 30,
                  2001, is hereby incorporated by this reference.

         99.4     Certificate of Amendment of Articles of Incorporation of
                  Saddleback Investment Services, Inc., dated September 14,
                  2001, filed with the California Secretary of State on
                  September 20, 2001, which was filed with the Securities and
                  Exchange Commission on January 14, 2002, as Exhibit 99.4 to
                  the Company's Annual Report on Form 10-KSB, is hereby
                  incorporated by this reference.

         99.5     Certificate of Determination of Rights, Privileges,
                  Preferences and Restrictions of Series A Convertible Preferred
                  Stock of Saddleback Investment Services, Inc., dated September
                  17, 2001, filed with the California Secretary of State on
                  September 21, 2001, which was filed with the Securities and
                  Exchange Commission on January 14, 2002, as Exhibit 99.5 to
                  the Company's Annual Report on Form 10-KSB, is hereby
                  incorporated by this reference.


     (b) Reports on Form 8-K.

          (1)  On August 8, 2001, the Company filed a Current Report on Form
               8-K, which disclosed (i) the Purchase Agreement, dated July 23,
               2001, and other related agreements, entered into by and between
               the Company and William R. Parker, whereby the Company agreed to
               purchase all of issued and outstanding capital stock of
               Saddleback Investment Services, Inc. and (ii) the election of
               William R. Parker as a Director of the Company.

                                       9
<PAGE>


          (2)  On August 10, 2001, the Company filed a Current Report on Form
               8-K, which disclosed (i) the Purchase Agreement, dated July 26,
               2001, entered into by and between the Company and William V.
               Perry, whereby the Company sold all of the issued and outstanding
               capital stock of EMB Mortgage Corporation and (ii) the Purchase
               Agreement, dated July 26, 2001, entered into by and between the
               Company and David Berman, whereby the Company sold all of the
               issued and outstanding capital stock of Ameritelecon, Inc.

          (3)  On August 30, 2001, the Company filed a Current Report on Form
               8-K, which disclosed the dismissal of its independent
               accountants, McKennon, Wilson & Morgan LLP, and the engagement of
               Kabani & Company, Inc., as independent accountants for the
               Company, both of which events occurred on August 28, 2001.

          (4)  On September 19, 2001, the Company filed an amended Current
               Report on Form 8-K/A, which included as an exhibit thereto the
               letter of McKennon, Wilson & Morgan LLP in compliance with Item
               304(a)(3) of Regulation S-K.

          (5)  On October 15, 2001, the Company filed a Current Report on Form
               8-K, which disclosed (i) the Purchase Agreement, dated September
               30, 2001, and other related agreements, entered into by and
               between the Company, FGFC Holdings, Inc., and First Guaranty
               Financial Corporation, whereby the Company agreed to purchase all
               of issued and outstanding capital stock of First Guaranty
               Financial Corporation and (ii) the intended election of Rodney K.
               Thompson as a Director of the Company.

          (6)  On December 26, 2001, the Company filed an amended Current Report
               on Form 8-K/A which included as exhibits thereto (i) an audited
               balance sheet and related statement of operations, stockholders
               equity and cash flows for First Guaranty Financial Corporation
               for the year ended September 30, 1999; (ii) audited balance sheet
               and related statement of operations, stockholders equity and cash
               flows for First Guaranty Financial Corporation for the year ended
               September 30, 2000 and unaudited balance sheet and related
               statement of operations, stockholders equity and cash flows for
               First Guaranty Financial Corporation for the year ended September
               30, 2001; and (iii) the Company's unaudited pro forma condensed
               consolidated balance sheet as of September 30, 2001 and unaudited
               pro forma condensed consolidated state of operations for the year
               ended September 30, 2001 to reflect the acquisition of First
               Guaranty Financial Corporation and Saddleback Investment
               Services, Inc.


                                       10
<PAGE>



                                   SIGNATURES

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

Registrant:                EMB Corporation


                           By: /s/ James E. Shipley
                           -----------------------------------
                           James E. Shipley, President

     In connection with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

Date:  February 19, 2002


/s/ James E. Shipley                           /s/ William R. Parker
--------------------------------------         ---------------------
James E. Shipley                               William R. Parker
Director, President, Acting Secretary,         Director
and Acting Principal Financial
and Chief Accounting Officer


/s/ Rodney K. Thompson
--------------------------------------
Rodney K. Thompson
Director


                                       11
<PAGE>


                   Index to Consolidated Financial Statements
                         EMB Corporation and Subsidaries

1.  Report of Kabani & Company, Inc.                                 F-1

2.  Consolidated Balance Sheet as of September 30, 2001              F-2

3.  Consolidated Statements of Operations for the years ended
    September 30, 2001 and 2000                                      F-3

4.  Consolidated Statements of Stockholder's Equity for years
    ended September 30, 2001 and 2000                                F-4

5.  Consolidated Statements of Cash Flows for the years ended
    September 30, 2001 and 2000                                      F-5

6.  Notes to the Consolidated Financial Statements                   F-6 to F-19

7.  Report of Briglio & Cheung                                       F-20


<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors
EMB Corporation

We have audited the accompanying consolidated balance sheet of EMB Corporation,
a Hawaii Corporation and subsidiaries (the "Company") as of September 30, 2001
and the related consolidated statements of operations, stockholders' deficit and
cash flows for the year then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit. We did
not audit the financial statements of Saddleback Investment Services, Inc. a
wholly owned subsidiary through September 30, 2001, which statements reflect
total stockholders' equity of 529,000 as on September 30, 2001. Those statements
were audited by other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for Saddleback Investment
Services, Inc. is based solely on the report of the other auditors.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of EMB Corporation and
subsidiaries as of September 30, 2001 and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.

The Company's consolidated financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. The Company has accumulated deficit of $$7,134,276 and excess of total
liabilities over total assets of $5,292,375 on September 30, 2001. These factors
as discussed in Note 3 to the financial statements, raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

As discussed in Notes 3, 8, 18, the Company restated the financial statements
referred to above.


/s/ KABANI & COMPANY, INC.
--------------------------
KABANI & COMPANY, INC.
CERTIFIED PUBLIC ACCOUNTANTS

Fountain Valley, California
December 12, 2001, except for Notes 3, 8 and 18,
as to which the date is February 15, 2002.


                                      F-1
<PAGE>
<TABLE>
<CAPTION>


                          EMB CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEET - RESTATED
                                 SEPTEMBER 30, 2001

                                       ASSETS
                                       ------
<S>                                                                     <C>
Current assets:
     Cash and cash equivalents                                          $    578,936
     Accounts receivable                                                     482,229
     Loans held for sale                                                  40,516,386
     Other current assets                                                     24,810
                                                                        ------------
                  Total current assets                                    41,602,361

Property and equipment, net                                                  130,120

Other assets:
     Restricted cash                                                         132,387
     Note receivable                                                         103,404
     Deposits and other assets                                               216,584
                                                                        ------------
                  Total other assets                                         452,375
                                                                        ------------
                                                                        $ 42,184,856
                                                                        ============

                        LIABILITIES AND STOCKHOLDERS' DEFICIT
                        -------------------------------------

Current liabilities:
     Accounts payable                                                        487,186
     Accrued expenses                                                      2,966,231
     Net liabilities of discontinued operations                            1,510,567
     Current portion of long term debt                                        66,418
     Notes payable - global settlement                                       448,109
     Notes payable related parties                                           830,112
     Convertible notes payable                                               500,000
     Warehouse credit line                                                40,516,386
                                                                        ------------
                  Total current liabilities                               47,325,009
                                                                        ------------
Long term debt:
     Note payable - long term                                                152,222

Stockholders' deficit:
     Common stock, no par value; 30,000,000 shares authorized,             1,841,901
           16,706,944 shares issued and outstanding
     Preferred convertible shares Series E , no par value; 3,000,000         235,000
           shares authorized; 2,500,000 shares issued and outstanding
     Treasury stock, preferred convertible shares                           (235,000)
     Accumulated deficit                                                  (7,134,276)
                                                                        ------------
                  Total stockholders' deficit                             (5,292,375)
                                                                        ------------
                                                                        $ 42,184,856
                                                                        ============


The accompanying notes are integral part of these consolidated financial statements.

                                        F-2
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000


                                                       2001            2000
                                                   ------------    ------------
REVENUES
       Fees and premiums                           $  7,035,083    $  3,346,320
       Interest income                                1,870,735         270,256
       Other income                                     347,684         201,799
                                                   ------------    ------------
                 Total Revenue                        9,253,502       3,818,375
                                                   ------------    ------------
OPERATING EXPENSES
       Salaries and wages                             1,961,234         935,304
       Interest and fees                              2,723,615       1,041,548
       Commissions                                    1,451,840         508,116
       Other general and administrative expenses      2,838,838       1,414,737
                                                   ------------    ------------
                 Total Operating Expenses             8,975,527       3,899,705
                                                   ------------    ------------
 INCOME (LOSS) FROM OPERATIONS                     $    277,975    $    (81,330)
                                                   ------------    ------------
OTHER INCOME (EXPENSE)
       Gain on sale of securities                          --            65,275
NET INCOME BEFORE INCOME TAX                            277,975         (16,055)
PROVISION FOR INCOME TAX                                 12,648            --
                                                   ------------    ------------
NET INCOME (LOSS)                                  $    265,327    $    (16,055)
                                                   ============    ============

BASIC WEIGHTED AVERAGE NUMBER OF
    COMMON STOCK OUTSTANDING                          8,490,952       5,000,000
                                                   ============    ============

BASIC NET INCOME (LOSS) PER SHARE                  $       0.03    $      0.000
                                                   ============    ============

DILUTED WEIGHTED AVERAGE NUMBER OF
    COMMON STOCK OUTSTANDING                         11,490,952       5,000,000
                                                   ============    ============

DILUTED AND DILUTED NET INCOME (LOSS) PER SHARE    $       0.02    $      0.000
                                                   ============    ============


               The accompanying notes are integral part of these
                       consolidated financial statements.

                                      F-3
<PAGE>

                                      EMB CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT) - RESTATED
                               FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000



                                             PREFERRED STOCK               COMMON STOCK
                                        -------------------------   -------------------------
                                          SHARES         AMOUNT        SHARES       AMOUNT
                                        -----------   -----------   -----------   -----------

Balance September 30, 1999                     --     $      --       5,000,000   $   170,997
Net loss for the year ended 9/30/99            --            --            --            --
Realized Gain                                  --            --            --            --
Contribution, Cash                             --            --            --            --
Reclassification to Note Payable               --            --            --            --
Contribution of Note Receivable                --            --            --            --
Contribution of Stock                          --            --            --            --
                                        -----------   -----------   -----------   -----------
Balance September 30. 2000                     --            --       5,000,000       170,997
Return of assets to a shareholder
 upon reprganization:
   Note Receivable                             --            --            --        (550,000)
   Investment in Genesisintermedia             --            --            --      (1,893,750)
Note Payables adjustment as a part
 of reo-ganization                             --            --            --         400,000
Restatement of common stock due to             --            --            --            --
   reorganization (See Note 17)           2,500,000       235,000    11,706,944     3,714,654
Net income for the year ended 9/30/00          --            --            --            --
                                        -----------   -----------   -----------   -----------
Balance September 30, 2001                2,500,000   $   235,000    16,706,944   $ 1,841,901
                                        ===========   ===========   ===========   ===========

Table continues below.

                                        ADDITIONAL                         TREASURY STOCK             Total
                                         PAID-IN-      ACCUMULATED    -------------------------   Stockholders'
                                          CAPITAL        DEFICIT        SHARES        AMOUNT     Equity (deficit)
                                        -----------    -----------    -----------   -----------  ---------------

Balance September 30, 1999              $ 2,280,179    $(1,558,454)          --            --      $   892,722
Net loss for the year ended 9/30/99            --          (16,055)          --            --          (16,055)
Realized Gain                                  --             --             --            --             --
Contribution, Cash                          111,000           --             --            --          111,000
Reclassification to Note Payable           (400,000)          --             --            --         (400,000)
Contribution of Note Receivable             550,000           --             --            --          550,000
Contribution of Stock                     1,034,915           --             --            --        1,034,915
                                        -----------    -----------    -----------   -----------    -----------
Balance September 30. 2000                3,576,094     (1,574,509)          --            --        2,172,582
Return of assets to a shareholder
 upon reprganization:
   Note Receivable                             --             --             --            --         (550,000)
   Investment in Genesisintermedia             --             --             --            --       (1,893,750)
Note Payables adjustment as a part
 of reo-ganization                             --             --             --            --          400,000
Restatement of common stock due to             --             --             --            --             --
   reorganization (See Note 17)          (3,576,094)    (5,825,094)     2,500,000      (235,000)    (5,686,534)
Net income for the year ended 9/30/00          --          265,327           --            --          265,327
                                        -----------    -----------    -----------   -----------    -----------
Balance September 30, 2001              $      --      $(7,134,276)     2,500,000   $  (235,000)    (5,292,375)
                                        ===========    ===========    ===========   ===========    ===========


            The accompanying notes are integral part of these consolidated financial statements.

                                                 F-4
<PAGE>


                                EMB CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                         FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000

                                                                        2001            2000
                                                                    ------------    ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
        Net income (loss)                                           $    265,327    $    (16,055)
        Adjustments to reconcile net income (loss) to net cash
        provided by (used in) operating activities:
            Depreciation                                                  99,288          90,080
            (Increase) Decrease in accounts receivable                  (187,593)        169,708
            (Increase) Decrease in loans held for sale               (21,236,400)     (2,641,759)
            (Increase) Decrease in restricted assets                     (21,970)           --
            Increase in accounts payable                                 251,522        (363,135)
            Increase in income taxes payable                              12,648            --
            Increase in other payables                                    81,640        (145,587)
            Increase in warehouse credit line                         21,236,400       2,641,759
                                                                    ------------    ------------
        Net cash flows provided by (used in) operating activities        500,862        (264,989)
                                                                    ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
            Decrease in Securities investment                               --           151,701
            Cash received from acquisition of business                    97,032            --
            Purchase of property and equipment                              --           (20,983)
            Decrease in other investments                                   --            36,862
                                                                    ------------    ------------
        Net cash provided by investing activities                         97,032         167,580
                                                                    ------------    ------------
CASH FLOW FROM FINANCING ACTIVITIES
            Cash contributed to equity                                      --           111,000
            Principal paid on note payable                               (80,477)        (49,771)
                                                                    ------------    ------------
        Net cash provided by (used in) financing activities              (80,477)         61,229
                                                                    ------------    ------------
NET INCREASE(DECREASE) IN CASH & CASH EQUIVALENTS                        517,417         (36,180)
CASH & CASH EQUIVALENTS, BEGINNING BALANCE                                61,519          97,699
                                                                    ------------    ------------
CASH & CASH EQUIVALENTS, ENDING BALANCE                             $    578,936    $     61,519
                                                                    ============    ============

Interest Paid                                                       $  2,729,615    $  1,041,548
                                                                    ============    ============
Income Taxes Paid                                                   $       --      $       --
                                                                    ============    ============
Non-Cash Items:
     Note receivable, acquired                                      $       --      $    550,000
                                                                    ============    ============
     Contribution of stock, addition                                $       --      $  1,034,915
                                                                    ============    ============
     Issuance of preferred stock, as treasury stock                 $    235,000    $       --
                                                                    ============    ============
     Return of note receivable to a shareholder on acquisition      $   (550,000)   $       --
                                                                    ============    ============
     Return of investment to a shareholder on acquisition           $ (1,893,750)   $       --
                                                                    ============    ============
     Adjustment of note payable on acquisition                      $    400,000    $       --
                                                                    ============    ============


      The accompanying notes are integral part of these consolidated financial statements.

                                            F-5
</TABLE>
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Organization and Nature of Operation

EMB Corporation (formerly called Pacific International, Inc.) (EMB) was
incorporated under the laws of the State of Hawaii on May 5, 1960. Effective
December 16, 1995, EMB acquired the net assets of Sterling Alliance Group, Ltd.
("SAG") which included 100% ownership in Electronic Mortgage Banc, Ltd. ("EMB
Mortgage") and certain land held for sale in Monterey County, California. EMB
was inactive at the time of the acquisition. For financial statement purposes,
the transaction was recorded as a recapitalization of SAG.

In fiscal 1998, EMB expanded its mortgage banking operations through its
acquisitions of Investment Consultants, Inc. ("ICI") and Preferred Holding
Group, Inc. ("PHG"). In fiscal 1999, EMB ceased its mortgage banking operations
of EMB Mortgage and divested itself of the assets of ICI and PHG due to an
economic downturn in the mortgage banking industry. In May 1999, EMB began
slowly to recommence its mortgage banking operations through acquisitions of
American Residential Funding ("AMRES") and Residential Mortgage Corporation
("RMC").

On January 12, 2000, EMB's Board of Directors adopted a plan to discontinue the
operations of its mortgage banking activities. On February 22, 2000, EMB sold
its interest in RMC to another mortgage banking entity, through the cancellation
of 40,000 shares of EMB's common stock. A loss of $569,000 resulted from the
exchange. On April 12, 2000, EMB consummated an Amended and Restated Purchase
Agreement with e-Net Financial.com Corporation ("e-Net") to sell all of the
outstanding stock currently held by EMB of AMRES for $11.5 million in cash and
stock. EMB recorded a gain of $9.04 million in connection with the sale.

On February 14, 2000, the EMB acquired Titus Real Estate Corp. ("Titus Real
Estate") for $110,500 as an entry into oil and gas operations. In September
2000, the parties rescinded the transaction.

On June 24, 2000, EMB entered into an asset purchase agreement with Cyrus Ltd.
("Cyrus") to acquire rights to operate two natural gas processing plants in
Texas, through a newly formed subsidiary, Global Energy Reserves, Inc. In
connection with this agreement, EMB issued 2,500,000 shares of common stock. Due
to unforeseen circumstances, the parties were unable to close the transaction,
and the 2,500,000 shares were returned to EMB.

Pursuant to a Purchase Agreement dated July 23, 2001, EMB acquired all of the
issued and outstanding shares of Saddleback Investment Services, Inc., a
California corporation ("SB") from William R. Parker ("Mr. Parker"), its sole
shareholder. SB was incorporated on November 9, 1992 under the laws of the State
of California. SB operates under a DBA American National Mortgage. SB assists
third parties in obtaining long term trust deed (mortgage) financing. SB is
subject to the laws and regulations issued by HUD and other regulatory agencies.
Saddleback, presently doing business as American National Mortgage ("American
National") is a mortgage broker and banking entity with its principal office
located in Santa Ana, California. American National was formed in November 1992
(see note 17).

Pursuant to a Purchase Agreement dated September 30, 2001, EMB acquired all of
the issued and outstanding shares of First Guaranty Financial Corporation, a
California corporation ("FG") from FGFC Holdings, Inc., a California corporation
("FGFC Holdings"), its sole shareholder. FG was organized June 13, 1988. First
Guaranty is a mortgage banking entity with its principal office located in Santa
Ana, California. First Guaranty was formed in June 1988 and operated solely as a
wholesale mortgage banker until June 1998. At that time, the management of First
Guaranty determined that it should expand its operations to include retail

                                      F-6
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


operations, as well. First Guaranty's current operations include loans generated
as retail mortgage business with the loans being originated by in-house loan
officers, and also loans generated through wholesale lending operations with the
loans being originated by independent mortgage brokers and submitted to First
Guaranty for funding. FG is subject to the laws and regulations issued by HUD
and other regulatory agencies. For accounting purposes, the transaction would be
treated as a recapitalization of FG with the FG as the accounting acquirer
(reverse acquisition), and would be accounted for in a manner similar to a
pooling of interests (see note 17).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of EMB
and its 100% wholly owned subsidiaries, FG and SB (collectively the "Company").
All significant inter-company accounts and transactions have been eliminated in
consolidation. The acquisition of FG (on September 30, 2001) has been accounted
for as a purchase and treated as a reverse acquisition since the former owners
of FG became the largest and controlling shareholder of EMB immediately
following the acquisition. The balance sheet includes balance sheets of EMB, FG
and SB while the statements of operation, shareholders equity and cashflows
include only FG's statements since the reverse acquisition took place on the
last day of the year.

Change in reporting entity

The accompanying financial statements in the accounts of FG for the periods
presented as a result of the reverse acquisition of EMB on September 30, 2001.
The operations of EMB and SB are included in operations from the dates of
acquisition. The consolidated entity is refereed to herein as EMB Corporation
and subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents

The Company considers all liquid investments with a maturity of three months or
less from the date of purchase that are readily convertible into cash to be cash
equivalents. Balances in bank accounts may, from time to time, exceed federally
insured limits.

Use of estimates

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

Income taxes

Deferred income tax assets and liabilities are computed annually for differences
between the financial statements and tax basis of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted laws
and rates applicable to the periods in which the differences are expected to
affect taxable income (loss). Valuation allowance is established when necessary
to reduce deferred tax assets to the amount expected to be realized.

                                      F-7
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Basic and diluted net loss per share

Net loss per share is calculated in accordance with the Statement of financial
accounting standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128
superseded Accounting Principles Board Opinion No.15 (APB 15). Net loss per
share for all periods presented has been restated to reflect the adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of common shares outstanding. Diluted net loss per share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised. Dilution is computed by applying the treasury stock method. Under
this method, options and warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period.

Stock-based compensation

The Company has adopted the disclosure provisions only of SFAS 123 and continues
to account for stock based compensation using the intrinsic value method
prescribed in accordance with the provisions of APB No. 25, Accounting for Stock
Issued to Employees, and related interpretations. Common stock issued to
employees for compensation is accounted for based on the market price of the
underlying stock, generally the average low bid price.

The Company accounts for stock-based compensation issued to non-employees and
consultants in accordance with the provisions of SFAS 123 and the Emerging
Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for
Equity Instruments that are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services". Common stock issued to
non-employees in exchange for services is accounted for based on the fair value
of the services received.

Fair value of financial instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial instruments, requires that the Company disclose estimated fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.

Comprehensive income

Statement of financial accounting standards No. 130, Reporting comprehensive
income (SFAS No. 130), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity, except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in
financial statements that are displayed with the same prominence as other
financial statements. The Company adopted this standard in 1998 and the
implementation of this standard did not have a material impact on its financial
statements.

Reporting segments

Statement of financial accounting standards No. 131, Disclosures about segments
of an enterprise and related information (SFAS No. 131), which superceded
statement of financial accounting standards No. 14, Financial reporting for
segments of a business enterprise, establishes standards for the way that public
enterprises report information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial statements regarding products and services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performances. The Company
adopted this standard in 1998 and the implementation of this standard did not
have a material impact on its financial statements.

                                      F-8
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Revenue

The Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin
(SAB) 101, "Revenue Recognition in Financial Statements," in December 1999. The
SAB summarizes certain of the SEC staff's views in applying generally accepted
accounting principles ("GAAP") to revenue recognition in financial statements.
The management of the Company believes its revenue recognition policies are in
accordance with the relevant accounting pronouncements. In that regard,
commissions generated from brokering loans are recognized at the date of close.
Notary services related revenue is recognized when the services are performed.
Loan origination fees are deferred. Upon the sale of loans to third parties
without recourse, such deferred fees are recorded as income.

Advertising

The Company expenses advertising costs as incurred.

Accounts Receivable

No allowance for un-collectible accounts has been provided. Management has
evaluated the accounts and believes they are all collectible.

Loans held for sale

Loans held for sale are recorded at the lower of cost or market. Loan
origination fee and related direct cost to originate the loans for loans held
for sale are capitalized as part of the carrying amount of loans held for sale.

Regulatory capital requirement and restricted cash

As an approved HUD non-supervised lender, the Company is subject to adjusted
capital requirements of $1,000,000 and minimum liquidity requirements of
$100,000. The cash reserved of such requirements is restricted.

Property & equipment

Property & equipment is depreciated, using the straight-line method, over
estimated useful lives of five to seven years. Depreciation expense for the
fiscal year ended September 30, 2001 was $99,288 compared to $90,080 for the
fiscal year ended September 30, 2000. Property and equipment consist of
following at September 30, 2001:

                     Furniture & fixture        $  72,211
                     Computer & software          274,749
                     Office equipment              56,053
                     Accumulated depreciation    (272,893)
                                                ---------
                                                $ 130,120
                                                =========


                                      F-9
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Contingent rights

The Company has entered into certain loan repurchase agreements with the lenders
to which they sell mortgage loans. If the borrowers of these loans fail to make
payments or irregularities are noted, the Company may be required to repurchase
these loans.

Market Risk

The Company is involved in the real estate loan market. The fluctuations of the
interest rates or other market condition within the real estate loan market may
have a significant effect on the volume and the profitability of business of the
Company.

Reclassifications

Certain items in the prior year financial statements have been reclassified for
comparative purposes to conform with the presentation in the current period's
presentation. These reclassifications have no effect on the previously reported
income (loss). Recent Pronouncements:

On July 20, 2001, the FASB issued SFAS No. 141, "Business Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets." These statements make
significant changes to the accounting for business combinations, goodwill, and
intangible assets.

SFAS No. 141 establishes new standards for accounting and reporting requirements
for business combinations and will require that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001.
Use of the pooling-of-interests method will be prohibited. This statement is
effective for business combinations completed after June 30, 2001.

SFAS No. 142 establishes new standards for goodwill acquired in a business
combination and eliminates amortization of goodwill and instead sets forth
methods to periodically evaluate goodwill for impairment. Intangible assets with
a determinable useful life will continue to be amortized over that period. This
statement becomes effective January 1, 2002.

Management is in the process of evaluating the requirements of SFAS No. 141 and
142, but does not expect these pronouncements will materially impact the
Company's financial position or results of operations.

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset
Retirement Obligations". SFAS 143 addresses financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. This Statement is effective for financial
statements issued for fiscal years beginning after June 15, 2002. The impact of
the adoption of SFAS 143 on the Company's reported operating results, financial
position and existing financial statement disclosure is not expected to be
material.

In August 2001, Statement of Financial Accounting Standards No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), was issued.
This statement addresses financial accounting and reporting for the impairment
or disposal of long-lived assets and broadens the definition of what constitutes
a discontinued operation and how the results of a discontinued operation are to
be measured and presented. The provisions of SFAS 144 are effective for
financial statements issued for fiscal years beginning after December 15, 2001.
The impact of the adoption of SFAS 144 on the Company's reported operating
results, financial position and existing financial statement disclosure is not
expected to be material.

                                      F-10
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


In January 2001, the Financial Accounting Standards Board Emerging Issues Task
Force issued EITF 00-27 effective for convertible debt instruments issued after
November 16, 2000. This pronouncement requires the use of the intrinsic value
method for recognition of the detachable and imbedded equity features included
with indebtedness, and requires amortization of the amount associated with the
convertibility feature over the life of the debt instrument rather than the
period for which the instrument first becomes convertible. Management is in the
process of evaluating the requirements of EITF 00-27, but does not expect this
pronouncement will materially impact the Company's financial position or results
of operations.

3. GOING CONCERN UNCERTAINTY

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
company as a going concern. However, the Company has an accumulated deficit of
$7,134,276, per the restated financial statements (note 18). The Company's total
liabilities exceed its total assets by $5,292,375. The Company faces continuing
significant business risks, including, but not limited to, its ability to
maintain vendor relationships by making timely payments when due.

In view of the matters described in the preceding paragraph, recoverability of a
major portion of the recorded asset amounts shown in the accompanying balance
sheet is dependent upon continued operations of the Company, which in turn is
dependent upon the Company's ability to raise additional capital, obtain
financing and succeed in its future operations, The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.

Management has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. The Company is actively pursuing
additional funding and potential merger or acquisition candidates and strategic
partners which would enhance stockholders' investment. In that regard, the
Company had a reverse acquisition with FG on September 30, 2001. Management
believes that the above actions will allow the Company to continue operations
through the next fiscal year.

4. LOANS HELD FOR SALE

The Company held conventional uninsured mortgages totaling $40,516,386 as of
September 30, 2001. These loans were originated by FG and SB with various
interest rates ranging from 7-13%, per annum. The warehouse line of credit (note
9) is collateralized by the Company's loans held for sale.

5. GLOBAL SETTLEMENT, NOTE RECEIVABLE AND NOTE PAYABLE

On June 26, 2001, EMB entered into a Settlement Agreement with e-Net
Financial.Com Corporation ("e-Net"), AMRES Holding LLC ("AMRES Holding"),
Vincent Rinehart ("Rinehart") (AMRES Holding and Rinehart being collectively,
the "Rinehart Parties"), and Williams de Broe ("WdB"). This Settlement Agreement
represented a "global" settlement by the parties involved with respect to
various claims or obligations asserted by one or more parties against one or
more parties. The resolutions of this agreement include the following: (a) e-Net
issued 1.5 million shares of its restricted common stock to EMB; (b) e-Net
issued 3.0 million shares of its common stock to WdB in exchange for
cancellation of its purported guarantee of an obligation of EMB due WdB in the

                                      F-11
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


amount of $657,349; (c) EMB credited e-Net with the sum of $424,766 against the
e-Net obligation due EMB; (d) EMB assigned to AMRES Holding (subject to
allocation among themselves by the Rinehart Parties) $484,446 of the e-Net
obligation due EMB, with EMB retaining $303,404 of the e-Net obligation due EMB;
(e) EMB issued to WdB a new promissory note in the principal amount of $348,109,
interest at 10% and at 12% if not paid by due date, payable by March 31, 2002;
(f) EMB issued 147,000 shares of its restricted common stock to WdB; and (g) EMB
credited e-Net with the sum of $200,000 on the remaining obligation of e-Net due
the Company, with the promissory note of such obligation being canceled and a
new convertible promissory note in the amount of $103,404 being issued by e-Net
to EMB. The note bears an interest rate of 10% per annum. The note has a
mandatory conversion into e-Net's common stock on December 15, 2001.

6. EQUITY INVESTMENT

In connection with the sale of its subsidiary to e-Net Financial.com Corporation
("e-Net") in April 2000, EMB received 7,500,000 shares of e-Net's common stock.
The investment is accounted under the equity method. On June 26, 2001, EMB
received an additional 1,500,000 of e-Net's common stock in connection with the
Global agreement (note 5). At September 30, 2001, the Company controlled
approximately 21% of the issued and outstanding common stock of e-Net. Since
e-Net's financial statements as of October 31, 2001 reflect stockholders'
deficit of $156,539, this investment is recorded at zero value as required by
the equity method of accounting.

7. ACCRUED EXPENSES

Accrued expenses as of September 30, 2001 consist of the following:

                Litigation reserve                    $1,847,095
                Professional fees                        136,116
                Officers and directors compensation      270,000
                Payroll taxes                            300,000
                Interest payable                          91,150
                Other                                    321,870
                                                      ----------
                                                      $2,966,231
                                                      ==========


8. NET LIABILITIES OF DISCONTINUED OPERATIONS

During the years ended September 30, 2001 and 2000, EMB disposed several of its
subsidiaries by selling its interest in those subsidiaries (note 1). The net
liabilities of discontinued operations per the restated financial statements
(note 18) are summarized as follows as of September 30, 2001:

       Current liabilities, excluding payroll liabilities   $  (122,990)
       Payroll liabilities                                     (341,122)
       Notes payable                                         (1,046,455)
                                                            -----------
       Net liabilities of discontinued operations           $(1,510,567)
                                                            ===========


On July 26, 2001, the Company and William V. Perry closed the transaction
whereby the Company sold to Mr. Perry all of the capital stock of EMB Mortgage
Corporation for a nominal consideration of $10. Prior to this transaction, EMB
Mortgage Corporation had been a wholly-owned subsidiary of the Company, with Mr.
Perry serving as its President. Prior to June 21, 2000, Mr. Perry had also been
a Director of the Company.

                                      F-12
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


On July 26, 2001, the Company and David Berman closed the transaction whereby
the Company sold to Mr. Berman all of the capital stock of Ameritelecon, Inc.
for a nominal consideration of $10. Prior to this transaction, Ameritelecon,
Inc. had been a wholly owned subsidiary of the Company, with Mr. Berman serving
as its President.

9. WAREHOUSE LINE OF CREDIT

FG has entered into a revolving mortgage purchase facilities totaling
$50,000,000. This arrangement is used to fund one-to-four family residential
first mortgages originated by FG. Prior to funding, FG is required to have
written investor commitments. These one-to-four family mortgages also serve as
the collateral for the line of credit. Daily interest is charged for each loan
outstanding at a rate determined by the agreement and varies from time-to-time.
As of September 30, 2001, the outstanding balance was $40,516,386.

SB has a $2,000,000 line of credit. The line bears interest at the prime-lending
rate. The line may only be used to fund pre-sold and pre-approved secured real
estate loans. The loans are collateral for the warehouse lines. When the loans
are purchased by an investor, the warehouse bank is repaid immediately. The
loans on warehouse line must be paid off within 60 days of funding.

10. NOTES PAYABLE

The Company has notes payable of $60,000 and 158,640 outstanding on September
30, 2001. The notes are secured by the properties of SB and FG respectively,
bear interest rate of 10.5% per annum and are due by September 2004. The current
portion of the notes amounts to $66,418. The long-term portion is due by
September 2004 with yearly installments of $66,418.

11. NOTES PAYABLE - RELATED PARTIES

Notes payable consist of amounts payable to shareholders. $230,112 is due to the
president of the Company. The note is due on April 1, 2002 and bears an interest
rate of 7% and 12% if unpaid after due date. The Company has a note payable of
$500,000 to former shareholder of FG. The note bears the interest rate of 10%
per annum and is due by September 30, 2003. The Company has a note payable of
$100,000 to former shareholder of SB. The note bears the interest rate of 6% per
annum and is due by March 1, 2003. The notes payable to former shareholders of
FG and SB are secured by share capital of respective entities. Interest expense
for the related party obligation for the period ended September 30, 2001 was $
56,443.

12. CONVERTIBLE NOTES PAYABLE

On or about April 10, 2001, the Company issued a 10% convertible note amounting
$500,000. The conversion price for the note is the volume-weighted trading
average Closing Bid Price during the ten (10) consecutive Trading Days
immediately preceding the Conversion Date. Interest is payable at maturity, or
upon conversion of the note, at 10% per annum. During fiscal year 2000, the
Company accrued interest of $24,312 on the note.

                                      F-13
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


13. SHAREHOLDERS EQUITY

Common stock:

The Company is authorized to issue 35,000,000 shares of capital stock;
30,000,000 shares are no par value common stock and 5,000,000 shares are
preferred stock. The preferred stock may be divided into and issued in one or
more series.

From time to time, the board of directors approves the issuance of common stock
for services and assets. The Company follows a policy of using the closing bid
price or the average closing bid prices near the transaction closing date, less
a discount of approximately 15% for transferability restrictions, to estimate
the fair value of the services or assets received. In rare cases, the Company
uses the value of the assets received.

During the year ended September 30, 2001, the Company issued 5,000,000 shares to
an entity owned by the President of the company in exchange of settlement of
debt owed by the EMB amounting $600,000. The exchange of shares was valued at
prevailing market rate of the shares of the Company.

Preferred stock:

All shares of Common Stock shall be of junior rank to all Preferred Shares in
respect to the preferences as to distributions and payments upon the
liquidation, dissolution and winding up of the Company. Preferred stock is
convertible into common stock of no par value at a conversion rate of 100%.
Mandatory Conversion: At any time or times on or after the Issuance Date, any
Holder of Preferred Shares shall be entitled to convert any whole number of
Preferred Shares into fully paid and non-assessable shares of Common Stock. If
any Preferred Shares remain outstanding on the Mandatory Conversion Date, such
Preferred Shares shall be converted at the Conversion Rate as of such date.
Preferred Stock have dividend rights subject to a declaration thereof by the
Company's Board of Directors, whereby each holder (a "Holder" and, collectively,
the "Holders") of the Preferred Shares shall be entitled to a dividend
(individually, a "Dividend"; collectively, the "Dividends") at a rate determined
by the Company's Board of Directors on a pari-passu basis with the holders of
Common Shares and other classes of preferred shares of the Company, except for
those holders of any class of preferred shares which have a preference with
respect to the right to receive dividends. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the Holders
of the Preferred Shares shall be entitled to receive in cash out of the assets
of the Company, whether from capital or from earnings available for distribution
to its stockholders (the "Liquidation Funds"), before any amount shall be paid
to the holders of any of the capital stock of the Company of any class junior in
rank to the Preferred Shares in respect of the preferences as to the
distributions and payments on the liquidation, dissolution and winding up of the
Company, an amount per Preferred Share equal to $1.00 and any accrued but unpaid
Dividends (such sum being referred to as the "Liquidation Preference"); provided
that, if the Liquidation Funds are insufficient to pay the full amount due to
the Holders of Preferred Shares, each Holder of Preferred Shares shall receive a
percentage of the Liquidation Funds equal to the full amount of Liquidation
Funds payable to such Holder as a liquidation preference. Until all of the
Preferred Shares have been converted as provided herein, the Company shall not,
directly or indirectly, redeem, or declare or pay any cash dividend or
distribution on, its Common Stock without the prior express written consent of
the Holders of not less than three-fifths (3/5) of the then outstanding
Preferred Shares. Holders of Preferred Shares shall have no voting rights,
except as required by law, including but not limited to, the Hawaii Business
Corporation Act, and as expressly provided in this Certificate of Designation.

The Company issued 5,500,000 shares of common stock and 2,500,000 shares of
series E preferred stock for the acquisition of FG and SB (see note 17).

                                      F-14
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


14. INCOME TAXES

At September 30, 2000, EMB has net deferred tax assets of approximately
$14,500,000 comprised primarily of its net operating loss carryforward. Based on
the Company's assessment of future realizability of deferred tax assets, a
valuation allowance has been provided, as it is more likely than not that
sufficient taxable income will not be generated to realize certain temporary
differences.

EMB's provision for income taxes differs from the benefit that would have been
recorded, assuming the federal rate of 34%, due to the valuation allowance for
net deferred tax assets.

FG's provision of taxes is consist of the following:

                             Federal      $ 93,211
                             State          26,058
                                          --------
                                           119,269
                             Tax credit    106,621
                                          --------
                                          $ 12,648
                                          ========

FG had a net operating loss carryover from prior years, of $1,211,573 and a
capital loss carryover of $86,426 which could be applied against future capital
gains. FG elected to forgo any loss carry-back and will apply the losses to
future years. FG's total deferred tax asset at September 30, 2001 is as follows:

                   Tax benefit of net operating
                          loss carry forward      $ 420,000
                   Valuation allowance             (420,000)
                                                  ---------
                                                  $    --
                                                  =========

The valuation allowance decreased to $420,000 from $527,000 during the year
ended September 30, 2001. It is reasonably possible that the FG's estimate of
the valuation allowance will change. Differences between financial statement and
tax losses in both the years consisted primarily of depreciation and was not
very significant. The net operating loss carry forward may be used to reduce
taxable income through the year 2015. Net operating loss for carry forwards for
the State of California are generally available to reduce taxable income through
the year 2005. The availability of the FG's net operating loss carry forwards
are subject to limitation if there is a 50% or more positive change in the
ownership of the FG's stock.

15. COMMITMENT

The Company has leased a facility in Santa Ana, California through July 25,
2005. The monthly rental ranges from $12,000 to $13,000 per month. The Company
has sub-leased a portion of the facility through July 25, 2002 at $7,337 per
month. Following is the net-commitment schedule for the year ended September 30:

                        2002                     $  55,200
                        2003                       111,041
                        2004                       184,411
                        2005                       153,676
                                                 ---------
                        Total                    $ 504,328
                                                 =========

The Company has a consulting agreement with a consulting Company to receive
consulting services in computer and Internet technologies matter. The term of
the agreement is through July 31, 2002. Under the agreement the Company will
issue 640,000 share of its common stock to the consulting Company valued at
$54,000. Through September 30, 2001, the Company has issued 460,000 shares to
the consulting company.

                                      F-15
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


The Company has a consulting agreement with a consulting Company to receive
consulting services in strategic planning and identification of possible
acquisition candidate. The term of the agreement is through July 15, 2004. Under
the agreement the Company will issue share of its common stock to the consulting
Company valued at $1,000,000. Through September 30, 2001, the Company has issued
600,000 shares to the consulting company valued at $130,000 under the agreement.

The Company has a consulting agreement with a consulting Company to receive
consulting services in assembling and managing the operations of various
mortgage-lending entities. The term of the agreement is through July 15, 2004.
Under the agreement the Company will issue share of its common stock to the
consulting Company valued at $1,500,000. Through September 30, 2001, the Company
has issued 800,000 shares to the consulting company valued at $225,000 under the
agreement.

During the year ended September 30, 2001, the Company entered into various other
consulting agreements and issued a total of 900,000 shares of restricted common
stock to various consultants valued at $75,000.

16. LITIGATION

On or about November 17, 1998, the Company entered into a Stipulated Judgment in
the matter of Yamaichi International (America) Inc., vs. EMB Corporation, USDC,
Southern District of New York, Case No. 98-7152 (DLC). The lawsuit arose out of
the obligation of the Company to pay rent for its branch corporate office in New
York City. The total amount of the judgment was $186,000. As of June 30, 2001,
the Company has paid approximately $7,100 toward the judgment. The outstanding
balance of the judgment has been accrued and reflected in the consolidated
financial statements.

The Company and Joseph K. Brick are currently engaged in litigation, Joseph K.
Brick vs. EMB Corporation, Circuit Court, Seventh Judicial District, Volusia
County, Florida, Case no. 99-30669 CICI, which was filed on or about March 23,
1999. The Company filed an appeal of a lower court ruling entering a default
judgment against the Company and in favor of Mr. Brick. In February 2001, this
appeal was denied. Subsequent thereto, a judgment was entered by the Court in
Volusia County, Florida, in favor of Mr. Brick in the amount of $1,303,440.22.
As of June 27, 2001, Mr. Brick obtained entry of a sister-state judgment against
the Company in the State of California.

The Company has also initiated a lawsuit against Mr. Brick, his wife, Florence
M. Brick, and their company, FMB Mortgage Corporation, in a matter entitled EMB
Corporation and EMB Mortgage Corporation vs. Joseph K. Brick, Florence M. Brick,
FMB Mortgage Corporation and Does 1 through 10, Superior Court of the State of
California, County of Orange, Case No.00CC08083, filed August 7, 2000. In this
litigation, the Company and its former subsidiary, EMB Mortgage Corporation,
alleged that Mr. Brick breached the Separation, Asset Purchase Agreement and
Release entered into by and between the Company and Mr. Brick by failing to
indemnify the Company against losses incurred by the Company resulting from
operations of the Company's Daytona Beach, Florida office (the "Daytona Office")
which was managed by Mr. and Mrs. Brick. The Company further alleged negligence
Mr. and Mrs. Brick in their management of the Company's Daytona Office and fraud
and conversion against Mr. and Mrs. Brick, together with FMB Mortgage, Inc. (the
company which they formed to carry on the business of the Daytona Office),
concerning tax reporting by FMB Mortgage, Inc. The Company and EMB Mortgage
Corporation have agreed, between themselves, that the Company will bear all
expenses of litigation, including attorney's fees and associated costs, and will
be entitled to the entire judgment, if any, obtained against the defendants
herein. The Company has accrued $1,300,000 in the consolidated financial
statements to cover any potential loss in the future.

                                      F-16
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


The Company and James C. Saunders, the former manager of the Company's Denver,
Colorado office (the "Denver Office") were engaged in litigation in the matter
entitled James C. Saunders vs. EMB Corporation, EMB Mortgage Corporation, and
Does 1 through 30, Superior Court of California, County of Orange, Case No.
00CC06034, filed May 18, 2000. In this litigation, Mr. Saunders alleged the
Company owed him certain moneys arising from the reacquisition of the Denver
Office by Mr. Saunders from the Company. A settlement was reached by the parties
to this litigation whereby the Company issued its convertible promissory note to
Mr. Saunders in the amount of $500,000 in exchange for a dismissal of this
action, which was entered on May 24, 2001.

Both the convertible note for $500,000 plus accrued interest through September
30, 2001 have been recorded by the Company to cover this debt.

The Company and Deposit Guaranty Mortgage Company ("DGMC") were engaged in
litigation in a matter entitled CarrAmerica Realty, L.P., vs. Deposit Guaranty
Mortgage Company, District Court of Dallas County, Texas, 68th Judicial
District, Case No. DV99-01262-C, filed October 19, 1999, in which the Company is
named as a Third Party for indemnification of DGMC for rent allegedly owed for
the Company's former office in Dallas, Texas. The Company and DGMC stipulated to
judgment against the Company and in favor of DGMC in the amount of $30,000. No
part of this judgment has been paid. The Company has accrued $30,000 in the
financial statements to cover the judgment.

On January 3, 2001, the Company was sued in the lawsuit styled, FirstBank of
Aurora vs. Investment Consulting Inc., Jane and/or John Does 1-100 and EMB
Corporation, Denver Colorado District Court Number 01CV0018. Plaintiff seeks
damages in the amount of $29,878.13 in respect of its allegation that the
Company's bank account was overdrawn by such amount. In addition, Plaintiff
seeks interest on such amount, and its costs and attorneys' fees. The Company
was served on January 21, 2001. The Company believes the allegations raised in
the Complaint to be without merit. However, as of this date, no responsive
pleading has been filed. The Company has accrued $30,000 in the financial
statements to cover the litigation.

The Company and Great West Life & Annuity Insurance Company ("Great West") were
engaged in litigation in the matter styled, Great West Life & Annuity Insurance
Company v. EMB Corporation, Superior Court of the State of California, County of
Orange, Case No. 00CC2472. In this litigation, Great West alleged that the
Company owed moneys for premiums for medical insurance coverage provided by
Great West to the Company and its former employees through the period ended
December 31, 1998. The Company and Great West stipulated to judgment against the
Company and in favor of Great West in the amount of $42,648.48. No part of this
judgment has been paid. The Company has accrued $43,000 to cover the judgment.

The Company and Donald Egan were engaged in litigation in the matter entitled
Donald Egan vs. EMB Corporation, et al, District Court, Denver County, Colorado,
Case No. 99CV-000736 Division 1. In this litigation, the Plaintiff alleged that
the Company owed moneys on an outstanding promissory note. On June 3, 1999, a
Court judgment was entered against the Company in the amount of $174,136.50. The
current balance on the judgment with accrued interest after credits for payments
on behalf of the Company is $79,065.62. On November 12, 2001 the Company and
Donald Egan entered into a General Release and Settlement Agreement whereby, as
full satisfaction of the judgment, the Company assigned to Mr. Egan all of its
interest in 1,500,000 shares of common stock of e-net that the Company had
acquired in the "Global Settlement" Agreement by and between the Company, e-Net
and other parties. See Part I, Item 1, "Description of Business" for a complete
description of the "Global Settlement" Agreement. The Company has accrued
$79,000 to cover the settlement.

                                      F-17
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


EMB Mortgage Corporation and Impac Funding Corporation are engaged in
litigation, Impac Funding Corporation vs. EMB Mortgage Corporation, et al.,
Superior Court, County of Monterey, and Case No. M50028, filed on August 1,
2000. This is a judicial foreclosure action, wherein Impac is seeking to
foreclose the Monterrey, California, real property owned by EMB Mortgage
Corporation. The obligation arises out of a promissory note secured by deed of
trust for moneys alleged owed to the plaintiff by EMB Mortgage Corporation for
loans required to be repurchased by EMB Mortgage Corporation or other alleged
defaults by EMB Mortgage Corporation of the various agreements with Impac
concerning the funding and purchase of loans by Impac on behalf of EMB Mortgage
Corporation. The Company and EMB Mortgage Corporation have agreed that the
Company will bear all expenses of litigation, including attorney's fees and
associated costs at its sole option, elect to assist EMB Mortgage Corporation in
reaching a resolution of the pending legal action. On or about October 4, 2001,
EMB Mortgage Corporation entered into a settlement agreement with Impac Funding
Corporation whereby the term of the promissory note was extended for one year,
with several interim payments. It was further agreed, and the Company concurred,
that, at the extended date of the note, the Company would issue shares of its
common stock to Impac Funding Corporation equivalent in value to the unpaid
balance of the note. The Settlement Agreement also provides that the Company
issue to Impac Funding Corporation a five-year warrant for the purchase of up to
100,000 shares of the Company's common stock at a price of $0.0563 per share.

On August 30, 2001, First Guaranty was sued in a lawsuit styled NFC Consultants,
Inc., HomeZipr Corp. Vs. First Guaranty Financial Corporation, et al, Superior
Court of California, County of Orange, Case No. 01CC1121. This lawsuit alleges
moneys owed by First Guaranty or other defendants arising out of a purported
consulting agreement whereby First Guaranty would receive retail mortgage leads
from one of the plaintiffs. The lawsuit also alleges that First Guaranty and
other defendants retained certain personal property of the one of the plaintiffs
arising out of the termination of a sublease of premises unrelated to First
Guaranty. The Company believes the allegations raised in the Complaint to be
without merit and has filed a Demurrer to the action. On or about January 11,
2002, the Demurrer of First Guaranty was granted by the Court, thereby denying
the lawsuit as originally pled. No new or amended pleadings have been filed by
plaintiffs.

On July 24, 2001, the Company entered into Settlement Agreements with Ben
Campbell ("Campbell"), the former Director and President of the Company and
Kenneth J. Quist ("Quist"), the former Vice President, Secretary, Principal
Accounting and Chief Financial Officer and Director of the Company, to
compensate them for past services rendered in such capacities and to reimburse
them for expenses incurred on behalf of the Company during the nine months ended
June 30, 2001. The terms of the Settlement Agreements, among other things,
provided that the Company issue 150,000 shares and 100,000 shares of the
Company's restricted common stock to Campbell and Quist, respectively. On the
same date, the Company agreed to issue 10,000 shares of the Company's restricted
common stock to each of Roger D. Hall, a former Director of the Company, and Ann
L. Petersen, a remaining Director of the Company, as compensation for past
services rendered in such capacities. The Company had expensed $165,000 in the
year ended September 30, 2000, and had expensed $56,250 during the three months
ended December 31, 2000. These expenses were charged to additional paid in
capital as the value of services provided by management. As of June 30, 2001,
the Company reversed the charge to additional paid in capital for $221,250 and
recorded a liability for the $270,000 with the difference recorded as settlement
expense.

The Company, and its subsidiaries, might be engaged in other legal proceedings
which are ordinary in normal course of business. In the opinion of management,
the amount of ultimate liability with respect to those proceedings, if any, will
not be material to the Company's financial position or results of operations.

                                      F-18
<PAGE>


                        EMB CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


17. ACQUISITIONS

Pursuant to a Purchase Agreement dated July 23, 2001, the Company, on July 24,
2001, closed a transaction, whereby it acquired all of the issued and
outstanding shares of capital stock of Saddleback Investment Services, Inc., a
California corporation ("Saddleback") from William R. Parker ("Mr. Parker"), its
sole shareholder. In exchange for the shares of Saddleback, the Company issued
500,000 of its restricted common stock to Mr. Parker and delivered to Mr.
Parker, the Company's secured promissory note payable to Mr. Parker in the
initial principal amount of $100,000, bearing interest at the rate of six
percent (6%) per annum. The Company has secured its promissory obligation with
the shares of Saddleback acquired by the Company in this transaction. In
addition, the Company issued to SB 500,000 shares of the Company's restricted
Series E Convertible Preferred Stock in exchange for 100,000 shares of SB's
restricted Series A Convertible Preferred Stock.

Pursuant to a Purchase Agreement dated September 30, 2001, the Company acquired
all of the issued and outstanding shares of capital stock of First Guaranty
Financial Corporation, a California corporation ("FG") from FGFC Holdings, Inc.,
a California corporation ("FGFC Holdings"), its sole shareholder. In exchange
for all of the shares of common stock of FG, the Company issued 5,000,000 shares
of its restricted common stock to FGFC Holdings and delivered to FGFC Holdings
the Company's secured two-year promissory payable to FGFC Holdings in the
initial principal amount of $500,000, bearing interest at the rate of ten
percent (10%) per annum. In addition, the Company issued to FG 2,000,000 million
shares of the Company's restricted Series E Convertible Preferred Stock in
exchange for 100,000 shares of First Guaranty's restricted Series A Convertible
Preferred Stock. As a part of the transaction, FG returned to a former
shareholder, a note receivable amounting $550,000 and investments in marketable
securities amounting $1,893,750. The return of such assets have been treated as
a part of the acquisition. The Purchase Agreement also provides that Rodney K.
Thompson, who presently serves as a Director and President of First Guaranty,
and is also a Director and President of FGFC Holdings, Inc., is to be named to
the Board of Directors of the Company.

For accounting purposes, the transaction would be treated as a recapitalization
of FG, with the FG as the accounting acquirer (reverse acquisition), and would
be accounted for in a manner similar to a pooling of interests. The operations
of the Company are those of FG for the years ended September 30, 2001 and 2000.
The operations of the combined entity have been merged since September 30, 2001,
the date of the acquisition. The consolidated balance sheet reflects position of
the combined companies at September 30, 2001.

18. RESTATEMENT

The Company's financial statements as of September 30, 2001 have been restated
to correct errors as follows:

EMB did not record the disposal of its subsidiaries on July 23, 2001. EMB
disposed off it its subsidiaries EMB Mortgage Corporation for $10.00 to Mr.
William Parry. The disposal resulted in a gain of $3,044,184 since the disposed
subsidiary had net liabilities of $3,044,174. The gain will be reflected in the
pre-merger financial statements of EMB. As stated in the note 17, the merger of
EMB and FG has been treated as a recapitalization of FG, with the FG as the
accounting acquirer (reverse acquisition), the impact on the Company's
consolidated financial statements is reduction of debts due to discontinued
operations and a the reduction of the accumulated deficit of the Company by
$3,044,184. The restatement did not result in any changes to the consolidated
statements of operations, earnings per share and the consolidated cashflows of
the Company.

                                      F-19
<PAGE>


                           INDEPENDENT AUDITORS REPORT


Board of Directors
Saddleback Investment Services, Inc., dba American National Mortgage
Santa Ana, CA

We have audited the accompanying balance sheet of Saddleback Investment
Services, Inc. dba American National Mortgage as of October 31, 2001 and the
related statements of income, retained earnings, and cash flow for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion of these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Saddleback Investment Services,
Inc. dba American National Mortgage at October 31, 2001, and the results of its
operations and cash flows for the year then ended, in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated November 7,
2001 on our consideration of the Company's internal controls and a report dated
November 7, 2001 on its compliance with specific requirements applicable to
major HUD programs. Those reports are an integral part of an audit performed in
accordance with Government Audit Standards and should be read in conjunction
with this report in considering the results of our audit.

Our audit was conducted for the purpose of forming an opinion of the basic
financial statements taken as a whole. The supplemental information included in
the report is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the audit procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.



/s/ Briglio & Cheung
--------------------
BRIGILIO & CHEUNG
Matthew Briglio - Audit Partner
Alhambra, California
November 7, 2001


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