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

                                  FORM 10-K /A1

       [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                     For the fiscal year ended June 30, 2002

     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
                              EXCHANGE ACT OF 1934
         For the transition period ________________ to _________________

                         Commission file number: 0-28168

                        STRATEGIC CAPITAL RESOURCES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                               11-3289981
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S Employer
incorporation or organization)                               Identification No.)

             7900 Glades Road, Suite 610, Boca Raton, Florida 33434
             ------------------------------------------------------
                     (Address of principal executive office)

                                 (561) 558-0165
                         -------------------------------
                         (Registrant's telephone number)

           Securities registered pursuant to Section 12(b) of the Act:

                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.001 par value

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).                      Yes [ ] No [X]

The aggregate market value of the Registrant's outstanding Common Stock held by
non-affiliates of the Registrant on December 19, 2002, was $ -0-. There were
77,192 shares of Common Stock outstanding as of December 19, 2002.
<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

Form 8-K, dated May 30, 2002, Form 8-K, dated June 30, 2002 and Form 8-K, dated
December 16, 2002 are hereby incorporated by reference into Part II and Part III
of this Form 10-K as if set forth.

         PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT

This Annual Report on Form 10-K contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995, and
may be identified by the use of such words as "believe," "expect," "anticipate,"
"should," "planned," "estimated" and "potential." Examples of forward- looking
statements include, but are not limited to, estimates with respect to our
financial condition, results of operations and business that are subject to
various factors which could cause actual results to differ materially from these
estimates. These factors include, but are not limited to, general economic
conditions, changes in interest rates, ability to continue insurance coverage,
real estate values, and competition; changes in accounting principals, policies,
or guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory, and technological factors that may affect
our operations, pricing, products and services.

                                        2
<PAGE>

                                TABLE OF CONTENTS

                          FORM 10-K/A1 ANNUAL REPORT OF

                        STRATEGIC CAPITAL RESOURCES, INC.



                                                                            PAGE

Facing Page
Index
PART I
Item 1.       Business.........................................................4
Item 2.       Properties......................................................10
Item 3.       Legal Proceedings...............................................10
Item 4.       Submission of Matters to a Vote of Security Holders.............12

PART II
Item 5.       Market for the Registrant's Common Equity and
                 Related Stockholder Matters..................................12
Item 6.       Selected Financial Data.........................................14
Item 7.       Management's Discussion and Analysis of Financial
                 Condition and Results of Operations..........................15
Item 7A.      Quantitative and Qualitative Disclosures About Market Risk......23
Item 8.       Financial Statements and Supplementary Data.............F-1 - F-22
Item 9.       Changes in and Disagreements With Accountants
                 on Accounting and Financial Disclosure.......................25
Item 9B.      Compliance With Section 16(a) of the Exchange Act...............25

PART III
Item 10.      Directors and Executive Officers of the Registrant..............25
Item 11.      Executive Compensation..........................................27
Item 12.      Security Ownership of Certain Beneficial Owners and Management
                 and Related Stockholder Matters..............................28
Item 13.      Certain Relationships and Related Transactions..................29

PART IV
Item 14.      Exhibits, Financial Statement Schedules
                 and Reports on Form 8-K......................................30

SIGNATURES....................................................................31

                                        3
<PAGE>

                                     PART I

As used in this Form 10-K, "we", "us" and "our" refer to Strategic Capital
Resources, Inc. and our consolidated subsidiaries, depending on the context.

ITEM 1.  BUSINESS

We are a Delaware corporation organized in 1995. We provide specialized
financing for major homebuilders and real estate developers. These arrangements
may take several forms including direct financing leases, option agreements, or
management agreements. Such agreements may represent off-balance sheet
transactions of our customers and clients. We are engaged in such arrangements
in three lines of business, consisting of one reportable segment, all with major
homebuilders and real estate developers throughout the United States:

Fully furnished model homes

Residential real estate acquisition and development

Multi-family residential property

We have formed several wholly owned, special purpose subsidiaries for the
exclusive purpose of acquiring specific properties, which subsidiaries perform
no other functions other than to manage the activities and operations directly
related to its specific purpose. The special purpose subsidiary is structured in
a way that its sole activity is the specific project. We control the activities
and retain the risks and rewards of our ownership of such subsidiaries. We also
guarantee the debt of each subsidiary. We do not have off-balance sheet
arrangements with our special-purpose entities or special-purpose entities owned
by others. We consolidate all of our special-purpose entities.

MODEL HOME PROGRAM

We purchase and leaseback fully furnished model homes complete with options and
upgrades to major publicly traded homebuilders ("clients"). The model homes are
leased pursuant to a triple net lease where the lessee is obligated to pay all
maintenance, taxes, insurance and other applicable costs, including, but not
limited to, utilities and homeowner association assessments. These arrangements
terminate only upon the sale of the model homes. In this regard, we have entered
into net listing agreements with real estate brokerage affiliates of those
clients with whom we enter into the leaseback arrangement. These agreements
provide for commissions and incentives, which are negotiated on a per
transaction basis. The sale price may not be less than the original purchase
price, unless the client elects to pay any deficiencies at the closing.

All of our clients are required to provide a surety bond, letter of credit or
equivalent financial instrument in order to insure their performance of their
obligations. These financial instruments provided by our clients have
historically ranged from 5% to 110% of our purchase price of the model homes.

In many cases, we have obtained various forms of insurance, which effectively
serve as credit enhancements. The insurance instrument insures the timely
performance of our client of its obligations under the relevant agreements. In
the event of default by our client, the insurer has an obligation to continue to
make the payments up to the penal sum of the bond. All such insurance has been
obtained from major domestic insurance companies rated "A" through "AAA" by
major credit rating agencies. Also see residual value insurance discussion in
the residential real estate acquisition and development section that follows. In
the event that any and all of the providers are unwilling to pay a claim we
would have to bear the cost of litigation to collect the claim and not have the
use of the funds for our operations until the litigation and potential appeals
are resolved in our favor. In the event that any or all of the providers are
unable to pay a claim we are subject to that credit risk. We evaluate the
financial condition of the provider prior to our acceptance of the credit
enhancement but cannot protect ourselves against downgrades by rating agencies
or future losses by the providers.

                                        4
<PAGE>

The intent of these arrangements is to reduce our cost of funds and to increase
the amounts borrowed, thereby increasing our profitability and leverage.

Since inception, we have purchased a total of 463 model homes at an aggregate
purchase price in excess of $102,000,000. The following is a breakdown of model
homes which we have purchased and the purchase price by state at June 30, 2002,
and June 30, 2001:


                               June 30, 2002              June 30, 2001
                        -------------------------   -------------------------
     State              No. of Homes     Amount     No. of Homes    Amount
---------------         ------------  -----------   ------------  -----------
Arizona                       1       $   134,650         7       $   764,356
California                   25         6,703,315        44        11,669,315
Florida                       0                --         3           836,403
Iowa                          8         1,259,335        15         2,622,695
Minnesota                     1           226,040         7         1,683,505
Nevada                        4           469,960        13         1,667,790
New Jersey                   20         5,028,087        29         8,079,198
New York                      1           254,000         3           883,291
North Carolina                5         1,155,778         7         1,648,741
Pennsylvania                  1           250,000         8         1,851,686
Texas                         2           659,000         9         2,299,900
Utah                          0                --         3           496,097
                             --       -----------       ---       -----------
TOTAL                        68       $16,140,165       148       $34,502,977
                             ==       ===========       ===       ===========

The following is a summary by state of our model home purchases and sales since
inception, as well as our inventory at June 30, 2002.


                                                              Model Home
                     Number of Model     Number of Model       Inventory
    State            Homes Purchased       Homes Sold       at June 30, 2002
--------------       ---------------     ---------------    ----------------
Arizona                     19                  18                  1
California                  62                  37                 25
Colorado                    22                  22                  0
Georgia                      5                   5                  0
Florida                    107                 107                  0
Iowa                        15                   7                  8
Minnesota                   21                  20                  1
Nevada                      13                   9                  4
New Jersey                 111                  91                 20
New York                     9                   8                  1
North Carolina              12                   7                  5
Pennsylvania                31                  30                  1
Texas                       25                  23                  2
Utah                         5                   5                  0
Virginia                     6                   6                  0
                           ---                 ---                ---
TOTAL                      463                 395                 68
                           ===                 ===                ===

                                        5
<PAGE>

The following chart summarizes our model home purchases and sales by state since
inception, as well as the current model home inventory at June 30, 2002:

                                                              Model Home
                     Cost of Model       Cost of Model         Inventory
     State          Homes Purchased        Homes Sold       at June 30, 2002
---------------     ---------------      -------------      ---------------
Arizona              $  2,124,640         $ 1,989,990         $   134,650
California             16,267,394           9,564,079           6,703,315
Colorado                4,715,463           4,715,463                  --
Georgia                 1,576,755           1,576,755                  --
Florida                20,086,710          20,086,710                  --
Iowa                    2,622,695           1,363,360           1,259,335
Minnesota               4,852,110           4,626,070             226,040
Nevada                  1,667,790           1,197,830             469,960
New Jersey             28,335,475          23,307,388           5,028,087
New York                3,301,435           3,047,435             254,000
North Carolina          2,758,255           1,602,477           1,155,778
Pennsylvania            7,191,197           6,941,197             250,000
Texas                   5,060,757           4,401,757             659,000
Utah                      837,726             837,726                  --
Virginia                1,495,847           1,495,847                  --
                     ------------         -----------         -----------
TOTAL                $102,894,249         $86,754,084         $16,140,165
                     ============         ===========         ===========

The following is a breakdown of model home lease revenues by state for fiscal
years ended June 30, 2002, 2001, and 2000:

                     Lease Revenue      Lease Revenue       Lease Revenue
                       Year Ended         Year Ended          Year Ended
     State             06/30/2002         06/30/2001          06/30/2000
---------------        ----------         ----------          ----------
Arizona                $   45,387         $  132,499          $  180,455
California              1,218,504          1,529,366           1,304,561
Colorado                       --                 --              81,126
Florida                    53,050            102,954             246,035
Iowa                      169,880            290,065                  --
Minnesota                  82,458            356,362              19,744
Nevada                    154,749            200,135             183,914
New Jersey                657,938          1,085,792           1,572,944
New York                   66,264            110,837             247,714
North Carolina            182,794            204,057             156,520
Pennsylvania              100,577            331,163             491,788
Texas                     177,663            407,561             287,196
Utah                       29,335             59,532              70,359
                       ----------         ----------          ----------
TOTAL                  $2,938,599         $4,810,323          $4,842,346
                       ==========         ==========          ==========

                                        6
<PAGE>

MODEL HOME PROGRAM SUBSEQUENT EVENTS

From July 1, 2002 through December 19, 2002, we sold nine model homes at an
aggregate sales price of $1,988,690. These model homes were acquired at an
aggregate cost of $1,863,685. In addition, we have contracts pending on eight
model homes at an aggregate sales price of $1,933,456, which were acquired at an
aggregate cost of $1,649,446.

RESIDENTIAL REAL ESTATE ACQUISITION AND DEVELOPMENT

We purchase parcels of residential real estate from non-affiliated third
parties. These parcels are selected by homebuilders with whom we have
established a business relationship. The parcels of land may require additional
government approvals or entitlements and development work or consist of finished
lots. If development work is required, the homebuilder enters into a fixed price
development agreement to develop the parcels of land for us, and in all cases,
is required to provide completion bonds for some or all work by a surety company
acceptable to us. The Company enters into these transactions with funding from
banks and these loans are secured by specific assets of the Company. As
development occurs, the Company retains ownership of the developed real estate.
We approve draw requests paid to the developer under the development agreements,
fund them ourselves or have our banks fund. If we fund the draws, the banks
reimburse us upon request. An exclusive option to purchase agreement is entered
into with the homebuilder simultaneously with the land acquisition. The interest
rate relating to the option is negotiated with each client. It is based on the
credit of the client, estimated duration and size of the project and interest
rates in effect at the time. The interest rate on the option is a fixed
percentage, is non-refundable, is payable monthly in advance by the homebuilder
and is fully earned. The interest income is calculated by applying the fixed
percentage to the Company's net investment in the real estate (cost of the land
plus development cost incurred less options exercised by the homebuilder). Our
financing agreements with our lenders may call for a fixed interest rate or
variable rate. These factors are all considered during negotiations to maintain
the Company's profit margins. Each time the homebuilder exercises their option
to purchase the residential real estate there is a formal real estate closing
and title passes to the homebuilder. If the homebuilder fails to exercise their
options to purchase the real estate, the Company has the right to sell the real
estate to another party and there is no refund of the interest received. In
addition, the Company has the right to draw against the developer's letter of
credit or performance bond. Since the option sales price of the real estate to
the homebuilder is equal to the Company's cost of the land plus costs to
develop, there typically is no gain or loss on the sale of the residential real
estate. The terms and conditions of each transaction are project specific
(interest rate on the option, term, takedown schedule, etc.).

We grant our clients an option to acquire finished lots in staged takedowns. In
consideration for the option we receive a deposit in the form of a performance
bond or a letter of credit equal to 20% or less of the total purchase price as
well as an option maintenance fee which is payable monthly in advance. The
option fees are fully earned when paid and non-refundable. The client has the
right to terminate their obligations under the option agreements by foregoing
the deposit, paying for the finished lots exercised and any other penalties
provided for in the agreements. We have legal title to these assets. If the
client terminated the agreements we have the risk of a decline in the market
value of the property.

Residual Value Insurance (RVI) is obtained to insure 80% -100% of the
acquisition cost of the model homes as well as 80% -100% of the fully developed
cost of the residential real estate. In some cases, the RVI covers the cash flow
(interest income on direct financing model home arrangements, interest relating
to the option on the residential real estate and other homebuilder contractual
obligations to the Company). The premiums are paid annually in advance and are
non-refundable and not proratable. They are a percentage of the insured value.
We understand that the premiums are based on numerous factors such as perceived
risk, allocation of statutory capital, and availability of similar coverage by
other insurance companies and the feasibility of different financial models.
Insurance companies writing RVI have suffered severe losses on automobiles,
aircraft, aircraft engines and various other assets/properties. This has
affected the pricing and availability of such coverage.

During the year ended June 30, 2002, we entered into three (3) Acquisition,
Development and Sale of Residential Real Estate Agreements in California (2) and
New Jersey (1). The following is a summary of the project costs by project
number:

                                                        Remaining
Project    Purchase   Development Costs   Total Costs  Development     Total
 Number     Price       Paid to Date     Paid to Date     Work     Project Costs
-------  -----------    ------------     ------------  ----------- -------------
   1     $20,546,010     $        --     $ 20,546,010  $ 3,085,749  $ 23,631,759
   2       1,680,925         989,489        2,670,414      185,220     2,855,634
   3       2,539,458       2,174,460        4,713,918           --     4,713,918
   4       3,554,591       1,965,374        5,519,965      347,835     5,867,800
   5       8,083,084       3,629,757       11,712,841      977,901    12,690,742
   6       6,762,000              --        6,762,000           --     6,762,000
   7      11,800,000       3,312,379       15,112,379    4,245,432    19,357,811
   8      11,736,233              --       11,736,233    5,093,099    16,829,332
   9       7,680,468      18,930,561       26,611,029    9,142,987    35,754,016
         -----------     -----------     ------------  -----------  ------------

TOTAL    $74,382,769     $31,002,020     $105,384,789  $23,078,223  $128,463,012
         ===========     ===========     ============  ===========  ============

                                        7
<PAGE>

The following is a summary of total costs paid to date, sales of finished lots
and our residential real estate balance at June 30, 2002:

Project    Total Costs       Sale of         Balance at
Number    Paid to Date    Finished Lots    June 30, 2002          Location
-------   ------------    -------------    -------------    -------------------
   1      $ 20,546,010     $ 7,097,320      $13,448,690     California
   2         2,670,414       1,241,579        1,428,835     Arizona
   3         4,713,918       4,713,918               --     Utah
   4         5,519,965       4,746,984          772,981     Nevada
   5        11,712,841       5,703,720        6,009,121     Nevada
   6         6,762,000       6,762,000               --     California
   7        15,112,379       1,640,492       11,736,233     New Jersey
   8        11,736,233              --       13,471,887     California
   9        26,611,029      11,458,234       15,152,795     California
          ------------     -----------      -----------
TOTAL     $105,384,789     $43,364,246      $62,020,542
          ============     ===========      ===========

The following is a breakdown of interest income relating to the option on
residential real estate acquisition and development by state:

                                       Year Ended June 30,
                                   -------------------------
                State                 2002           2001
            -------------          ----------     ----------
            Arizona                $  209,961     $  146,417
            California              4,270,960      2,453,415
            Nevada                  1,210,232        454,122
            New Jersey              1,288,196             --
            Utah                      127,503        210,645
                                   ----------     ----------
            Total                  $7,106,852     $3,264,599
                                   ==========     ==========


RESIDENTIAL REAL ESTATE ACQUISITION AND DEVELOPMENT SUBSEQUENT EVENTS

The following is a summary of development costs paid and sales of finished lots
from July 1, 2002, through December 19, 2002:


            Project       Development      Sales of
             Number       Costs Paid     Finished Lots
            -------       ----------     -------------
               1          $2,604,559      $ 9,154,945
               2             131,674          595,958
               3                  --          772,981
               4             565,835        2,281,493
               5             629,122        3,609,078
               6           1,332,966               --
               7           2,260,625        7,861,078
                          ----------      -----------

            TOTAL         $7,524,781      $24,275,533
                          ==========      ===========

MULTI-FAMILY RESIDENTIAL PROPERTY

On July 15, 1999, we purchased a 288 unit multi-family residential property in
Jacksonville, Florida, for a purchase price of $10,227,999. The purchase price
was paid as follows:

Assumption of existing first mortgage         $ 4,927,999
New loan                                        5,300,000
                                              -----------
Total Purchase Price                          $10,227,999
                                              ===========

                                        8
<PAGE>

At the time of purchase, the Company entered into a five-year management
agreement with a non-affiliated independent management company. The management
company is responsible for the operation of the property, retains all income
from the property and is responsible for any losses. The Company receives a
monthly fee comprised of the sum of the debt service to cover the assumed
existing first mortgage ($43,365) plus required escrows for real estate taxes,
property insurance and repair reserve, plus a 12% annual return on the
$5,300,000 new loan. The escrow portion is variable based on changes in
estimated expenses. The Company's profit on the transaction arises from the
difference between the 12% return and interest expense paid by the Company on
its $5,300,000 loan. The management company receives the benefit of the property
appreciation, rent and occupancy increases. The annual return is 11% for the
first two years, 12% for year three and 13% for years four and five. The average
return over the term of the agreement is 12%.

The management company has an option to purchase the property any time during
the last four years of the agreement at an amount equal to the balance of the
first mortgage plus an interest adjustment of $121,527, representing the
difference between the 11% paid and the 12% due us, bearing interest of 12%
since August 25, 2001, plus $5,300,000. If they fail to exercise the option, the
management company is required to pay a balloon payment of $5,300,000 at the end
of the five years. A performance bond, issued by an insurance company rated
"AAA" by Moody's and Standard & Poors, in the amount of $8,335,000 has been
obtained and paid for by the management company to insure the payment and
performance of the management company. The performance bond insures the monthly
payments by the management company and the $5,300,000 balloon payment at the end
of the agreement.

The Company accounts for the multi-family residential property as a direct
financing arrangement, in accordance with the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 13, Accounting for Leases, because
the agreement contains a bargain purchase option. In May 2003, after
consultation with the Securities and Exchange Commission, the Company's
management discovered that it had not properly accounted for the implicit
interest rate in the agreement and has accounted for the prior period adjustment
as a correction of error in the consolidated financial statements included in
Item 8.

SFAS No. 13 dictates the following accounting treatment for this transaction:
(1) Using the actual purchase price of $10,227,999, the bargain purchase option
at the end of five (5) years of $4,330,902 and the minimum lease payments, an
implicit interest rate of 10.295% is derived utilizing present value tables; (2)
the implicit interest rate is then applied to the purchase price and an interest
income stream is generated for the five (5) years; (3) the implicit amount is
compared to the cash amount received (net of executory payments for taxes and
insurances); (4) since the cash received is greater than the implicit interest,
the excess is recorded as a reduction to the net investment in the consolidated
balance sheets in Item 8 of this Form 10-K/A1, resulting in a net investment of
$10,010,585 and $10,116,600 at June 30, 2002 and 2000, respectively. The
reduction to the net investment also results in an increase in a deferred tax
asset, since the reduction is being recognized for book purposes and not for tax
purposes.

The table below reflects the change to the results previously reported.

<TABLE>
<CAPTION>
                                    Implicit
                                    Interest      Reduction to     Blended      Deferred     Net Decrease
 Fiscal Year       Cash Received     Income      Net Investment    Tax Rate    Tax Benefit   To Earnings
---------------    -------------  ------------   --------------  ------------  -----------   -----------
<S>                <C>            <C>            <C>                   <C>     <C>           <C>
6/30/2000          $   1,103,386  $  1,050,539   $       52,847        40.0%   $    21,140   $    31,707
6/30/2001              1,103,386     1,044,834           58,552        40.0%        23,421        35,131
6/30/2002              1,143,136     1,037,121          106,015        40.0%        42,406        63,609
                   -------------  ------------   --------------                -----------   -----------

Total              $   3,349,908  $  3,132,494   $      217,414                $    86,967   $   130,447
                   =============  ============   ==============                ===========   ===========
</TABLE>

REVENUE CONCENTRATIONS
----------------------

Since 2000, three of our major clients have represented a significant portion of
our total revenues. Of our total revenues, one of these clients represents 57%
of our revenues during 2002, 52% in 2001, and 57% in 2000. A second client
represented 23% in 2002, 15% in 2001, and 22% of our revenues in 2000. A third
client represented 11% of our total revenue in 2001.

COMPETITION AND MARKET FACTORS

We are subject to all the general risks associated with financing and investing
in real estate, such as adverse changes in general or local economic conditions,
changes in the supply of or demand for similar or competing properties in an
area, changes in interest rates and operating expenses, changes in market rental
rates, changes in and compliance with accounting issues relating to off-balance
sheet financing, inability to procure residual value insurance polices,
inability to lease properties upon the termination or expiration of existing
leases, the renewal of existing leases, and the inability to collect payments
from clients.

Our business operates in a highly competitive environment. The financial
services industry consists of a large number of companies, including banks,
pension funds, insurance companies, finance companies, leasing companies, and
real estate investment trusts, most of which are larger and have greater
financial resources than we do.

There can be no assurance that we will be able to raise sufficient capital
through borrowings, or the issuance of debt and equity securities, to achieve
our investment objectives.

EMPLOYEES

At December 19, 2002, we employed seven (7) full-time employees, which included
executive, financial, sales and administrative personnel. Our employees are not
represented by unions or subject to any collective bargaining agreements.
Management considers the relationship with its employees to be excellent. In
addition, from time to time, we retain outside professional and expert
consultants to assist us with our business plan. At December 19, 2002, we had
one outside consultant, our corporate and securities counsel, who is performing
additional consulting services for us separate from his legal services and whom
we have retained on a month-to-month basis.

We are dependent on the efforts of our executive officers, key employees and
directors. We have an employment contract with only one person. There can be no
assurance that we will be able to recruit additional personnel with equivalent
experience in the event of our loss of their services.

                                        9
<PAGE>

ITEM 2.  PROPERTIES

Our corporate office is located at 7900 Glades Road, Suite 610, Boca Raton,
Florida 33434, where we lease 2,216 square feet of executive office space
pursuant to a five (5) year written lease expiring March 2007, at an annual
lease rate of $68,539 during 2002 (approximately $5,700 per month). Our annual
lease rate will be $65,062 in 2003. We moved to this location in January 2002,
when our prior lease at 2500 Military Trail North, Suite 260, Boca Raton,
Florida 33431, expired. We believe that our current facility is adequate for our
current and planned level of operations.

We own additional properties more fully described in Item 1, above.

INSURANCE

We have comprehensive insurance including liability, fire, flood, extended
coverage personal injury and rental loss insurance with respect to our
properties. We believe that such insurance provides adequate coverage.

ITEM 3.  LEGAL PROCEEDINGS

During the year ended June 30, 1997, we disposed of our construction subsidiary,
Iron Eagle Contracting and Mechanical, Inc. ("IECM"). Under the terms of the
agreement, we sold the net assets of IECM for a note in the amount of
$1,312,500. The note bore interest at the prime rate plus 1%. Interest was
payable in monthly installments. The note was secured by all assets of IECM's
parent company, Monarch Investment Properties, Inc. ("Monarch"), which was
formerly known as Iron Holdings Corp., and by all of the issued and outstanding
shares of IECM.

During June 1999, we filed a lawsuit against Monarch, and its subsidiaries, IECM
and Tahoe Realty Corp., as well as two of its officers and other individuals, in
the Supreme Court of the State of New York, County of Queens. The action asserts
seven separate causes of action arising out of a default in payment of the
remaining $1,100,000 balance due under the promissory note evidencing moneys due
to us from Monarch as a result of its purchase of IECM from us.

The Court granted our motion for summary judgment during March 2000 against
Monarch in the sum of $1,100,000 plus interest from January 1, 1999, a judgment
of possession of all collateral pledged by Monarch and judgment that we are the
rightful owner and entitled to immediate possession of the collateral,
impressing a trust on said collateral, declaring defendants to be trustees of
said collateral and directing said trustees to deliver such collateral to us. A
decision of the Appellate Division limited the extent of the corporate
defendant's liability and the thrust of the action is against the guarantors.
The action is now in the discovery stage. While it is difficult to predict the
outcome of any litigation, there are no counterclaims asserted against us and
there does not appear to be a range of potential loss to us.

During the years ended June 30, 2001 and 2000, we took impairment charges of
$1,100,000 for the balance on the promissory note. The amount of the write-down
was determined by evaluating the underlying value of the collateral, the cost of
recovery, ongoing litigation costs and the difficulty in realizing the
collateral securing the promissory note. Actual losses could differ from our
current estimate and will be reflected as adjustments in future financial
statements.

Also, we filed suit against BankAtlantic Bancorp., Inc. and BankAtlantic, a
federal savings bank, in the Circuit Court of the 15th Judicial Circuit in and
for Palm Beach County, Florida, by complaint dated December 30, 1998. The
complaint charges a breach of fiduciary duty and seeks unspecified damages in
that the defendant undertook to act as agent or broker in connection with
obtaining a $200 million loan facility relating to a sale and lease back program
for a major, publicly-traded national builder. Rather than complete the
financing transaction, the complaint alleges economic opportunity was usurped by
defendant and entered into an agreement directly with the builder, utilizing,
inter alia, the terms of our program. This matter is in the early stages of
discovery. Since this represents a potential contingent gain for us, there are
no receivable amounts recorded in the accompanying consolidated balance sheets.

                                       10
<PAGE>

During May 2000, we, along with FPE Funding, LLC ("FPE"), filed a complaint
entitled "In the case of Strategic Capital Resources, Inc. and FPE Funding, LLC
v. Dylan Tire Industries, LLC, Dylan Custom Mixing, LLC; Mid-American Machine
and Equipment, LLC f/k/a Mid-American Tire and Machine, LLC; GMAC Commercial
Credit, LLC; Robert C. Liddon, Trustee; Mary Aronov, Trustee; David Feingold;
John Tindal; Brett Morehouse; Johnny Guy; Shan Sutherland; and Pirelli Tire
LLC," Chancery Court for Davidson County, Tennessee, Case No. 00-1296-III,
against the referenced defendants alleging, among other things, breach of
contract, fraud, and civil conspiracy, arising from the breach of a sale and
leaseback commitment for which we procured funding and under which FPE was to be
the owner/lessor of a manufacturing facility.

The defendants/counter-plaintiffs, Dylan Tire Industries, LLC, Mid-American
Machine and Equipment, LLC and Dylan Custom Mixing, LLC have filed a
counterclaim, seeking unspecified consequential damages "estimated to exceed
$500,000" for alleged breach of a loan commitment issued by us. The basis of the
claim is that we allegedly failed to honor our commitment to lend for the
acquisition of a manufacturing facility, resulting in damages to the
defendants/counter-plaintiffs, who borrowed the money directly from our lender
at allegedly a greater cost and who allegedly had to pay a greater price for the
facility as a result of the alleged delay in the closing. We believe the
counterclaim is without merit and we are vigorously defending the counterclaim.
As such, there is no accrual in the accompanying consolidated balance sheets.

Our claims were substantially dismissed by the lower court and affirmed by the
appellate court. We have appealed to the Tennessee Supreme Court. We have
additional claims that have not as yet been filed pending the appeal outcome. We
have recorded a receivable from Dylan Tire Industries, LLC for a commitment fee
of approximately $180,000. As a result of the uncertainty regarding collection
of the receivable, we have reserved the entire balance. For the year ended June
30, 2002, we recorded an impairment charge for the receivable amounting to
$91,122.

We are also party to an action entitled Star Insurance Company v. Strategic
Capital Resources, Inc., 15th Judicial Court, Palm Beach County, Florida, Case
No. CL 00-433 AD, which is an action on an indemnity bond. Discovery has been
conducted, but is not completed. Mediation, which was conducted on August 13,
2002, has been adjourned. The Plaintiff has not been vigorously prosecuting this
action. We intend to vigorously defend this action if and when the plaintiff
proceeds. Due to the uncertainties of litigation, we are unable to evaluate the
likelihood of an unfavorable outcome or estimate the amount of range of
potential loss. This matter has been referred by the court for mediation to see
if the parties can settle the case. We are mediating with the plaintiff to
settle the case but there is no assurance that the settlement will occur. As
such there are no accruals in the accompanying consolidated balance sheet at
June 30, 2002 for this matter.

As of December 19, 2002 we are not involved in any other material litigation
nor, to our knowledge, is any other material litigation threatened against us or
any of our properties, other than routine litigation arising in the ordinary
course of business. See Notes to consolidated financial statements.

                                       11
<PAGE>

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

During June 2002, a majority of our shareholders by consent approved a reverse
stock split, whereby one (1) share of our Common Stock was issued in exchange
for every two hundred (200) shares of Common Stock issued and outstanding on the
record date. An applicable Information Statement was filed with the Securities
and Exchange Commission and disseminated to our shareholders.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Until November 20, 2002, our Common Stock was traded on the OTC Bulletin Board
under the symbol "SCPI." Our trading symbol was changed from "JJFN" to the
current symbol on the effective date of the reverse stock split referenced above
in Item 4. Because this report was filed late, our common stock was delisted
from trading on the OTC Bulletin Board. Upon information and belief, as of the
date of this report, our Common Stock does not trade. We intend to cause an
application to be filed to reinstate our common stock for trading on the OTC
Bulletin Board subsequent to the filing of this report and our quarterly report
on Form 10-Q for the three month period ended September 30, 2002. While no
assurances can be provided, we believe trading of our common stock will be
reinstated on the OTC Bulletin Board in the near future.

The following table sets forth, for the periods indicated, the high closing bid
price and low closing asked price for our Common Stock as reported by the OTC
Bulletin Board during the two year period prior to July 1, 2002. All current and
historical figures to our Common Stock have been adjusted to reflect our reverse
stock split (200 to 1).

                                      Year Ended June 30,
                 ----------------------------------------------------------
                       2002                 2001                2000
                 ----------------     ----------------     ----------------
   Quarter        High      Low        High      Low        High      Low
    Ended         Bid      Asked       Bid      Asked       Bid      Asked
------------     ------    ------     ------    ------     ------    ------
September 30         --        --     $40.00    $36.00     $60.00    $50.00
December 31          --        --     $28.00    $24.00     $50.00    $48.00
March 31         $34.00    $24.00     $26.00    $24.00         --        --
June 30          $51.00    $ 3.00     $38.00    $30.00         --        --


As of December 19, 2002, there is no bid or asked price applicable to our Common
Stock, as our Common Stock does not publicly trade as of the date hereof. The
last sale price of our Common Stock as reported on the OTC Bulletin Board, which
took place on November 13, 2002, was $10.00. As of June 30, 2002, there were
approximately 557 shareholders of record, not including those persons who held
their shares in "street name."

We have not paid any cash dividends on our Common Stock and do not anticipate
paying any in the foreseeable future. We intend to continue our present policy
of retaining earnings for investment in our operations.

                                       12
<PAGE>

On November 2, 1995, we sold 400,000 shares of our 6% Participating Convertible
Preferred Stock for $1,000,000 in cash. Each share was originally convertible
into one share of our Common Stock at $2.50 per share commencing in December
1996. Dividends are declared on the basis of a 50% participation in the rental
revenue stream up to $60,000 per year. At June 30, 2001, we had 400,000 shares
of 6% Participating Convertible Preferred Stock issued and outstanding. We had
not paid any distributions on this Preferred Stock since July 1996, as a result
of a dispute between two unaffiliated parties who were entitled to dividends. In
July 1998, David Miller, our Chairman, acquired all of these shares of
Convertible Preferred Stock. At December 30, 1998, we owed $130,000 in unpaid
distributions. In October 1998, we began paying distributions to Mr. Miller at
the rate of $10,000 per month, which brought us current on preferred
distributions in November 2000. During June 2002, these 400,000 shares of
Convertible Preferred Stock were redeemed for $500,000 in cash and a note for
$500,000. The note bears 6% interest, payable monthly. $250,000 is due July 1,
2003 and the balance is due July 1, 2004.

On April 8, 2002, our Board of Directors voted to authorize and recommend that
our shareholders approve a reverse stock split, whereby one (1) share of our
common stock would be issued for every two hundred (200) shares outstanding on
the established record date of April 8, 2002. Messrs. Miller and Wilson, two of
our directors, abstained from voting due to a perceived potential conflict of
interest arising out of these directors holding warrants to purchase shares of
our Common Stock. This reverse stock split was approved in June 2002 by those of
our shareholders representing a majority of the shares of Common Stock then
outstanding pursuant to the laws of the State of Delaware.

Most of our previously outstanding warrants to purchase shares of our Common
Stock had been issued to Mr. Miller, our Chairman, in connection with loans that
had been extended to us by Mr. Miller and another member of our management from
time to time since our inception. The loans represented funds that were
necessary to conclude transactions in the ordinary course of our business, but
were unavailable from other sources. According to the terms of these warrants,
in the event of a transaction that resulted in a reduction of the number of
outstanding shares of our Common Stock, including a reverse stock split, there
would be no proportionate adjustment in the number of shares issuable upon
exercise of the warrants or in the exercise price thereof. The warrants had
exercise prices that ranged from $.13 to $.47. In June 2002, an aggregate of
1,430,000 warrants were exercised for an aggregate exercise price of $236,100
(approx. $0.17 per warrant).

SUBSEQUENT EVENT

In December 2002, the warrant exercise discussed above was rescinded by the
mutual consent of the former warrant holders and our Company. This rescission
was necessary due to what we believe to be inaccurate advice provided to us by
our former independent accountants, who failed to advise of various negative tax
consequences to the warrant holder, and more importantly, significant negative
impact to our income statement relating to the fact that the applicable warrant
agreement contained the provisions discussed above.

In addition, also in December 2002, pursuant to the approval of our Board of
Directors and the warrant holders, the relevant warrant agreements were amended
to negate the provisions specifying that they are not affected by any reverse
stock split, effective as of the date of our reverse stock split. As a result,
the 8,797,114 previously outstanding warrants have been reduced to 38,856
pursuant to the 200:1 reverse stock split previously undertaken. The exercise
prices have also been adjusted pursuant to the reverse stock split, resulting in
exercise prices ranging from $24 to $94 per warrant. This amendment was also
necessary as a result of incorrect advice provided by our prior independent
accountants.

                                       13
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

The selected financial data presented below for the years ended June 30, 2002,
2001, 2000, 1999, and 1998 have been derived from our audited consolidated
financial statements. This data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and related notes thereto included
elsewhere in this Report.

As more fully described in Note 1 to our audited consolidated financial
statements included in "Part II, Item 8, Financial Statements and Supplemental
Data" below, errors resulting in a net understatement of previously reported
interest expense for the years ended June 30, 2001, 2000, 1999 and 1998 were
discovered by our management during 2002. In addition, during 2003, management
discovered an error in its accounting for the multi-family property resulting in
an overstatement of interest income and income tax expense for the years ended
June 30, 2002, 2001 and 2000. Accordingly, our consolidated balance sheets and
our statement of operations and stockholders' equity for the years presented
below have been restated to reflect corrections to previously reported amounts.

                             SELECTED FINANCIAL DATA
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                                      June 30,
                                             -------------------------------------------------------
                                               2002       2001        2000       1999         1998
                                             --------   --------    --------    --------    --------
                                            (Restated) (Restated)  (Restated)  (Restated)  (Restated)
<S>                                          <C>         <C>        <C>         <C>         <C>
Income Statement Data:

  Revenues and Other Income
   Interest income on direct
    financing arrangements:
     Model homes                             $  2,939    $ 4,810    $  4,842    $  4,664    $  3,545
     Residential real estate                    7,107      3,265          --          --           9
     Multi-family residential property            819        954         949          --          --
   Gain on sale of model home properties
    under direct financing arrangements           394        377         324         226          37
   Interest and other income                       81        136         324         127         129
                                             --------   --------    --------    --------    --------
        Total Revenues and Other Income        11,340      9,542       6,439       5,017       3,720
                                             --------   --------    --------    --------    --------
  Costs and Operating Expenses
   Interest and financing costs to
    financial institutions                      4,957      5,598       3,836       2,697       2,037
   Interest and financing costs to
    stockholders                                  214        387         348         559         471
   Depreciation and amortization                1,547        931         665         509         470
   Corporate selling, general
    and administrative                          2,564      1,536       1,554       1,434       1,148
   Impairment charge                               91      1,000         100          --          --
                                             --------   --------    --------    --------    --------
     Total Costs and Operating Expenses         9,373      9,452       6,503       5,199       4,126
                                             --------   --------    --------    --------    --------

  Income (loss) before income
   tax benefit (expense)                        1,967         90         (64)       (182)       (406)
  Income tax benefit (expense)                 (1,079)       (71)        (46)        (80)         10
                                             --------   --------    --------    --------    --------
  Net income (loss)                               888         19        (110)       (262)       (396)
  Preferred stock distributions                    55         85         120          90          --
                                             --------   --------    --------    --------    --------
  Income (loss) applicable to
   common stockholders                       $    833   $    (66)   $   (230)   $   (352)   $   (396)
                                             ========   ========    ========    ========    ========

Per Share Data:
  Basic:
    Net income (loss)                        $  10.79   $   (.85)   $  (2.90)   $  (3.23)   $  (4.66)
    Weighted average number of common
     shares outstanding                            77         78          79          81          85
  Assuming Dilution:
    Net income (loss)                        $  10.73   $   (.85)   $  (2.90)   $  (3.23)   $  (4.66)
    Weighted average number of common
          shares outstanding                       78         78          79          95          85
</TABLE>

                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                                      June 30,
                                            -------------------------------------------------------
                                              2002       2001        2000       1999         1998
                                            --------   --------    --------    --------    --------
                                           (Restated) (Restated)  (Restated)  (Restated)  (Restated)
<S>                                         <C>        <C>         <C>         <C>         <C>
Balance Sheet Data:
  Total assets                              $ 90,667   $ 94,887    $ 56,114    $ 37,159    $ 40,824
  Mortgages and notes payable               $ 77,592   $ 83,351    $ 46,541    $ 27,958    $ 31,538
  Other liabilities                         $  4,674   $  3,067    $  1,192    $    765    $    685
  Stockholders' equity                      $  8,401   $  8,469    $  8,381    $  8,436    $  8,601
</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS

A summary of our operating results, including our subsidiaries for the fiscal
years ended June 30, 2002, June 30, 2001, and June 30, 2000 are presented below.
As more fully described in Note 1 to our audited consolidated financial
statements included in "Part II, Item 8, Financial Statements and Supplemental
Data" below, errors resulting in a net understatement of previously reported
interest expense for the years ended June 30, 2001 and 2000 was discovered by
our management during 2002 and in 2003 management discovered an error in its
accounting for the multi-family residential property resulting in an
overstatement of interest income and income tax expense for the years ended June
30, 2002, 2001 and 2000. Accordingly, our consolidated balance sheets as of June
30, 2002 and 2001 and our statements of operations, stockholders' equity and
cash flows for the years ended June 30, 2002, 2001 and 2000 have been restated
to reflect corrections to previously reported amounts.


<TABLE>
<CAPTION>
                                                                             Years Ended June 30,
                                                      --------------------------------------------------------------
                                                             2002                  2001                  2000
                                                          (Restated)            (Restated)            (Restated)
                                                      ------------------    ------------------    ------------------
<S>                                                   <C>            <C>    <C>            <C>    <C>            <C>
Revenues and Other Income:
  Interest income on direct financing arrangements:
    Model homes                                       $   2,939       26%   $   4,810       51%   $   4,842       75%
    Residential real estate                               7,107       63%       3,265       34%          --       --
    Multi-family residential property                       819        7%         954       10%         949       15%
  Gain on sale of model home properties under
   direct financing arrangements                            394        3%         377        4%         324        5%
  Interest and other income                                  81        1%         136        1%         324        5%
                                                      ---------   ------    ---------   ------    ---------   ------
Total revenues and Other Income                          11,340      100%       9,542      100%       6,439      100%

Costs and operating expenses:
  Interest and financing costs
   to financial institutions                              4,957       44%       5,598       59%       3,836       60%
  Interest and financing costs to stockholders              214        2%         387        4%         348        5%
  Depreciation and amortization                           1,547       14%         931       10%         665       10%
  Corporate selling, general and administrative           2,564       23%       1,536       16%       1,554       24%
  Impairment charge                                          91       --        1,000       10%         100        1%
                                                      ---------   ------    ---------   ------    ---------   ------
Total costs and operating expenses                        9,373       83%       9,452       99%       6,503      101%
</TABLE>

                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                                Years Ended June 30,
                                          ---------------------------------------------------------------
                                                                       2001                  2000
                                                 2002               (Restated)            (Restated)
                                          ------------------    ------------------    -------------------
<S>                                       <C>             <C>   <C>            <C>    <C>             <C>
Income (loss) before income tax expense       1,967       17%          90        1%         (64)       (1)%
Income tax expense                            1,079        9%          71        1%          46        -- %
                                          ---------   ------    ---------   ------    ---------    ------
Net income (loss)                         $     888        7%   $      19       --%   $    (110)       (1)%
                                          =========   ======    =========   ======    =========    ======
</TABLE>

Comparison of Year Ended June 30, 2002 to Year Ended June 30, 2001.

Interest income on model home direct financing arrangements for the year ended
June 30, 2002, decreased $1,871,724 (39%) compared to the prior year period. The
decreased revenue was primarily attributable to the interest income on the
decreased number of model home direct financing arrangements. The direct
financing arrangement balance, which amounted to $16,140,165 at June 30, 2002,
compared to $34,502,977 at June 30, 2001. As of December 19, 2002, our portfolio
of model homes is decreasing as a result of continued sales of these homes. We
did not acquire any model homes during fiscal year 2002. Unless we are able to
acquire additional inventory of model homes in the future our revenues from this
business will decrease. We are currently negotiating with various builders to
purchase additional model homes and expect to acquire the model homes in the
near future.

Interest income relating to the options on residential real estate direct
financing arrangements increased $3,842,253 (118%) from $3,264,599 for the year
ended June 30, 2001 to $7,106,852 for the year ended June 30, 2002. The increase
is attributable to the increase in residential real estate from $44,524,990 at
June 30, 2001 to $62,020,542 at June 30, 2002.

Interest income on the multi-family residential property direct financing
arrangement decreased $134,493 (14%) from $953,965 for the year ended June 30,
2001, to $819,472 for the year ended June 30, 2002. The decrease was the result
of the implicit interest rate adjustment which reduced actual interest income
under the arrangement. Also see Item 8 in this Form 10-K/A1, footnote 2(B) to
the consolidated financial statements.

Gain on sale of model home properties under direct financing arrangements
represents the gain resulting from the sales of our model homes. The increase of
$16,467 (4%) from $377,392 from the year ended June 30, 2001 to $393,859 for the
year ended June 30, 2002 is primarily attributable to the increase in the number
of model homes sold. During the year ended June 30, 2002, we sold 80 model homes
at an average price of $248,480, compared to 69 model homes at an average price
of $260,101 for the prior year.

Sales of residential real estate increased by $40,530,642 for the year ended
June 30, 2002 from $1,416,802 for the eyar ended June 30, 2001, to $41,947,444
for the year ended June 30, 2002. Since the residential real estate transactions
are direct financing arrangements, the sales revenue and cost of sales have been
netted in the consolidated statements of operations in Item 8 of this Form
10-K/A1. The sales revenue and cost of sales are typically the same amount. The
strong housing market has resulted in our customers exercising their options at
a rapid pace. The Company's residential real estate agreements have three
distinct phases: 1. Acquisition of undeveloped property 2. Development of land
and infrastructure 3. Sale of finished lots. During the acquisition and
development phases, funds are being invested and revenue is being recognized as
option income on residential real estate. As the lots are developed and our
customers exercise their option to purchase the completed lots, sales are
recognized. These transactions are direct financing arrangements. The option
sales price is comprised of the acquisition cost of the land plus all contracted
development work. The contract stipulates that the land will be purchased by the
homebuilder at the contracted completed cost and therefore there is no gain or
loss on the sale. As the land development nears completion, more lots are needed
by the builder to build new homes. Over the life of the project, the Company
recognizes increasing interest income on the option during development and when
development slows down, increased sales and decreased interest income result.

                                       16
<PAGE>

Interest and financing costs to financial institutions decreased $640,857 (11%)
for the year ended June 30, 2002, compared to the prior year period, primarily
due to the decrease in loans utilized to purchase additional assets and lower
interest rates.

Residual Value Insurance (RVI) indemnifies an insured against a loss that might
occur if the proceeds of the sale of a properly maintained asset are less than
that asset's insured residual value at a specific point in time. It protects
against a decline in the market value of the property.

If we are unwilling or unable to obtain such insurance coverage, our cost of
funds might increase. Some of the Company's lenders consider the insurance as a
credit enhancement to the loan. Lack of the coverage will result in the Company
being required to increase the amount of down payment (equity/investment) in a
transaction and may have to pay a higher interest rate for the borrowed funds.
In a typical transaction we were required to invest 5% of our own cash in the
transaction with RVI coverage. Without RVI coverage, we will be required to
invest 10%-15% of our own cash in the transaction (i.e. original loan amount $10
million - with RVI we would be required to invest 5% or $500,000 - without RVI
we would be required to invest an additional 5%-10% or $500,000 to $1,000,000
instead of $500,000). This will result in a decrease in loan-to value ratios in
our financing and we assume the risk of loss if the property is sold below our
original acquisition cost.

RVI is obtained to insure 80% to 100% of the acquisition cost of the model homes
as well as 80% to 100% of the fully developed cost of the residential real
estate. In some cases, RVI even covers the cash flow - i.e. interest income on
direct financing of model home arrangements and interest relating to the options
on the residential real estate (this includes related homebuilder contractual
obligations to the Company). The premiums are paid annually in advance by the
Company and are non-refundable and not pro-ratable. They represent a percentage
of the insured value. We understand that the premiums are based on numerous
factors such as - perceived risk, allocation of statuary capital, and
availability of similar coverage by other insurance companies and the
feasibility of different financial models.

Insurance companies providing RVI coverage have suffered severe losses on
automobiles, aircraft, aircraft engines and various other assets/properties. The
losses reflected poor underwriting performance. The mandatory recognition by the
insurance carriers of prior period reserve deficiencies as well as deteriorating
investment results have resulted in higher premiums and fewer providers. As a
result, some insurance companies have ceased providing RVI coverage primarily
due to large "shock" losses which have caused both weaker and stronger insurance
companies to retrench or withdraw from the market place leaving a limited number
of insurance companies that are willing to provide such coverage. As a result of
the limited number of insurance companies willing to provide the RVI coverage,
the existing providers are able to increase their pricing for such coverage. In
addition, due to the significant losses by these insurance companies in other
segments, coverage terms and conditions have been more restrictive and the lack
of competition and capacity has hampered the availability and significantly
increased the pricing for such coverage. Cost of reinsurance coverage available
to the primary insurers has dramatically increased due to the catastrophic
losses associated with September 11, asbestos claims, class action lawsuits and
adverse trends in other lines.

                                       17
<PAGE>

Further downgrades by the rating agencies of property and casualty insurance
companies have led to their diminished presence in the commercial and specialty
lines business segments and continue to result in increased premiums.

This has adversely affected coverage pricing and availability. The inability to
obtain cost effective RVI insurance on future projects could affect the cost of
funds from the lending institutions we work with as the coverage is considered a
credit enhancement. In addition, the coverage gives the Company added security
in the event a homebuilder does not fulfill its contractual obligations to the
Company.

In the event that any and all of the providers are unwilling to pay a claim, we
would have to bear the cost of litigation to collect the claim and not have the
use of the funds for our operations until the litigation and potential appeals
are resolved in our favor. In the event that any or all of the providers are
unable to pay a claim, we are subject to that credit risk. We evaluate the
financial condition of the provider prior to our acceptance of the credit
enhancement but can not protect ourselves against downgrades by rating agencies
or future losses by the providers.

Depreciation and amortization expense increased $616,194 (66%) from $930,942 for
the year ended June 30, 2001, to $1,547,136 for the year ended June 30, 2002.
The increase was due to the write off of deferred financing costs upon the sale
of model homes. The net investment in model homes under direct financing
arrangements decreased $18,362,812 (53%) from $34,502,977 at June 30, 2001 to
$16,140,165 at June 30, 2002.

Interest and financing costs to stockholders represents interest resulting from
the actual interest rate on the stockholder loans and the fair value of warrants
issued with the stockholder loans that is also accounted for as additional
interest expense. The total interest expense decreased by $173,056 (45%) for the
year ended June 30, 2002, due to a reduction in the interest related to the
outstanding warrants. Warrants from prior years expired and additional warrants
were not issued. For the year ended June 30, 2002, non-cash interest expense
related to the warrants and interest expense related to the actual interest rate
on the loans amounted to $98,668 and $115,362, respectively. For the year ended
June 30, 2001, non-cash interest expense from the warrants and interest expense
from the actual interest rate on the loans amounted to $269,142 and $117,944,
respectively.

Corporate selling, general and administrative costs increased $1,028,224 (a 67%
increase) from $1,536,118 for the year ended June 30, 2001, to $2,564,342 for
the year ended June 30, 2002. These costs increased as a result of our re-audit
of three years of financial statements, retention of experts to advise us on
various accounting issues related to outstanding warrants and our reverse stock
split (which issues are discussed above under "Part II, Item 5"), our retaining
additional legal counsel and consultants applicable to the aforesaid issues,
consulting fees of $70,470 paid during this period, termination fees pursuant to
a settlement agreement between us and our former chief financial officer of
$72,550, professional fees of $143,500 and moving costs of $35,697. Corporate
selling, general and administrative costs as a percentage of total revenue
increased compared to the prior year period by 7%.

Impairment charges decreased $908,878 (91%) from $1,000,000 for the year ended
June 30, 2001 to $91,122 for the year ended June 30, 2002. During 2001, the
Company recorded an impairment charge of $1,000,000 against a promissory note
that originated from the sale of the net assets of Iron Eagle Contracting and
Mechanical, Inc. in 1997. For the year ended June 30, 2002, the Company recorded
an impairment charge of $91,122 against a commitment fee receivable from Dylan
Tire Industries, LLC. Also see Item 8 in this Form 10-K/A1, footnote 4 to the
consolidated financial statements.

Net income for the year ended June 30, 2002, was $887,730, compared to net
income of $18,660 for the prior year period, an increase of $869,070 (4,657%).
Net income as a percentage of total revenue increased due to the larger
impairment charge recognized in our prior fiscal year.

                                       18
<PAGE>

Comparison of Year Ended June 30, 2001 to Year Ended June 30, 2000.

Interest income on model home direct financing arrangements decreased an
immaterial amount from June 30, 2000 to June 30, 2001 due to the asset balances
of model homes remaining consistent at June 30, 2001 and 2000.

Interest income relating to the options on residential real estate increased
from -0- for the year ended June 30, 2000 to $3,264,599 for the year ended June
30, 2001. The Company did not have any residential real estate in 2000.

Gain on sale of model home properties under direct financing arrangements
increased $53,582 (17%) from $323,810 for the year ended June 30, 2000 to
$377,392 for the year ended June 30, 2001. During the year ended June 30, 2001,
we sold 69 model homes at an average price of $260,131, compared to 76 model
homes at an average price of $257,255 for the year ended June 30, 2000.

Sales of residential real estate increased from -0- for the year ended June 30,
2000 to $1,416,802 for the year ended June 30, 2001. The Company did not have
any residential real estate during 2000. Also see comparison of residential real
estate sales for the years ended June 30, 2002 and June 30, 2001.

Interest and financing costs to financial institutions increased $1,761,432 (or
46%) for the year ended June 30, 2001 compared to the prior year period,
primarily due to the increase in loans utilized to purchase additional model
homes and residential real estate.

Interest and financing costs to stockholders increased $39,206 (or 11%) due to
additional borrowings from stockholders and new warrants being issued. Also see
interest and financing costs to stockholders discussion for June 30, 2002 to
June 30, 2001. For the year ended June 30, 2000, non-cash interest expense
related to the warrants and interest expense related to the actual interest rate
on the loans amounted to $235,660 and $112,220, respectively.

Corporate selling, general and administrative costs decreased $17,822 (a 1%
decrease), from $1,553,940 for the year ended June 30, 2000, to $1,536,118 for
the year ended June 30, 2001.

Net income for the year ended June 30, 2001 was $18,660, compared to a net loss
of ($110,413) for the prior year period.

LIQUIDITY AND CAPITAL RESOURCES

Funding for our operations has been provided by cash flow from operations,
secured bank loans/financing as well as loans from our stockholders.

Our uses for cash during the year ended June 30, 2002, were for revenue
producing asset acquisitions, interest, operating expenses, and redemption of
Preferred Stock. We provided for our cash requirements from borrowings, the sale
of model homes and residential real estate and other revenues. At June 30, 2002,
we had approximately $21 million of unused, committed credit facilities
available to us under existing revolving loan agreements, which is restricted
for the use to acquire model homes and residential real estate in accordance
with the terms of those agreements. These facilities expire through August 2003.
We received a commitment for $15,700,000 from a new financial institution which
will also be restricted to acquire residential real estate. The loan will bear
interest based on 30 day LIBOR plus a premium. It is our policy not to incur
costs from activation of new credit facilities unless and until needed. We
believe that these sources of cash are sufficient to finance our working capital
requirements and other needs for the next twelve months. However, as part of our
ongoing business, we have constant discussions with financial institutions for
increased credit facilities and with investment bankers and other financial
institutions regarding private or public placement of our debt or equity
securities. We constantly review financing availability in the capital markets.
However, there are no definitive agreements in place for us to obtain any
additional financing and no assurances can be provided that we will undertake
any such action in the immediate future.

At June 30, 2002, we had notes payable in the amount of $1,909,200 due to
stockholders , which arose from advances they have made to us. The notes are
payable on demand and accrue interest at 9%, which interest is paid monthly.
Interest related to the 9% coupon on stockholder notes payable totaled $115,361,
$109,543 and $112,220 for the years ended June 30, 2002, 2001 and 2000,
respectively. Additionally, we incurred non-cash interest expense relating to
the issuance of warrants with the stockholder loan amounting to $98,668,
$269,142 and $235,660 for the years ended June 30, 2002, 2001 and 2000,
respectively. At June 30, 2002 and 2001, stockholder loans outstanding were
$1,909,200 and $1,223,100, respectively.

                                       19
<PAGE>

COMMON STOCK REPURCHASE PROGRAM

During 2000, the Company implemented a common stock repurchase program. As of
June 30, 2002, 10,368 (post reverse split) shares had been repurchased under
this program at a cost of $457,999 or $44.17 per share, adjusted for our reverse
stock split. We did not purchase any shares during our fiscal year ended June
30, 2002, and we do not anticipate implementing a new repurchase program. We are
currently evaluating a tender offer for fractional and odd lot shares to reduce
our costs but there are no assurances that we will undertake this activity in
the near future, or at all.

IMPAIRMENT CHARGE

In March 2000, we set up a loss reserve of $100,000 against the promissory note,
and have taken the remaining $1,000,000 non-cash charge during the year ended
June 30, 2001 to write the carrying value of the note to 0. The amount of the
write down was determined by evaluating the underlying value of the collateral
and the difficulty anticipated in efforts to realize the value of such
collateral securing the Note. We also evaluated cost of recovery, ongoing
litigation costs, and other economic conditions and trends in making our
determination. Actual losses could differ from our current estimate and will be
reflected as adjustments in future financial statements. See "Part I, Item 3,
Legal Proceedings" and "Item 8, Financial Statements and Supplementary Data."

CASH FLOWS

Year Ended June 30, 2002

Net cash provided by operating activities totaled $3,494,802 and was comprised
of net income of $887,730, plus net adjustments for non-cash items of $1,885,711
plus a net change in other operating assets and liabilities of $721,361.

Net cash used in investing activities of $3,910,102 was comprised of investments
in direct financing leases of $11,469,091, offset by $7,558,989 in proceeds from
sales of direct financing leases.

Net cash used in financing activities totaled $2,769,924 and was comprised of
net repayments of stockholders loans of $50,000, plus deferred financing costs
of $1,705,208, plus purchase of treasury stock of $500,000, principal payments
on mortgage payable of $459,716 and preferred distributions of $55,000.

Year Ended June 30, 2001

Net cash provided by operating activities totaled $1,861,971 and was comprised
of net income of $18,660 plus net adjustments for non-cash items of $1,857,819,
less a net change in other operating assets and liabilities of $14,508.

Net cash provided by investing activities of $2,624,384 was comprised of
investment in capital expenditures of $9,513, $1,983,897 in proceeds from sales
of direct financing leases, and proceeds from note receivable of $650,000.

Net cash used in financing activities of $1,951,264 was comprised of proceeds
from mortgage payable of $416,645 plus net proceeds from stockholders loans of
$81,680, offset by deferred financing costs of $948,012, plus purchases of
treasury stock of $114,823, principle payments on mortgage payable of $1,301,754
and preferred distributions of $85,000.

Year Ended June 30, 2000

Net cash provided by operating activities totaled $704,196 and was comprised of
a net loss of $110,413, plus net adjustments for non-cash items of $708,308,
plus a net change in other operating assets and liabilities of $106,301.

Net cash provided by investing activities of $1,946,390 was comprised of
investments in direct financing leases of $586,183 plus capital expenditures of
$3,933, offset by $3,186,506 in proceeds from sales of direct financing leases,
proceeds from note receivable of $350,000 less a loan advance of $1,000,000.

Net cash used in financing activities of $1,889,757 was comprised of principal
payments on mortgages payable of $958,886, plus repayments of stockholders loans
of $183,987, plus deferred financing costs of $566,494, plus purchases of
treasury stock of $60,390, and preferred distributions of $120,000.


SEGMENT REPORTING

Segment Reporting - Statement of Financial Accounting Standards No. 131 ("FAS
131") "Disclosures about Segments of an Enterprise and Related Information"
established standards for the manner in which public enterprises report
information about operating segments. We have determined that our operations
primarily involve one reportable segment, real estate financing arrangements.

NEW ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board has recently issued several new
Statements of Financial Accounting Standards ("SFAS"). Statement No. 141,
"Business Combinations" supersedes Accounting Principles Board ("APB") Opinion
No. 16 and various related pronouncements. Pursuant to the new guidance in
Statement No. 141, all business combinations must be accounted for under the
purchase method of accounting; the pooling-of-interests method is no longer
permitted. SFAS 141 also establishes new rules concerning the recognition of
goodwill and other intangible assets arising in a purchase business combination
and requires disclosure of more information concerning a business combination in
the period in which it is completed. This statement is generally effective for
business combinations initiated on or after July 1, 2001. Statement No. 142,
"Goodwill and Other Intangible Assets" supercedes APB Opinion 17 and related
interpretations. Statement No. 142 establishes new rules on accounting for the
acquisition of intangible assets not acquired in a business combination and the
manner in which goodwill and all other intangibles should be accounted for
subsequent to their initial recognition in a business combination accounted for
under SFAS No. 141. Under SFAS No. 142, intangible assets should be recorded at
fair value. Intangible assets with finite useful lives should be amortized over
such period and those with indefinite lives should not be amortized. All
intangible assets being amortized as well as those that are not, are both
subject to review for potential impairment under SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of". SFAS No. 142 also requires that goodwill arising in a business combination
should not be amortized but is subject to impairment testing at the reporting
unit level to which the goodwill was assigned to at the date of the business
combination.

                                       20
<PAGE>

SFAS No. 142 is effective for the fiscal years beginning after December 15, 2001
and must be applied as of the beginning of such year to all goodwill and other
intangible assets that have already been recorded in the balance sheet as of the
first day in which SFAS No. 142 is initially applied, regardless of when such
assets were acquired. Goodwill acquired in a business combination whose
acquisition date is on or after July 1, 2001, should not be amortized, but
should be reviewed for impairment pursuant to SFAS No. 121, even though SFAS No.
142 has not yet been adopted. However, previously acquired goodwill should
continue to be amortized until SFAS No. 142 is first adopted.

Statement No. 143 "Accounting for Asset Retirement Obligations" establishes
standards for the initial measurement and subsequent accounting for obligations
associated with the sale, abandonment, or other type of disposal of long-lived
tangible assets arising from the acquisition, construction, or development
and/or normal operation of such assets. SFAS No. 143 is effective for the fiscal
years beginning after June 15, 2002, with earlier application encouraged.

In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets and supercedes
FASB Statement No. 121, "Accounting for the Impairment of Long- Lived Assets and
for Long-Lived Assets to be Disposed Of". The provisions of the statement are
effective for financial statements issued for the fiscal years beginning after
December 15, 2001.

In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. SFAS
145 rescinds the provisions of SFAS No. 4 that requires companies to classify
certain gains and losses from debt extinguishments as extraordinary items,
eliminates the provisions of SFAS No. 44 regarding transition to the Motor
Carrier Act of 1980 and amends the provisions of SFAS No. 13 to require that
certain lease modifications be treated as sale leaseback transactions. The
provisions of SFAS 145 related to classification of debt extinguishments are
effective for fiscal years beginning after May 15, 2002. Earlier application is
encouraged.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Restructuring
Costs." SFAS 146 applies to costs associated with an exit activity (including
restructuring) or with a disposal of long-lived assets. Those activities can
include eliminating or reducing product lines, terminating employees and
contracts and relocating plant facilities or personnel. Under SFAS 146, we will
record a liability for a cost associated with an exit or disposal activity when
that liability is incurred and can be measured at fair value. SFAS 146 will
require us to disclose information about our exit and disposal activities, the
related costs, and changes in those costs in the notes to the interim and annual
financial statements that include the period in which an exit activity is
initiated and in any subsequent period until the activity is completed. SFAS 146
is effective prospectively for exit or disposal activities initiated after
December 31, 2002, with earlier adoption encouraged. Under SFAS 146, a company
cannot restate its previously issued financial statements and the new statement
grandfathers the accounting for liabilities that a company had previously
recorded under Emerging Issues Task Force Issue 94-3.

The adoption of these pronouncements is not expected to have a material effect
on our consolidated financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We have identified critical accounting policies that, as a result of judgments,
uncertainties, uniqueness and complexities of the underlying accounting
standards and operation involved, could result in material changes to our
consolidated financial position or results of operations under different
conditions or using different assumptions. The most critical accounting policies
and estimates are:

> Estimated allowance for uncollectible accounts receivable;

> Estimate of the fair value of warrants issued in connection with stockholder
  loans;

> Estimates regarding ongoing litigation;

> Estimates of the fair value of financial instruments;

> Revenue recognition in accordance with SFAS No. 13, Accounting for Leases;

Details regarding our use of these policies and the related estimates are
described in the accompanying consolidated financial statements as of June 30,
2002 and 2001 and for the years ended June 30, 2002, 2001 and 2000. During the
year ended June 30, 2002, there have been no material changes to our critical
accounting policies that impacted our consolidated financial condition or
results of operations other than the correction of errors as discussed in
footnote 1(Q) to our consolidated financial statements.

                                       21
<PAGE>

TRENDS

During our fiscal year ended June 30, 2002, our operations continued to
accelerate. For the fiscal year ended June 30, 2002, total purchases of revenue
producing assets were in excess of $59 million, compared to approximately $54
million for the year ended June 30, 2001. Monthly revenue from direct financing
arrangements (model homes and residential real estate) outstanding at June 30,
2002, 2001, and 2000 were $955,000, $912,000, and $521,000, respectively. During
our fiscal year ending June 30, 2003, we expect to continue to focus on
improving our profitability and returns on our invested capital.

It is anticipated that demand for our specialty financial services will continue
to develop during 2003, as our clients continue to desire to maintain their
financial ratios. Further, our financial services allow our clients the ability
to maximize financial leverage while reducing their applicable risks. We
anticipate that continued strong demand in the housing industry, along with
favorable interest rate spreads, should allow us to continue our growth.

While no assurances can be provided, we believe that favorable demographics
should prevent a significant downturn. In this regard, a recent study performed
by the Joint Center for Housing Studies of Harvard University included
projections suggesting that the number of owners will rise by an average of 1.1
million annually over the next two decades. Much of this growth reflects the
dramatic rise in the foreign-born population since the 1970's with the pickup in
Latin American and Asian immigration. Today, over one in ten U.S. residents is
foreign-born. The housing outlook remains bright with about 1.2 million
households expected to form each year through 2020. Reflecting the growing
immigrant and minority populations, Joint Center projections suggest that
homeowners will account for the lion's share of household growth, rising in
number from just over 70 million in 2000 to 92.3 million by 2020.

Producing housing for the burgeoning number of U.S. households, together with
meeting baby-boomer demand for vacation and retirement homes and replacing units
lost from the stock, calls for average annual construction of 1.7 million new
homes and apartments in the decades ahead. Add to this the enormous investment
required to maintain and upgrade the existing inventory of homes and it is clear
to us that housing will remain a key driver of the economy for the foreseeable
future.

INFLATION

Inflation has not had a significant impact on the results of operations and is
not anticipated to have a significant negative impact in the foreseeable future.
Although increases in the rate of inflation may tend to increase interest rates
which may increase our cost of borrowed funds, we attempt to pass the increases
through to our customers through increased charges. The potential adverse impact
of inflation on our lease operations is further mitigated by requiring clients
to pay all operating expenses, including but not limited to real property taxes,
insurance and utilities. However, there is no assurance that inflation will not
have a material adverse impact on our future results of operation.

DEFLATION

Deflation is a persistent fall in the general price level of goods and services.
Deflation is dangerous, however, more so even than inflation, when it reflects a
sharp slump in demand, excess capacity and a shrinking money supply. Runaway
deflation of this sort can be much more damaging than runaway inflation, because
it creates a vicious spiral that is hard to escape. The expectation that prices
will be lower tomorrow may encourage consumers to delay purchases, depressing
demand and forcing firms to cut prices by even more. Falling prices also inflate
the real burden of debt (that is, increase real interest rates) causing
bankruptcy and bank failure. This makes deflation particularly dangerous for
economies that have large amounts of corporate debt. Most serious of all,
deflation can make monetary policy ineffective; nominal interest rates cannot be
negative, so real rates can get stuck too high.

                                       22
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to changes in interest rates primarily as a result of our
floating rate debt arrangements, which include borrowings under lines of credit.
These lines, along with cash flow from operations, are used to maintain
liquidity and fund business operations. The nature and amount of our debt may
vary as a result of business requirements, market conditions and other factors.
It has not been necessary for us to use derivative instruments to adjust our
interest rate risk profile, although we continuously evaluate the need for
interest rate caps, swaps, and other interest rate-related derivative contracts,
to mitigate this risk.

A hypothetical 100 basis point adverse move (increase) in interest rates along
the entire interest rate curve would adversely affect our annual interest cost
by approximately $775,000.

RISK FACTORS

Our business is subject to numerous risk factors, which should be considered in
evaluating our Company and our financial outlook, including the following:

There are risks due to recent events, including increased insurance risk,
perceived risk of travel and adverse changes in economic conditions, which could
negatively affect our business. Due in large part to the terrorist activities of
September 11, 2001, and other recent events, we believe that insurance and
surety companies are re-examining many aspects of their business, and may take
actions including increasing premiums, requiring higher self-insured retentions
and deductibles, requiring additional collateral on surety bonds, reducing
limits, restricting coverages, imposing exclusions, such as sabotage and
terrorism, and refusing to underwrite certain risks and classes of business. Any
increased premiums, mandated exclusions, change in limits, coverages, terms and
conditions or reductions in the amounts of bonding capacity available may
adversely affect our ability to obtain appropriate insurance coverages at
reasonable costs, which could have a material adverse effect on our business.

Terrorist attacks or acts of war may seriously harm our business. Terrorist
attacks or acts of war may cause damage or disruption to our Company, our
employees, our facilities and our customers, which could impact our revenues,
costs and expenses, and financial condition. The terrorist attacks that took
place in the United States on September 11, 2001, were unprecedented. The
potential for future terrorist attacks has created many economic and political
uncertainties, some of which may have additional material adverse affects on our
business, results of operations, and financial condition.

The FASB has issued an Exposure Draft "Consolidation of Certain Special Purpose
Entities" ("SPE's"), a proposed Interpretation of Accounting Research Bulletin
(ARB) No. 51, "Consolidated Financial Statements" that establishes accounting
guidance for consolidation of SPE's. We believe that implementation of this
Exposure Draft, when and if it becomes a final accounting rule, would not
require our clients to consolidate our transactions.

There are appraisal risks. Real estate appraisals are only estimates of property
values based on a professional's opinion and may not be accurate predictors of
the actual amount that we would receive from a property sale. If an appraisal is
too high, the property's value could go down upon reappraisal or if the property
is sold for a lower price than the appraisal. An appraisal does not guarantee
the value of a property.

We may need additional funds for the growth and development of our business. If
we are unable to obtain these funds, we may not be able to expand our business
as planned and this could adversely affect our results of operations and future
growth.

There is a risk of change of economic conditions in the homebuilding industry.
The homebuilding industry historically has been cyclical and is affected
significantly by adverse changes in general and local economic conditions, such
as:

- employment levels;
- population growth;
- consumer confidence and stability of income levels;
- availability of financing for land acquisitions, construction and permanent
  mortgages;
- interest rates;
- inventory levels of both new and existing homes;
- supply of rental properties;
- conditions in the housing resale market.

                                       23
<PAGE>

There is a current crisis in the United States involving investor confidence due
to financial statement fraud and restatement of other issuer financial
statements. In response to a stream of business scandals that have decreased
investor confidence, landmark corporate and accounting reform legislation has
been passed by the US Congress this summer, including creation of the Public
Company Accounting Oversight Board. Regulators are continuing the process of
reworking accounting issues and policies that previously have been open to
interpretation. We have not, nor do we believe that our clients have engaged in
overly aggressive accounting strategies.

We have attempted to comply with the Sarbanes-Oxley Act of 2002. The Securities
and Exchange Commission implemented Section 302 of the Sarbanes-Oxley Act of
2002 (the "Act") effective August 29, 2002. Provisions of the Act apply to all
public reporting companies who file reports with the Securities and Exchange
Commission. In addition to certification by the Chief Executive Officer and
Chief Financial Officer as to the accuracy and completeness of financial
statements contained in filed reports, other restrictions and requirements are
part of the Act. The consensus of the AICPA and public filers is that additional
clarification will be needed to fully comply with the Act.

We also consider residual value insurance to be a risk factor. See RVI
discussion in Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations.

Our operations are dependant on the continued efforts of our officers and
executive management. Our ability to attract and retain business is
significantly affected by relationships and the quality of service rendered. The
loss of those key officers and members of executive management may cause a
significant disruption to our business. Additionally, the loss of such key
personnel could materially adversely affect our operations, including our
ability to establish and maintain client relationships.

                                       24
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA






                        STRATEGIC CAPITAL RESOURCES, INC.
                                AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                          AS OF JUNE 30, 2002 AND 2001









                        STRATEGIC CAPITAL RESOURCES, INC.
                                AND SUBSIDIARIES



                                    CONTENTS


PAGE         F-2        INDEPENDENT AUDITORS' REPORT

PAGE         F-3        CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2002 AND 2001

PAGE         F-4        CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS
                        ENDED JUNE 30, 2002, 2001 AND 2000

PAGES     F-5 - F-6     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE
                        YEARS ENDED JUNE 30, 2002, 2001 AND 2000

PAGE         F-7        CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS
                        ENDED JUNE 30, 2002, 2001 AND 2000

PAGES     F-8 - F-22    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30,
                        2002, 2001 AND 2000

                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
Strategic Capital Resources, Inc.
  and Subsidiaries
Boca Raton, Florida

We have audited the accompanying consolidated balance sheets of Strategic
Capital Resources, Inc. and subsidiaries as of June 30, 2002 and 2001 and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the years ended June 30, 2002, 2001 and 2000. 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated 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
audits provide a reasonable basis for our opinion.

As more fully described in Note 1 of the notes to the consolidated financial
statements, errors resulting in a net understatement of previously reported
interest expense for the years ended June 30, 2001 and 2000 and an overstatement
of interest income and income tax expense for the years ended June 30, 2002,
2001 and 2000 were discovered by management of the Company during 2002 and 2003.
Accordingly, the consolidated balance sheets as of June 30, 2002 and 2001 and
the statements of operations, stockholders' equity and cash flows for the years
ended June 30, 2002, 2001 and 2000 have been restated to reflect corrections to
previously reported amounts.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Strategic Capital Resources, Inc. and subsidiaries as of June 30, 2002 and 2001
and the results of their consolidated operations and their consolidated cash
flows for the years ended June 30, 2002, 2001 and 2000, in conformity with
accounting principles generally accepted in the United States of America.



Weinberg & Company, P.A.
Certified Public Accountants

Boca Raton, Florida
November 27, 2002, except for Note 12 which is as of December 19, 2002 and Note
                   1(Q) which is as of May 9, 2003

                                       F-2
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                          AS OF JUNE 30, 2002 AND 2001
                          ----------------------------


<TABLE>
<CAPTION>
                                     ASSETS
                                     ------
                                                                                                 2002            2001
                                                                                             (As Restated)   (As Restated)
                                                                                             ------------    ------------
<S>                                                                                          <C>             <C>
REVENUE PRODUCING ASSETS
 Net investment in direct financing arrangements:
  Model homes                                                                                $ 16,140,165    $ 34,502,977
  Residential real estate                                                                      62,020,542      44,524,990
  Multi-family residential property                                                            10,010,585      10,116,600
                                                                                             ------------    ------------

        Total Revenue Producing Assets                                                         88,171,292      89,144,567
                                                                                             ------------    ------------

OTHER ASSETS
 Cash and cash equivalents                                                                        801,415       3,986,639
 Deferred charges, net                                                                            848,466         673,382
 Deferred income taxes                                                                             86,967         328,561
 Other                                                                                            758,923         754,519
                                                                                             ------------    ------------

        Total Other Assets                                                                      2,495,771       5,743,101
                                                                                             ------------    ------------


TOTAL ASSETS                                                                                 $ 90,667,063    $ 94,887,668
------------                                                                                 ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

LIABILITIES
 Mortgages and notes payable                                                                 $ 77,592,476    $ 83,351,379
 Accounts payable and accrued expenses                                                          1,739,401       1,055,764
 Unearned income                                                                                  173,038         368,003
 Current income taxes                                                                             237,093              --
 Deferred income taxes                                                                            615,035         420,000
 Stockholder loans                                                                              1,909,200       1,223,100
                                                                                             ------------    ------------
        Total Liabilities                                                                      82,266,243      86,418,246
                                                                                             ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
 Convertible preferred stock, $.01 par value, 5,000,000 shares authorized, 400,000 shares
  issued and outstanding in 2001                                                                       --           4,000
 Common stock, $.001 par value, 25,000,000 shares authorized, 87,560 shares issued and
  77,192 shares outstanding in 2002, 87,560 shares issued and 77,192 shares outstanding in
  2001                                                                                                 88              88
 Additional paid-in capital                                                                     8,847,616       9,744,948
 Treasury stock, 10,368 shares at cost                                                           (457,999)       (457,999)
 Retained earnings (deficit)                                                                       11,115        (821,615)
                                                                                             ------------    ------------


TOTAL STOCKHOLDERS' EQUITY                                                                      8,400,820       8,469,422
                                                                                             ------------    ------------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                   $ 90,667,063    $ 94,887,668
------------------------------------------                                                   ============    ============
</TABLE>

                 See notes to consolidated financial statements

                                       F-3

<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE YEARS ENDED JUNE 30, 2002, 2001 AND 2000
                ------------------------------------------------

<TABLE>
<CAPTION>
                                                                   2002          2001           2000
                                                               (As Restated) (As Restated)  (As Restated)
                                                                -----------   -----------    -----------
<S>                                                             <C>           <C>            <C>
REVENUES AND OTHER INCOME
 Interest income on direct financing arrangements:
  Model homes                                                   $ 2,938,599   $ 4,810,323    $ 4,842,346
  Residential real estate                                         7,106,852     3,264,599             --
  Multi-family residential property                                 819,472       953,965        948,702
 Gain on sale of model home properties under direct financing
 arrangements                                                       393,859       377,392        323,810
 Interest and other income                                           81,470       135,798        323,620
                                                                -----------   -----------    -----------
       Total Revenues and Other Income                           11,340,252     9,542,077      6,438,478
                                                                -----------   -----------    -----------

COSTS AND OPERATING EXPENSES
 Interest and financing costs to financial institutions           4,956,835     5,597,692      3,836,260
 Interest and financing costs to stockholders                       214,030       387,086        347,880
 Depreciation and amortization                                    1,547,136       930,942        664,751
 Corporate selling, general and administrative                    2,564,342     1,536,118      1,553,940
 Impairment charge                                                   91,122     1,000,000        100,000
                                                                -----------   -----------    -----------
       Total Costs and Operating Expenses                         9,373,465     9,451,838      6,502,831
                                                                -----------   -----------    -----------


INCOME (LOSS) BEFORE INCOME TAX EXPENSE                           1,966,787        90,239        (64,353)


INCOME TAX EXPENSE                                                1,079,057        71,579         46,060
                                                                -----------   -----------    -----------


NET INCOME (LOSS)                                                   887,730        18,660       (110,413)

PREFERRED STOCK DISTRIBUTIONS                                        55,000        85,000        120,000
                                                                -----------   -----------    -----------


INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS                 $   832,730   $   (66,340)   $  (230,413)
                                                                ===========   ===========    ===========

EARNINGS PER SHARE DATA:


Basic earnings (loss) per share                                 $     10.79   $      (.85)   $     (2.90)
                                                                ===========   ===========    ===========


Diluted earnings (loss) per share                               $     10.73   $      (.85)   $     (2.90)
                                                                ===========   ===========    ===========
</TABLE>

                 See notes to consolidated financial statements

                                       F-4

<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                FOR THE YEARS ENDED JUNE 30, 2002, 2001 AND 2000
                ------------------------------------------------


<TABLE>
<CAPTION>
                    Preferred Stock           Common Stock          Additional       Treasury Stock         Retained
                ------------------------  ------------------------    Paid-In   -------------------------   Earnings
                  Shares       Amount       Shares       Amount       Capital     Shares        Amount      (Deficit)      Total
                -----------  -----------  -----------  -----------  ----------- -----------   -----------  -----------  -----------
<S>                 <C>      <C>               <C>     <C>          <C>              <C>      <C>          <C>          <C>
Balance,
 July 1, 1999,
 as previously
 reported           400,000  $     4,000       85,060  $        85  $ 8,363,479      (5,541)  $  (282,786) $   351,308  $ 8,436,086

Prior period
 adjustment to
 account for
 financing
 warrants                --           --           --           --      876,170          --            --     (876,170)          --
                -----------  -----------  -----------  -----------  ----------- -----------   -----------  -----------  -----------

Balance,
 July 1, 1999
 (as restated)      400,000        4,000       85,060           85    9,239,649      (5,541)     (282,786)    (524,862)   8,436,086

Treasury
 stock
 purchased               --           --           --           --           --      (1,211)      (60,390)          --      (60,390)

Preferred
 distributions           --           --           --           --           --          --            --     (120,000)    (120,000)

Issuance of
 financing
 warrants                --           --           --           --      235,660          --            --           --      235,660

Net loss
 (as restated)
                         --           --           --           --           --          --            --     (110,413)    (110,413)
                -----------  -----------  -----------  -----------  ----------- -----------   -----------  -----------  -----------

Balance,
 June 30, 2000
 (as restated)      400,000        4,000       85,060           85    9,475,309      (6,752)     (343,176)    (755,275)   8,380,943

Treasury
 stock
 purchased               --           --           --           --           --      (3,616)     (114,823)          --     (114,823)

Financing
 warrants
 exercised               --           --        2,500            3          497          --            --           --          500

Preferred
 distributions           --           --           --           --           --          --            --      (85,000)     (85,000)

Issuance of
 financing
 warrants                --           --           --           --      269,142          --            --           --      269,142

Net income
 (as restated)
                         --           --           --           --           --          --            --       18,660       18,660
                -----------  -----------  -----------  -----------  ----------- -----------   -----------  -----------  -----------
</TABLE>

                 See notes to consolidated financial statements

                                       F-5

<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                FOR THE YEARS ENDED JUNE 30, 2002, 2001 AND 2000
                ------------------------------------------------


<TABLE>
<CAPTION>
                    Preferred Stock           Common Stock         Additional       Treasury Stock          Retained
               ------------------------  ------------------------    Paid-In   ------------------------     Earnings
                  Shares      Amount        Shares       Amount      Capital     Shares       Amount        (Deficit)      Total
               -----------  -----------  -----------  -----------  ----------- -----------  -----------    -----------  -----------
<S>                <C>            <C>         <C>              <C>   <C>           <C>         <C>            <C>         <C>
Balance,
 June 30, 2001
 (as restated)     400,000        4,000       87,560           88    9,744,948     (10,368)    (457,999)      (821,615)   8,469,422

Preferred
 distributions          --           --           --           --           --          --           --        (55,000)     (55,000)

Preferred
 stock
 redemption       (400,000)      (4,000)          --           --     (996,000)         --           --             --   (1,000,000)

Issuance of
 financing
 warrants               --           --           --           --       98,668          --           --             --       98,668

Net income
 (as restated)
                        --           --           --           --           --          --           --        887,730      887,730
               -----------  -----------  -----------  -----------  ----------- -----------  -----------    -----------  -----------

BALANCE,
 JUNE 30, 2002
 (AS RESTATED)          --  $        --       87,560  $        88  $ 8,847,616 $   (10,368) $  (457,999)   $    11,115  $ 8,400,820
               ===========  ===========  ===========  ===========  =========== ===========  ===========    ===========  ===========
</TABLE>

                 See notes to consolidated financial statements

                                       F-6

<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE YEARS ENDED JUNE 30, 2002, 2001 AND 2000
                ------------------------------------------------

<TABLE>
<CAPTION>
                                                                                    2002           2001            2000
                                                                                (As Restated)  (As Restated)   (As Restated)
                                                                                ------------    ------------    ------------
<S>                                                                             <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

 Net income (loss)                                                              $    887,730    $     18,660    $   (110,413)
                                                                                ------------    ------------    ------------
 Adjustments to reconcile net income (loss) to net cash provided by operating
  activities:
  Amortization expense                                                             1,530,124         912,191         647,300
  Depreciation expense                                                                17,012          18,751          17,451
  Deferred income taxes                                                              436,629         (23,421)        (21,140)
  Gain on sale of model home properties under direct financing
    arrangements                                                                    (393,859)       (377,396)       (323,810)
  Impairment charge                                                                   91,122       1,000,000         100,000
  Interest expense from issuances of warrants                                         98,668         269,142         235,660
  Multi-family residential property interest expense                                 106,015          58,552          52,847
  Changes in operating assets and liabilities:
    (Increase) in other assets                                                        (4,404)       (418,554)       (241,746)
    Increase (decrease) in current income taxes                                      237,093          36,000          (9,800)
    Increase in accounts payable and accrued expenses                                683,637         356,897         169,236
    Increase (decrease) in unearned income                                          (194,965)         11,149         188,611
                                                                                ------------    ------------    ------------

            Total adjustments                                                      2,607,072       1,843,311         814,609
                                                                                ------------    ------------    ------------
        Net Cash Provided By Operating Activities                                  3,494,802       1,861,971         704,196
                                                                                ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

 Increase in investment in properties under direct financing arrangements:
  Model homes                                                                             --              --        (586,183)
  Residential real estate                                                        (11,469,091)             --              --
 Proceeds from sale of properties under direct financing arrangements:
  Model homes                                                                      1,878,105       1,913,058       3,186,506
  Residential real estate                                                          5,680,884          70,839              --
 Loan advance                                                                             --              --      (1,000,000)
 Proceeds from note receivable                                                            --         650,000         350,000
 Capital expenditures                                                                     --          (9,513)         (3,933)
                                                                                ------------    ------------    ------------
         Net Cash (Used In) Provided By Investing Activities                      (3,910,102)     (2,624,384)      1,946,390
                                                                                ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from mortgages and notes payable                                                --         416,645              --
 Principal payments on mortgages payable                                            (459,716)     (1,301,754)       (958,886)
 Deferred finance charges                                                         (1,705,208)       (948,012)       (566,494)
 Proceeds from stockholder loans                                                     435,000         353,680              --
 Repayments of stockholder loans                                                    (485,000)       (272,000)       (183,987)
 Preferred distributions                                                             (55,000)        (85,000)       (120,000)
 Redemption of preferred stock                                                      (500,000)             --              --
 Purchase of treasury stock                                                               --        (114,823)        (60,390)
                                                                                ------------    ------------    ------------
         Net Cash Used In Financing Activities                                    (2,769,924)     (1,951,264)     (1,889,757)
                                                                                ------------    ------------    ------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                              (3,185,224)      2,535,091         760,829

CASH AND CASH EQUIVALENTS - BEGINNING                                              3,986,639       1,451,548         690,719
                                                                                ------------    ------------    ------------

CASH AND CASH EQUIVALENTS - ENDING                                              $    801,415    $  3,986,639    $  1,451,548
----------------------------------                                              ============    ============    ============
</TABLE>

                 See notes to consolidated financial statements

                                       F-7

<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

NOTE 1 DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------------------------

(A) Description of Business
---------------------------

Strategic Capital Resources, Inc. and Subsidiaries (the "Company") provides
specialized financing for major homebuilders and real estate developers
("clients") throughout the United States. These arrangements may take several
forms which include direct financing leases, option agreements, or management
agreements. Such arrangements may represent off-balance sheet transactions for
the Company's clients.

The Company is engaged in such arrangements in three lines of business,
consisting of one reportable segment, all with major homebuilders and real
estate developers throughout the United States (See Note 2(A) and (B)):

1)   Fully furnished model homes.

2)   Residential real estate acquisition and development.

3)   Multi-family residential property.

(B) Basis of Presentation
-------------------------

This summary of significant accounting policies of the Company is presented to
assist in understanding the consolidated financial statements. The consolidated
financial statements and notes are representations of the Company's management,
which is responsible for their integrity and objectivity. These accounting
policies conform to accounting principles generally accepted in the United
States of America and have been consistently applied in the preparation of the
consolidated financial statements.

(C) Principles of Consolidation
-------------------------------

The accompanying consolidated financial statements include the accounts of
Strategic Capital Resources, Inc. and of its wholly owned subsidiaries,
including special purpose subsidiaries. Intercompany transactions have been
eliminated in consolidation.

(D) Special Purpose Subsidiaries
--------------------------------

The Company has several wholly owned special purpose subsidiaries, all of which
are consolidated. They were formed for the exclusive purpose of acquiring
specific properties and perform no functions other than to manage a specific
project. A special purpose subsidiary is an entity structured in a way that its
sole activity is the specific project.

(E) Special Purpose Entities
----------------------------

The Company does not have off-balance sheet arrangements with special purpose
entities.

(F) 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.

(G) Fair Value of Financial Instruments
---------------------------------------

The carrying value of all financial instruments, including debt, accounts
payable and accrued expenses, cash and temporary cash investments, approximates
their fair value at year-end due to the relatively short duration of such
instruments.

(H) Segment Reporting
---------------------

The Company determined that its operations involve one reportable segment, real
estate financing arrangements.

                                      F-8
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

(I) Concentration of Credit Risk
--------------------------------

Financial instruments, which potentially subject the Company to concentration of
credit risk, consist principally of cash and a customer receivable included in
other assets, described below.

At June 30, 2002 and 2001, the Company had cash balances with two banks, which
were, in the aggregate, $154,279 and $3,184,000 respectively, in excess of the
$100,000 limit insured by the Federal Deposit Insurance Corporation for each
bank. Based on credit analysis of the financial institutions with which it does
business, the Company believes it is not exposed to any significant credit risk
on cash.

A client owes the Company $668,000 for past due lease payments, real estate
taxes, other operating costs under the leases, model home resale deficiencies as
well as un-reimbursed costs and expenses. The receivable is included in other
assets in the accompanying consolidated balance sheets. The client filed Chapter
11 bankruptcy reorganization in May 2002. The receivable is covered by surety
bonds, other insurance, as well as a claim on the assets of the client. The
Company has commenced the process of filing proofs of claim, making appropriate
motions and taking other actions in the Bankruptcy Court to recover and receive
lease payments, real estate taxes and other operating costs under the leases in
addition to the outstanding balances. Management believes that the Company has
sufficient insurance coverage and surety bonds to fully cover the amount due.
Also See Note 2(A)).

(J) Depreciation
----------------

Office furniture and equipment (included in other assets) are carried at cost
and are depreciated on the straight-line method over five years. At June 30,
2002, office furniture and equipment were fully depreciated.

(K) Treasury Stock
------------------

Treasury stock is recorded at cost. Issuance of treasury shares is accounted for
on a first-in, first-out basis. Differences between the cost of treasury shares
and the re-issuance proceeds are charged to additional paid-in capital, if
reissued. No shares have been reissued.

(L) New Accounting Pronouncements
---------------------------------

The Financial Accounting Standards Board ("FASB") has recently issued several
new Statements of Financial Accounting Standards ("SFAS"). Statement No. 141,
"Business Combinations" supersedes Accounting Principles Board ("APB") Opinion
No. 16 and various related pronouncements. Pursuant to the new guidance in
Statement No. 141, all business combinations must be accounted for under the
purchase method of accounting; the pooling-of-interests method is no longer
permitted. SFAS 141 also establishes new rules concerning the recognition of
goodwill and other intangible assets arising in a purchase business combination
and requires disclosure of more information concerning a business combination in
the period in which it is completed. This statement is generally effective for
business combinations initiated on or after July 1, 2001.

Statement No. 142, "Goodwill and Other Intangible Assets" supercedes APB Opinion
17 and related interpretations. Statement No. 142 establishes new rules on
accounting for the acquisition of intangible assets acquired in a business
combination and the manner in which goodwill and all other intangibles should be
accounted for subsequent to their initial recognition in a business combination
accounted for under SFAS No. 141. Under SFAS No. 142, intangible assets should
be recorded at fair value. Intangible assets with finite useful lives should be
amortized over such period and those with indefinite lives should not be
amortized. All intangible assets being amortized as well as those that are not,
are both subject to review for potential impairment under SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of". SFAS No. 142 also requires that goodwill arising in a business
combination should not be amortized but is subject to impairment testing at the
reporting unit level to which the goodwill was assigned to at the date of the
business combination.

SFAS No. 142 is effective for the fiscal years beginning after December 15, 2001
and must be applied as of the beginning of such year to all goodwill and other
intangible assets that have already been recorded in the balance sheet as of the
first day in which SFAS No. 142 is initially applied, regardless of when such
assets were acquired. Goodwill acquired in a business combination whose
acquisition date is on or after July 1, 2001, should not be amortized, but
should be reviewed for impairment pursuant to SFAS No. 121, even though SFAS No.
142 has not yet been adopted. However, previously acquired goodwill should
continue to be amortized until SFAS No. 142 is first adopted.

Statement No. 143 "Accounting for Asset Retirement Obligations" establishes
standards for the initial measurement and subsequent accounting for obligations
associated with the sale, abandonment, or other type of disposal of long-lived
tangible assets arising from the acquisition, construction, or development
and/or normal operation of such assets. SFAS No. 143 is effective for the fiscal
years beginning after June 15, 2002, with earlier application encouraged.

                                      F-9
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets and supercedes
FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of". The provisions of the statement are
effective for financial statements issued for the fiscal years beginning after
December 15, 2001.

In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. SFAS
145 rescinds the provisions of SFAS No. 4 that requires companies to classify
certain gains and losses from debt extinguishments as extraordinary items,
eliminates the provisions of SFAS No. 44 regarding transition to the Motor
Carrier Act of 1980 and amends the provisions of SFAS No. 13 to require that
certain lease modifications be treated as sale leaseback transactions. The
provisions of SFAS 145 related to classification of debt extinguishments are
effective for fiscal years beginning after May 15, 2002. Earlier application is
encouraged.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Restructuring
Costs." SFAS 146 applies to costs associated with an exit activity (including
restructuring) or with a disposal of long-lived assets. Those activities can
include eliminating or reducing product lines, terminating employees and
contracts and relocating plant facilities or personnel. Under SFAS 146, the
Company will record a liability for a cost associated with an exit or disposal
activity when that liability is incurred and can be measured at fair value. SFAS
146 will require the Company to disclose information about its exit and disposal
activities, the related costs, and changes in those costs in the notes to the
interim and annual financial statements that include the period in which an exit
activity is initiated and in any subsequent period until the activity is
completed. SFAS 146 is effective prospectively for exit or disposal activities
initiated after December 31, 2002, with earlier adoption encouraged. Under SFAS
146, a company cannot restate its previously issued financial statements and the
new statement grandfathers the accounting for liabilities that a company had
previously recorded under Emerging Issues Task Force Issue 94-3.

The adoption of these pronouncements is not expected to have a material effect
on our consolidated financial statements.

(M) Cash and Cash Equivalents
-----------------------------

For financial statement presentation purposes, the Company considers all highly
liquid investments with an original maturity of three months or less to be cash
equivalents.

(N) Revenue Recognition and Concentration
-----------------------------------------

The Company accounts for its model homes and residential real estate development
financing arrangements under the direct financing method of accounting
prescribed under SFAS No. 13, Accounting for Leases. Under the direct financing
method of accounting, the assets are recorded as an investment in direct
financing arrangements and represent the minimum net payments receivable,
including third-party guaranteed residuals, plus the un-guaranteed residual
value of the assets, if any, less unearned income. Gain on sale of model home
properties under direct financing arrangements is recorded at the time each
model home property sale is closed and when title and possession have been
transferred to the buyer.

Since the residential real estate transactions are financing arrangements in the
form of purchase options, the Company recognizes the related interest income
monthly. There is no gain from the sales of this real estate because the sales
price equals the Company's cost. For the years ended June 30, 2002, 2001 and
2000, the Company sold $41,947,444, $1,416,802 and $0, respectively.

The Company accounts for its multi-family residential property arrangement as a
direct financing arrangement. Interest income is recorded, as earned over the
term of the agreement. Also see Note 2(B).

Since 2000, three of our major clients have represented a significant potion of
our total revenues. Of our total revenues, one of these clients represents 57%
of our revenues during 2002, 52% in 2001, and 57% in 2000. A second client
represented 23% in 2002, 15% in 2001, and 22% of our revenues in 2000. A third
client represented 11% of our total revenue in 2001.

(O) Earnings Per Common Share
-----------------------------

Basic earnings per common share is computed by dividing the net income
applicable to common stock stockholders by the weighted average number of shares
of common stock outstanding during the period. Diluted earnings per share is
computed by dividing net income by the weighted average number of common shares
including the dilutive effect of common share equivalents then outstanding.

                                      F-10
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

In 2002, the Board of Directors and a majority of the Company's stockholders
approved a 200 for 1 reverse stock split of the outstanding shares of the
Company's common stock, effective June 13, 2002. The Company's capital
structure, weighted average common shares and earnings per share have been
restated for all years presented to give retroactive effect to the reverse stock
split.

The following is the calculation of basic and diluted earnings per share for the
years ended June 30, 2002, 2001 and 2000:

<TABLE>
<CAPTION>
                                                               For the Year Ended June 30,
                                                      --------------------------------------------
                                                          2002            2001            2000
                                                      (As Restated)   (As Restated)   (As Restated)
                                                      ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>
Earnings:

Net income (loss)                                     $    887,730    $     18,660    $   (110,413)

Dividends on preferred shares                              (55,000)        (85,000)       (120,000)
                                                      ------------    ------------    ------------


Income (loss) applicable to common stockholders       $    832,730    $    (66,340)   $   (230,413)
                                                      ============    ============    ============

Basic:

Income (loss) applicable to common stockholders       $    832,730    $    (66,340)   $   (230,413)
                                                      ============    ============    ============

Weighted average shares outstanding during the year         77,192          78,009          79,363
                                                      ============    ============    ============


Basic earnings (loss) per share                       $      10.79    $       (.85)   $      (2.90)
                                                      ============    ============    ============

Diluted:

Income (loss) applicable to common stockholders       $    832,730    $    (66,340)   $   (230,413)
                                                      ============    ============    ============

Weighted average shares outstanding during the year         77,192          78,009          79,363

Effect of dilutive securities:
 Stock options                                                 293              --              --
 Warrants                                                      110              --              --
                                                      ------------    ------------    ------------

Diluted weighted average shares outstanding                 77,595          78,009          79,363
                                                      ============    ============    ============

Diluted earnings (loss) per share                     $      10.73    $       (.85)   $      (2.90)
                                                      ============    ============    ============
</TABLE>

Additionally, the Company's 400,000 shares of preferred stock were convertible
into 400,000 shares of pre-split common stock at $2.50 per share. Such
conversion has not been assumed for the years ended June 30, 2001 or 2000, since
the effect on loss per share would be anti-dilutive. The preferred shares were
redeemed during the year ended June 30, 2002 (See Note 8).

(P) Reclassifications
---------------------

Certain amounts have been reclassified in prior years to conform to the current
year's presentation. Specifically, the proceeds from the sale of model homes
under direct financing arrangements and the related costs have been reported as
a net gain on the sale of model home properties under direct financing
arrangements in the consolidated statements of operations.

In addition, sales of residential real estate under direct financing
arrangements and the related costs which are typically the same amount are no
longer reported as operating revenue and operating expense.

The multi-family operating expenses (property taxes, insurance and repairs) have
been netted against the multi-family residential property interest income on
direct financing arrangements.

                                      F-11
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

(Q) Restatement of Consolidated Financial Statements Resulting from the
Correction of Errors
-----------------------------------------------------------------------

The accompanying consolidated balance sheets as of June 30, 2002 and 2001 and
the consolidated statements of operations, stockholders' equity and cash flows
for the years ended June 30, 2002, 2001 and 2000 have been restated to correct
errors resulting in the net understatement of interest expense and additional
paid-in capital and the overstatement of interest income and income tax expense.

One of the errors resulted from the Company not recording the effects of
detachable warrants issued with stockholder debt. Also see Notes 7 and 8(C). The
effect of the error was to increase non-cash interest expense and decrease net
income by $269,142 and $235,660 for 2001 and 2000, respectively. The effect of
the error was to also increase additional paid-in capital by $1,380,972 at June
30, 2001.

The second error resulted from the Company's over-accrual of interest expense at
June 30, 2001. The effect of the error was to decrease interest expense and
increase net income by $98,395 for 2001. The effect of the error was to also
increase retained earnings and decrease accrued expenses by $98,395 at June 30,
2001.

Additionally in May 2003, after consultation with the Securities and Exchange
Commission, the Company's management discovered that it had not properly
accounted for the implicit interest rate in the multi-family residential
property agreement. As a result of the correction, interest income decreased by
$106,015, $58,552 and $52,847 for the years ended June 30, 2002, 2001 and 2000,
respectively. Additionally, income tax expense was reduced by $42,406, $23,421
and $21,140 for the years ended June 30, 2002, 2001 and 2000, respectively. The
adjustment to interest income also resulted in a decrease to the net investment
in the multi-family residential property by $106,015 and $111,399 at June 30,
2002 and 2001, respectively.

The net effect of the errors on income (loss) per share was to reduce previously
reported earnings per share of $11.61, $.01 and $.00 for the years ended June
30, 2002, 2001 and 2000, respectively to an income (loss) per share of $10.79,
$(.85) and $(2.90), respectively.

The retained earnings (deficit), additional paid-in capital, the net investment
in multi-family residential property and the deferred tax asset in the June 30,
2002 and 2001 consolidated balance sheets, and the net income (loss), interest
income and income tax expense in the consolidated statements of operations,
stockholders' equity and cash flows for the years ended June 30, 2002, 2001 and
2000 have been restated for the effects of the adjustments resulting from the
correction of the errors.

NOTE 2 DIRECT FINANCING ARRANGEMENTS
------------------------------------

(A) Model Home Program
----------------------

The Company has entered into a series of direct financing arrangements with
various major homebuilders and real estate developers that provide for monthly
payments, which are negotiated on a per transaction basis and are designed to
cover our debt service as well as to provide us positive cash flow. The monthly
payments are recorded to interest income on direct financing arrangements in the
accompanying consolidated statements of operations. In addition, under the terms
of the agreements, all expenses arising during the term of the agreement are
paid by the client including, but not limited to, utilities, homeowner
association assessments, maintenance, insurance and real estate taxes.

The arrangements terminate only upon the sale of the model homes. In connection
therewith, the Company has entered into net listing agreements with the real
estate brokerage affiliates of some of the clients. Such agreements provide for
commissions and incentives, which are negotiated on a per transaction basis. The
sales price may not be less than the original purchase price unless the client
elects to pay any deficiency at the closing.

All clients are required to provide a surety bond, letter of credit or
equivalent financial instrument in order to insure their performance of their
obligations. The financial instruments provided by clients have historically
ranged from 5% to 110% of the Company's purchase price of the model homes.

Residual Value Insurance (RVI) is obtained to insure 80% -100% of the
acquisition cost of the model homes. In some cases, the RVI covers the interest
income derived from such direct financing arrangements and other homebuilder
contractual obligations to the Company. The premiums are paid annually in
advance and are non-refundable and not proratable. They are a percentage of the
insured value.

                                      F-12
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

All such insurance has been obtained from major domestic based insurance
companies rated "A" through "AAA" by major credit rating agencies. The intent of
these arrangements is to reduce the cost of funds, and to increase the amounts
borrowed, thereby increasing profitability and leverage.

The Company accounts for its model home transactions under the provisions of
SFAS 13, Accounting for Leases. Since the Company has RVI for the model home
transactions, the homes are considered direct financing arrangements rather than
operating leases.

Approximately 35% of the Company's interest income on model home direct
financing arrangements was derived from two homebuilders for the year ended June
30, 2002.

(B) Multi-Family Residential Property
-------------------------------------

On July 15, 1999, we purchased a 288 unit multi-family residential property in
Jacksonville, Florida, for a purchase price of $10,227,999. The purchase price
was paid as follows:

        Assumption of existing first mortgage           $     4,927,999
        New loan                                              5,300,000
                                                        ---------------

        Total Purchase Price                            $    10,227,999
                                                        ===============

At the time of purchase, the Company entered into a five-year management
agreement with a non-affiliated independent management company. The management
company is responsible for the operation of the property, retains all income
from the property and is responsible for any losses. The Company receives a
monthly fee comprised of the sum of the debt service to cover the assumed
existing first mortgage ($43,365) plus required escrows for real estate taxes,
property insurance and repair reserve, plus a 12% annual return on the
$5,300,000 new loan. The escrow portion is variable based on changes in
estimated expenses. The multi-family operating expenses (property taxes,
insurance and repairs) have been netted against the multi-family interest income
in the accompanying consolidated statements of operations. The Company's profit
on the transaction arises from the difference between the 12% return and
interest expense paid by the Company on its $5,300,000 loan. The management
company receives the benefit of the property appreciation, rent and occupancy
increases. The annual return is 11% for the first two years, 12% for year three
and 13% for years four and five. The average return over the term of the
agreement is 12%.

The management company has an option to purchase the property any time during
the last four years of the agreement at an amount equal to the balance of the
first mortgage plus an interest adjustment of $121,527, representing the
difference between the 11% paid and the 12% due us, bearing interest of 12%
since August 25, 2001, plus $5,300,000. If they fail to exercise the option, the
management company is required to pay a balloon payment of $5,300,000 at the end
of the five years. A performance bond, issued by an insurance company rated
"AAA" by Moody's and Standard & Poors, in the amount of $8,335,000 has been
obtained and paid for by the management company to insure the payment and
performance of the management company. The performance bond insures the monthly
payments by the management company and the $5,300,000 balloon payment at the end
of the agreement.

The Company accounts for the multi-family residential property as a direct
financing arrangement, in accordance with the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 13, Accounting for Leases, because
the agreement contains a bargain purchase option. In May 2003, after
consultation with the Securities and Exchange Commission, the Company's
management discovered that it had not properly accounted for the implicit
interest rate in the agreement and has accounted for the prior period adjustment
as a correction of error in the accompanying consolidated financial statements.
Also see Note 1(Q).

SFAS No. 13 dictates the following accounting treatment for this transaction:
(1) Using the actual purchase price of $10,227,999, the bargain purchase option
at the end of five (5) years of $4,330,902 and the minimum lease payments, an
implicit interest rate of 10.295% is derived utilizing present value tables; (2)
the implicit interest rate is then applied to the purchase price and an interest
income stream is generated for the five (5) years; (3) the implicit amount is
compared to the cash amount received (net of executory payments for taxes and
insurances); (4) since the cash received is greater than the implicit interest,
the excess is recorded as a reduction to the net investment in the accompanying
consolidated balance sheets, resulting in a net investment of $10,010,585 and
$10,116,600 at June 30, 2002 and 2001, respectively. The reduction to the net
investment also results in an increase in a deferred tax asset, since the
reduction is being recognized for book purposes and not for tax purposes.

                                      F-13
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

The table below reflects the change to the results previously reported.

<TABLE>
<CAPTION>
                                     Implicit        Reduction
       Fiscal                        Interest         to Net        Blended      Deferred      Net Decrease
        Year       Cash Received      Income         Investment     Tax Rate    Tax Benefit    To Earnings
     -----------   -------------   -------------    ------------   -----------  -----------   -------------
<S>                <C>             <C>              <C>                <C>      <C>           <C>
     6/30/2000     $   1,103,386   $   1,050,539    $     52,847       40.0%    $    21,140   $      31,707
     6/30/2001         1,103,386       1,044,834          58,552       40.0%         23,421          35,131
     6/30/2002         1,143,136       1,037,121         106,015       40.0%         42,406          63,609
                   -------------   -------------    ------------                -----------   -------------

     Total         $   3,349,908   $   3,132,494    $    217,414                $    86,967   $     130,447
                   =============   =============    ============                ===========   =============
</TABLE>

(C) Residential Real Estate Acquisition and Development Arrangements

The Company purchases parcels of residential real estate selected by
homebuilders from third parties. The parcels of land may require entitlement and
development or consist of finished lots. The Company simultaneously enters into
a fixed price development agreement to develop the parcels of land and in all
cases the Company requires the developer to provide completion bonds for some or
all work by a surety company acceptable to the Company. The Company enters into
these transactions with funding from banks and these loans are secured by
specific assets of the Company. As development occurs, the Company retains
ownership of the developed real estate. The Company approves draw requests paid
to the developer under the development agreements. The Company or their banks
fund the draw. If the Company funds the draws, the banks reimburse the Company
upon request. An exclusive option to purchase agreement is entered into with the
homebuilder simultaneously with the land acquisition and development contract.
The terms and conditions of each transaction are project-specific (interest rate
on the option, term, takedown schedule, etc.) The interest rate on the option is
negotiated with each client. It is based on the credit of the client, estimated
duration and size of the project and interest rates in effect at the time. The
interest rate on the option is a fixed percentage, is non-refundable, is payable
monthly in advance by the homebuilder and is fully earned. The interest rate on
the option is calculated by applying the fixed percentage to the Company's net
investment in the real estate (cost of the land plus development cost incurred
less options exercised by the homebuilder). Our financing agreements with our
lenders may call for a fixed interest rate or variable rate. These factors are
all considered during negotiations to maintain the Company's profit margins.

Each time the homebuilder exercises their option to purchase the residential
real estate there is a formal real estate closing and title passes to the
homebuilder. If the homebuilder fails to exercise their options to purchase the
real estate, the Company has the right to sell the real estate to another party
and there is no refund of the interest received. In addition, the Company has
the right to draw against the developer's letter of credit or performance bond.
Since the option sales price of the real estate to the homebuilder is equal to
the Company's cost of the land plus costs to develop, there typically is no gain
or loss on the sale of the residential real estate.

We grant our clients an option to acquire finished lots in staged takedowns. In
consideration for the option we receive a deposit in the form of a performance
bond or a letter of credit equal to 20% or less of the total purchase price as
well as an option maintenance fee which is payable monthly in advance. The
option fees are fully earned when paid and non-refundable. The client has the
right to terminate their obligations under the option agreements by foregoing
the deposit, paying for the finished lots exercised and any other penalties
provided for in the agreements. We have legal title to these assets. If the
client terminated the agreements we have the risk of a decline in the market
value of the property.

RVI is obtained to insure 80% -100% of the fully developed cost of the
residential real estate. In some cases, the RVI covers the option income derived
from such development arrangements and other homebuilder contractual obligations
to the Company. The premiums are paid annually in advance and are non-refundable
and not proratable. They are a percentage of the insured value.

Approximately 90% of the interest income relating to the options on residential
real estate was derived from two homebuilders for the year ended June 30, 2002.


NOTE 3 NET INVESTMENT IN DIRECT FINANCING ARRANGEMENTS
------------------------------------------------------

The components of the net investment in direct financing arrangements are as
follows:

                                                               June 30,
                                                       -------------------------
                                                          2002          2001
                                                       -----------   -----------


Gross investment in direct financing arrangements      $88,171,292   $89,144,567
Less: unearned income                                      173,038       368,003
                                                       -----------   -----------

Total net investment in direct financing arrangements  $87,998,254   $88,776,564
                                                       ===========   ===========

                                      F-14
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

NOTE 4 IMPAIRMENT CHARGES
-------------------------

During the year ended June 30, 1997, the Company disposed of its construction
subsidiary, Iron Eagle Contracting and Mechanical, Inc. ("IECM"). Under the
terms of the agreement, the Company sold the net assets of IECM for a note in
the amount of $1,312,500. The note bears interest at the prime rate plus 1%.
Interest was payable in monthly installments. The note was secured by all assets
of IECM's parent company, Monarch Investment Properties, Inc. ("Monarch"), which
was formerly known as Iron Holdings Corp., and by all of the issued and
outstanding shares of IECM.

During June 1999, the Company filed a lawsuit against Monarch, and its
subsidiaries, IECM and Tahoe Realty Corp., as well as two of its officers and
other individuals, in the Supreme Court of the State of New York, County of
Queens. The action asserts seven separate causes of action arising out of a
default in payment of the remaining $1,100,000 balance due under the promissory
note evidencing moneys due to the Company from Monarch as a result of its
purchase of IECM from the Company.

The Court granted the Company's motion for summary judgment during March 2000
against Monarch in the sum of $1,100,000 plus interest from January 1, 1999, a
judgment of possession of all collateral pledged by Monarch and judgment that
the Company is the rightful owner and entitled to immediate possession of the
collateral, impressing a trust on said collateral, declaring defendants to be
trustees of said collateral and directing said trustees to deliver such
collateral to the Company. A decision of the Appellate Division limited the
extent of the corporate defendant's liability and the thrust of the action is
against the guarantors. The action is now in the discovery stage. Management has
pursued the action appropriately and aggressively since its inception. While it
is difficult to predict the outcome of any litigation, there are no
counterclaims asserted against the Company and there does not appear to be a
range of potential loss to the Company.

During the years ended June 30, 2001 and 2000, the Company took impairment
charges of $1,000,000 and $100,000, respectively on the promissory note. The
amount of the write-down was determined by evaluating the underlying value of
the collateral, the cost of recovery, ongoing litigation costs and the
difficulty in realizing the collateral securing the promissory note. Actual
losses could differ from our current estimate and will be reflected as
adjustments in future financial statements.

During May 2000, we, along with FPE Funding, LLC ("FPE") filed a complaint
entitled "In the case of Strategic Capital Resources, Inc. and FPE Funding, LLC
v. Dylan Tire Industries, LLC, Dylan Custom Mixing, LLC; Mid-American Machine
and Equipment, LLC f/k/a/ Mid-American Tire and Machine, LLC; GMAC Commercial
Credit, LLC; Robert C. Liddon, Trustee; Mary Aronov, Trustee; David Feingold;
John Tindal; Brett Morehouse; Johnny Guy; Shan Sutherland; and Pirelli Tire
LLC," Chancery Court for Davidson County, Tennessee, Case No. 00-1296-III,
against the referenced defendants alleging, among other things, breach of
contract, fraud, and civil conspiracy, arising from the breach of a sale and
leaseback commitment for which we procured funding and under which FPE was to be
the owner/lessor of a manufacturing facility.

The defendants/counter-plaintiffs, Dylan Tire Industries, LLC, Mid-American
Machine and Equipment, LLC and Dylan Custom Mixing, LLC have filed a
counterclaim, seeking unspecified consequential damages "estimated to exceed
$500,000" for alleged breach of a loan commitment issued by the Company. The
basis of the claim is that the Company allegedly failed to honor its commitment
to lend for the acquisition of a manufacturing facility, resulting in damages to
the defendants/counter-plaintiffs, who borrowed the money directly from the
Company's lender at allegedly a greater cost and who allegedly had to pay a
greater price for the facility as a result of the alleged delay in the closing.
The Company believes the counterclaim is without merit and will vigorously
defend itself. As such, there is no accrual in the accompanying consolidated
balance sheets.

The Company's claims were substantially dismissed by the lower court and
affirmed by the appellate court. The Company has appealed to the Tennessee
Supreme Court and have additional claims that have not as yet been filed pending
the appeal outcome. The company recorded a receivable from Dylan Tire
Industries, LLC for a commitment fee of approximately $180,000. As a result of
the uncertainty regarding collection of the receivable, the Company has impaired
the entire balance. For the year ended June 30, 2002, the Company recorded an
impairment charge for the receivable amounting to $91,122.

NOTE 5 DEFERRED CHARGES
-----------------------

Deferred charges consist of the following:

                                                               June 30,
                                                      --------------------------
                                                        2002              2001
                                                      --------          --------

Deferred finance charges                              $848,466          $611,222
Deferred offering costs                                     --            62,160
                                                      --------          --------

                                                      $848,466          $673,382
                                                      ========          ========

                                      F-15
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

Deferred finance charges are carried at cost. Amortization is provided on the
straight-line method over the lives of the loans to which the deferred finance
charges relate. Amortization expense of deferred finance charges was $1,530,124
for the year ended June 30, 2002, $901,591 for the year ended June 30, 2001 and
$635,186 for the year ended June 30, 2000.


NOTE 6 MORTGAGES AND NOTES PAYABLE
----------------------------------

Mortgages and notes payable are collateralized by first mortgages on specific
properties. Interest is payable monthly in arrears at interest rates ranging
from 4.75% to 8.75% as of June 30, 2002. The maturity dates range from one to
fifteen years.

During December 2001, the Company consolidated its $15,000,000 and $45,000,000
revolving credit facility into one commercial revolving line of credit totaling
a maximum loan amount of $60,000,000 which expires August 2003. The interest
rate is a thirty-day LIBOR based floating rate plus a premium and a floor. In
addition to the mortgages being secured by specific properties, all loans are
secured by specific leases and related security bonds and/or residual value
insurance policies.

At June 30, 2002, maturities of mortgages and notes payable are as follows:

               Year ending June 30, 2003                   $   8,608,912
               Year ending June 30, 2004                      60,582,454
               Year ending June 30, 2005                       4,450,752
               Year ending June 30, 2006                         212,509
               Year ending June 30, 2007                         230,055
                      Thereafter                               3,507,794
                                                           -------------

                                                           $  77,592,476
                                                           =============

NOTE 7 STOCKHOLDER LOANS PAYABLE
--------------------------------

Stockholder loans payable arose from advances various stockholders made to the
Company. The loans are payable on demand, bearing interest at 9%, which is
payable monthly. Interest on stockholder loans payable totaled $115,361 for the
year ended June 30, 2002, $109,653 for the year ended June 30, 2001, and
$112,220 for the year ended June 30, 2000. Management believes that the loans
from stockholders were made on equal or better terms than were available
elsewhere. During the years ended June 30, 2002, 2001, and 2000, the Company
issued a total of 5,366, 7,460, and 5,730 detachable warrants, respectively, to
stockholders who had made loans to the Company. The Company does not believe
that the detachable warrants are embedded derivatives under the provisions of
SFAS 133, Accounting for Derivative Instruments and Hedging Activities, and
therefore accounted for the detachable warrants in accordance with APB No. 14,
Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants. In
accordance with APB 14, the Company apportioned fair value (see below) to the
warrants using the Black-Scholes pricing model. Fair value was determined using
the closing market prices of the Company's common stock on the grant date. The
fair value of the warrants on the date of grant was treated as additional
interest expense in the year of grant since the stockholder loans are due on
demand. In the past, the Company did not account for the grants of the warrants.
The Company is currently accounting for the warrants as a correction of an error
in the accompanying consolidated financial statements (See Note 1(Q)). The
additional non-cash interest expense resulting from the accounting for the
warrants amounted to $98,668, $269,142 and $235,660 for the years ended June 30,
2002, 2001 and 2000, respectively.

A note for $500,000 was issued to a stockholder in partial payment for
redemption of the convertible preferred stock. The note bears interest of 6%
payable monthly; $250,000 is due July 1, 2003 and $250,000 on July 1, 2004. (See
Note 8(A)).

NOTE 8 STOCKHOLDERS' EQUITY
---------------------------

(A) Convertible Preferred Stock
-------------------------------

At June 30, 2001, the Company had 400,000 shares of its 6%, $.01 par value
participating convertible preferred stock outstanding. During June 2002, the
400,000 outstanding shares of preferred stock were redeemed for $1,000,000
($2.50 per share), the original sales price amount received on issuance. A note
for $500,000 was issued and a cash payment of $500,000 was paid to the preferred
stockholders (See Note 7).

                                      F-16
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

As of June 30, 2002, there are no unpaid distributions in arrears.

(B) Common Stock
----------------

During April 2002, the Board of Directors and a majority of the Company's
stockholders approved a 200 for 1 reverse stock split of the outstanding shares
of the Company's common stock. The reverse stock split became effective in June
2002. The Company's capital structure, weighted average common shares and
earnings per share have been restated for all years presented to give
retroactive effect to the reverse stock split. The trading symbol was changed
from JJFN to SCPI on the effective date of the reverse stock split.

(C) Warrants
------------

The following is a summary of warrant transactions during the years ended June
30, 2002, 2001 and 2000 (also See Note 7):

                                            Number of Shares of
                                               Common Stock         Weighted
                                                Underlying           Average
                                                 Warrants         Exercise Price
                                              ---------------    ---------------

Outstanding at July 1, 1999                            27,930    $         46.51

Issued                                                  5,730    $         47.95
Expired                                                (5,130)   $         30.34
                                              ---------------

Outstanding at June 30, 2000                           28,530    $         49.71

Issued                                                  7,460    $         34.86
Exercised                                              (2,500)   $          0.20
Expired                                               (10,505)   $         53.74
                                              ---------------

Outstanding at June 30, 2001                           22,985    $         48.43

Issued                                                  5,366    $         31.43
Cancelled/Expired                                     (10,146)   $         58.73
                                              ---------------

Exercisable and outstanding at June 30, 2002           18,205    $         37.68
                                              ===============

(D) Stock Option Plans
----------------------

The Company has established Equity Incentive Plans (the "Plans") to attract and
retain key employees, to provide an incentive for them to achieve long-range
performance goals and to enable them to participate in the long-term growth of
the Company. Under the terms of the Plans, the Company may award Incentive Stock
Options which are intended to qualify under Section 422A of the Internal Revenue
Code. All such options may be exercised during a four-year period commencing one
year from the date of the option grant and terminating five years from date of
issuance.

The following is a summary of option transactions during the years ended June
30, 2002, 2001 and 2000:

                                                 Number of      Weighted Average
                                                   Shares        Exercise Price
                                               --------------    ---------------

Outstanding at July 1, 1999                            16,875    $        52.00

Granted - November 1999                                 3,875    $        58.00
Cancelled / Expired                                    (2,250)            56.00
                                               --------------

Outstanding at June 30, 2000                           18,500    $        52.00

Granted - December 2000                                 3,750    $        32.00
Cancelled / Expired                                    (1,500)   $        60.00
                                               --------------

Outstanding at June 30, 2001                           20,750    $        52.00

Granted - October 2001                                  3,000    $        26.00
Cancelled / Expired                                   (11,250)   $        44.00
                                               --------------

Exercisable and outstanding at June 30, 2002           12,500    $        46.00
                                               ==============

                                      F-17
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

The Company accounts for stock-based compensation in accordance with Accounting
Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock Issued to
Employees. Under APB 25, the Company does not recognize compensation expense for
stock options granted under the plans as the options are granted at exercise
prices equal to, or greater than, the market price of the Company's common stock
at the date of grant. If the Company were to issue options at less than the
market price, the Company would then recognize compensation expense in an amount
equal to the excess of the market value of the underlying stock over the
exercise price of the stock option. No pro forma disclosures have been presented
since, in the opinion of management, the effect of the application of such
provision is immaterial to the consolidated financial statements for the years
ended June 30, 2002, 2001 and 2000.

(E) Common Stock Repurchase Program
-----------------------------------

During 2000, the Company implemented a common stock repurchase program. As of
June 30, 2002, 10,368 (post reverse split) shares had been repurchased under
this program at a cost of $457,999 or $44.17 per share, adjusted for our reverse
stock split. We did not purchase any shares during our fiscal year ended June
30, 2002, and we do not anticipate implementing as new repurchase program. We
are currently evaluating a tender offer for fractional and odd lot shares to
reduce our costs but there are no assurances that we will undertake this
activity in the near future or at all.

NOTE 9 INCOME TAXES
-------------------

The Company's effective tax rates for the years ended June 30, 2002, 2001 and
2000 were 54.9%, 79.3% and 71.6%, respectively.

The provision for income taxes for each of the three years ended June 30 was as
follows:

                                                For the Year Ended June 30,
                                          --------------------------------------
                                             2002          2001          2000
                                          ----------    ----------    ----------
Current:
 Federal                                  $  433,250    $       --    $       --
 State                                       209,213            --            --

Deferred:
 Federal                                     337,955        51,593        32,432
 State                                        98,639        19,986        13,628
                                          ----------    ----------    ----------

Total provision for income taxes          $1,079,057    $   71,579    $   46,060
                                          ==========    ==========    ==========

Deferred income taxes arise from temporary differences in reporting assets and
liabilities for income tax and financial accounting purposes. These temporary
differences primarily resulted from net operating losses and from depreciating
model homes for tax purposes only.

                                      F-18
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

The components of the deferred income tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                                          2002                          2001
                                              ----------------------------   ---------------------------
                                              Deferred Tax    Deferred Tax   Deferred Tax   Deferred Tax
                                                 Assets       Liabilities       Assets      Liabilities
                                              ------------    ------------   ------------   ------------
<S>                                           <C>             <C>            <C>            <C>
Deferred income taxes, current:
Operating loss and credit carryforwards       $         --    $         --   $    284,000   $         --
Prepaid and deferred charges                            --         235,152             --             --
Implicit interest for multi-family property         86,967              --             --             --
                                              ------------    ------------   ------------   ------------
Total Current                                       86,967         235,152        284,000             --
                                              ------------    ------------   ------------   ------------

Net Current                                         86,967         235,152        284,000             --
                                              ------------    ------------   ------------   ------------

Deferred income taxes, non-current:
Accumulated depreciation                                --         379,883             --        420,000
Interest from issuances of warrants                591,856              --        469,527             --
Implicit interest for multi-family property             --              --         44,561             --
Operating loss and credit carryforwards                 --              --             --             --
                                              ------------    ------------   ------------   ------------


Total Long-Term                                    591,856         379,883        514,088        420,000

Valuation allowance                               (591,856)             --        469,527             --
                                              ------------    ------------   ------------   ------------
Net Long-Term                                           --         379,883         44,561        420,000
                                              ------------    ------------   ------------   ------------


Net Deferred Tax Assets/Liabilities           $     86,967    $    615,035   $    328,561   $    420,000
                                              ============    ============   ============   ============
</TABLE>

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The valuation allowance at June 30, 2002 and 2001
is related to deferred tax assets on interest expense from issuances of
warrants. The warrants must be exercised in order to generate sufficient future
taxable income to realize the deferred tax assets. Management believes it is
more likely than not that these warrants will never be exercised.

The following is a reconciliation of the federal statutory income tax amount on
income to the provision for income taxes:

<TABLE>
<CAPTION>
                                                        For the Year Ended June 30,
                                                -----------------------------------------
                                                   2002           2001            2000
                                                -----------    -----------    -----------
<S>                                             <C>            <C>            <C>
Federal statutory income tax (benefit) at 34%   $   668,708    $    30,681    $   (21,880)
State tax cost, net of federal tax benefit          253,065         91,440         89,602
Depreciation - current                             (295,136)      (404,753)      (399,412)
Gain on sales                                       399,538        190,680        237,000
Gain on future sales - net of depreciation          (40,000)        95,876         (2,300)
Bad debt allowance                                       --        (40,000)        40,000
Interest from issuances of warrants                  39,466        107,655         94,264
Other                                                53,416             --          9,286
Net operating loss                                       --             --           (500)
                                                -----------    -----------    -----------
Total provision for income taxes                $ 1,079,057    $    71,579    $    46,060
                                                ===========    ===========    ===========
</TABLE>

NOTE 10 SUPPLEMENTAL CASH FLOW INFORMATION
------------------------------------------

The Company's non-cash investing and financing activities were as follows:

During the years ended June 30, 2002, 2001, and 2000, the Company acquired
revenue producing assets at a cost of $59,442,998, $53,776,277, and $35,953,868,
respectively. Such purchases were financed as follows:

                                      F-19
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

<TABLE>
<CAPTION>
                                                   For the Year Ended June 30,
                                         --------------------------------------------
                                             2002            2001            2000
                                         ------------    ------------    ------------
<S>                                      <C>             <C>             <C>
Revenue producing assets                 $ 59,442,998    $ 53,776,277    $ 35,953,868
Bank borrowings                           (47,973,907)    (53,776,277)    (35,367,685)
                                         ------------    ------------    ------------

Investment in revenue producing assets   $ 11,469,091    $         --    $    586,183
                                         ============    ============    ============
</TABLE>

During the years ended June 30, 2002, 2001 and 2000, the Company sold revenue
producing assets and also paid down the related debt. The sales and related debt
pay down are as follows:

<TABLE>
<CAPTION>

     Model Home Sales                               For the Year Ended June 30,
     ----------------                    --------------------------------------------
                                             2002            2001            2000
                                         ------------    ------------    ------------
<S>                                      <C>             <C>             <C>
Model home sales proceeds                $ 18,828,378    $ 15,506,805    $ 19,901,534
Debt payments                             (16,950,273)    (13,593,747)    (16,715,028)
                                         ------------    ------------    ------------

Net proceeds                             $  1,878,105    $  1,913,058    $  3,186,506
                                         ============    ============    ============


     Residential Real Estate Sales                  For the Year Ended June 30,
     -----------------------------       --------------------------------------------
                                             2002            2001            2000
                                         ------------    ------------    ------------

Residential real estate sales proceeds   $ 41,947,444    $  1,416,802    $         --
Debt payments                             (36,266,560)     (1,345,963)            (--)
                                         ------------    ------------    ------------

Net proceeds                             $  5,680,884    $     70,839    $         --
                                         ============    ============    ============
</TABLE>

Interest paid totaled $5,072,185, $5,360,997, and $3,836,804 during the years
ended June 30, 2002, 2001 and 2000, respectively. Income taxes paid totaled
$405,000, $35,000 and $18,000 during the years ended June 30, 2002, 2001 and
2000, respectively.

During the year ended June 30, 2002, the Company redeemed all of its preferred
stock as follows:

Redemption price                                                    $ 1,000,000
Notes issued                                                           (500,000)
                                                                    -----------

Cash paid                                                           $   500,000
                                                                    ===========

NOTE 11 COMMITMENTS AND CONTINGENCIES
-------------------------------------

(A) Lease Agreement
-------------------

The Company leases its office space under a non-cancelable operating lease for a
five-year term ending in March 2007. Rent expense for the years ended June 30,
2002, 2001 and 2000, was $68,539, $85,972, and $75,015 respectively. The
following is a schedule of future minimum lease payments:

                     Year Ending:
                     ------------
                     June 30, 2003                 $    65,062
                     June 30, 2004                      66,780
                     June 30, 2005                      68,566
                     June 30, 2006                      70,424
                     June 30, 2007                      50,555
                                                   -----------

                                                   $   321,387
                                                   ===========

(B) Employment Agreements
-------------------------

Effective July 29, 1997, the Board of Directors elected the Company's principal
stockholder to the position of Chairman of the Board and entered into a ten-year
employment agreement with the stockholder. Effective January 1, 1998, the
employment agreement provides for annual compensation of $225,000 with 10%
annual increases during the second through tenth years. During June 2002, the
Board of Directors extended this employment agreement for an additional five
years with the same terms and conditions.

                                      F-20
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

(C) Qualified Retirement Plans
------------------------------

During the year ended June 30, 2002, the Company instituted a Profit Sharing
Plan. No contributions have been made or accrued for this plan for the year
ended June 30, 2002.

Effective January 1, 2000, the Company instituted a savings plan, which
qualifies under Section 401(k) of the Internal Revenue Code. Participating
employees may contribute up to 25% of their pre-tax salary, but not more than
statutory limits. The Company contributes 3% of a participant's earnings, which
totaled $31,846, $28,880, and $12,654 for the years ended June 30, 2002, 2001
and 2000, respectively.

(D) Compensation Plan
---------------------

The Company's compensation plan rewards all employees for their contribution to
achievement of Company goals. The program establishes a targeted award based
upon the level and role for each eligible participant. At this time, the Company
has not incurred any expenses relating to this compensation plan.

(E) Financing Activities
------------------------

At June 30, 2002, the Company had approximately $21 million of unused, committed
credit facilities available under existing revolving loan agreements, which may
be utilized to acquire real estate assets in accordance with the terms of those
agreements. Such credit facilities expire through August 2003.

Subsequent to year-end, the Company received a commitment for a $15.7 million
credit facility. The interest rate is based on a 30-day LIBOR rate plus a
premium.

As a part of its ongoing business, the Company is in constant discussion with
financial institutions for credit facilities, as well as private or public
placements of its debt or equity securities. An offering or private placement of
senior notes with warrants, convertible preferred stock or similar type of
security is currently being evaluated. It is the Company's policy not to incur
costs from activation of credit facilities unless and until needed.

(F) Legal Proceedings
---------------------

BankAtlantic Bankcorp, Inc.
15th Judicial Circuit Court, Palm beach County, Florida
Case No. CL 98-11662-AG

The Company filed suit against BankAtlantic Bancorp., Inc. and BankAtlantic, a
federal savings bank, in the Circuit Court of the 15th Judicial Circuit in and
for Palm Beach County, Florida by complaint dated December 30, 1998. The
complaint charges a breach of fiduciary duty and seeks unspecified damages in
that the defendant undertook to act as agent or broker in connection with
obtaining a $200 million loan facility, relating to a sale and lease back
program for a major, publicly-traded national builder. Rather than complete the
financing transaction, the complaint alleges economic opportunity was usurped by
defendant and entered into an agreement directly with the builder, utilizing,
inter alia, the terms of the Company's program. This matter is in the early
stages of discovery. Since this represents a potential contingent gain for the
Company, there are no receivable amounts recorded in the accompanying
consolidated balance sheets.

Star Insurance Company v. Strategic Capital Resources, Inc.
15th Judicial Court, Palm beach County, Florida
Case No. CL 00-433 AD

This is an action on an indemnity bond. Discovery commenced, but is not
completed. Mediation, which was conducted on August 13, 2002, has been
adjourned. Plaintiff has not been vigorously prosecuting this action. Defendant
will vigorously defend this action if and when the plaintiff proceeds. Due to
the uncertainties of litigation, we are unable to evaluate the likelihood of an
unfavorable outcome or estimate the amount of range of potential loss. This
matter has been referred by the court for mediation to see if the parties can
settle the case. The Company is mediating with the plaintiff to settle the case
but there is no assurance that the settlement will occur. As such there are no
accruals in the accompanying consolidated balance sheet at June 30, 2002 for
this matter.

                                      F-21
<PAGE>

               STRATEGIC CAPITAL RESOURCES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2002, 2001 AND 2000
                          ----------------------------

We are not presently involved in any other material litigation nor, to our
knowledge, is any other material litigation threatened against us or any of our
business properties, other than routine litigation arising in the ordinary
course of business.

NOTE 12 SUBSEQUENT EVENTS
-------------------------

(A) Model Home Program
----------------------

From July 1, 2002 through December 19, 2002, the Company sold nine model homes,
underlying the direct financing leases at an aggregate sales price of
$1,988,690. These models were acquired at an aggregate cost of $1,863,685.

The Company also has contracts pending on eight model homes at an aggregate
sales price of $1,933,456, which were acquired at an aggregate cost of
$1,649,446.

(B) Residential Real Estate Acquisition and Development
-------------------------------------------------------

From July 1, 2002 through December 19, 2002 , the Company paid development costs
in the amount of approximately $7,524,781 and had sales of finished lots in the
amount of approximately $24,275,533.

(C) Amendment to Warrant Agreements
-----------------------------------

The agreements for the detachable warrants issued in connection with loans from
stockholders included a provision that the number of shares exercisable and the
exercise price were not to be affected by reverse splits. On December 12, 2002,
with the approval of the warrant holders and the Board of Directors, the Company
amended the warrant agreements effective as of the date of the reverse split
(June 13, 2002), to have the number of shares and exercise prices be effectuated
by the reverse stock split. As such, all disclosures relating to the warrants
and diluted earnings per share in the accompanying consolidated financial
statements and footnotes have been restated to reflect the amendment (See Notes
7 and 8(C)). As a result of the warrants being affected by the reverse stock
split, the number of outstanding warrants was decreased from 3,641,000 to 18,205
and the weighted average exercise price of the warrants increased from $.19 to
$37.68.

                                      F-22
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Effective October 11, 2002, our independent accountants, Citrin Cooperman &
Company, LLP ("Citrin"), resigned. Thereafter, on October 14, 2002, our Board of
Directors, on the recommendation of our Audit Committee, retained the firm of
Weinberg & Company, P.A. to audit our financial statements for our fiscal years
ended June 30, 2002, 2001 and 2000.

We are uncertain as to whether there were any disagreements with Citrin on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Citrin, would have caused Citrin to make a reference to the
subject matter on the disagreements in connection with its report, or whether
there existed a disagreement relating to interpretation of law. In this regard,
we filed various reports on Form 8-K, including a Form 8-K on or about October
24, 2002, which explain the various issues involved in this matter. Readers are
urged to review this aforesaid report. All of our Form 8-K reports are
incorporated herein by reference as if set forth.

ITEM 9B. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires our officers,
directors and person who own more than 10% of our Common Stock to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. All of the aforesaid persons are required by SEC regulation to
furnish us with copies of all Section 16(a) forms they file. In June 2002,
certain of our officers, including David Miller, our Chairman and Scott Miller,
our Vice President, did exercise an aggregate of 1,430,000 warrants for an
aggregate exercise price of $236,100 (approx. $0.17 per warrant). They filed
Form 4's with the SEC relevant thereto in July 2002, which filings were late.
Thereafter, as discussed in "Part II, Item 5" above, in December 2002, this
warrant exercise was rescinded by the mutual consent of the warrant holders and
our Company. The warrant holders, including Messrs. David and Scott Miller,
filed Form 4's with the SEC, advising of this rescission. These forms were filed
late. However, we did file a report on Form 8-K in a timely manner with the SEC,
advising of the rescission of the warrant exercise. We are unaware of any other
matters not in compliance with Section 16(a).

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

As of December 19, 2002, our officers and directors and their respective
positions with our Company were as follows:


              Name                  Age               Position
              ----                  ---               --------

        David Miller                57      President, CEO and
                                            Chairman of the Board

        Cary Greenberg              59      Treasurer, Chief Financial Officer
                                            and Chief Accounting Officer

        Samuel G. Weiss             53      Secretary, Director

        Scott Miller                27      Vice President, Assistant Secretary

        Ralph Wilson                73      Director

        John H. Roach, Jr.          61      Director


David Miller is the father of Scott Miller. There are no other family
relationships amongst our management.

                                       25
<PAGE>

RESUMES

David Miller was appointed Chairman of the Board on July 29, 1997. On December
1, 2000, Mr. Miller was elected President and Chief Executive Officer. Prior to
that time, Mr. Miller had been engaged as a consultant to the Company since its
organization. Prior, from 1992 through 1997, he was a strategic consultant to
several companies, including Antares Resources Corporation and Priority Capital
Corporation. Since 1994, Mr. Miller has served as Chairman of the Board of Lite
'N Low, Inc., a holding company no longer actively engaged in business. Mr.
Miller is currently Chairman of Priority Capital Corp. Mr. Miller devotes
substantially all of his time to the business of the Company.

Cary Greenberg was appointed Treasurer, Chief Accounting Officer and Chief
Financial Officer in April 2002. Prior to joining our Company, from January 1998
through February 2001, Mr. Greenberg was a consultant to Mobile Computer
Training, Inc., Fort Lauderdale, FL, a privately held educational software
company. From January 1998 through February 2001, Mr. Greenberg was Chief
Financial Officer of Sunvest Resorts, Inc., Hollywood, FL, a publicly held real
estate company. From July 1996 through January 1998, he was also Chief Financial
Officer for Central Press, Inc., Pompano, FL, a subsidiary of Wallace Computer
Systems, Inc., a publicly held printing company. Mr. Greenberg received a
Bachelor of Science degree in accounting from C.W. Post University in 1973. Mr.
Greenberg devotes substantially all of his time to our business.

Samuel G. Weiss, Secretary and Director, has been our Secretary since our
organization. Effective May 1997, Mr. Weiss was interim President and served in
that capacity until January 1, 1999. Since 1974, Mr. Weiss has been engaged in
the practice of law in the State of New York. Mr. Weiss also served as
Secretary, General Counsel, and Director of Antares Resources Corporation from
June 1993 to December 1996. Mr. Weiss devotes only such time as is necessary to
our business.

Scott Miller, Vice President and Assistant Secretary, was appointed to his
positions with us in September 2000. Prior to joining our Company, Mr. Miller
earned a Master's Degree in mediation and arbitration from Nova Southeastern
University. He received a Bachelor of Arts degree in English from Hofstra
University in 1997. He devotes substantially all of his time to our business.

Ralph Wilson, Director, has held this position since our organization. From
October 1990 through February 1995, Mr. Wilson was President of Antares
Resources Corporation and served as a Director of Antares from December 1994 to
December 1996. In addition, since 1971, Mr. Wilson has been a principal officer
of Comet Electronics Corp., a privately owned manufacturer of subassemblies in
Farmingdale, New York. Mr. Wilson devotes only such time as is necessary to our
business.

John H. Roach, Jr. was elected a Director of our Company in December 1998. Since
January 2002, he has been self employed as a financial consultant to various
private companies and individuals. From May 2000 through December 2001, he was a
Senior Client Advisor for J.P. Morgan Private Bank. Prior thereto, from 1998 to
2000 he was Senior Managing Director for Reliance National. From 1995 to 1997,
he was Senior Managing Director, Client Management and Marketing for American
International Group, AIG Risk Finance. From 1992 to 1995, he was Vice Chairman
and Senior Managing Director for Geneva Companies, Geneva Financial Corporation.
From 1964 to 1992, he was Managing Director, Head of Corporate Finance Client
Management and Loan Products for Chemical Bank. Mr. Roach devotes only such time
as is necessary to our business.

                                       26
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

The following table reflects all forms of compensation for services rendered to
us for the fiscal years ended June 30, 2002, 2001, and 2000 of our Chief
Executive Officer and one other member of management who received aggregate
compensation of $100,000 during our prior three years. No other member of our
management received compensation in excess of $100,000 during our fiscal year
ended June 30, 2002.

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                        ANNUAL COMPENSATION          LONG TERM COMPENSATION
                                  -----------------------------  -------------------------------
                                                                         Awards          Payouts
                                                                 ----------------------  -------
                                                          Other              Securities
                                                         Annual  Restricted  Underlying           All Other
        Name and                                         Compen     Stock     Options/    LTIP     Compen-
   Principal Position       Year    Salary     Bonus     sation    Award(s)   SAR's (2)  Payouts  sation (3)
  --------------------      ----  --------- -----------  ------  ----------  ----------  -------  ----------
<S>                         <C>   <C>       <C>            <C>      <C>        <C>         <C>      <C>
David Miller,               2002  $371,127  $132,355(1)    (1)      $ 0             --     N/A      $ 5,100
Chairman of the Board,      2001  $308,115  $ 59,319(1)    (1)      $ 0        200,000     N/A      $12,836
President, Chief Executive  2000  $291,098  $ 50,262(1)    (1)      $ 0        200,000     N/A      $ 4,037
Officer and Director

John Kushay, (4)            2002  $191,469        --       --       $ 0             --     N/A           --
Treasurer, Chief Financial  2001  $115,617  $ 11,011(1)    (1)      $ 0        100,000     N/A      $ 4,661
Officer, Vice President     2000  $107,030  $ 16,362(1)    (1)      $ 0        100,000     N/A      $ 1,067
and Director
</TABLE>
-------------------------------------
(1)  Includes prerequisites and other personal benefits unless the aggregate
     amount is less than either $50,000 or 10% of the total of annual salary and
     bonus reported for the named executive officer.
(2)  We do not have a stock appreciation  right ("SAR") program.
(3)  Represents contributions made by us to our 401(k) plan and auto allowances.
(4)  Mr. Kushay resigned his positions with us in April 2002.

                                       27
<PAGE>

EMPLOYMENT AGREEMENT

On July 29, 1997, our Board of Directors provided our Chairman, David Miller,
with a ten year employment agreement which became effective January 1, 1998.
This agreement provides for annual compensation of $225,000, with 10% annual
increases which began in 1999 and continue through the balance of the term of
the agreement. During 2002, our Board extended this agreement for an additional
five years with the same terms and conditions.

STOCK OPTION PLAN/OPTIONS AND WARRANTS

In June 2001, a majority of our shareholders approved by consent our "2001 Stock
Option Plan" (the "Plan"). This Plan provides for the grant of incentive and
non-qualified stock options that may be issued to key employees, non-employee
directors, independent contractors and others and we have reserved 12,500 shares
of our Common Stock for issuance under the Plan. The options are to be granted
for a term of not more than five (5) years and other terms and conditions that
are usual and customary. As of the date of this report, options to purchase all
of the 12,500 shares reserved for issuance under this Plan had previously been
issued, but in December 2002, all of these options were cancelled with the
consent of the holders thereof.

The purpose of the Plan is to aid us in retaining the services of executive and
key employees and in attracting new management personnel when needed for future
operations and growth, and to offer such personnel additional incentive to put
forth maximum efforts for the success of our business and opportunities to
obtain or increase proprietary interest and, thereby, to have an opportunity to
share in our success.

In addition, at June 30, 2002, there were additional options issued and
outstanding to purchase an aggregate of 7,250 shares of our Common Stock. In
December 2002, all of these options were cancelled with the consent of the
holders thereof.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The following tables sets forth certain information regarding ownership of our
Common Stock as of December 19, 2002, by (i) each person known to us to own
beneficially more than 5% of our Common Stock, (ii) each officer and director of
our Company; and (iii) all directors and officers as a group. Unless otherwise
indicated, each person listed on the tables has sole voting and investment power
as to the shares shown.

Amount and Nature of Name and Address of Beneficial Owner Beneficial Ownership
Percent of Class(1)
------------------------------------   --------------------  ------------------

Directors and Officers:

   David Miller                               33,354(2)             43.2%
   3565 NW 61st Circle
   Boca Raton, Florida  33496

   Scott Miller                                6,600                 8.6%
   3565 NW 61st Circle
   Boca Raton, Florida  33496

   Samuel G. Weiss                               770                 1.0%
   265 Sunrise Hwy, Su. 30
   Rockville Center, New York  11570

   Ralph Wilson                                  787                 1.0%
   7 Ensign Lane
   Massapequa, New York  11758

   All Officers and Directors as a Group      41,511                53.8%
   (5 persons)
----------------------------
(1)  Does not include Treasury Shares.

(2)  Includes  5,250 of shares  owned by Lite 'N Low,  Inc.  and 7,750 of shares
     owned by Priority Capital Corp.

                                       28
<PAGE>

Amount and Nature of Name and Address of Beneficial Owner Beneficial Ownership
Percent of Class(1)
------------------------------------   --------------------  ------------------

Other 5% Shareholders:

   Libo Fineberg, Trustee (1)                  6,250                 8.1%
   Helen Miller Irrevocable Trust
   3500 Gateway Drive
   Pompano Beach, Florida  33069


   Rita Miller (2)                             6,600                 7.6%
   3565 NW 61st Circle
   Boca Raton, Florida 33496

(1) David Miller direct beneficiary. No voting power. David Miller disclaims any
beneficial ownership.

(2) Wife of David Miller - sole voting power and ownership. David Miller
disclaims any beneficial ownership.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have various notes payable to members of our management. These loans arose
from advances various stockholders made to us. The notes are payable on demand,
bearing interest at 9%, which is payable monthly. Interest on stockholder notes
payable totaled $115,361 for the year ended June 30, 2002, $109,653 for the year
ended June 30, 2001, and $112,220 for the year ended June 30, 2000. Our
management believes that the loans from stockholders were made on equal or
better terms than were available elsewhere. During the years ended June 30,
2002, 2001, and 2000, we issued a total of 5,366, 7,460, and 5,730 detachable
warrants, respectively, to these stockholders. These warrants have subsequently
been terminated. In accordance with APB 14, we apportioned fair value to the
warrants using the Black-Scholes pricing model. Fair value was determined using
the closing market prices of our common stock on the grant date. The fair value
of the warrants on the date of grant was treated as additional interest expense
in the year of grant since the stockholder loans are due on demand. In the past,
we did not account for the grants of the warrants. We are currently accounting
for the warrants as a correction of an error in our accompanying consolidated
financial statements. The additional non-cash interest expense resulting from
the accounting for the warrants amounted to $98,668, $269,142 and $235,660 for
the years ended June 30, 2002, 2001 and 2000, respectively. See "Part II, Item
5" above and "Part II, Item 8, Financial Statements and Supplementary Data" and
the notes thereto for a more detailed description of these obligation and events
applicable thereto.

In June 2002, we also issued a note for $500,000 to our Chairman, David Miller,
in partial payment for our redemption of our convertible preferred stock. The
note bears interest of 6% payable monthly. $250,000 is due July 1, 2003 and
$250,000 is due on July 1, 2004. See "Part II, Item 8, Financial Statements and
Supplementary Data" and Note 8(A) thereto.

We have been advised by Weinberg & Company, P.A., that neither the firm nor any
of its associates has any relationships with us or our subsidiaries other than
the usual relationship that exists between certified public accountants and
clients.

Audit Fees: An aggregate of $125,196 was billed for professional services
rendered for the audit of our annual financial statements for the fiscal year
ended June 30, 2002. Weinberg & Company, P.A. was retained as our independent
auditor subsequent to the filing of our last report on Form 10-Q filed during
the fiscal year ended June 30, 2002 and as a result, we did not incur any
charges relevant thereto.

Financial Information Systems Design and Implementation Fee: Weinberg & Company,
P.A.. did not render professional services to us relating to financial
information systems design and implementation during our 2002 fiscal year.

                                       29
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. Financial Statements: Reference is made to the index set forth in "Item
8, Financial Statements and Supplementary Data" of this Annual Report on Form
10-K.

2. Exhibits: The following exhibits are filed as part of this Annual Report on
Form 10-K.



                    Incorporated by
                Reference to Registration
Exhibit No.        Statement 333-1842                     Description
-----------  --------------------------------  ---------------------------------

    3.1                    X                   Certificate of Incorporation, as
                                               amended to date

    3.2                    X                   By-laws, as amended to date


                      Incorporated by
                 Reference to Form 10-K for
Exhibit No.  Fiscal Year Ended June 30, 1998              Description
-----------  -------------------------------   ---------------------------------

  10.12                    X                    Employment Contract with
                                                David Miller dated as of
                                                January 1, 1998.


                     Incorporated by
               Reference to Form 10-K for
Exhibit No.  Fiscal Year Ended June 30, 1997              Description
-----------  -------------------------------   ---------------------------------

  10.14                    X                   Incentive Stock Plan


Exhibit No.          Filed Herewith                       Description
-----------  -------------------------------   ---------------------------------

  21.1                     X                   List of Company subsidiaries.

  99.1                     X                   Certification of Financial
                                               Statements in Accordance with
                                               Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

On or about May 30, 2002, we filed a report on Form 8-K, advising of the
authorization of our pending reverse stock split effective June 17, 2002 and
matters ancillary thereto.

Subsequent to June 30, 2002, we filed two (2) reports on Form 8-K, including
those reports dated October 11, 2002, wherein we advised of the resignation of
Citrin Cooperman & Company, LLP as our independent auditor and the retention of
Weinberg & Company, P.A. as our independent auditor who audited the financial
statements included in this report. This Form 8-K also included a lengthy
narrative on the events and circumstances surrounding the resignation of Citrin
Cooperman & Company, LLP.

On or about December 16, 2002, we filed a report on Form 8-K, advising of
various changes to the accounting treatment we had historically attributed to
the sales of our model homes, as well as the accounting treatment applicable to
our amending certain warrant agreements relating to our outstanding warrants.
For a more detailed description of these matters see "Part II, Item 8, Financial
Statements and Supplementary Data" and Notes thereto.

                                       30
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized, on December 23, 2002.

                        STRATEGIC CAPITAL RESOURCES, INC.





                                By: /s/ DAVID MILLER
                                    ------------------------------------------
                                    David Miller, President, CEO,
                                    and Chairman of the Board


                                By: /s/ CARY GREENBERG
                                    ------------------------------------------
                                    Cary Greenberg, Treasurer, Chief Financial
                                    Officer and Chief Accounting Officer



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



/s/ DAVID MILLER                                     Dated: June 12, 2003
-----------------------------------
David Miller, Director

/s/ SAMUEL G. WEISS                                  Dated: June 12, 2003
-----------------------------------
Samuel G. Weiss, Director

/s/ RALPH WILSON                                     Dated: June 12, 2003
-----------------------------------
Ralph Wilson, Director

/s/ JOHN H. ROACH, JR.                               Dated: June 12, 2003
-----------------------------------
John H. Roach, Jr., Director

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<PAGE>

                                 CERTIFICATIONS

We, David Miller and Cary Greenberg, certify that:

1. We have reviewed this annual report on Form 10-K of Strategic Capital
Resources, Inc.;

2. Based on our knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

3. Based on our knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

4. We are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Registrant and have;

a. designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b. evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within ninety (90) days of the filing date of this
annual report (the "Evaluation Date"); and

c. presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. We have disclosed, based on our most recent evaluation, to the Registrant's
auditors and the Audit Committee of the Registrant's Board of Directors (or
persons performing the equivalent function):

a. all significant deficiencies in the design or operation of internal controls
which could adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weakness in internal controls; and

b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal controls; and

6. We have indicated in this annual report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.





Dated: June 12, 2003                         /s/ DAVID MILLER
                                             -----------------------------------
                                             Chief Executive Officer


Dated: June 12, 2003                         /s/ CARY GREENBERG
                                             -----------------------------------
                                             Chief Financial Officer

                                       32