U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                  Form 10-QSB/A
                                 (Amendment #2)


                                   (Mark One)

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

                For the quarterly period ended September 30, 2001

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

       For the transition period from __________________ to ______________

                         Commission file number: 1-14219

                      Transnational Financial Network, Inc.
 -------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

        California                                      94-2964195
-------------------------------------------------------------------------------
(State or other jurisdiction                  (IRS Employer Identification No.)
  of incorporation or organization)

                   401 Taraval Street, San Francisco, CA 94116
 -------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (415) 242-7800
 -------------------------------------------------------------------------------
                         (Registrant's telephone number)


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


                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of November 14, 2001: 5,181,732





<PAGE>



                      TRANSNATIONAL FINANCIAL NETWORK, INC.

                               SEPTEMBER 30, 2001

                                    UNAUDITED

                                EXPLANATORY NOTE

         This Form 10-QSB/A is being filed to amend and restate the information
disclosed in Items 1 and 2 of Part 1 of the Form 10-QSB/A filed on July 30, 2002
(Amendment #1) for the quarter ended September 30,2001. The previous filing did
not accurately indicate the amount and timing of the fair value of mortgage loan
derivative instruments, and the following restatement recapitulates the
disclosures in the previous filing to reflect more accurately those values and
timing.



                              TABLE OF CONTENTS                      PAGE NUMBER


PART 1    Item 1      Financial Information

                      Condensed Balance Sheets as of September 30, 2001
                      and December 31, 2000                                   2

                      Condensed Statements of Operations
                      For the Three and Nine Months Ended
                      September 30, 2001 and 2000                             3

                      Condensed Statements of Cash Flows for the
                      Nine Months Ended September 30, 2001 and 2000           4

                      Notes to Condensed Financial Statements                 5

          Item 2      Management's Discussion and Analysis of
                      Financial Condition and Results of Operations           7

          Item 3      Controls and Procedures                                10

PART 2    Item 1      Legal proceedings                                      10

          Item 2      Changes in Securities and Use of Proceeds              10

          Item 3.     Exhibits and reports on form 8-K                       10

                      SIGNATURES                                             11

                      Certifications Required by 18 U.S.C.                   12
                      Section 1530, Sections 302 and 906 of the
                      Sarbanes-Oxley Act of 2002





                                      -1-
<PAGE>


Item 1.  Financial Information


                      TRANSNATIONAL FINANCIAL NETWORK, INC.

                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                          September 30,                       December 31,
                                                             2001                               2000
                                                             ----                               ----
                                                          (restated)                          (audited)

ASSETS
<S>                                                         <C>                                <C>
         Cash and cash equivalents                          $ 1,238,093                        $   492,938
         Restricted cash and cash equivalents                 1,041,834                            400,000
         Mortgage loans held for sale                         6,495,859                         20,307,222
         Accrued interest receivable                              1,363                             41,733
         Due from Shareholders                                     -                                11,613
         Receivable from Loan Link, LLC                            -                               300,000
         Notes receivable                                       136,322                            136,322
         Goodwill                                             3,126,162                          3,428,321
         Property and equipment, net                            190,008                            296,913
         Other assets                                         1,092,342                          1,477,077
                                                              ---------                          ---------

TOTAL ASSETS                                                 13,321,983                        $26,892,139
                                                            ===========                        ===========


LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
         Warehouse notes payable                            $ 6,176,690                        $19,645,445
         Accrued interest payable                                77,230                            219,602
         Accounts payable and accrued liabilities             1,080,688                            556,209
         Subordinated debt                                    2,007,000                            712,000
                                                              ---------                            -------

TOTAL LIABILITIES                                             9,341,608                         21,133,256
                                                              ---------                         ----------


SHAREHOLDERS' EQUITY:
         Preferred stock, no par value: 2,000,000 shares
            authorized, no shares issued and outstanding           -                                  -
         Common stock, no par value: 20,000,000 shares
            authorized: 5,180,603 shares issued and
            outstanding, as of September 30, 2001, and
            4,279,310 issued and outstanding
            as of December 31, 2000                          11,540,182                         10,594,450
         Accumulated deficit                                 (7,559,807)                        (4,835,567)
                                                             ----------                        -----------

TOTAL SHAREHOLDERS' EQUITY                                    3,980,375                          5,758,883
                                                             ----------                          ---------


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                   13,321,983                        $26,892,139
                                                            ===========                        ===========
</TABLE>



See accompanying notes to condensed financial statements.

                                      -2-
<PAGE>





                      TRANSNATIONAL FINANCIAL NETWORK, INC.

                       CONDENSED STATEMENTS OF OPERATIONS

                                   (unaudited)

<TABLE>
<CAPTION>

                                                       For the Three                      For the Nine
                                                       Months Ended                       Months Ended
                                                       September 30,                      September 30,
                                                -------------------------          ---------------------------
                                                     2001         2000                  2001              2000
                                                (restated)                         (restated)
INCOME

<S>                                            <C>         <C>                   <C>                <C>
    Net gain on sale of mortgage loans         $  837,673  $   561,696           $ 2,618,561        $ 1,435,302
    Production income                           2,072,353    1,268,356             6,118,924          3,910,249
    Interest income                               499,234      538,651             2,657,920          1,415,468
    Other income (expense)                        (70,953)      43,976               (22,333)           250,129
                                               ----------  -----------            ----------        ------------
                                                3,338,307    2,412,679            11,373,072          7,011,148
                                               ----------  -----------            ----------        ------------

EXPENSES

    Interest expense                              642,259      613,156             3,509,693          1,542,222
    Salaries, benefits and commissions          2,573,969    1,725,181             7,909,218          5,698,424
    General and administrative                    741,029      655,666             2,506,868          2,143,222
    Occupancy                                     179,418      164,190               518,493            534,099
                                                  -------    ---------           -----------         ----------
                                                4,136,675    3,158,193            14,444,272          9,917,967
                                                ---------    ---------            ----------          ---------


LOSS BEFORE INCOME TAXES and cumulative
effect of change in accounting principle         (798,368)    (745,514)           (3,071,200)        (2,906,819)
                                                ---------     --------           -----------          ---------
INCOME TAX (BENEFIT) EXPENSE                         -        (219,190)                 -              (219,190)
                                               ----------     --------           -----------          ---------
NET LOSS before cumulative effect of
    change in accounting principle               (798,368)    (526,324)           (3,071,200)        (2,687,629)
                                               ----------     --------           -----------          ---------
Cumulative effect of change in
accounting principle                                 -            -                  346,960               -
                                               ----------     --------           -----------          ---------

NET LOSS                                       $ (798,368) $  (526,324)          $(2,724,240)       $(2,687,629)
                                                ==========  ===========           ===========       ============

NET LOSS PER SHARE - Basic and diluted:
   Before cumulative effect of change in
      accounting principle                     $   (0.17)  $    (0.12)           $    (0.69)        $    (0.63)
   Cumulative effect of change in accounting
      principle                                     0.00        (0.00)                 0.08               0.00
   Net loss per share                              (0.17)       (0.12)                (0.61)             (0.63)

WEIGHTED AVERAGE SHARES OUTSTANDING:
   Basic and diluted                            4,756,226    4,279,310             4,440,029          4,279,310

</TABLE>



See accompanying notes to condensed financial statements.


                                      -3-
<PAGE>




                      TRANSNATIONAL FINANCIAL NETWORK, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS

                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                        For the Nine
                                                                                 Months Ended September 30,
                                                                                        2001              2000
                                                                                   (restated)
Cash flows from operating activities:
<S>                                                                             <C>                <C>
    Net loss                                                                    $   (2,724,240)    $  (2,687,629)
    Adjustments to reconcile net loss to net cash provided
    by (used in) operating activities:
             Gain on sale mortgage loans                                            (2,618,561)       (1,294,033)
             Provision for early payoffs and loan losses                               264,713           141,269
             Issuance of stock warrants for services and subordinated debt              45,732            35,741
             Depreciation and amortization                                             442,959           477,498
             Mortgage loans originated for sale                                   (581,953,929)     (435,605,766)
             Proceeds from sales of mortgage loans                                 598,646,853       411,543,556
             Net gain on sale of investment property                                      -              (65,298)

             Changes in assets and liabilities:
                      Accrued interest receivable                                       40,370           (29,270)
                      Due from shareholder                                              11,613              -
                      Notes receivable                                                    -               35,819
                      Other assets                                                     384,735           117,867
                      Accrued interest payable                                        (142,372)           92,561
                      Accounts payable and accrued liabilities                         296,766           433,054
                                                                                     ---------           -------

    Net cash provided by (used in) operating activities                             12,694,639       (26,804,631)

Cash flows from investing activities:
    Purchases of property and equipment                                                (33,895)          (12,391)
    Repayment of advances by Loan Link, LLC                                               -              200,000
    Additional cost to acquire LRS                                                        -              (30,438)
                                                                                       -------           -------
    Net cash provided by (used in) investing activities                                (33,895)          157,171

Cash flows from financing activities:
    Warehouse notes payable - net borrowings (repayments)                          (13,468,755)       26,864,753
    Payments on real estate mortgage                                                      -               (1,156)
    Borrowings on subordinated debt                                                  1,295,000           560,000
    Sale of common stock                                                               900,000              -
    Short-term borrowings                                                              759,491              -
    Repayments of short-term borrowings                                               (759,491)             -
                                                                                   -----------           --------

    Net cash provided by (used in) financing activities                            (11,273,755)       27,423,597
                                                                                   -----------        ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 1,386,989           776,137

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                         892,938           862,257
                                                                                       -------           -------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                        $    2,279,927     $   1,638,394
                                                                                 =============      =============

Cash paid (refunded) during the period for:
    Interest                                                                    $    3,835,321     $   1,386,465
    Income taxes                                                                         1,540          (597,278)
</TABLE>


See accompanying notes to condensed financial statements.


                                      -4-
<PAGE>



                      TRANSNATIONAL FINANCIAL NETWORK, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2001
                                   (unaudited)

NOTE 1   General - The accompanying financial statements of Transnational
         Financial Network, Inc. (the "Company") as of and for the three and
         nine month periods ending September 30, 2000, and September 30, 2001,
         are unaudited and have been prepared without audit pursuant to the
         rules and regulations of the Securities and Exchange Commission.
         Certain information and financial disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted pursuant to such
         rules and regulations. Accordingly, these unaudited condensed financial
         statements should be read in conjunction with the audited financial
         statements included in the Company's Form 10-KSB for the year ended
         December 31, 2000. These statements include all adjustments consisting
         only of normal recurring accruals, which are, in the opinion of
         management considered necessary for a fair presentation of financial
         position and results of operations. The preparation of financial
         statements in conformity with generally accepted accounting principles
         requires management to make estimates and assumptions that affect
         certain reported amounts and disclosures. Accordingly, actual results
         could differ from those estimates.

NOTE 2   Quarterly Results - The results of operations of the Company for the
         three and nine-month periods ended September 30, 2001 and 2000 are not
         necessarily indicative of the results to be expected for the full year.

NOTE 3   Net Loss Per Share - Basic net loss per share is computed by dividing
         net loss by the weighted average common shares outstanding during the
         period. Diluted net loss per share is computed based on the weighted
         average number of common shares outstanding adjusted for potentially
         dilutive securities. For the three and nine months ended September 30,
         2001 and 2000, the effect of including potentially dilutive securities
         in the calculation of diluted net loss per share would be antidilutive.
         As a result, the effect of potentially dilutive securities of 783,000
         has not been included in the calculations.

NOTE 4   Financing Facilities - The Company accounts for the transfer of
         assets under one of its financing facilities as gain on sale of
         mortgage loans since they satisfy the condition to be accounted for as
         a sale.

NOTE 5   Subordinated Debt and Notes Payable - During the first six months of
         2001, the Company received additional subordinated debt in the amount
         of $1,295,000. The subordinated debt bears interest at 15% and has
         five-year detachable warrants to purchase 35,000 shares of common stock
         at $.75 per share. The maturity dates of this subordinated debt range
         from August 14, 2002 to June 11, 2004. Also during the first quarter of
         2001, the Company raised short-term borrowings of $759,491 from various
         members of management and shareholders. The interest rate on these
         short-term borrowings was 12%. As of September 30, 2001, all of these
         amounts had been repaid.

NOTE 6   Restatement - The Company filed its first restatement of its
         financial statements for the three and nine month periods ended
         September 30, 2001 on July 30, 2002. As explained more fully in that
         restated 10-QSBA (Amendment #1) the originally reported net loss for
         the quarter ended September 30, 2001 of $(731,390) or $(0.15) per
         share, was restated to $(660,111) or $(0.13) per share. The originally
         reported net loss for the nine months ended September 30, 2001 of
         $(2,401,586) or $(0.54) per share, was restated to $(2,582,380) or
         $(0.58) per share. This restatement, which is the second of two
         restatements, filed to reflect more accurately the fair value of
         mortgage loan derivatives as required by SFAS 133, adjusts net loss for
         the quarter ended September 30, 2001 reported in the first restatement
         from $(660,111) or $(0.13) per share to $(798,368) or $(0.17) per
         share, and adjusts net loss for the nine months ended September 30,
         2001 reported in the first restatement from $(2,582,380) or $(0.58) per
         share to $(2,724,240) or $(0.61) per share. The Company also filed its
         first restatements for the first and second fiscal quarters of 2001 on
         July 30, 2002 and is contemporaneously filing the second restatements
         for those same quarters for the same reasons.

         Certain of the restatement amounts include corrections of insignificant
         arithmetic errors in the originally filed 10-QSB for the quarter ended
         September 30, 2001.

                                      -5-
<PAGE>

         The second restatement for the three and nine months ended September
         30, 2001 is presented as follows:

<TABLE>
<CAPTION>

                                               As Reported in
       As of September 30, 2001                 Amendment #1       Restatement #2     As Restated
       Balance Sheet - Captions                Filed 7/30/02       Adjustments        Herein
       ------------------------                -------------       -----------        -----------
<S>                                            <C>                 <C>                <C>
       Other assets                            $1,233,202          $(140,860)         $1,092,342
       Accumulated deficit                     (7,418,947)          (140,860)         (7,559,807)
</TABLE>

<TABLE>
<CAPTION>

                                              As Reported in
 For Three Months ended September 30, 2001    Amendment #1         Restatement #2     As Restated
 Statement of Operations - Captions           Filed 7/30/02        Adjustments        Herein
----------------------------------            -------------        --------------     -----------
<S>                                             <C>                 <C>                <C>
       Other income (expense)                   $ 67,304            $(138,257)         $ (70,953)
       Net loss - before income taxes           (660,111)            (138,257)          (798,368)
       Net loss                                 (660,111)            (138,257)          (798,368)
       Net loss per share -
                basic and diluted:                (0.14)               (0.03)             (0.17)
</TABLE>

<TABLE>
<CAPTION>

                                              As Reported in
For Nine Months ended September 30, 2001      Amendment #1         Restatement #2     As Restated
Statement of Operations - Captions            Filed 7/30/02        Adjustments        Herein
       ----------------------------------     -------------        --------------     -----------
<S>                                             <C>                <C>               <C>
       Other income (expense)                   $  151,487         $(173,820)        $  (22,333)
       Net loss - before income taxes           (2,896,380)         (174,820)        (3,071,200)
       Cumulative effect of change in
            Accounting principle                   314,000            32,960            346,960
       Net loss                                 (2,582,380)         (141,860)        (2,724,240)
       Net loss per share - basic and diluted:
            Before cumulative effect of change
                in accounting principle             (0.65)            (0.04)             (0.69)
            Cumulative effect of change in
                accounting principle                 0.07              0.01               0.08
            Net loss per share                      (0.58)            (0.03)             (0.61)
</TABLE>


<TABLE>
<CAPTION>

                                              As Reported in
For Nine Months ended September 30, 2001      Amendment #1         Restatement #2     As Restated
       Statement of Cash Flows - Captions     Filed 7/30/02        Adjustments        Herein
       ----------------------------------     --------------       -----------        -----------
<S>                                           <C>                 <C>             <C>
       Net loss                               $ (2,582,380)       $ (141,860)     $  (2,724,240)
       Other assets                                243,875           140,860            384,735
       Accounts payable and accrued
                liabilities                        295,766             1,000            296,766
</TABLE>

NOTE 7   Sale of Equity Securities -During the third quarter of 2001 the
         Company sold 900,000 shares of common stock to several investors for
         aggregate proceeds of $900,000. The agreement covering approximately
         $50,000 of such proceeds specifies that shareholder approval is
         required before monies can be released to the Company, in order to
         comply with American Stock Exchange listing requirements. Also, during
         the third quarter of 2001 the Company issued 50,000 options to a
         consultant in exchange for services. The options have a term of 2 1/2
         years and are exercisable at $1.20 per share. The fair value of these
         options has been expensed during the third quarter. The fair value of
         these options of $28,000 has been expensed in the third quarter.

NOTE 8   New Accounting Standards - In June 2001, the Financial Accounting
         Standards Board (the "FASB") adopted SFAS No. 141 Business Combinations
         and SFAS No. 142 Goodwill and Intangible Assets. SFAS No. 141 addresses
         the methods used to account for business combinations and requires the
         use of the purchase method of accounting for all combinations after
         June 30, 2001. SFAS No. 142 addresses the methods used to amortize
         intangible assets and to assess impairment of those assets, including
         goodwill resulting from business combinations accounted for under the
         purchase method. SFAS No. 142 is effective for fiscal years beginning
         after December 15, 2001. Included in our assets at September 30, 2001,
         is goodwill related to an acquisition in 1999 with a net carrying value
         of $3,126,162. Upon adoption of SFAS No. 142, we will no longer
         amortize this goodwill, decreasing our amortization expense by
         approximately $400,000 per year. We are required to assess this
         goodwill for impairment in the year of adoption. We will not be able to
         determine the full effect of these new pronouncements on our financial
         position or our results of operations until we are able to complete our
         analysis of the impairment provisions of the new standards.

NOTE 9   Litigation - In connection with the previously disclosed litigation
         involving the former principals of LRS, Inc., cash in the amount of
         $137,612 is being held by the San Francisco Sheriff's Department
         pursuant to a writ of attachment. Although no assurances can be made,
         the Company believes that it will prevail in this matter, and

                                      -6-

<PAGE>

         accordingly, no accrual has been made for a loss contingency in this
         matter.

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
condensed financial statements and the notes thereto included as Item 1 of this
Report. The discussion of results and trends does not necessarily imply that
these results and trends will continue.

Forward-Looking Information

The Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of the Form 10-QSB contain forward-looking
information. The forward-looking information involves risks and uncertainties
that are based on current expectations, estimates, and projections about the
Company's business, management's beliefs and assumptions made by management.
Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks",
"estimates", and variations of such words and similar expressions are intended
to identify such forward-looking information. Therefore, actual outcomes and
results may differ materially from what is expressed or forecasted in such
forward-looking information due to numerous factors, including, but not limited
to, availability of financing for operations, successful performance of internal
operations, impact of competition and other risks detailed below as well as
those discussed elsewhere in this Form 10-QSB and from time to time in the
Company's Securities and Exchange Commission filings and reports. In addition,
general economic and market conditions and growth rates could affect such
statements.

GENERAL

Transnational Financial Network, Inc. ("Transnational Financial Network, Inc."
or the "Company") is a wholesale and retail mortgage banker which originates,
funds and sells mortgage loans secured by one to four family residential
properties principally in the San Francisco Bay area, Southern California, and
Arizona. Since 1985, when the Company was incorporated, it has been engaged in
the retail origination of mortgage loans, and currently maintains retail offices
in San Francisco and Campbell, California. In 1995, the Company began a
wholesale division to close and fund loans originated by mortgage brokers as
well as those originated through the Company's retail division. The Company
maintains wholesale offices in San Francisco, Campbell, and Tustin, California
as well as Phoenix, Arizona. The Company operates in one business segment -
mortgage banking.

The Company's loan production and results of operations are strongly affected by
mortgage interest rates. Increasing mortgage rates raises the qualifying income
required of a homebuyer and reduces housing affordability. It also causes
mortgage refinance activity to decline because fewer homeowners can successfully
obtain a mortgage at a lower interest rate than their original mortgage. Higher
interest rates increase the cost of home ownership resulting in diminished
demand for mortgage loans, whether the purpose of the mortgage loan was for the
purchase of a home, refinancing of a home to obtain a lower rate or longer term,
home improvement, debt consolidation, or obtaining cash. When rates are high,
the mortgage loan financing that does occur usually takes the form of variable
rate mortgage loans, that is, mortgage loans that have interest rates that
frequently change over the life of the loan and, consequently, lower initial
interest rates than those charged on long term fixed interest rate mortgage
loans.

Throughout 1999 mortgage interest rates increased. In January 1999, 30-year
mortgage interest rates were 6.74%, reaching 7.55% at the end of the second
quarter and 7.91% at year-end. During the first quarter of 2000 the 30-year
mortgage rate went up to 8.24%, then peaked at 8.54% in the middle of September.
Rates dropped steadily over the remainder of the year, and as of December 31,
2000 the 30-year fixed rate average had dropped to approximately 7.13%. Rates
continued to drop during the first nine months of 2001, reaching 6.82% in
September 2001.

As a consequence, the Company saw its volume of mortgage originations pick-up
(as rates dropped) during the 4th quarter of 2000 and into the first quarter of
2001. During the second and third quarter the Company's wholesale mortgage
originations were constrained due to reductions in available warehouse
facilities. Origination volume during the third quarter was also significantly
affected by the terror attacks that occurred on September 11, 2001.

To diminish the overall effects of a variable interest rate market, the Company
has employed other measures to stabilize business. Some of these measures are
the offering of a broader menu of products, delivering mortgages to the
secondary market in volume packages, and expanding both the nature and scope of
mortgage originations. Further changes were implemented operationally, such as
the centralization of operations in two regional centers, for conventional and
government programs.

                                      -7-
<PAGE>

The following table sets forth the wholesale and retail production for the
periods indicated (in thousands):
<TABLE>
<CAPTION>

          1st Qtr-00    2nd Qtr-00       3rd Qtr-00     4th Qtr-00     1st Qtr-01      2nd Qtr-01     3rd Qtr-01
<S>        <C>           <C>              <C>            <C>            <C>             <C>             <C>
Wholesale  $ 144,044     $ 130,879        $ 154,914      $ 181,745      $ 241,780       $ 187,462       $152,973
Retail        77,406        82,928           67,974         87,598        108,327         136,115       $140,241
Total      $ 221,450     $ 213,807        $ 222,888      $ 269,343      $ 350,107       $ 323,577       $293,214
</TABLE>

Overall, the Company's mortgage loan volume increased by $308.8 million or 47%
for the first nine months of 2001 when compared to the first nine months of
2000. Wholesale mortgage loan production through September 30 of this year was
$152.4 million or 35% greater than in the same period in 2000. Retail loan
production was $156.4 million or 68% more compared to the first nine months of
2000.

During the course of the Company's year end audit, management evaluated the
accounting treatment of transactions recorded during the quarter ended September
30, 2001. Upon further consideration of all relevant transaction details,
management determined that the accounting treatment of several transactions was
not appropriate. In order to ensure appropriate accounting and reporting
treatment for all material transactions during the quarter ended September 30,
2001, management has restated and amended the Company's Form 10Q for that
quarter. For details of the restated transactions, see Note 6. to the unaudited
Condensed Financial Statements.

NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2000

The Company incurred a net loss of $(2,724,240) for the nine months ended
September 30, 2001 compared to a net loss of $(2,687,629) during the comparable
period last year. Overall, the slightly larger (1.3%) net loss in the first nine
months of 2001 as compared to the same period last year resulted from a
combination of (1) a 47% increase in loan volume, (2) an 11% drop in operating
costs as a percentage of loan volume, and (3) a $272,462 decrease in other
income (expense). These factors helped offset a $725,019 increase in net
interest expense over the prior year, and a $219,190 income tax benefit in 2000
that did not recur in 2001.

Net gain on sale of mortgage loans increased by $1,183,259 or 82%. The increase
in net gain on sale arose from higher wholesale loan production, as well as
higher profitability per loan. Total wholesale loans closed were $582.2 million,
or 35% greater than in the same period last year.

Production income increased by $2,208,675 or 56%. Production income increased
because of an increase in retail and wholesale loan production. Retail loan
production was $156.4 million or 68% greater than in the first nine months of
2000.

Other income (expense) was lower by $272,462 or 109% for the first nine months
of 2001 compared to the totals for the same period last year.

During the first nine months of 2001, the Company incurred net interest expense
of $851,773 compared to net interest expense in the first nine months of 2000 of
$126,754. The unfavorable result in 2001 reflects (1) greater levels of loans
warehoused by the company in the first nine months of 2001 resulting from
increasing business volumes and longer dwell times for those loans, and (2) the
negative gap between the initial interest rates on mortgage loans funded and the
interest rate on the Company's warehouse lines which increased as the Company
began using new, higher priced, warehouse lenders beginning in the fourth
quarter of 2000.

Excluding interest expense, total expenses were $10,934,579 or 31% higher during
the first nine months of 2001 compared to the same period in 2000. This compares
favorably to a 47% increase in loan volumes over the same period. Commissions
increased by $1,555,157 or 63% and salaries and benefits increased by $655,637
or 20%, as a result of higher loan volumes. General and administrative expenses
increased by $363,645 or 17%, mainly as a result of increased loan volume.
Occupancy costs decreased by $15,606 or 3%, mainly as a result of cost reduction
efforts.

THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2000

The Company incurred a net loss of $ $(798,368) for the three months ended
September 30, 2001 as compared to a net loss of $(526,324) during the comparable
period last year. Overall, the greater net loss in the third quarter of 2001
compared to the same period last year was the result of an increase of $68,520
in net interest expense, a $949,379 increase in operating expenses (total

                                      -8-

<PAGE>

expenses excluding interest expense), and a $219,190 income tax benefit in 2000
that did not recur in 2001. These factors were partly offset by increased gains
on sales of mortgage loans and an Increase in production income resulting from a
32% increase in loan volume.

Net gain on sale of mortgage loans increased $275,977 or 49%. The bulk of the
increase in net gain on sale arose from higher profitability on wholesale loan
production. Total wholesale loans closed were $153.0 million, or 1% less than in
the same period last year.

Production income increased by $803,997 or 63%. Production income increased
because of an increase in retail and wholesale loan production. Retail loan
production was $140.2 million or 81% greater than in the third quarter of 2000.

Other income (expense) declined by $(114,929) or (261%) for the third quarter of
2001 as compared to the totals for the same period last year.

During the third quarter of 2001, the Company incurred net interest expense of
$143,025 compared to net interest expense in the third quarter of 2000 of
$74,505. The unfavorable result in 2001 reflects the negative gap between the
initial interest rates on mortgage loans funded and the interest rate on the
Company's warehouse lines that increased as the Company began using new, higher
priced, warehouse lenders beginning in the fourth quarter of 2000.

The Company has taken steps to better manage expenses since the beginning of
2001. These steps include reducing the number of support staff, placing
wholesale account executives on straight commission so that compensation will
vary with loan production, renegotiating vendor contracts and prioritizing
technology projects.

Excluding interest and taxes, total expenses were $3,494,416 or 37% higher
during the third quarter of 2001 compared to the same period in 2000. This
compares to a 32% increase in loan volumes over the same period. Commissions
increased by $621,642 or 78% and salaries and benefits increased by $227,146 or
24%, as a result of higher loan volumes and the acquisition of two new branches.

General and administrative expenses increased by $85,363 or 13%, mainly as a
result of increased loan volume. Occupancy costs increased by $15,228 or 9%,
primarily due to the acquisition of two new branches.

LIQUIDITY AND CAPITAL RESOURCES

The Company's capital resources are substantially provided by warehouse lenders
(one of the lenders funds through a purchase as defined under SFAS 125) who fund
the mortgage loans pending the final sale of the mortgage loan to investors. The
size of the Company's warehouse facilities is based on the Company's tangible
net worth and cash resources. The Company's operating losses have eroded this
net worth and cash position. As of September 30, 2001 the Company had two
financing facilities for a maximum of $65 million. These warehouse facilities
have various financial and operational covenants with which the Company must
comply. One of the warehouse facilities requires that a deposit of $1 million be
maintained in a collateral bank account. As of September 30, 2001 the Company
was in default under certain financial covenants of these lines that require the
maintenance of minimum levels of tangible net worth and the attainment of
positive earnings.

As a result of changes in the industry, and the contraction of warehouse
facilities, the Company has been forced to reduce its levels of loan production.
Wholesale production in October 2001 totaled $60.4 million, a 34% decline over
February's peak volume of $91.7 million. Failure to obtain warehouse lines or
additional financing facilities would limit the Company's ability to grow, and
failure to maintain the existing facilities would have a material adverse effect
on the Company's operations and financial performance.

During the third quarter of 2001, the Company sold common stock in the amount of
$900,000. As a result of this cash infusion, the Company's cash position during
the third quarter of 2001 improved despite operating losses.

To facilitate its business activities over the remainder of 2001, the Company
has undertaken the following operating and financing activities:

1.       Expanded its product mix to include more profitable product types.
2.       Strengthened mortgage broker pricing policies and procedures to reduce
         price concessions and increase loan margins.
3.       Restructured funding and shipping procedures in order to reduce
         warehouse time. As a result, the period of time between a mortgage
         loan's closing and its final sale to investors has decreased from a
         high of approximately 30 days to current levels of 15-18 days with an
         achievable target of 10-15 days.
4.       Began implementing new loan origination software to improve
         productivity.
5.       Continues to seek additional capital through the sale of equity and
         debt securities.

                                      -9-

<PAGE>

6.       Is actively seeking new warehouse lines.

If the Company receives the additional equity funds it is seeking, this would
both provide additional cash and allow the Company to renegotiate the interest
rates it pays on current warehouse facilities, as well as obtain additional
warehouse facilities. This would result in a reduction in the Company's negative
net interest margin that has been a significant contributor to operating losses.
No guarantees can be made that the preceding activities will result in a return
to profitability and/or an improvement in the Company's cash position.

Item 3.  Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Securities
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms, and that such information is accumulated and communicated to the
Company's management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure.

During the 90-day period prior to the date of this report, an evaluation was
performed under the supervision and with the participation of the Company's
management, including the Chief Executive Officer and the Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based upon that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective. There have been no
significant changes in the Company's internal controls or in other factors that
could significantly affect these controls, and no corrective actions taken with
regard to significant deficiencies or material weaknesses in such controls,
subsequent to the date of our most recent evaluation of internal controls.

PART 2

Item 1.  Legal Proceedings.

There have been no new material developments in connection with legal
proceedings. See the Form 10-QSB for the period ending June 30, 2001 for further
information regarding legal proceedings.


Item 2.  Changes in Securities and Use of Proceeds.

During the third quarter of 2001 the Company sold 900,000 shares of common stock
to several investors for aggregate proceeds of $900,000. The agreement covering
approximately $50,000 of such proceeds specifies that shareholder approval is
required before monies can be released to the Company, in order to comply with
American Stock Exchange listing requirements.

During the third quarter of 2001 the Company issued 50,000 options to a
consultant in exchange for services. The options have a term of 2 1/2 years and
are exercisable at $1.20 per share.

During the third quarter, 8,000 previously issued warrants were exercised in a
cashless transaction, resulting in the issuance of 1,293 shares of common stock.

These sales of securities were exempt from registration under the Securities Act
pursuant to Section 4(2) thereunder as transactions not involving a public
offering.


Item 3.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS

                    NONE

(b)      REPORTS ON FORM 8-K

                    NONE

                                      -10-

<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                        Transnational Financial Network, Inc.
March 14, 2003          /s/ Joseph Kristul
--------------          --------------------------------------
                        Joseph Kristul,
                        Chief Executive Officer

March 14, 2003          /s/ Katey Carroll
--------------          ------------------------------------
                        Katey Carroll
                        Chief Financial Officer


                                      -11-



                                 CERTIFICATIONS

                              Certification of CEO
                    pursuant to Section 906 of the Sarbanes-
              Oxley Act of 2002 regarding Quarterly Report on Form
                10-QSB/A for the quarter ended September 30, 2001

         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections
(a) and (b) of section 1350, chapter 63 of title 18, United States Code), the
undersigned officer of, a Delaware corporation (the "Company"), does hereby
certify that:

         1. The Company's Quarterly Report on Form 10-QSB/A for the quarter
ended September 30, 2001 (the Form 10Q-SB/A) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended; and

         2. Information contained in the Form 10-QSB/A fairly presents, in all
material respects, the financial condition and results of operations of the
Company.




Date:   March 14, 2003                    By: /s/ Joseph Kristul
        ---------------                   -------------------------------------
                                          Joseph Kristul
                                          Chief Executive Officer


                                      -12-
<PAGE>

                              Certification of CFO
                    pursuant to Section 906 of the Sarbanes-
              Oxley Act of 2002 regarding Quarterly Report on Form
                10-QSB/A for the quarter ended September 30, 2001

         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections
(a) and (b) of section 1350, chapter 63 of title 18, United States Code), the
undersigned officer of, a Delaware corporation (the "Company"), does hereby
certify that:

         1. The Company's Quarterly Report on Form 10-QSB/A for the quarter
ended September 30, 2001 (the Form 10Q-SB/A) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended; and

         2. Information contained in the Form 10-QSB/A fairly presents, in all
material respects, the financial condition and results of operations of the
Company.





Date:    March 14, 2003                By:      /s/ Katey Carroll
         ---------------                        -------------------------------
                                                Katey Carroll
                                                Chief Financial Officer

                                      -13-
<PAGE>

                                 CERTIFICATION

  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (subsections (a) and
  (b) of section 1530, chapter 63 of title 18, United States Code), the
  undersigned officer of Transnational Financial Network, Inc., a Delaware
  corporation (the "Company"), does hereby certify that:


         1.       I have reviewed this quarterly report on Form 10-QSB/A of
                  Transnational Financial Network, Inc.;

         2.       Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary 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
                  quarterly report;

         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly 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
                  quarterly report;

         4.       The registrant's other certifying officers and I 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
                           quarterly report is being prepared;

                  b)       evaluated the effectiveness of the registrant's
                           disclosure controls and procedures as of a date
                           within 90 days prior to the filing date of this
                           quarterly report (the "Evaluation Date"); and

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

         5.       The registrant's other certifying officers and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of registrant's
                  board of directors (or persons performing the equivalent
                  functions):

                  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
                           weaknesses in internal controls; and

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

     The registrant's other certifying officers and I have indicated in this
     quarterly 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.


Date:  March 14, 2003                 /s/ Joseph Kristul
                                      -------------------
                                      Joseph Kristul
                                      Chief Executive Officer

                                      -14-
<PAGE>

                                 CERTIFICATION


         Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (subsections
(a) and (b) of section 1530, chapter 63 of title 18, United States Code), the
undersigned officer of Transnational Financial Network, Inc., a Delaware
corporation (the "Company"), does hereby certify that:

         1.       I have reviewed this quarterly report on Form 10-QSB/A of
                  Transnational Financial Network, Inc.;

         2.       Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary 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
                  quarterly report;

         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly 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
                  quarterly report;

         4.       The registrant's other certifying officers and I 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
                           quarterly report is being prepared;

                  b)       evaluated the effectiveness of the registrant's
                           disclosure controls and procedures as of a date
                           within 90 days prior to the filing date of this
                           quarterly report (the "Evaluation Date"); and

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


         5.       The registrant's other certifying officers and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the audit committee of registrant's
                  board of directors (or persons performing the equivalent
                  functions):

                  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
                           weaknesses in internal controls; and

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


     The registrant's other certifying officers and I have indicated in this
     quarterly 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.

Date:   March 14, 2003                /s/ Katey Carroll
                                      ----------------------
                                      Katey Carroll
                                      Chief Financial Officer


                                      -15-