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

                                   Form 10-QSB

                                   (Mark One)

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

                    For the fiscal period ended July 31, 2004

[ ]  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 of              (IRS Employer Identification No.)
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 August 27, 2004: 6,791,360




<PAGE>





                      TRANSNATIONAL FINANCIAL NETWORK, INC.

                                  July 31, 2004

            Report on Form 10-QSB for the Quarter Ended July 31, 2004

                                    UNAUDITED




TABLE OF CONTENTS                                                 PAGE NUMBER


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

     Condensed Balance Sheets as of July 31, 2004 (Unaudited)
        and April 30,2004...................................................2

     Condensed Statements of Operations for the Three Months
        Ended July 31, 2004 and 2003........................................3

     Condensed Statements of Cash Flows for the Three Months
        Ended July 31, 2004 and 2003........................................4

     Notes to Condensed Financial Statements............................... 5-9

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.............................................10-16

Item 3.  Controls and Procedures  .........................................17


PART II.  OTHER INFORMATION

Item 2. Changes in Securities..............................................17

Item 3. Exhibits and Reports on Form 8-K...................................17

Signatures.................................................................18














                                       1
<PAGE>


PART 1. FINANCIAL INFORMATION

Item 1.  Financial Statements

                      TRANSNATIONAL FINANCIAL NETWORK, INC.
                            CONDENSED BALANCE SHEETS

                     as of July 31, 2004 and April 30, 2004
                               ------------------


<TABLE>
<CAPTION>
                               ASSETS                                                         JULY 31,             APRIL 30,
                                                                                                2004                 2004
                                                                                                ----                 ----
                                                                                            (unaudited)

<S>                                                                                         <C>                  <C>
     Cash and cash equivalents, unrestricted                                                $   1,615,416        $  1,585,034
        Restricted cash                                                                         1,100,000           2,000,000
        Investments held-to-maturity                                                            1,015,234           1,015,234
        Short-term mortgage related accounts receivable                                           413,997             448,705
        Mortgage loans held for sale                                                              739,432             365,918
        Deferred tax asset                                                                        291,365             291,365
        Goodwill                                                                                3,972,305           3,972,305
        Property and equipment, net                                                               128,677             142,223
        Fair value of derivative financial instruments                                             17,100             175,000
        Other assets                                                                              170,144             230,901
                                                                                            -------------        ------------
     Total assets                                                                           $   9,463,670        $ 10,226,685
                                                                                            =============        ============

               LIABILITIES    AND    SHAREHOLDERS' EQUITY

   Accrued interest payable                                                                 $      33,353        $     35,735
   Income taxes payable                                                                             8,262              29,180
   Accounts payable and accrued liabilities                                                       547,687             615,035
   Settlement payable                                                                             352,127             639,047
   Capital lease obligations                                                                       15,601              21,522
   Subordinated debt                                                                            1,512,000           1,512,000
                                                                                            -------------        ------------

   Total liabilities                                                                            2,469,030           2,852,519
                                                                                            -------------        ------------

   Shareholders' equity:
      Preferred stock, no par value: 2,000,000 shares authorized; no shares
         issued or outstanding                                                                          -                  -
      Common stock, no par value: 20,000,000 shares authorized; 6,791,360
         and  6,828,160  shares  issued  and outstanding at July 31, 2004
            and April 30, 2004, respectively.                                                  13,422,276          13,459,474
   Accumulated deficit                                                                         (6,427,636)         (6,085,308)
                                                                                            -------------        ------------


      Total shareholders' equity                                                                6,994,640           7,374,166
                                                                                            -------------        ------------


      Total liabilities and shareholders' equity                                            $   9,463,670        $ 10,226,685
                                                                                            =============        ============
</TABLE>


              SEE ACCOMPANYING NOTES TO THESE FINANCIAL STATEMENTS

                                       2
<PAGE>


                      TRANSNATIONAL FINANCIAL NETWORK, INC.
                       CONDENSED STATEMENTS OF OPERATIONS

                for the three months ended July 31, 2004 and 2003
                               ------------------

<TABLE>
<CAPTION>

  Three Months Ended
                                                                                July 31, 2004    July 31, 2003
                                                                                (unaudited)       (unaudited)

           Revenue:
<S>                                                                             <C>               <C>
             Net gain from sale of loans                                        $1,103,141        $2,288,134
             Production income                                                   1,358,721         3,524,214
             Other income                                                           29,525            12,843
                                                                                ----------        ----------

                    Total revenue                                                2,491,387         5,825,191
                                                                                ----------        ----------

           Direct expenses:
             Commissions and production incentives                                 826,879         2,165,029
             Production expense                                                    154,456           458,302
             Pair-off fees                                                           1,500            (3,677)
             Early loan payoff penalties                                             3,500            40,000
                                                                                ----------        ----------
                    Total direct expenses                                          986,335         2,659,654
                                                                                ----------        ----------

           Interest income (expense):
             Interest income from loans in warehouse                               251,987           412,073
             Interest expense on warehouse financing                              (179,417)         (530,471)
                                                                                -----------       -----------

                    Net interest income (expense)                                   72,570          (118,398)
                                                                                ----------        -----------

           Gross profit on mortgage activities                                   1,577,622         3,047,139

           Indirect expenses:
             Salaries and benefits                                                 950,609         1,249,496
             General and administrative                                            559,461           635,943
             Occupancy                                                             173,809           179,449
             Depreciation and amortization                                          18,856            28,420
                                                                                ----------        ----------

                    Total indirect expenses                                      1,702,735         2,093,308
                                                                                ----------        ----------

                    Operating (loss) income                                       (125,113)          953,831
                                                                                -----------       ----------

           Nonoperating income (expense):
             Other interest expense                                                (59,315)         (128,804)
             Other expense                                                        (157,900)          (68,300)
                                                                                -----------       -----------

                    Total nonoperating expense                                    (217,215)         (197,104)
                                                                                ----------        ----------

                    (Loss) income before income taxes                             (342,328)          756,727

           Income tax provision                                                          -            42,000
                                                                                ----------        ----------

                    Net (loss) income                                           $ (342,328)       $  714,727
                                                                                ===========       ==========

           Net (loss) income per share
                    Basic                                                       $   (0.05)        $    0.11
                    Diluted                                                     $   (0.05)        $    0.10

           Weighted average shares outstanding
                    Basic                                                        6,794,787         6,762,321
                    Diluted                                                      6,794,787         6,945,663
</TABLE>




              SEE ACCOMPANYING NOTES TO THESE FINANCIAL STATEMENTS
                                        3
<PAGE>



                      TRANSNATIONAL FINANCIAL NETWORK, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS

                for the three months ended July 31, 2004 and 2003
                               ------------------

<TABLE>
<CAPTION>

                                                                                                        Three Months Ended
                                                                                                   July 31, 2004   July 31, 2003
                                                                                                    (unaudited)     (unaudited)
 Cash flows from operating activities:
<S>                                                                                              <C>               <C>
 Net (loss) income                                                                               $    (342,328)    $    714,727
    Adjustments to reconcile net (loss) income to net cash
      provided by operating activities:
    Depreciation and amortization                                                                       18,856           28,420
    Net change in fair market value of financial derivatives                                           157,900           68,300
    Provision for early payoff penalties                                                                 3,500           40,000
    Net effect of changes in assets and liabilities:
      Other assets                                                                                      57,256           24,834
      Accrued interest payable                                                                          (2,382)           3,414
      Income tax payable                                                                               (20,918)          44,267
      Accounts payable and accrued liabilities                                                         (67,348)         (73,686)

    Net effect of changes in mortgage loans activity:
      Mortgage related short-term accounts receivable                                                   34,708          443,927
      Mortgage loans originated for sale                                                           (97,672,404)    (247,312,488)
      Mortgage loans proceeds from sale                                                             97,298,890      247,391,561
                                                                                                 -------------     ------------

          Net cash (used in) provided by operating activities                                         (534,270)       1,373,276
                                                                                                 --------------    ------------

 Cash flows from investing activities:
    Property and equipment purchases                                                                    (5,309)         (47,924)
    Decrease in restricted cash                                                                        900,000                -
                                                                                                 -------------     ------------

          Net cash provided by (used in) investing activities                                          894,691          (47,924)
                                                                                                 -------------     ------------

 Cash flows from financing activities:
      Warehouse notes payable-net repayments                                                                 -         (325,327)
      Payments on settlement payable                                                                  (286,920)        (300,000)
    Proceeds from stock option exercise                                                                      -           10,265
    Payments on capital lease obligations                                                               (5,921)          (4,550)
    Borrowings on subordinated debt                                                                          -          200,000
    Payments on subordinated debt                                                                            -         (200,000)
    Repurchases of common stock                                                                        (37,198)               -
                                                                                                 --------------    ------------

          Net cash used in financing activities                                                       (330,039)        (619,612)
                                                                                                 -------------     ------------

 Net increase in cash and cash equivalents, unrestricted                                                30,382          705,740
                                                                                                 -------------     ------------

 Cash and cash equivalents, unrestricted, beginning of period                                        1,585,034        1,847,996
                                                                                                 -------------     ------------

 Cash and cash equivalents, unrestricted, end of period                                          $   1,615,416     $  2,553,736
                                                                                                 =============     ============

 Cash paid during the period for:
      Interest                                                                                   $     225,532     $    564,452
    Income taxes                                                                                        20,918           85,000

 Schedule of non-cash investing and financing activities:
    Increase in goodwill and settlement payable                                                              -           88,218
</TABLE>



              SEE ACCOMPANYING NOTES TO THESE FINANCIAL STATEMENTS
                                       4
<PAGE>





                      TRANSNATIONAL FINANCIAL NETWORK, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

     NOTE 1       General

     The accompanying financial statements of Transnational Financial Network,
     Inc. (the "Company") as of and for the three month periods ended July 31,
     2004 and 2003, are unaudited and have been prepared 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 accounting principles generally
     accepted in the United States of America 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 April 30, 2004. These unaudited 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 accounting principles generally accepted in
     the United States of America requires management to make estimates and
     assumptions that affect certain reported amounts and disclosures.
     Accordingly, actual results could differ from those estimates. The results
     of operations of the Company for the three months ended July 31, 2004 and
     2003 are not necessarily indicative of the results to be expected for the
     full year.

     NOTE 2       Summary of Significant Accounting Policies

     Use of Estimates - The preparation of financial statements in conformity
     with accounting principles generally accepted in the United States of
     America requires management to make certain estimates and assumptions,
     including the depreciable lives of assets, the fair value of goodwill and
     financial derivatives, the realizable portion of deferred tax assets, that
     affect the reported amounts of assets and liabilities and disclosure of
     contingent 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.

     Statement of Cash Flows - For purposes of the statement of cash flows, the
     Company considers cash equivalents to be short-term, highly liquid
     investments used in its cash management activities and generally having a
     remaining maturity of three months or less from the date of purchase.

     Income Taxes - The Company uses the asset and liability method in
     accounting for deferred income taxes. Deferred tax assets and liabilities
     are calculated by applying applicable tax laws to the differences between
     the financial statement base and the tax base of assets and liabilities.
     The effect on deferred taxes of a change in tax rates is recognized in
     income in the period that includes the enactment date.

     Stock-Based Compensation - The Company follows APB 25 in accounting for its
     employee stock options. The disclosure provision of SFAS 148 has been
     incorporated into these financial statements and accompanying footnotes.

     The following table illustrates the effect on net (loss) income that would
     have resulted if the Company had applied the fair value recognition
     provisions of Financial Accounting Standard No. 123, Accounting for
     Stock-Based Compensation, to stock-based employee compensation.

                                       5
<PAGE>

                      TRANSNATIONAL FINANCIAL NETWORK, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)


     NOTE 2       Summary of Significant Accounting Policies - continued
<TABLE>
<CAPTION>

      Stock-Based Compensation - continued
                                                                     Quarter Ended
                                                             --------------------------
                                                              July 31,        July 31,
                                                                2004            2003
                                                              --------       --------
                Net (loss) income:
<S>                                                           <C>           <C>
                  As reported                                 $ (342,327)   $   714,727

                  Pro forma                                   $ (391,637)   $   641,357

                Basic (loss) income per common share:
                  As reported                                 $   (0.05)    $     0.11
                  Pro forma                                   $   (0.06)    $     0.09
                Diluted (loss) income per common share:
                  As reported                                 $   (0.05)    $     0.10
                  Pro forma                                   $   (0.06)    $     0.09
</TABLE>

     There were no option grants during the quarters ended July 31, 2004 or
     2003.

     NOTE 3       Financing Facilities

     As of July 31, 2004, the Company had a maximum mortgage loan financing
     capacity of $60 million through two master sale agreements, or warehouse
     lines of credit. Under these arrangements, the lending financial
     institutions purchase a 100% loan participation interest in each loan upon
     the Company obtaining a firm forward sale delivery commitment from
     investors and upon the financial institutions' approval of the loan based
     on their underwriting criteria. The Company recognizes income from loans
     transferred under these lines as a gain on sale immediately upon the
     purchase and funding of the loans by the financial institutions.

     In connection with these agreements, the Company may be required to
     repurchase certain loans that, subsequent to acquisition by the financial
     institutions, fail to meet certain representations and warranties set forth
     in the agreements at the date of the sale. During the fiscal three month
     period ended July 31, 2004, the Company was required to repurchase one loan
     in the amount of $263,646 that it resold during the quarter for a loss of
     approximately $14,500. The Company was not required to repurchase any loans
     during the fiscal three month period ended July 31, 2003.

     Loan interest charges incurred in connection with the sale are estimated
     and recognized as a reduction in sales proceeds immediately upon the loan
     being transferred. Loan interest expense is calculated based on the number
     of days the loan remains with the financial institution, until it is
     ultimately resold to a third party investor. During the intervening period
     the Company sub-services the loans on behalf of the financial institutions.

     The first master sale agreement provides a credit facility of $30 million
     as of July 31, 2004. Under this arrangement, an additional bulge capacity
     of $10 million is available if needed, bringing the total capacity under
     this arrangement to $40 million. The Company has not used this interim
     bulge capacity to date. Interest on the $30 million portion of the line is
     at the Prime Rate or 3.99%, whichever is higher. Prime was 4.25% at July
     31, 2004. Interest on the remaining $10 million of the line is 0.05% higher
     than that charged on the $30 million portion. The rate paid by the Company
     on this line as of July 31, 2004 was 4.25%. The Company is required to
     maintain a non-interest bearing cash collateral deposit with this lender of
     $1,000,000, which has been included as restricted cash in the balance
     sheets.

     The second master sale agreement provides a credit facility of $20 million
     as of July 31, 2004. Interest on the facility is at LIBOR plus a margin
     ranging from 1.875% to 2.375%. The rate paid by the Company on this line as
     of July 31, 2004 was 3.15%. The Company is required to maintain an interest
     bearing cash collateral deposit with this lender of $100,000, which has
     been included as restricted cash in the balance sheets.

                                       6

<PAGE>

                      TRANSNATIONAL FINANCIAL NETWORK, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NOTE 3 Financing Facilities - continued

These two master sale agreements are each for a one-year period and are
typically renewed annually. However, the agreements give each party the right to
terminate the agreement upon 30 days' written notice. These financing facilities
have various financial and operational covenants with which the Company must
comply. As of July 31, 2004, the Company was not in compliance with one of its
financial covenants, which requires the Company to maintain profitability on a
quarterly basis. However, the lender has agreed that it will not discontinue
this facility due to this default. The CEO and the President of the Company have
both personally guaranteed the above financing facilities.

NOTE 4 Goodwill

Goodwill is attributable to the purchase of the Company's Campbell branch
(formerly LRS, Inc.) in 1999.

NOTE 5 Subordinated Debt

As of July 31, 2004, the Company had $1,512,000 of subordinated debentures
outstanding. Of the total amount, $1,112,000 bears interest at 10% and $400,000
bears interest at 15%. Subordinated debt interest expense of $44,200 and $76,763
was incurred in the fiscal periods ended July 31, 2004 and 2003, respectively.

NOTE 6 Settlement Payable

This obligation arises from the December 2002 settlement of litigation related
to the purchase price of the Campbell branch (formerly LRS, Inc.). The balance
of the obligation includes unpaid principal and accrued interest. Pursuant to
the Settlement Agreement, the Company is making monthly payments of $100,000 and
will continue doing so until the debt is fully paid in November 2004. Interest
accrues at an annual rate of 10% on the unpaid balance.

NOTE 7 Stock Option Programs and Warrants to Purchase Common Stock

As of July 31, 2004, the Company had options outstanding under the programs
described herein.

In March 1999, four Directors of the Company were granted 240,000 non-qualifying
options to purchase common stock at an exercise price of $7.50 per share. The
options were vested on the grant date and expire in March 2009. Of the total
grant, 160,000 options may be exercised only in the event of a change in control
as defined in the option agreement. There are no forfeiture provisions
associated with the options granted, accordingly, the option granted to three of
the four directors who subsequently resigned remain outstanding until they are
exercised or expire.

The Company has two stock option plans: the 1998 Stock Compensation Plan ("1998
Plan") for employees and the 2000 Stock Incentive Plan ("2000 Plan") for
directors, officers and other employees which replaced the 1998 Plan in February
2000.

Options issued and outstanding from the 1998 Plan will continue to be honored,
but no additional options may be issued under the 1998 Plan. As of July 31,
2004, there were a total of 18,000 share options outstanding under the 1998
Plan, all with an exercise price of $7.50 per option, which vested over 4 years,
and which expire in August 2008.

Under the 2000 Plan, a total of 750,000 shares were initially reserved. The
options typically vest over four to five years. As of July 31, 2004, there were
874,322 options outstanding under the 2000 Plan. The share reserve increases by
4% of total common shares outstanding each year, beginning on January 1, 2001.
The maximum annual increase in the share reserve is limited to 400,000 shares.


                                       7
<PAGE>

                      TRANSNATIONAL FINANCIAL NETWORK, INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NOTE 7 Stock Option Programs and Warrants to Purchase Common Stock - continued

Accordingly, the following table is a roll forward of the share reserve limit
through July 31, 2004:

                                             Number of Options
Initially Reserved                                          750,000
January 1, 2001                                             171,172
January 1, 2002                                             205,503
January 1, 2003                                             270,407
January 1, 2004                                             272,640
                                                            -------
Reserve amount at July 31, 2004                           1,669,722
                                                          =========

In June 2002, the Board of Directors of the Company unanimously granted to
Joseph Kristul, its Chief Executive Officer, an option to purchase 300,000
shares of the Company's common stock at a price of $0.73 per share. The shares
will be unregistered. The options vest over either four years, or immediately
upon the occurrence of certain events including a change in control, or 60 days
after the cessation of Mr. Kristul's full-time employment by the Company,
whichever events occur first. The options expire in four years, unless
previously exercised pursuant to the above conditions.

The table below summarizes aggregate activity for all options programs for the
fiscal period ended July 31, 2004:

                                                              All Programs
                                                        -----------------------
                                                                        Weighted
                                                                        Average
                                                        Stock           Exercise
                                                        Options         Price
                                                        -----------     --------
       Outstanding at April 30, 2004:                     1,446,072     $  2.07
          Grants                                                 --
          Forfeitures                                       (13,750)       0.73
          Exercises                                              --
                                                          ---------
       Outstanding at July 31, 2004                       1,432,322        2.08
                                                          ---------



As of July 31, 2004, there were 53,000 warrants to purchases share of the
Company's common stock outstanding. The exercise prices of the warrants ranged
from $0.55 to $7.50.

NOTE 9 Basic and Diluted Net (Loss) Income Per Share

Basic net (loss) income per share is computed by dividing net (loss) income by
the weighted average common shares outstanding during the period. Diluted net
(loss) income per share is computed based on the weighted average number of
common shares outstanding adjusted for potentially dilutive securities. For the
period ended July 31, 2004, the effect of including potentially dilutive
securities in the calculation of diluted net loss per share was antidilutive.
For the three months ended July 31, 2003, the effect of including potentially
dilutive securities in the calculation of diluted net income per share decreased
basic earnings per share by $0.01 per share. Potentially dilutive securities
were 748,104 and 644,938 as of July 31, 2004 and 2003, respectively.


                                       8
<PAGE>


                     TRANSNATIONAL FINANCIAL NETWORK, INC.

              NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)

NOTE 10 Fair Value of Financial Instruments

A summary of the total contract value of the Company's exposure to off-balance
sheet credit risk as of July 31, 2004 and April 30, 2004, including financial
instruments whose contract amount represents credit risk only is as follows:

                                          July 31, 2004         April 30, 2004
                                          -----------------     ---------------
                                          -----------------     ---------------
 Commitments to extend credit             $     26,374,496      $39,667,350
 Mandatory forward delivery commitments          5,200,000               --


Commitments to extend credit are contractual agreements entered into with
customers to fund mortgage loans, which remain valid as long as there is no
violation of any condition established in the contract. These commitments
generally have fixed expiration dates or other termination clauses. Since many
of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. The
balance sheet value of these contracts, calculated in accordance with SFAS 133,
was $2,600 and $175,000 at July 31, 2004 and April 30, 2004, respectively.

The Company is exposed to credit risk on its mandatory forward delivery
commitments when the Company's position in these instruments becomes positive
(i.e. "in-the-money") and the Company is a net creditor to the counter party to
the agreement. If the Company cannot deliver the agreed-upon loans into the
commitment by the expiration date, the Company is subject to a financial penalty
("pair-off fee"). The balance sheet value of these contracts, calculated in
accordance with SFAS 133, was $14,500 and $0 at July 31, 2004 and April 30,
2004, respectively.

NOTE 11 Subsequent Event

Subsequent to July 31, 2004, the Company refunded $200,000 of subordinated debt
which carried interest at 15%. The Company also issued $44,000 in new
subordinated debt which carries interest at 10% aand which has terms that are
similar to its existing subordinated debt.




                                       9
<PAGE>


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.

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 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. ("TFN" 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
origination of retail mortgage loans, and currently maintains wholly owned
retail offices in San Francisco and Campbell, California. In addition, we
maintain Net Branches in association with local mortgage brokerage companies. As
of July 31, 2004, we had two Net Branches, one in San Diego, California and one
in Scottsdale, Arizona. We expect to continue our policy of adding and
subtracting Net Branches from our branch network on an opportunistic basis in
the future.

In 1995, the Company began a wholesale division to close and fund loans
originated by independent third party mortgage brokers as well as those
originated through the Company's retail division. The Company maintains
wholesale offices in San Francisco 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, with origination volumes increasing in periods of
declining interest rates, and declining during periods of increasing 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 is 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
and, consequently, have lower initial interest rates than those charged on
longer term fixed interest rate mortgage loans.

To diminish the overall effects of a variable interest rate market, the Company
has employed other measures to stabilize business. These measures include
offering a broader menu of products, delivering mortgages to the secondary
market in volume packages, and expanding both the nature and scope of mortgage
originations. Wholesale operations are centralized in two regional centers for
both conventional and government programs to provide greater economic
efficiencies. Nonetheless, the Company's origination volume trends have been and
will continue to be heavily influenced by both the level and trend of interest
rates.


                                       10
<PAGE>


The data in the table below is presented to provide context for the discussion
that follows the table.

                      Transnational Financial Network, Inc.
                       Condensed Statements of Operations
                                 and Production

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                   For the 3 Months Ended

                                                    July 31,     July 31,             % Change
                                                        2004         2003       Increase  (Decrease)
----------------------------------------------------------------------------------------------------

Revenue:
<S>                                               <C>          <C>              <C>
    Net gain on sale of mortgages                 $1,103,141   $2,288,134       (52)%
    Production revenue                             1,358,721    3,524,214       (61)%
    Other revenue                                     29,525       12,843       130 %
                                                  ----------   ----------

                 Total revenue                     2,491,387    5,825,191       (57)%

Direct expense:
    Commission and production incentives             826,879    2,165,029       (62)%
    Production expense                               154,456      458,302       (66)%
    Pair-off fees                                      1,500       (3,677)         nm
    Provision for early payoff penalties               3,500       40,000       (91)%
                                                  ----------   ----------

                 Total direct expense                986,335    2,659,654       (63)%

Net interest income (expense)
    Interest income on loans in warehouse            251,987      412,073       (39)%
    Interest expense on loans in warehouse          (179,417)    (530,471)      (66)%
                                                  ----------   ----------

                 Net interest income (expense)        72,570     (118,398)         nm
                                                      ------   ----------

Gross profit on mortgage activities                1,577,622    3,047,139       (48)%

Indirect expense
    Salaries and benefits                            950,609    1,249,496       (24)%
    General and administrative                       559,461      635,943       (12)%
    Occupancy                                        173,809      179,449        (3)%
    Depreciation                                      18,856       28,420       (34)%
                                                  ----------   ----------

                 Total indirect expense            1,702,735    2,093,308       (19)%
                                                  ----------   ----------

                 Operating income (loss)            (125,113)     953,831          nm

Non-operating income (expense):
     Other interest expense                          (59,314)    (128,804)      (54)%
     Other income (expense), including
       SFAS 133 adjustment                          (157,900)     (68,300)      131 %
                                                  -----------  ----------

            Total non-operating income (expense)    (217,214)    (197,104)       10 %
                                                  ------------ ----------

Income (loss) before taxes                          (342,327)     756,727          nm

Provision for income taxes                                --       42,000          nm
                                                  ----------   ----------

                 Net income (loss)                $ (342,327)  $  714,727          nm
                                                  ===========  ==========


Production ($ millions):

Wholesale                                         $   98       $ 247            (60)%
Retail                                                83         216            (62)%
                                                  ------       -----
    Total production                              $  181       $ 463            (61)%
                                                  ------       -----
</TABLE>



                                       11
<PAGE>


The following table shows the Company's wholesale and retail production trends
by fiscal quarter for the last nine fiscal quarters:
<TABLE>
<CAPTION>

                                                              Origination Volumes
                                                                  ($ millions)

Fiscal Quarter Ended     7-31-04    4-30-04    1-31-04  10-31-03    7-31-03   4-30-03  1-31-03  10-31-02    7-31-02
                         -------    -------    -------  --------    -------   -------  -------  --------    -------

<S>                      <C>        <C>        <C>     <C>        <C>        <C>       <C>       <C>        <C>
Wholesale                $   98     $  128     $ 102   $   134    $   247    $   194   $   198   $   179    $   95
Retail                       83        144        88       216        216        244       234       244       195
                         ------     ------     -----   -------     ------    -------   -------   -------    ------

Total                    $  181     $  272     $ 190   $   463    $   463    $   438   $   432   $   423    $  290
                         ======     ======     =====   =======    =======    =======   =======   =======    ======
</TABLE>



FISCAL QUARTER JULY 31, 2004 COMPARED TO FISCAL QUARTER ENDED JULY 31, 2003 AND
FISCAL QUARTER ENDED JULY 31, 2002

Revenue Analysis

Total revenues for the fiscal period ended July 31, 2004 decreased 57% to $2.5
million from $5.8 million in the year earlier period. This decrease occurred
while aggregate loan originations for the Company decreased 61% in the fiscal
period ended July 31, 2004 as compared to the year earlier period. The
year-over-year change in our total revenues were subject to two dominant
influences:

First, wholesale originations decreased 61% in the quarter recently ended when
compared to the like period a year ago. Our originations in the year ago period
were at a peak level due to the historically low interest rate environment.
However, although our wholesale originations were 61% lower, our revenues from
the gain on sale of mortgage loans decreased by 51%. The fact that our revenues
did not decrease as much as our originations indicates that we improved the gain
on sale percentage that we earned on our originations. For the fiscal period
ended July 31, 2004, our gain on sale was 113 basis points versus 93 basis
points in the comparable prior period. This improvement principally reflects two
ongoing efforts by the Company, including the change to our product mix, which
we began implementing in the third quarter of 2001 and a new program that we
tested in July 2004 to use our available cash to originate small pools of
mortgage loans in order to sell the entire pool for a higher yield than we
normally achieve when we sell loans to mortgage investors one by one.

As shown in the table below, we have increased our gain on sale over the last
two years, with a 53% rise from the 74 basis points in the quarter ended July
31, 2002 to 113 basis points in the quarter which recently ended.
<TABLE>
<CAPTION>

                                               Wholesale Gain on Sale
                                               ----------------------
                                                   (Basis Points)
Fiscal Quarter Ending      7-31-04   4-30-04  01-31-04   10-31-03   7-31-03    4-30-03    1-31-03   10-31-02    7-31-02
                           -------   -------  --------   --------   -------    -------    -------   --------    -------
<S>                        <C>       <C>      <C>        <C>        <C>        <C>        <C>       <C>         <C>
Gain On Sale               113       93       134        140        106        128        101       88          74
</TABLE>

Our gain on sale margin experienced significant increases in several quarters
primarily due to fees that we receive when we fulfilled our obligations in
forward delivery commitments that we entered into. The gain one sale in the
quarters ended January 31, 2004 and October 31, 2003 were higher due to the
receipt of such forward delivery fees. In the absense of such fees, the gain on
sale in those quarters would have been 108 and 94. In the current environment,
we expect to continue to earn such bonuses from time to time, but do not expect
such bonuses necessarily to occur at regular intervals within our fiscal
quarterly reporting periods. Furthermore, since the bonus levels are dependent
upon achieving a targeted pull-through rate on a total forward delivery
commitment, the bonus is not earned, nor can it be accrued for, until the
forward delivery commitment is completed, and the actual pull-through rate is
determined. Finally, we also experienced a higher gain on sale during the three
months ended July 31, 2004 due to the implementation of a program to use our
available cash to originate small pools of mortgage loans in order to sell the
entire pool for a higher yield than we normally achieve when we sell loans to
mortgage investors one by one.

Second, our retail loan originations decreased by 61% in the quarter just ended
when compared to the like quarter a year ago. This acted as a brake on our total
year-over-year revenue growth. While we continue to add loan officers to our
retail operations, we have not targeted it for growth as aggressively as we have
our wholesale operations. This is because our wholesale operations are
substantially more profitable.


                                       12
<PAGE>


Gross Profit Analysis

Gross profits for the quarter just ended decreased by 61% when compared to that
earned in the year ago period. However, our gross margin increased from 52% to
63%, reflecting our highest gross margin in the last nine quarters. This is
primarily attributed to the increased gain on sale that we have achieved in the
three months ended July 31, 2004 through our efforts to originate higher
yielding mortgage loan products and our effort to originate and sell mortgage
loans in bulk.

As shown in the table below, we have experienced generally increasing gross
margins over the last two years, although there has been quarter-to-quarter
variability due to various factors, including changes in interest rates, our
product mix, and our secondary marketing effectiveness. The peak gross margin
shown in the first quarter of 2005 was primarily due to an increased focus on
wholesale production rather than retail production due to the higher margins.
<TABLE>
<CAPTION>

                                           Gross Profit Margin Trends
                                           --------------------------
Fiscal Quarter Ending     7-31-04    4-30-04   1-31-04   10-31-03   7-31-03    4-30-03    1-31-03   10-31-02   7-31-02
                          -------    -------   -------   --------   -------    -------    -------   --------   -------
<S>                       <C>        <C>       <C>       <C>        <C>        <C>        <C>       <C>        <C>
Gross Profit Margin       63.3%      56.9%     61.9%     53.7%      52.3%      53.8%      47.1%     43.9%      38.8%
</TABLE>

The increasing gross margin trend in the last four quarters principally reflects
the following two factors:

First, our wholesale originations, which have higher gross profitability than
retail mortgage originations, have increased from 32% of our total loan
originations in the first fiscal quarter two years ago to 54% of our total loan
originations in the recently ended first quarter.

Second, as previously discussed, we have benefited from changes we made to our
product mix as well as from increased demand from investors in our Alt-A
mortgage loans. As a result, our Gain on Sale margin has steadily increased,
thus magnifying the effect of the mix factor change.

Indirect Expense Analysis

Aggregate Indirect Expenses decreased 19% to $1.7 million in the quarter ended
July 31, 2004 when compared to the like period a year earlier. As shown in the
table below, the Company has driven its Operating Expenses as a percent of
revenues materially lower over the last two years.
<TABLE>
<CAPTION>

                                            Indirect Expense and Components
                                            -------------------------------
                                              (As a Percent of Revenues)

Fiscal Quarter Ending     7-31-04  4-30-04   1-31-04   10-31-03    7-31-03   4-30-03   1-31-03  10-31-02    7-31-02
                          -------  -------   -------   --------    -------   -------   -------  --------    -------
<S>                        <C>      <C>       <C>        <C>        <C>        <C>      <C>       <C>        <C>
Total Indirect Expenses    68.3%    51.1%     57.5%      40.6%      35.9%      33.6%    38.6%     38.9%      47.5%

Selected Components
Salaries and Benefits      38.1%    29.1%     34.7%      24.7%      21.4%      19.0%    20.4%     21.1%      27.0%
General and Admin.         22.5%    16.4%     16.3%      11.4%      10.9%      11.3%    14.5%     13.6%      15.1%
</TABLE>


While our year-over-year comparisons reflect a decrease in the dollar amount of
indirect expenses, the ratio of indirect expenses and the selected components
reflect a significant percentage increase primarily due to the decline in
revenues, which decreased during the last fiscal quarter and during the last
fiscal year.

General and Administrative expenses have stabilized at the current absolute
level, and we do not expect them to change materially from here.

As a result, if our revenues taper off in response to the recent rise in
interest rates, we expect that our Indirect Expenses, as a percent of our
Revenues, will continue to increase.


                                       13
<PAGE>


Non-Operating Expense Analysis

Our Non-Operating Expenses consist of two types.

First, we incur Other Interest Expense. This is interest expense that is not
directly associated with our mortgage lending activities (warehouse loans). It
results from two obligations. First, the subordinated debt we have incurred to
bolster our capital base accounts for approximately $42 thousand of quarterly
interest expense. Second, the obligation related to an acquisition we made in
1999 accounts for approximately $15 thousand of quarterly interest expense. By
contract, this latter obligation (principal and accrued interest), of which we
owed $352,127 as of July 31, 2004, will be repaid in full during November 2004.
We have been required to make payments in the amount of $100,000 per month under
the settlement agreement and the fulfillment of this obligation in November 2004
is expected to substantially increase our cash flows.

The second part of our Non-Operating Expense is labeled "Other Income/Expense".
It consists almost entirely of non-cash charges or credits that derive from the
application of Statement of Financial Accounting Standard Number 133 relating to
the accounting for mortgage loan derivative instruments. This figure will be
either positive or negative from quarter to (consecutive) quarter, principally
based upon whether or not our locked mortgage pipeline (mortgages where we have
committed, or locked in, to a buyer to fund a mortgage for a specific amount at
a specific rate) rises or falls from the immediately preceding quarter.

In the quarter just ended, there was a negative adjustment to this Statement of
Financial Accounting Standards ("SFAS") No. 133 asset of approximately $158,000.
This reflects the fact that our locked pipeline decreased in size at July 31,
2004, compared to what it was at April 30, 2004.

Liquidity and Capital Resources

Our operations are funded through internally generated funds and with warehouse
lines of credit (as set forth below) providing the funding necessary to fund
mortgage loans pending the mortgage loan's resale to investors. Our unrestricted
cash position for the three months ended July 31, 2004, increased by $30,382.
However, our restricted cash balance decreased by $900,000 during the same
period. The most significant factors affecting our cash flow are summarized
below.

Operational cash flows for the three months ended July 31, 2004.

With the exception of income taxes payable and non-cash accruals, the cash
effect reflected in our statement of operations is usually realized within 30
days of the close of the accounting period. Accordingly, by adding depreciation
of $18,856, the change in the fair value of financial derivatives of $157,900,
and the provision for early payoff penalties of $3,500, (each of which are
adjustments that do not have a cash effect), to net loss of $342,328, we used
$162,072 in cash in operations for the three month period ended July 31, 2004.

Included in this $162,072 use of cash from operations are reductions in various
current liabilities and a change in other assets for an additional $33,392 use
of cash.

Cash flows related to mortgage loan-financing activities.

Our mortgage loans are funded through Master Sale Agreements. When we fund a
loan utilizing Master Sales Agreement facilities, the loan is considered sold to
the lending facility, therefore the asset and liability related to loans funded
in this manner do not appear on our balance sheet. We used $338,806 in cash in
our mortgage loan financing activities during the three month period ended July
31, 2004, primarily related to our program to fund pools of mortgage loans to
sell in bulk.

Cash flows related to investing activities.

During the three months ended July 31, 2004, we restructured one of our Master
Sale Agreements so that we were able to obtain our $900,000 security deposit
under the arrangement, which was previously included in restricted cash.

Cash flows related to financing activities

In December 2002 we settled certain litigation related to our acquisition of
LRS, Inc. The settlement requires us to pay the former principals of that entity
$100,000 per month, three of which were made in the quarter ended July 31, 2004,
which reduced the principal amount by $286,920. At July 31, 2004, we owed
$352,127 on this obligation.

In addition, in the three month period ended July 31, 2004, we refinanced
$112,000 of subordinated debt from 15% to 10%. This subordinated debt will
mature in three years.

Finally, during May 2004, we repurchased 36,800 shares of the Company's common
stock at a total cost of $37,198 under a stock repurchase program that had been
authorized by the Board of Directors during December 2003.


                                       14
<PAGE>

Summary of Financing Facilities

The capital resources utilized by the Company to fund its mortgage lending
activities are primarily provided by warehouse lenders that fund the mortgage
loans through Master Sales Agreements ("warehouse facilities"). The size of the
Company's warehouse facilities is based on the Company's net worth and cash
resources. As of July 31, 2004, the Company had a total of two financing
facilities for a maximum financing capacity of up to $60 million.

     The funding  facilities have various  financial and  operational  covenants
with which the Company must comply,  including the requirement  that the Company
maintain  cash  deposits  with  certain   lenders  as   compensating   balances.
Collectively, these facilities require compensating balances of $1.1 million. As
of July 31, 2004,  the Company was not in  compliance  with one of its financial
covenants,  which requires the Company to maintain  profitability on a quarterly
basis. However, the lender has agreed that it will not discontinue this facility
due to this default.The  agreements are renewable on an annual basis, subject to
the  lenders'  evaluation  of the  Company's  financial  position  at that time.
However,  despite the fact that the agreements  are for a year at a time,  other
provisions  included in the agreements  give both the lender and the Company the
right  to  terminate  the  agreement  without  cause;  either  immediately  upon
notification  or  with 30  days  written  notice.  Termination  of any of  these
facilities could have a material adverse effect on the Company's  operations and
its  financial  performance  by  constraining  its  ability  to fund  loans.  If
termination were to occur, the Company would need to seek alternative sources of
financing,  possibly under less favorable terms. Joseph Kristul,  CEO, and Maria
Kristul,  President, have both personally guaranteed the two facilities in place
at July 31, 2004. The Company believes that its relationships  with its existing
lenders is satisfactory at the current time.

To expand its operations, the Company needs to obtain additional warehouse lines
of credit or additional financing facilities. The level of financing facilities
the Company can obtain is a multiple of the Company's equity. For every dollar
increase in the Company's equity, we can expect a $15 increase in financing
facility capacity. Conversely, every dollar reduction in equity has the
potential to constrain the Company's financing facilities by $15. Given the
improvement in the Company's cash flow from operations during the last two
years, management was able to renegotiate the interest rates it pays on its
facilities. We will negotiate for more favorable terms from our other lenders,
as well as seek to obtain additional financing facilities at favorable rates. If
successful, this will increase the Company's funding capacity as well as
continue to improve net interest income (expense), which has been a contributor
to prior years' operating losses.

Our overall funding strategy is to use committed facilities, summarized as of
July 31, 2004:
<TABLE>
<CAPTION>

                             Committed      Outstanding        Required      Interest Rate
Type of Facility               Facility        Balance       Cash Deposit    July 31, 2004     Maturity
----------------             -------------  ------------     ------------    -------------     --------

<S>                          <C>            <C>             <C>                <C>            <C>
Master sales agreement (1)   $40,000,000    $ 9,924,852     $1,000,000         4.25%(2)       Annual or 30 days notice
Master sales agreement (1)    20,000,000      6,783,129        100,000         3.15%(3)       Annual or 30 days notice

Totals                       $60,000,000    $16,707,981     $1,100,000
                             ===========    ===========     ==========
</TABLE>

(1)      The Company accounts for the loans underlying these facilities as sold
         as of July 31, 2004.
(2)      The contractual interest rate on this facility was 3.99% or Prime,
         whichever is greater.
(3)      The contractual interest rate on this facility is one month LIBOR plus
         a margin ranging from 1.875% to 2.375%.

The Company is a party to financial instruments with off-balance sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit in the form of
loans, and mandatory forward delivery commitments. These instruments involve, to
varying degrees, elements of credit and interest rate risk in excess of the
amounts recognized in the balance sheet. The mandatory forward delivery
commitments also involve the risk of nonperformance on the part of the Company.
The Company manages these risks by entering into these agreements with major,
well-known financial institutions. The contract amounts of those instruments
reflect the extent of involvement the Company has in particular classes of
financial instruments.


                                       15
<PAGE>


The notional value of financial instruments, whose contract amounts represent
credit and risk at the indicated dates, are as follows:

                                                  July 31,            April 30,
                                                    2004                2004
                                            -----------------------------------

Commitments to extend credit                $     26,374,496       39,667,350
Mandatory forward delivery commitments             5,200,000               --

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract on the part
of the customer. Commitments generally have fixed expiration dates or other
termination clauses. Since many of the commitments to extend credit are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements.



                                       16
<PAGE>


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. OTHER INFORMATION

Item 2.  CHANGES IN SECURITIES


On December 17, 2003, the Company announced that our Board of Directors had
approved a share buy-back plan of up to 250,000 shares, or 3.7% of the Company's
total shares outstanding. On May 6, 2004, the Board of Directors approved an
extension of the date of this plan to December 31, 2004 from the originally
schedule termination date of June 30, 2004.

During the month ended May 31, 2004 we repurchased 36,800 shares of the
Company's common stock for an average price of $1.01. We did not repurchase any
shares during the months ended June and July 2004. Under the terms of the share
by-back plan, we may repurchase a maximum amount of 213,200 additional shares
before the termination date of December 31, 2004, unless otherwise extended by
the Board of Directors.


Item 3.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS

         31.1     Certification of the Chief Executive Officer pursuant to 18
                  U.S.C. Section 1350 as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002
         31.2     Certification of the Chief Financial Officer pursuant to 18
                  U.S.C. Section 1350 as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002
         32.1     Certification of the Chief Executive Officer pursuant to 18
                  U.S.C. Section 1350 as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002
         32.2     Certification of the Chief Financial Officer pursuant to 18
                  U.S.C. Section 1350 as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002

(b)      REPORTS ON FORM 8-K

                  NONE


                                       17
<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.

Date: September 14, 2004                /s/ Joseph Kristul
      ------------------                ------------------------------------
                                        Joseph Kristul, Chief Executive Officer


Date: September 14, 2004                /s/ Jack Thrift
      ------------------                ------------------------------------
      Jack Thrift                       Chief Financial Officer










                                       18
<PAGE>