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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, DC 20549


Form 10-KSB

|  |  |                                                                                                 
|- |  | ------------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934    
| 
|  |  | For the fiscal year ended September 30,
    2003                                                
| 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|  |  | For the transition period
    from           to                                                 

Commission file number 000-49971

Ocean West Holding Corporation

(Name of small business issuer in its
charter)


|                                                                   |  |                                      
|------------------------------------------------------------------ |  | -------------------------------------
|Delaware                                                           |  | 71-0876952                           
|(State or other jurisdiction of
    incorporation or organization) |  | (IRS Employer
    Identification No.)

15991 Redhill Avenue, Suite 110

Tustin, California 92780


(Address of principal executive
offices)


Issuers telephone number:
(714) 247-4200

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

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of Each Class |  | Name of Each Exchange on Which Registered
|                    |  |                                          
|None                |  | None                                     

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

Common Shares, $0.01 par value per
share

Common Stock Purchase Warrants


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 requirement for the
past
90 days.     Yes þ          No o

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

The issuers revenues for its most recent
fiscal year ended September 30, 2003 were $13,156,597.

The aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by
reference to the average bid and asked price of such common
equity, as of December 5, 2003 was $422,356.

The number of shares outstanding of each of
the issuers classes of common equity as of
December 30, 2003 was: 5,586,104 common shares, 210,096
Class B common shares and 0 Class D common
shares.

Transitional Small Business Disclosure
Format          Yes o          No þ



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TABLE OF CONTENTS

|           |                                                                                                                                  |      |    |    | 
|---------- | -------------------------------------------------------------------------------------------------------------------------------- | ---- | -- | -- | 
|           |                                                                                                                                  | Page
|           |                                                                                                                                  |     
|PART I     |                                                                                                                                  |      | 2  |   
|           | Item 1.  Description of Business                                                                                                 |      |    | 2  | 
|           | Item 2.  Description of Property                                                                                                 |      |    | 9  | 
|           | Item 3.  Legal Proceedings                                                                                                       |      |    | 10 | 
|           | Item 4.  Submission of Matters to
    a Vote of Security Holders                                                                 |      |    | 10 | 
|PART II    |                                                                                                                                  |      | 10 |   
|           | Item 5.  Market for Common Equity
    and Related Stockholder Matters                                                            |      |    | 10 | 
|           | Item 6.  Managements
    Discussion and Analysis or Plan of Operation                                                           |      |    | 11 | 
|           | Item 7.  Financial Statements                                                                                                    |      |    | 24 | 
|           | Item 8.  Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosures                           |      |    | 51 | 
|PART III   |                                                                                                                                  |      | 51 |   
|           | Item 9.  Directors, Executive
    Officers, Promoters and Control Persons, Compliance with
    Section 16(a) of the Exchange Act |      |    | 51 | 
|           | Item 10. Executive Compensation                                                                                                  |      |    | 52 | 
|           | Item 11. Security Ownership of Certain
    Beneficial Owners and Management                                                      |      |    | 53 | 
|           | Item 12. Certain Relationships and
    Related Transactions                                                                      |      |    | 54 | 
|           | Item 13. Exhibits and Reports on
    Form 8-K                                                                                    |      |    | 54 | 
|SIGNATURES |                                                                                                                                  |      | 56 |   

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PART I



|        |                         
|------- | ------------------------
|Item 1. | Description of Business.

Ocean West Holding Corporation (Ocean
West) was formed in Delaware on August 15, 2000 as
the holding company of Ocean West Enterprises, Inc., a
California corporation. The holding company received all of the
shares of Ocean West Enterprises in exchange for shares of its
stock effective March 11, 2002.

Ocean West Enterprises was incorporated in
November 1988 in the state of California and is engaged in the
business of mortgage banking/brokering. We principally operate
under the name of Ocean West Funding. All references herein to
Ocean West, the Company, us,
our, and we, include Ocean West and its
consolidated subsidiary, unless the context otherwise requires.

Overview

We are a retail and wholesale mortgage banking
company primarily engaged in the business of originating and
selling loans secured by real property with one-to-four units.
The company offers a wide range of products aimed primarily at
high quality, low risk borrowers. Under our current business
strategy, we will make most of our loans to:



| |   |                                                          
| | - | ---------------------------------------------------------
| |  | purchase existing residences                             
|
| |  | refinance existing mortgages                             
|
| |  | consolidate other debt                                   
|
| |  | finance home improvements, education or similar
    needs

Ocean West primarily originates conventional
mortgage loans, which meet Federal National Mortgage Association
(FNMA) and Federal Home Loan Mortgage Corporation
(FHLMC) standards. The Company also originates, to a
lesser degree, Federal Housing Authority FHA loans.
Ocean West continues to expand into the higher risk Alternative
A/ Sub-prime market to assist in efforts to diversify its
lending practices.

We give our borrowers a credit grade through two
basic methods. One is through an underwriter that knows and
understands the end investors credit requirements and
grades the borrowers accordingly. The other is through automated
underwriting systems used by many investors including Fannie Mae
and Freddie Mac. In the automated system, the borrowers
credit information is entered into a computer-driven
underwriting system that analyzes the data and runs a credit
report. The majority of the Companys production is secured
by first priority mortgages. Based on dollar volume, for fiscal
year ended September 30, 2003 approximately 90% of the
total funded loans were in the first position of loans
originated by us and are secured by a first priority mortgage.
The remaining mortgages are typically in a second position.

Products

Ocean West offers a broad range of mortgage loan
products to provide flexibility to mortgage loan brokers and our
retail division. These products vary in loan-to-value ratio and
income requirements as well as other factors. The following is a
list of our primary standard products:



| |   |                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Conforming Mortgage
    Products Adjustable and
    fixed rate loan programs that meet the guidelines for purchase
    by government-sponsored entities, such as FNMA and FHLMC which
    guarantee mortgage backed securities, and by permanent investors
    in mortgage backed securities secured by, or representing
    ownership in, such mortgage loans.
|
| |  | FHA/VA
    Thirty-year fully amortizing adjustable or fixed rate
    program  adjustable rate program indexed to the
    one-year treasury featuring a cap of annual interest rate
    increases of 1% and a life cap on increases of 5%.                                                                                                                     

2



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Alt A/Sub Prime Mortgage
    Products Alternative-A/
    Sub-Prime loans are adjustable and fixed rate loans that usually
    do not meet FNMA and FHLMC guidelines due to various reasons.
    These loans usually do not meet this guideline because they
    require a reduced amount of income verification and may exceed
    these agencies maximum loan-to-value (LTV)
    guidelines. These loans are sold to institutional investors such
    as Credit Suisse First Boston, Banco Popular and Saxon Mortgage.
|
| |  | Second Mortgage
    Program Fixed rate
    amortizing and fixed rate with a balloon payment programs that
    are limited to borrowers we identify as A+ through B credit,
    risks, with a maximum combined loan-to-value ratio equal to 100%.                                                                                                                                                                                                                                                                         
|
| |  | JUMBO
    Loans Adjustable and fixed
    rate loan program for loans that exceed the loan limits set by
    the FNMA (Fannie Mae) and the FHLMC (Freddie Mac). These loans
    are sold to investors in the secondary market that specialize in
    these types of loans and are structured to meet the guidelines
    provided by specific investors.                                                                                                                                                                   
|
| |  | Non-Conforming
    Loans Fixed-rate first
    mortgage loans that are amortized over a fifteen or thirty-year
    period as well as loans with a balloon payment in fifteen years
    and payable during the fifteen-year period under a thirty-year
    amortization schedule.                                                                                                                                                                                                                                          

Loan Origination

We originate both purchase and refinance mortgage
loans. The percentage of refinance loans as compared to total
volume for the year ended September 30, 2003 was 69.7% and
59% for the six month period ending September 30, 2002, as
compared to 61% for the fiscal year ended March 31, 2002.

We originate loans primarily through three
different channels. The first is directly through our
corporate retail division. This division deals
directly with the client. Most of the retail loans are referred
to us through real estate agents or past clients. The remaining
clients are generated through various marketing techniques such
as direct mail, telemarketing, or various lead providers. The
corporate retail loans comprised 20.3% of our loan volume for
the year ended September 30, 2003 as compared to 18% for
the six month period ended September 30, 2002 and 4% for
the fiscal year ended March 31, 2002.

The second method of origination is through our
net branch network of retail branches. A net branch
is a retail branch where all related branch expenses must be
paid for through branch revenues and the manager of the branch
is compensated only through the branch profits. We have
concentrated on developing this area of our business in recent
months because we believe this is one of the most cost effective
and efficient ways to increase loan originations. The net
branches comprised 56.7% of the loan volume in the fiscal year
ended September 30, 2003 as compared to 49% for the six
month period ended September 30, 2002 and 50% for the
fiscal year ended March 31, 2002.

As of September 30, 2003 we had 78 retail
net branches in 29 states. These branches are
located in areas close to potential borrowers and referral
sources. Being located near these referral sources better
enables the Company in developing referral business. Our goal is
to continue to develop and maintain recurring referral sources.
To supplement branch business, we continue to develop lead
programs through various providers.

The third method of origination is the wholesale
channel which represents loans solicited through mortgage
brokers. A loan broker generally receives commissions on the
individual loan transactions submitted by the broker.
Commissions vary based upon loan type, loan amount, interest
rate and fees charged by the broker. Average commissions are
approximately $3,880 per loan transaction. The loan officer will
be compensated from the commissions earned. The typical
compensation to the loan officer ranges from 55% to 75% of the
total commissions earned. This division comprised 9.5% of our
total loan volume for the fiscal year ended September 30,
2003 as compared to 33% for the six month period ended
September 30, 2002 compared to 46% for fiscal year ended
March 31, 2002.

We incur certain costs in originating loans,
including general and administrative expenses, salary and
commission expenses, out-of-pocket expenses, and interest due on
borrowings on the warehouse line of credit.

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Underwriting Process

Loans originated through the corporate retail
division or net branches require processing. Processing
procedures very depending on specific loan program and investor
requirements. Loan applications are reviewed and verified for
accuracy. The verification process includes, but is not limited
to: (i) evaluation of the borrowers credit worthiness
by obtaining a formal credit report through an approved credit
agency, (ii) third party verification of the
applicants income and deposit information, and
(iii) obtaining a preliminary title and appraisal report.
Once processing is complete, the file is sent on to underwriting.

Regardless of how a loan is generated, all loans
must be underwritten in accordance with guidelines set forth by
management and the secondary market investors. Some underwriting
criteria include borrower income and credit worthiness,
loan-to-value ratios, property condition and type, insurance
requirements and investor requirements. Our underwriting
guidelines also comply with those guidelines set forth by the
FNMA, FHLMC, FHA, Veterans Administration (VA) and
private institutional investors. The underwriting guidelines are
intended to aid in evaluating the credit history of the
potential borrower, the capacity of the borrower to repay the
mortgage loan, the value of the real property, which will secure
the loan, and the adequacy of such property as collateral for
the proposed loan. The loan terms, including interest rate and
maximum loan-to-value ratio, are determined based upon the
underwriters review of the loan application and related
data and the application of the underwriting guidelines.

We employ only experienced underwriters. Our
Underwriting Manager must approve the hiring of all
underwriters, including those who will be located in a regional
or branch office. Our underwriters must have had either
substantial underwriting experience or substantial experience
with us in other aspects of the mortgage finance industry before
becoming part of the underwriting department. All underwriters
are required to participate in ongoing training, including
regular supervisory critiques of each underwriters work.
We believe that our underwriting personnel have the ability to
analyze the specific characteristics of each loan application
and make appropriate credit judgments.

The level of income verification varies with
program type. The underwriting guidelines include four levels of
documentation requirements for applicants, which are referred to
as the Full Documentation, Lite
Documentation, Stated Income Documentation,
and No Documentation programs. The purchasers in the
secondary market dictate the level of income documentation
required for a specific loan. Except for the No Documentation
programs, where verification of income is not required, we
review:



| |   |                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------
| |  | the applicants source of income;                                                                     
|
| |  | calculate the amount of income from sources
    listed on the loan application or other documentation;
|
| |  | review the credit history of the applicant;                                                           
|
| |  | calculate the debt service-to-income ratio to
    determine the applicants ability to repay the loan;
|
| |  | review the type and use of the property being
    financed; and                                       
|
| |  | review the property.                                                                                  

Under our Full Documentation programs, applicants
are generally required to submit two written forms of
verification of stable income for at least twelve months. Under
our Lite Documentation programs, the applicant may submit
twenty-four months of bank statements in lieu of traditional
documentation such a tax returns and pay-stubs. Our Stated
Income Documentation programs may be accepted based upon the
monthly income stated on the mortgage loan application if other
criteria are met. Our No Documentation programs do not give
consideration to income. Instead, more weight is given to the
borrowers credit history and property value. All of the programs
require a telephone verification of the employment of salaried
employees. In the case of purchase money loans, under the Full
Documentation program guidelines and, on all purchase loans
where the loan-to-value ratio is greater than 80%, we also
verify source of funds to be deposited by the applicant into
escrow.

In most cases, our underwriters determine the
applicants ability to repay the loan using: (a) a
qualifying rate that is equal to the stated interest rate on
fixed-rate loans, (b) the initial interest rate on loans
which

4



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provide for three years of fixed interest rate
and payments before the initial interest rate adjustment, or
(c) 2% above the initial interest rate on other
adjustable-rate loans. The underwriting guidelines require that
mortgage loans be underwritten following a standard procedure
that complies with applicable federal and state laws and
regulations. It also requires our underwriters to be satisfied
of the value of the property to be mortgaged based upon a review
of the appraisal. In general, the maximum principal amount of
loans originated under our conventional program is $650,000;
however, management may approve and make larger loans on a
case-by-case basis. Larger loans also require approval by the
intended purchaser of the loan.


Automated underwriting systems are rapidly
becoming the industry standard when underwriting conventional
loans. These systems can be used for underwriting loan programs
such as FHA and VA; and at times specific investors require
their use. The two primary systems are the FNMAs Desktop
Underwriter and the FHLMCs Loan Prospector. Over the past
few years, the trend has moved toward the exclusive use of these
systems. We currently underwrite over half of the loans
originated using these systems. We are also in the process of
developing it own proprietary underwriting system to aid in the
process of underwriting those loan programs that can not be
underwritten by the Desktop Underwriter or Loan Prospector.

Management evaluates the underwriting guidelines
on an ongoing basis and periodically modifies them to reflect
current assessments of various issues relating to underwriting
analysis. In addition, as new loan products are developed, we
adopt underwriting guidelines that we believe are appropriate
for the new products. All loans are underwritten to the
standards of the intended purchasers of the loans. The Company
makes certain representations and warranties customary in the
industry relating to, among other things, accurate information,
program standards, and compliance with laws and regulations. If
we are found to have breached such a representation or warranty,
we could be required to repurchase the loan.

Quality Control

We have implemented a loan quality control
process to help enforce sound lending practices and compliance
with our policies and procedures as well the compliance
requirements of agencies such as HUD, Fannie Mae and the
requirements of other purchasers of mortgages. Prior to funding
a loan, we perform a pre-funding quality control
audit in which our staff re-verifies the borrowers
credit history and employment, using automated services as well
as verbal verifications. In addition, an independent appraiser
appraises properties that will potentially secure the mortgage
loans. A qualified licensed independent appraiser must conduct
all appraisals and the appraisal must conform to the Uniform
Standards of Professional Appraisal Practice adopted by the
Appraisal Standards Board of the Appraisal Foundation. Our
personnel also review every appraisal to confirm the adequacy of
the property as collateral prior to funding.

In addition, our quality assurance department
audits a percentage of all loans that are funded. The department
reviews the documentation, including appraisals and
verifications, for compliance with established underwriting
guidelines and lending procedures. The department also
reexamines the funding documents for accuracy, completeness and
adherence to corporate, state and federal requirements. As part
of the audit process, any deficiencies discovered are reported
to senior management to determine trends and any need for
additional training of personnel.

Loan Funding

Loans that are closed using our own credit
facilities are funded through short term borrowing on our
warehouse lines of credit. We pay interest on funds advanced
under the warehouse line of credit at a pre-negotiated rate. The
rate at which the Company borrows is variable in nature and
typically averages between 4.5% and 5.5%. Ocean West
currently has approval for $13,000,000 in warehouse capability.
Ocean West has its primary warehouse line of $8,000,000 with
Provident Consumer Financial Services. A second line of
$5,000,000 is with Warehouse One. The line with Warehouse One
continues to renew itself on an annual basis. The facilities are
secured by the mortgage loans financed through the line, related
mortgage servicing agreements and the personal guarantees of our
primary shareholders, Marshall Stewart and Daryl Meddings.

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Ocean West repays the outstanding balance under
the warehouse line with the proceeds from the sale of mortgage
loans. The additional proceeds earned from loan sales also
replenish working capital.


The loan agreement governing the terms of the
Warehouse One line of credit contains a restrictive covenant
relating to tangible net worth. The Company received an
amendment to its agreement with Warehouse One changing its
financial net worth covenant from $750,000 to $450,000 on
December 30, 2003. Currently, the Company is in compliance
with its lender under the new amended agreement. Payment of cash
dividends or redemption of shares is also restricted to net
income after the date of the applicable agreement computed on a
cumulative basis.

Our ability to finance and purchase mortgage
loans depends on our ability to secure warehousing lines with
acceptable terms. Until recently we have funded the majority of
our loans through First Collateral Services. First Collateral
ceased providing us funds under the line effective
April 30, 2003. The outstanding balance on the First
Collateral Services line of credit is being paid off as the
loans securing the lines are sold. The interest rates charged on
our lines of credit with Provident Consumer Financial Services
and Warehouse One are approximately 1% higher than the rate
First Collateral charged. The fees associated with the Warehouse
One and Provident lines are also $50 to $100 more per
transaction than those charged by First Collateral. In addition,
the lending limits on the First Collateral line of credit had
been larger than those granted by the current providers. The
loss of First Collateral as our primary warehouse lender has
increased our cost of funds and has limited our ability to fund
a higher volume of loans. To the extent we are not successful in
using these alternate warehousing sources, we may have to
curtail our mortgage loan origination activities, which would
also have a material adverse effect on our operations and
financial condition.

To help address the lower limits on the lines of
credit, in March 2003, we began participating in a fast
funding program offered by Union Federal Bank, one of the
regular purchasers of our loans. This program has significantly
eased the restraints on funding imposed by the limits on the
lines of credit by allowing us to remove loans that are funded
through our warehouse lines of credit in a shorter period of
time, freeing up the line for new loans. Participation in the
program is an additional $150 fee per loan. The program is
designed to roll loans on and off the warehouse lines of credit
within 48 to 72 hours of funding. However, we do not
receive the profits from the loan at the time it is taken off
the warehouse lines of credit. The profits are paid when the
file has been reviewed and cleared, typically within seven to
ten days, which is consistent with our current revenue
recognition policy.

Sale of Loans

The percentage of originated loans that were
funded using the Companys warehouse lines of credit was
29.3% of the total dollar volume for the year ended
September 30, 2003. We generally sell substantially all of
the loans originated. Once we have funded a loan through a
credit facility, the next objective is to sell the loan as
quickly as possible, which typically happens in ten to fifteen
business days. A reconciliation package is prepared for our
accounting department. The file then moves on to the shipping
department where it is copied and stacked to specific investor
guidelines. After we receive the final closing statement,
usually two to three days after funding, the file is sent to the
appropriate investor and revenue is recognized. We typically
make general representations and warranties to purchasers of the
mortgages relating to borrower disclosures, closing procedures,
credit documentation, follow-up documentation and accuracy of
representations. In many cases, purchasers of the mortgages will
require language in the documentation mandating that we return
all or a portion of the premium and any premium paid for
servicing rights for loans that are paid off early, typically
prior to the end of the first six months. In most cases, we are
only liable for premium recapture if the loan is being prepaid
as a result of a refinancing through us or one of our affiliates.

Most of our loans are purchased by the following
institutional investors: GreenPoint Mortgage Funding Inc.,
Indy Mac Bank F.S.B., Banco Popular, First Nationwide
Mortgage Corporation, First Horizon Home Loan Corporation,
ABN Amro Mortgage Group, Inc. (Interfirst),
U.S. Bank, F.S.B., Union Federal Bank, Credit Suisse First
Boston, Washington Mutual, F.A., Lehman Brothers Bank,
F.S.B. (Aurora), and Suntrust Mortgage, Inc.

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Purchasers of loans vary from time to time as the
purchasers get in and out of the market. For the year ended
September 30, 2003 four buyers purchased in excess of 10%
of our production funded on our warehouse lines of credit: Union
Federal purchased 27%, Credit Suisse First Boston
purchased 15%, U.S. Bank purchased 11%, and First
Nationwide purchased 10%. For the six month period ended
September 30, 2002, two buyers purchased in excess of 10%
of our production funded on our warehouse lines of credit: First
Nationwide purchased approximately 15% and U.S. Bank
purchased approximately 12%. For the fiscal year ended
March 31, 2002, First Nationwide purchased
approximately 17%. Our secondary marketing department
chooses the purchaser for a particular loan. Commitments to
purchase loans are made on a loan-by-loan basis. We are not
required to provide a certain number of loans to any purchaser.

Occasionally, two to three times per year, we are
required to repurchase loans from investors. The repurchase
price is equal to the amount of the original purchase price,
plus interest and fees associated with the loan, less any
payments made by the borrower. Our disposition of the loan upon
repurchase depends upon the reason for the repurchase. In most
cases, the repurchase occurs because the investor believes the
loan does not meet guidelines. Usually, in these cases, we are
able to sell the loan to another investor as a seasoned loan
with a payment history in three to six months time. In the event
of resale, there is little ultimate effect on our results of
operations other than a delay in recognition of income. In some
cases, based upon our historical experience a loss potential of
ten to fifteen percent of the loan balance does exist. If the
loan is not resalable as is, we generally work with the borrower
to refinance the loan into a different loan program. On rare
occasions, we are unable refinance or sell the loan and are
forced to hold the loan for a longer period of time. When this
occurs, the institution extending us the warehouse line of
credit will require us to pay down the credit facility at a rate
of 10% of the principal balance per month until paid in full.

Mortgage Loan Servicing Rights

We currently sell the servicing rights on
essentially all the loans we fund. At the time the loan is sold,
the purchaser of the loan typically pays us a premium for the
release of the servicing rights. The premium is paid for the
right to collect the servicing fees for the period the loan
remains on the investors books. A typical spread for an
A grade loan is  1/4 of 1%
annually. In the past, we occasionally retained servicing
rights, but no longer do so on a regular basis. Since we are not
currently set up to service loans in-house, we contract with a
third party to sub-service any loans for which we have servicing
rights. The sub-servicer is responsible for accepting and
posting all payments, maintaining escrow accounts and reporting
to the end investors, such as Fannie Mae. For this service, we
typically pay the sub-servicer a monthly fee averaging $6
to $7 per loan. As of September 30, 2003, the
sub-servicer sub-serviced 54 loans with approximately
$6,427,517 in total principal balance. The amounts paid to the
sub-servicer will decline as the loans are paid off.

Regulation

The consumer finance industry is highly
regulated; therefore Ocean West Enterprises is subject to
extensive and complex rules and regulations of, and examinations
by, various federal, state and local government authorities.
These rules impose obligations and restrictions on our loan
origination, credit activities and secured transactions. In
addition, these rules limit the interest rates, finance charges
and other fees that we may assess, mandate extensive disclosure
to borrowers, prohibit discrimination, and impose multiple
qualifications and licensing obligations. Failure to comply with
these requirements may result in, among other things, loss of
HUD approved status, demands by purchasers of mortgages for
indemnification or mortgage loan repurchases, exercise of rights
of rescission of mortgage loans by borrowers, class action
lawsuits by borrowers, administrative enforcement actions, and
civil and criminal liability. We use our quality assurance
program to monitor compliance and, based upon assessments of our
compliance staff, believe that we are in compliance with
applicable rules and regulations in all material respects.

Our loan origination activities are subject to
the laws and regulations in each state in which we conduct
lending activities. For example, state usury laws limit the
interest rates that we can charge on our loans. In connection
with plans to expand our geographic reach, we have investigated
licensing requirements in additional states. We currently hold
licenses or exemption certificates in thirty-five states. We do
not have operations or significant loan activity in all of these
states at this time. Our current operations and loan activity

7



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is primarily in California. California
originations made up 59% of our total volume based on units.
Other states that we originated more than 1% of our total
volume based on units were Arizona (4.6%),
Oregon (3.6%), Connecticut, Kansas, Mississippi, Missouri,
Nevada, Texas, and Tennessee (2%), and Florida, Illinois,
Indiana, Louisiana, Massachusetts and Washington (1%).


Our lending activities are also subject to
various federal laws, including the Truth-in-Lending Act, the
Equal Credit Opportunity Act, the Fair Credit Reporting Act, the
Real Estate Settlement Procedures Act and the Home Mortgage
Disclosure Act. We are not currently making loans subject to the
Homeownership and Equity Protection Act of 1994. More
specifically, we are subject to disclosure requirements under
the Truth-in-Lending Act and Regulation Z promulgated
thereunder. The Truth-in-Lending Act is designed to provide
consumers with uniform, understandable information relating to
specify terms and conditions of loan and credit transactions
and, by standardizing the form of information provided,
facilitate comparisons among available credit options. The act
also gives consumers the right to change their minds about a
credit transaction by guaranteeing consumers a three-day right
to cancel some credit transactions, such as loans of the type we
originate. In addition, the Truth-in-Lending Act gives consumers
the right to rescind the loan transaction if the lender fails to
provide the required disclosures to the consumer. We are also
required to comply with the Equal Credit Opportunity Act of 1994
and Regulation B promulgated thereunder, the Fair Credit
Reporting Act, the Real Estate Settlement Procedures Act of 1975
and the Home Mortgage Disclosure Act of 1975. The Equal Credit
Opportunity Act prohibits lenders from discriminating against an
applicant for a loan on the basis of race, color, sex, age,
religion, national origin or marital status. Regulation B
prohibits lenders from requesting some types of information from
loan applicants. The Fair Credit Reporting Act requires lenders
to supply applicants with information relating to the denial of
any loan application. Beginning with loans originated in 1997,
the Home Mortgage Disclosure Act requires that we file annual
reports with HUD for collection and reporting of statistical
data in loan transactions. The Real Estate Settlement Procedures
Act mandates disclosures concerning settlement fees and charges
and mortgage servicing transfer practices. It also prohibits the
payment or receipt of kickbacks or referral fees in connection
with the performance of settlement services.

The Sarbanes-Oxley Act of 2002
(Sarbanes-Oxley Act) was signed into law by
President Bush on July 30, 2002 in response to public
concerns regarding corporate accountability in connection with
the recent accounting scandals at Enron and WorldCom. The stated
goals of the Sarbanes-Oxley Act are to increase corporate
responsibility, to provide for enhanced penalties for accounting
and auditing improprieties at publicly traded companies and to
protect investors by improving the accuracy and reliability of
corporate disclosures pursuant to the securities laws. The
Sarbanes-Oxley Act is the most far-reaching U.S. securities
legislation enacted in some time. The Sarbanes-Oxley Act
generally applies to all companies, both U.S. and non-U.S., that
file or are required to file periodic reports with the
Securities and Exchange Commission (SEC), under the
Securities Exchange Act of 1934 (Exchange Act).
The Sarbanes-Oxley Act includes very specific additional
disclosure requirements and new corporate governance rules,
requires the SEC and securities exchanges to adopt extensive
additional disclosure, corporate governance and other related
rules and mandates further studies of certain issues by the SEC
and the Comptroller General. The Sarbanes-Oxley Act represents
significant federal involvement in matters traditionally left to
state regulatory systems, such as the regulation of the
accounting profession, and to state corporate law, such as the
relationship between a board of directors and management and
between a board of directors and its committees. Of the new
requirements imposed by the Sarbanes-Oxley Act, among others, we
currently have no independent directors on our board
of directors, no audit committee, compensation committee nor
nomination committee and we do not have any independent
financial experts on our board of directors. As a
result, we currently would not be eligible to have our shares
listed on the NASDAQ, AMEX or NYSE, even if we were to meet the
other listing requirements of such self-regulatory organizations.

We conduct telemarketing sales through which a
portion of our retail loan business is generated. In
October 2003, a national do-not-call registry which a
consumer can join to prevent unwanted telemarketing calls became
operational pursuant to rules promulgated by the Federal
Communications Commission as required by the Telephone Consumer
Protection Act of 1991. In addition, a number of states have
enacted laws regulating telemarketing sales activities some of
which establish do-not-call registries and we will be

8



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required to comply with this new national
registry and will be prohibited from placing unsolicited
marketing calls to any consumer who has placed their name in the
registry.


The laws and regulations under which we operate
are subject to change at any time. In addition, new laws or
regulations may be added at any time. There can be no assurance
that any change or addition of laws will not make compliance
more difficult or more extensive, restrict ability to originate,
broker, purchase or sell loans, further limit the amount of
commissions, interest or other charges which may be earned, or
otherwise adversely affect our business or prospects.

Competition

We face strong competition in originating,
purchasing and selling mortgage loans and related mortgage
servicing rights. Our competition is principally from savings
and loans associations, other mortgage companies, commercial
banks and, to a lesser degree, credit unions and insurance
companies, depending upon the type of mortgage loan product
offered. In addition to offering a wide array of competitive
products, we compete with these entities by striving to provide
helpful and timely service to mortgage brokers and borrowers
alike. Many of these institutions have greater financial
resources than we do and maintain a significant number of branch
offices in the areas in which we conduct operations. Increased
competition for mortgage loans from other lenders may result in
a decrease in the volume of mortgage loans that we are able to
originate and purchase. If we are unable to compete effectively,
our operations and financial condition could be materially and
adversely affected.

Employees

As of December 30, 2003, we had
approximately 475 employees of which 387 are primarily
employed in sales approximately 50 in clerical positions
and the remaining 14 employees in administrative positions.



|        |                         
|------- | ------------------------
|Item 2. | Description of Property.

The Companys principal operating offices
are located at 15991 Redhill Ave., Suites 100 &110, Tustin,
California. We lease approximately 16,320 square feet of office
space under a lease the current term of which expires
November 30, 2007. The two founding shareholders, Marshall
Stewart and Daryl Meddings, personally guaranteed the lease.
Rent is currently $34,059 per month plus overrides and increases
annually beginning December 1, 2003 to $35,972 for the last
year of the term. We have the right to renew the lease for one
additional sixty-month term. During the renewal term, the rent
will be adjusted to the then current market rate. We also have
78 branch offices of which all are leased. The branch offices
are leased properties of varying types. Lease periods are
typically twenty-four to thirty-six months in length. The
average lease payment is approximately fifteen-hundred dollars
per month per office.

The Company evaluates on a continuing basis the
suitability and adequacy of all of its branch office locations,
and has active programs of relocating or closing any as
necessary to maintain efficient and attractive facilities. The
Company believes its present facilities are adequate for its
operating purposes.

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Our primary branch offices are located at:

|                           |  |                                     |  |                           
|-------------------------- |  | ----------------------------------- |  | --------------------------
|Name                       |  | Address                             |  |                           
|                           |  |                                     |  |                           
|Ocean West Funding         |  | 3260 E. Indian School Rd.           |  | Phoenix, AZ 85018         
|Ocean West Funding         |  | 12221 W. Bell Rd., #120             |  | Surprise, AZ 85374        
|Ocean West Funding         |  | 1237 S. Val Vista Dr., #123         |  | Mesa, AZ 85204            
|Ocean West Funding         |  | 10970 Arrow Route, Ste. 210         |  | Rancho Cucamonga, CA 91730
|Pacific Loan Company       |  | 40258 Hwy. 41, Ste. A               |  | Oakhurst, CA 93644        
|Ocean West Funding         |  | 25950 Acero, Suite 310              |  | Mission Viejo, CA 92691   
|Ocean West Funding         |  | 1954 Placentia Ave., #206           |  | Costa Mesa, CA 92627      
|Victory Financial          |  | 211 Bulen St.                       |  | Roseville, CA 95678       
|Visionary Mortgage         |  | 3353 Bradshaw Rd., #226             |  | Sacramento, CA 95827      
|Ocean West Funding         |  | 441 Lanfanco Cir.                   |  | Sacramento, CA 95835      
|Capital Mortgage Solutions |  | 6929 Sunrise Blvd., Ste. 206        |  | Citrus Heights, CA 95610  
|Ocean West Funding         |  | 1215 Thomaston Ave. Bldg. 2, Ste. 7 |  | Waterbury, CT 06704       
|Gold Star Mortgage         |  | 3737 N. Meridian St., #204          |  | Indianapolis, IN 46208    
|Ocean West Funding         |  | 12510 W. 62 Terrace, #105           |  | Shawnee, KS 66216         
|Americor                   |  | 605 N. Causeway                     |  | Mandeville, LA 70470      
|Federal Street Mortgage    |  | 800 Federal St.                     |  | Andover, MA 01810         
|Straight Line Mortgage     |  | 17125 S.W. Boones Ferry Rd.         |  | Lake Oswego, OR 97071     
|Ocean West Funding         |  | 2320 East North St.                 |  | Greenville, SC 29650      
|Ocean West Funding         |  | 3245 Whitebrook, #100               |  | Memphis, TN 38118         
|Ocean West Funding         |  | 5998 Knight Arnold Rd.              |  | Memphis, TN 38115         
|No Bull Mortgage           |  | 9805 NE 116th St., #7473            |  | Kirkland, WA 98034        

Item 3.     Legal
Proceedings.

We are party to claims from time to time, not
required to be disclosed in accordance with Item 103 of
Regulation S-B. While management currently believes that
the ultimate outcome of these proceedings, individually and in
the aggregate, will not have a material adverse effect on our
financial position or results of operations, litigation is
subject to inherent uncertainties. Were an unfavorable ruling to
occur, there exists the possibility of a material adverse impact
on our results of operations of the period in which the ruling
occurs. The estimate of the potential impact on our financial
position or overall results of operations for the above legal
proceedings could change in the future.

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

No matters were submitted to a vote of the
Companys security holders during the last quarter of the
fiscal year ended September 30, 2003.

PART II

Item 5.     Market
for Common Equity and Related Stockholder Matters.

Ocean West Holding Corporation began trading on
August 12, 2002 and shares of our common stock are listed
on the over-the-counter bulletin board (OTCBB) governed by the
NASD. Our common stock trades under the symbol OWHC
and the warrants trade under the symbol OWHCW. The
quotations listed below reflect interim dealer prices without
retail mark-up, mark-down or commission and may not represent
actual transactions. Trading of our common stock has been
minimal with limited or sporadic quotations and therefore we
believe there is no established public market for the common
stock. There is no established public market for the warrants.

10



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The following table sets forth the high and low
bid quotations per share or warrant of the Companys
registered securities for each quarter during the last two
fiscal years, as reported by OTCBB.

|                                   |  |               |      |                   |  |      |      |     |  |  |      |  |  |  |      | 
|---------------------------------- |  | ------------- | ---- | ----------------- |  | ---- | ---- | --- |  |  | ---- |  |  |  | ---- | 
|                                   |  |               |      |                   |  |     
|                                   |  |               |      | Common Stock     
|                                   |  | Common Shares |      | Purchase Warrants
|                                   |  |               |      |                  
|                                   |  | High          |      | Low               |  | High |      | Low
|                                   |  |               |      |                   |  |      |      |    
|Year Ended September 30, 2002:     |  |               |      |                   |  |      |      |     |  |  |      |  |  |  |      | 
|August 12, 2002-September 30, 2002 |  | $             | 0.30 |                   |  | $    | 0.15 |     |  |  | None |  |  |  | None | 
|Year Ended September 30, 2003:     |  |               |      |                   |  |      |      |     |  |  |      |  |  |  |      | 
|Quarter Ended December 31, 2002    |  | $             | 0.51 |                   |  | $    | 0.15 |     |  |  | None |  |  |  | None | 
|Quarter Ended March 31, 2003       |  | $             | 0.35 |                   |  | $    | 0.15 |     |  |  | None |  |  |  | None | 
|Quarter Ended June 30, 2003        |  | $             | 0.20 |                   |  | $    | 0.07 |     |  |  | None |  |  |  | None | 
|Quarter Ended September 30, 2003   |  | $             | 0.40 |                   |  | $    | 0.13 |     |  |  | None |  |  |  | None | 

As of September 30, 2003 there were
1,137 holders of record of the common shares, two holders
of record of the Class B common shares, no holders of
record of the Class D common shares, and no holders of
record of the common stock purchase warrants.

We did not pay any cash dividends on any common
shares, but did pay dividends on the preferred shares. We do not
intend on paying any dividends on common shares in the
foreseeable future. In addition, our warehouse line providers
restrict our ability to pay cash dividends. The decision to pay
dividends on common shares will depend on our situation with
regard to profitability, cash availability and credit line
restrictions.

Currently, we do not have any securities
authorized for issuance under any equity compensation plans.

Except as described below, there were no sales of
unregistered securities by Ocean West during the year ended
September 30, 2003. In November 2002, we issued
500 shares of our Series M preferred stock to one
investor, at a purchase price of $1,000 per share for net
cash proceeds of $500,000. The issuance was made in reliance of
Section 4(2) of the Securities Act of 1933. During fiscal
year ended September 30, 2003, the Company redeemed all
500 shares of its Series M preferred stock for
$1000 per share.

Ocean West registered 5,247,676 common shares and
3,000,000 common stock purchase warrants on a registration
statement (file number 333-86484) which became effective on
August 12, 2002. On August 12, 2002 all of the
warrants and 300,000 of the shares were sold to the underwriter,
Monogenesis Corporation, most of which were distributed by
Monogenesis to its shareholders as described in the registration
statement. Each warrant may be exercised by holders to purchase
one common share at a price of $1.25 per share through
June 12, 2003. The remaining shares registered represent
the 3,000,000 common shares underlying the warrants and
1,965,776 shares held by security holders. Ocean West
received $13,104 for such shares and warrants which it used as
working capital. In June 2003, 1,000 warrants were
exercised with net proceeds of $1,250 received by Ocean West
which it used as working capital. The remaining warrants expired
in accordance with their terms as of June 30, 2003. There
were no other net offering proceeds to Ocean West as the
unexercised warrants expired.

The selling security holders are expected to
offer their shares for sale from time to time (but not through
Monogenesis). The offering price for the sale of selling
shareholder shares until the shares were quoted on the OTC
Bulletin Board was $1.70 per share. Ocean West does not
know the amount, if any, of shares sold by selling shareholders.

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

This section should be read in conjunction with
Item 7. Financial Statements.

Forward-Looking Statements

Statements contained in this Form 10-KSB
that are not historical facts are forward-looking statements
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. In

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addition, words such as believes,
anticipates, expects,
intends and similar expressions are intended to
identify forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements or events, or timing of events, to differ
materially from any future results, performance or achievements
or events, or timing of events, expressed or implied by such
forward-looking statements. We cannot assure that we will be
able to anticipate or respond timely to the changes that could
adversely affect our operating results in one or more fiscal
quarters. Results of operations in any past period should not be
considered indicative of results to be expected in future
periods. Fluctuations in operating results may result in
fluctuations in the price of our securities.


Critical Accounting Policies

As set forth in greater detail in the Footnote
(1) to Ocean Wests financial statements Summary
of Significant Accounting Policies, the Company recognizes
revenue upon sale of a loan when the documents are shipped to
the independent investors, and all rights have passed and the
Company has become obligated to convey the loan, thereby
isolating the transferred assets from the Company and fulfilling
all criteria of SFAS No. 140. If these criteria were not
met, then revenue recognition would be delayed until the
proceeds were subsequently received from the investors,
typically within the following month.

Pursuant to SFAS No. 91, the Company
capitalizes its loan origination costs, including an amount of
its payroll and related costs which are directly attributable to
the credit origination process. The measurement of such
capitalizable costs requires the use of some judgments by
management, as to the portion of such costs associated with
credit origination and with other activities.

Disclosure, pursuant to SFAS No. 107, is
required of the fair value of financial instruments. However,
since most of the Companys financial instruments turn over
within a very short time period, management discloses that the
net book value approximates fair value at the balance sheet date.

New Accounting Pronouncements

In June 2002, the FASB issued Statement
No. 146, Accounting for Costs Associated with Exit or
Disposal Activities. This statement nullifies EITF Issue
No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring).
Statement No. 146 is different from EITF Issue
No. 94-3 in that Statement No. 146 requires that a
liability be recognized for a cost associated with an exit or
disposal activity only when the liability is incurred, that is
when it meets the definition of a liability in the FASBs
conceptual framework. Statement No. 146 also establishes
fair value as the objective for initial measurement of
liabilities related to exit or disposal activities. In contrast,
under EITF Issue 94-3, a company recognized a liability for an
exit cost when it committed to an exit plan. Statement
No. 146 is effective for exit or disposal activities that
are initiated after December 31, 2002. The adoption of Statement
No. 146 can be expected to impact the timing of liability
recognition associated with any future exit activities.

In November 2002, the FASB issued FASB
Interpretation No. 45 (FIN45), Guarantors
Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness to Others. This
interpretation elaborates on the disclosures to be made by a
guarantor in interim and annual financial statements about its
obligations under guarantees issued. FIN 45 also clarifies that
a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation
undertaken. The Company was required to adopt FIN 45 on
December 31, 2002. The adoption of FIN 45 did not have
a material effect on the Companys financial position or
results of operations.

In May 2003, the FASB issued SFAS 150,
Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity, effective
for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning
of the first interim period beginning after June 15, 2003.
This statement establishes standards for how an issuer
classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that
an issuer classify a freestanding financial instrument that is
within its scope as a liability (or an asset in some
circumstances). The adoption of

12



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SFAS 150 will not have an impact on the
Companys consolidated financial position, results of
operations or cash flows.


Results of Operations

Our revenues are currently derived primarily from
loan origination fees and net gain on the sale of mortgage
loans. Revenues generated from the sale of a loan vary based on
loan type and size. Premiums paid can range from 1/8% to 5% of
the loan amount with an average premium. Conventional conforming
loans have lower premiums while government and Alternative A and
Sub-Prime products have higher premiums. Fees received also vary
depending on loan type and origination source and generally
range from $495 to $995 per loan. For example, typically FHA
refinance loans generate $495 in fees and conventional
conforming loans generate $995 in fees.

Real estate purchase transactions and therefore
the mortgage banking industry are subject to seasonal trends.
These trends generally reflect nationwide home sale patterns.
Such sale typically peak in the spring and summers months while
declining in the late fall and winter months. However, the
refinance segment of the industry is less seasonal, changing
instead as interest rates rise and fall.

Ocean West Holding Corporation changed its
year-end subsequent to March 31, 2002 from March 31 to
September 30 effective in 2002. The reasons for the change
were a reduction in auditing costs as fewer companies use a
September 30 year-end and to aid in HUD reporting.



| |                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------
| | Year Ended September 30, 2003 Compared
    to Six Month Period Ended September 30, 2002 and Year Ended
    March 31, 2002

During the fiscal year ended September 30,
2003, we made 5,928 loans with an aggregate dollar value of
approximately $1,128,717,574 compared to 2,252 loans with
an aggregate dollar value of approximately $366,435,891 for six
months ended September 30, 2002 and 4,269 loans with an
aggregate dollar value of approximately $669,512,900 for fiscal
year ended March 31, 2002. Most of the loans originated
were in principal amounts between $100,000 and $180,000.

Net revenues from origination and/or sale of
loans increased 142% from the six month period ending
September 30, 2002. Annualizing the shortened period would
result in an increase of 21%. The increase is primarily due to
lower interest rates and favorable market conditions. Net
revenues from origination and/or sale of loans decreased 49%
from $10.5 million for fiscal year ended March 31,
2002. However, revenues for the Company actually increased 3%
over the previous year if the earnings for the shortened year
ended September 30, 2002 are annualized, as compared to
March 31, 2002.

As a percentage, total operating expenses were
97.4% of the total revenues for the year ended
September 30, 2003, as compared to 99.6% of total revenues
for the six month period ending September 30, 2002 and 103%
for the fiscal year ended March 31, 2002. Salary, wages and
payroll taxes represented 50.5% of total revenues as compared to
51.9% of total revenues for the six month period ending
September 30, 2002 and 56.8% of total revenues for the year
ended March 31, 2002. As a percentage of total revenues,
administrative expenses decreased 0.6% for the year ended
September 30, 2003 and for the six month period ending
September 30, 2002, administrative expenses expressed as a
percentage of total revenues, increased 1.3% as compared to the
fiscal year ended March 31, 2002. General and
administrative expenses were primarily made up of rent,
advertising services, fees for professional services, insurance,
office expenses and interest. Salaries, wages and payroll taxes
increased slightly as a percentage of total revenues as the
Company began downsizing its corporate costs during the later
part of the fiscal year ended September 30, 2003, of which
impact is not annualized. Rent, insurance and related office
expenses increased slightly towards the end of the fiscal year
ended September 30, 2003 as the Company increased its
corporate square footage by 3,160 square feet, due to
moving our retail division from another location into the
corporate location in order to increase efficiencies. As a
percentage of revenues, depreciation and amortization remained
about the same at 1.5% of total revenues for the year ended
September 30, 2003 as compared to 1.7% for the six month
period ending September 30, 2002 and 1.2% for the year
ended March 31, 2002.

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Ocean West had income from operations of $340,086
for the year ended September 30, 2003 compared to $21,108
for the six month period ended September 30, 2002 and a loss of
$282,894 from operations for the fiscal year ended March 31,
2002. We had a net income of $321,883 for the year ended
September 30, 2003, a net loss of $201,426 for the six
month period ended September 30, 2002 compared to a net
loss of $284,494 for the fiscal year ended March 31, 2002.
However, the net loss for the six month period ended
September 30, 2002 was due to a one-time stock and warrants
compensation expense due to Ocean West moving from a private to
a public company. If that expense is excluded, we had net income
before taxes of $21,128.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate
funds to support asset growth, satisfy disbursement needs,
maintain reserve requirements and otherwise operate on an
ongoing basis. If our loan volume increases too rapidly, the
increase could have a severe impact on our liquidity. Our
warehouse credit facilities limit the amount that may be
advanced on each loan funded. Therefore, cash must be used to
fund the additional dollars needed to close escrow. The revenue
is not recognized until the loan is sold. Thus, it is crucial
that we closely monitor loan volume.

Since inception through September 30, 2003,
the Company has suffered recurring losses from operations, we
have incurred aggregate net losses of $3,452,000. In addition,
the Company was not in compliance with certain loan covenants
under one of its warehouse lines of credit as of
September 30, 2003. These circumstances raise substantial
doubt about our ability to continue as a going concern, as
described in the explanatory paragraph on our independent
auditors report on the September 30, 2003
consolidated financial statements, which are included with this
annual report.

Net cash provided by operating activities for the
year ended September 30, 2003 was $12,125,089 compared to
net cash used for operating activities for the six month period
ended September 30, 2002 of $7,847,296 compared to net cash
provided by operating activities of $8,307,135 for the fiscal
year ended March 31, 2002. The primary sources of cash
provided for the year ended September 30, 2003 was from a
decrease in mortgage loans held for sale of $12,607,709. The
primary use of cash for the six month period ended
September 30, 2002 was receivables for loans sold of
$8,235,272. The primary sources of this cash provided in for
fiscal year 2002 was from a decrease in mortgage loans held for
sale and receivables from loans sold which were significantly
larger than at the end of fiscal year 2003. As investors
purchase loans, the amounts advanced for such loans through the
warehouse line of credit are paid. At that time, the receivables
are cleared and the cash deposited in our operating account.
These accounts vary significantly depending upon where the bulk
of the loans are in the process of funding and selling.

Net cash used in investing activities during the
year ended September 30, 2003 was $12,674, which was
primarily used to purchase property and equipment of $43,383
which was offset by the proceeds from the sale of property of
$26,104 and the collection of notes receivable of $4,605. Net
cash used in investing activities during the six month period
ended September 30, 2002 was $111,094, which was used to
purchase property and equipment in the amount of $61,489 and
issuance of notes receivable in the amount of $49,605. Net cash
used in investing activities during fiscal year ended
March 31, 2002 was $20,505 which was used to purchase
property and equipment of $55,146 offset by the collection of
$34,641 in notes receivable.

Net cash used for financing activities for the
year ended September 30, 2003 was $11,842,308 consisting
primarily of payments under the warehouse line of credit of
$11,983,870, and payments of $489,197 on notes payable and
long-term debt (including stockholder notes payable), payment of
$108,297 on capital leases, preferred stock dividends of
$216,729 and $500,000 for the redemption of preferred stock.
These items were offset by proceeds from notes payable and
long-term debt of $915,888, proceeds from the exercise of
warrants of $1,250, as well as proceeds from the issuance of
preferred stock of 500,000. Net cash provided by financing
activities for the sixth month period ended September 30,
2002 was $8,029,461 consisting primarily of borrowings under the
warehouse line of credit of $7,612,802, proceeds from long-term
debt (including notes payable to stockholders) of $613,135,
proceeds from issuance of common stock of $10,104 and proceeds
from the sale of warrants of $3,000. These items were offset by
payments of $55,845 on long-term debt, $53,847 on capital leases
and preferred stock dividends of $99,888. For fiscal year ended
March 31, 2002 net cash used by

14



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financing activities was $8,639,858, also
consisting primarily of net payments under the warehouse lines
of credit of $8,485,197 and including proceeds from the issuance
of preferred stock of $300,000. These were offset by payments of
$52,411 on long-term debt, $85,792 on capital leases, $110,500
for redemption of preferred stock, $195,958 of preferred stock
dividends and $10,000 for redemption of common stock.


Based on dollar volume, during the year ended
September 30, 2003 we funded approximately 24% of our loans
through our warehouse credit facilities. Loans that are closed
using our credit facilities are funded through short term
borrowing on our warehouse lines of credit. We pay interest on
funds advanced under the warehouse lines of credit at a
pre-negotiated rate. The interest rate at which we borrow is
variable in nature and typically averages between 4.5% and 5.5%
per annum. The average time between funding a mortgage and the
receipt of proceeds from the sale of the mortgage was
approximately fifteen days during fiscal 2002 and continued as
such for the year ended September 30, 2003.

Our ability to finance and purchase mortgage
loans depends on our ability to secure warehouse lines of credit
with acceptable terms. Until recently we have funded the
majority of our loans through First Collateral Services. First
Collateral ceased providing us funds under the line effective
April 30, 2003. The outstanding balance on the First
Collateral Services line of credit is being paid off as the
loans securing the lines are sold. As of September 30, 2003
the outstanding balance with First Collateral Services was
$846,266. As of September 30, 2002, the outstanding balance
on the line of credit with First Collateral Services was
$18,304,412. Until January 2003, we had frequently drawn amounts
in excess of the limit on the line. It bears interest at 8% and
the rate on September 30, 2002 was 4.311%.

Currently we fund loans through our warehouse
lines of credit with Provident Consumer Financial Services and
Warehouse One Acceptance Company IV, LLC. As of
September 30, 2003 the outstanding balance with Provident
Consumer Financial Services and Warehouse One was $6,455,760 and
$712,950, respectively. The lending limit on the line of credit
through Provident Consumer Financial Services is currently
$8,000,000 and the Warehouse One lending limit is $5,000,000.
The Warehouse One and Provident lines are also $50 to $100 more
per transaction than those charged by First Collateral. In
addition, the lending limits on the First Collateral line of
credit had been larger than those granted by the current
providers The interest rates charged on our lines of credit with
Provident Consumer Financial Services and Warehouse One are
approximately 1% higher than the rate First Collateral charged.
The loan agreement governing the terms of the Warehouse One line
of credit contains a restrictive covenant relating to tangible
net worth. The Company received an amendment to its agreement
with Warehouse One changing its financial net worth covenant
from $750,000 to $450,000 on December 30, 2003. Currently,
the Company is in compliance with its lender under the new
amended agreement. There is the possibility that we may lose the
credit facility at any time, which would cause a negative impact
on the way we do business and a material adverse effect on our
results of operations and financial condition.

At September 30, 2003 the interest rate
charged on our warehousing lines of credit with Provident
Consumer Financial Services and Warehouse One were approximately
4.43% and 5.61%, respectively. The fees associated with
Provident Consumer Financial Services and Warehouse One is also
$50 to $100 more per transaction than those charged by First
Collateral. In addition the lending limits on the First
Collateral line of credit has been larger than those granted by
the current providers. The loss of First Collateral as our
primary warehouse lender has increased our cost of funds and has
limited our ability to fund a higher volume of loans and may
have a material adverse effect on our results of operations and
financial condition. To the extent we are not successful in
securing alternate warehousing sources; we may have to curtail
our mortgage loan origination activities, which would also have
a material adverse effect on our results of operations and
financial condition.

At the present time, our liquidity resources are
minimal. We are currently not in compliance and have not
consistently met the HUD net worth requirements. We were unable
to maintain a minimum net worth of $1,000,000 to retain our
mortgagee status. Due to the facts that the Company was unable
to maintain its required net worth and the amount of FHA
business has decreased significantly over the past few years, we
elected to change our status to Correspondent with HUD in July
of 2003. The percentage of FHA loans funded for the year ended
September 30, 2003 was 9.2% based on dollar volume,
compared to 24% for the six month period ended
September 30, 2002, compared to 21% for the year ended
March 31, 2002. In addition,

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we frequently draw in excess of the maximum
amount provided for in the agreement on the primary line of
credit.


In the past, we have also funded operations
through the issuance of our equity securities. From
April 1, 2000 through September 30, 2002, we received
proceeds of $335,000 from the issuance of 1,340 shares of Ocean
West Enterprises common stock which were exchanged for
187,600 common shares of Ocean West, $1,057,505 from the
issuance of Ocean West Enterprises and Ocean West preferred
stock. From April 1, 2000 through September 30, 2002,
we redeemed $10,000 of common stock, redeemed $185,500 of
preferred stock, converted 3,700 shares of preferred stock with
a total stated value of $967,500 to common stock, issued 250,400
Class B common shares in connection with the exchange of
shares of Ocean West Enterprises, converted 40,304 shares of
Class B common stock to 40,304 shares of common stock,
issued 388,800 common shares in connection with the
distribution under the registration statement which became
effective in August 2002 and received $10,104 in proceeds for
such shares, and paid dividends on preferred stock of $471,873.
Of the shares that were redeemed, $54,000 was redeemed in
connection with a write off of a note receivable.

In March 2002, 3,700 shares of the
outstanding preferred stock of Ocean West Enterprises were
exchanged for 774,000 common shares of Ocean West based on
the following formula: stated value divided by five with the
result multiplied by four. Ocean West Enterprises also redeemed
15 shares of the preferred stock. The remaining 5,855
preferred shares were exchanged for 5,855 preferred shares
of Ocean West. In September 2002, the Company issued
500 shares of Preferred Stock Series M at a price of
$1,000 per share.

During fiscal year ended September 30, 2003,
we incurred capital lease obligations of $129,939 for equipment
purchases. No capital leases were incurred during the six months
year ended September 30, 2002. During fiscal year ended
March 31, 2002, we incurred capital lease obligations of
$130,920 for new telephones and related equipment and computer
equipment.

Management currently believes that cash flows
from operations will be sufficient to meet the Companys
current liquidity and capital needs at least through fiscal
2004. In response to the reduction in loan volume due to the
rising interest rate market that began in July 2003, we have
reduced fixed overhead primarily through staff reductions. So
long as there are no material adverse changes to the terms or
availability of our warehouse lines of credit, we believe we can
meet our liquidity and capital needs at current production
levels at least through fiscal 2004. However, we are currently
exploring possible liquidity sources either through additional
borrowings or potential capital partners to enable us to
increase our loan production. Additionally, we believe a
development of a market in our stock should aid in increasing
capital. We intend to retain earnings for the foreseeable future
to help increase liquidity. Future offerings are possible,
although we do not currently have any specific offering plans.
In the event we are required to raise additional equity
financing, there can be no assurance that any such equity
financing will be available on acceptable terms. If such
financing is not available on satisfactory terms, we may be
unable to expand or continue our business as desired and
operating results may be adversely affected. Any equity
financing could result in dilution to existing stockholders.

In the short term, our goal is to maintain
current production levels with no significant increases or
decreases until our liquidity increases. We believe that an
increase in net income will aid liquidity.

Interest Rate Risks

The uncertainty, which potentially has the single
largest effect on the results of operations of the Company, is
interest rate trends. Trends in interest rates are not only
important to the refinance business, but are also very important
in the purchase market as well. As interest rates rise, more
individuals are eliminated as potential borrowers. The reason
for this is simple  as interest rates get higher, so
do the mortgage payments. Higher payments mean fewer people have
the ability to qualify for loans. Historically, a rising
interest rate market is more difficult for mortgage bankers like
us to deal with than for banks. The reason for this is that
banks tend to have an advantage in an adjustable rate market,
because banks have the ability to hold loans and, therefore, can
be more creative in designing adjustable rate loans to fit the
borrowers needs. Mortgage bankers are limited to loan
products that can be sold in the secondary market or
securitized. These programs have become more competitive in
recent years, but banks still retain a competitive advantage.

Inflation has an impact on us because it
typically has an impact on interest rates. As the threat of
inflation becomes more of a concern, interest rates tend to
rise. This result is based upon the perception that the

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Federal Reserve Bank will revise short-term
interest rates to keep inflation in check. This concern
ultimately affects interest rates.


The primary market risks that we face are
interest rate risks. Interest rate movements affect the interest
expense on our warehouse lines of credit, the interest income
earned on loans held for sale, the value of mortgages held for
sale and the ultimate gain recognized on mortgage loans which
are sold. In a high interest rate environment, borrower demands
for mortgage loans, especially refinancing of existing
mortgages, decline. Higher interest rates may also adversely
affect the volume of mortgage loans. In a low interest rate
market, typically one in which the interest rates have declined
sufficiently to make refinancing for lower rates economical, we
may incur early pay-off penalties when significant number of
loans we originate are refinanced within the first six months of
the loan being sold to an investor.

We protect against interest rate risks to the
extent we can by pre-selling most loans to investors prior to
funding, locking in rates and returns. The method of locking in
rates and returns varies from investor to investor. Some
investors will commit to rates by telephone while others require
written commitments via facsimile or e-mail. The investor
responds with a commitment or trade number upon confirmation. At
that point, the rate and purchase price for that loan are
guaranteed for a definite period of time. We have the option
with most investors to lock in rates for either a best efforts
or mandatory delivery. A mandatory delivery brings the best
price, typically 1/4 of 1% higher, but requires us to deliver
the loan within the committed time frame. If we do not meet the
deadline, we may have to pay a penalty, usually ranging from
$300 to $1,000. The lock period that we give to the
broker/borrower is typically a minimum of five days before the
loan package needs to be delivered to the investor. The loan
must be in fundable form when it is delivered to the
investor. This means that both the credit and the collateral
packages must be complete. If this is not the case, which
happens rarely, the investor may re-price the loan. In such
event, if the market has deteriorated, we have some interest
rate risk.

We also monitor and work to match the interest
rates we charge on our loans to the interest rates on the
warehouse line of credit used to fund the loan. Since the time
period that the financing for any one loan is outstanding is
short, typically ten to fifteen business days, the risk of a
negative interest rate gap continuing for an extended period
time is lessened. Upon sale of the loan, the interest rate risk
shifts to the investor. In the past, management has at times
used hedging strategies to lessen the risks arising out of
rising and falling interest rates, but is not currently using
hedging strategies due to the complexities involved in hedging
and personnel needed to properly manage it.

Risk Factors Relating to Our Business and Our
Industry

Some of the more prominent known risks and
uncertainties of our business are set forth below. However, this
section does not discuss all possible risks and uncertainties to
which we are subject, nor can it be assumed that there are not
other risks and uncertainties which may be more significant.



| |   |                                                                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the Company has suffered recurring losses from
    operations, has an accumulated deficit and was not in compliance
    with a certain loan covenant under one of its warehouse lines of
    credit as of September 30, 2003, that raise substantial
    doubt about the Companys ability to continue as a going
    concern;
|
|
| |  | the Companys dependence on the warehouse
    lines of credit, the limits of which have been reduced, and
    failure to comply with a restrictive covenant relating to the
    lines of credit;                                                                                                                              
|
|
| |  | the Companys need for additional funding
    sources so that its ability to originate and fund loans is not
    impaired; and                                                                                                                                                                                                
|
|
| |  | the Companys ability to compete with banks
    and other mortgage lenders that are significantly larger.                                                                                                                                                                                                                     

If we are unable to maintain adequate
funding sources, our ability to originate and fund loans will be
impaired.Our ability to originate
and purchase mortgage loans depends to a large extent upon our
ability to secure financing upon acceptable terms to fund and
hold the mortgage loans until sold. We currently fund all but a
few of the mortgage loans we purchase and originate through
credit facilities with commercial banks and financial
institutions collateralized by loan purchase agreements. On rare
occasions, we fund loans out of cash flow without using our
credit facilities. These agreements are generally terminable at
will by either party and must be renewed each year. Our
borrowings are in turn repaid with proceeds received when
mortgage loans are

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sold. We currently rely on Provident Consumer
Financial Services and Warehouse One to provide our primary
credit facilities for our loan originations and purchases. Any
failure to renew or obtain adequate funding under our financing
facilities or other financing arrangements, or any substantial
reduction in the size of or increase in the cost of such
facilities, could have a material adverse effect on our
business, results of operations and financial condition. To the
extent we are not successful in maintaining or replacing
existing financing, we may have to curtail our mortgage loan
origination and purchase activities, which could have a material
adverse effect on our operations and financial condition.


In the past, we have also funded operations
through the issuance of our preferred stock. In the event we are
required to raise additional equity financing, there can be no
assurance that any such equity financing will be available on
acceptable terms. If such financing is not available on
satisfactory terms, we may be unable to expand or continue our
business as desired and operating results may be adversely
affected. Any equity financing could result in dilution to
existing stockholders.

We were not in compliance with restrictive
covenants imposed by our warehouse lender at September 30,
2003 and if we do not comply with the restrictive covenants,
they could demand repayment at any
time.Ocean West also has a
$5,000,000 warehouse line of credit with Warehouse One. The
balance on this line as of September 30, 2003 was $712,950.
This line also is a LIBOR based line and as of
September 30, 2003 the rate was 3.25% over LIBOR. The loan
agreement governing the terms of the Warehouse One line of
credit contains a restrictive covenant relating to tangible net
worth. The Company received an amendment to its agreement with
Warehouse One changing its financial net worth covenant from
$750,000 to $450,000 on December 30, 2003. Currently, the
Company is in compliance with its lender under the new amended
agreement. If we do not comply with the restrictive covenants,
there is the possibility that we may lose the credit facility at
any time, which would cause a negative impact on the way we do
business and a material adverse effect on our results of
operations and financial condition.

General economic conditions may adversely
affect our business.Economic
conditions affect the overall level of activity in the mortgage
business. The decision to buy, sell or refinance a residence is
affected by such economic conditions as the overall growth or
decline of the economy, the level of consumer confidence, real
estate values, interest rates and investment returns expected by
the financial community. These conditions can affect the number
and size of mortgage loans of the types we typically originate
and make these mortgage loans less attractive to borrowers or to
investors in the mortgages. In addition, a decline in real
estate values will have an adverse effect on the loan-to-value
ratios for the related mortgage loans, weakening the collateral
coverage and resulting in greater exposure in the event of a
default. This greater exposure to default could make it more
difficult for us to obtain interim financing for mortgage loans
we originate or purchase or decrease the availability of
purchasers of such mortgage loans.

We are likely to originate and sell fewer
mortgage loans if interest rates
rise.In periods of rising
interest rates, historically the demand for mortgage loans has
declined which could result in lower revenues for us. The
refinancing segment of the mortgage business is usually the
first segment affected. The reason is that as interest rates
rise, the costs of refinancing outweigh any interest rate saving
eliminating those who are refinancing solely to reduce their
interest rate. For the year ended September 30, 2003,
refinance loans made up approximately 70% in total dollar volume
of our loans. Rising interest rates also affect the purchase
segment of the mortgage business. As interest rates increase,
payment amounts rise decreasing the number of potential
borrowers who feel they can afford the payments and who qualify
for the mortgages.

Interest rate fluctuations can affect the
profitability of our mortgage
loans.Changes in interest rates
can affect the volume, net interest income and sale of mortgage
loans originated and purchased by us. When we purchase or
originate a loan, we usually have a commitment from a third
party to purchase that loan. Generally, we fund the loan using
borrowings from our lines of credit that are limited to specific
uses and are known as warehouse lines of credit. The warehouse
line of credit is repaid upon the sale of the warehoused loans.
Before we sell the mortgage loan, we are entitled to receive
interest income on the loan from the borrower and we
simultaneously pay interest expense to the institution providing
the warehouse line of credit. The interest rate we receive
during this period and the interest rate we pay are usually
different. The profitability of the loan is affected by this
difference and fluctuations in interest rates before the
mortgage loan

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is sold. Although we generally have a commitment
to sell the mortgage loan before we commit to fund the mortgage
loan, there are situations in which we bear a risk of changes in
interest rates prior to the mortgage loan being sold. In
particular, if interest rates increase during the time before we
sell an uncommitted mortgage loan but after we have funded the
mortgage loan, we could be required to sell the principal of the
mortgage loan for less than we funded, thereby decreasing the
mortgage loans profitability or incurring a loss on the
mortgage loans sale.


Payments for mortgage loan servicing rights
may be less in times of stable or declining interest
rates.The prices we receive upon
the sale of mortgage loans and servicing rights depend upon a
number of factors, including the general supply of and demand
for mortgage servicing rights, as well as prepayment and
delinquency rates on the portfolios of mortgage servicing rights
being sold. Interest rate changes can also affect the
profitability of the sale of mortgage loan servicing rights to a
third party. Purchasers of mortgage loan servicing rights
analyze a variety of factors to determine the purchase price
they are willing to pay, including the prepayment sensitivity of
servicing rights. Because of the increased likelihood of
prepayment of loans in periods of declining interest rates, the
price of mortgage loan servicing rights related to higher rate
mortgage loans may be less than in times of stable or increasing
interest rates, which could adversely affect our operations and
financial condition.

We do not have significant servicing rights
income to offset some of the effect of an economic
downturn.Mortgage companies often
offset some of the effects of an economic downturn caused by
high interest rates through fees received for servicing
mortgages. Currently, mortgage servicers receive a minimum of
one quarter of one percent of the outstanding mortgage loan
balance per annum for services rendered and consequently have a
continuing revenue stream during periods when the volume of new
originations slows. However, we sell the servicing rights on
more than 99% of the mortgage loans we originate or purchase.
Because we are not servicing a large portfolio of mortgage
loans, we must rely upon the generation or purchase of mortgage
loans for revenues. This makes us more vulnerable to changes in
the economic cycle and general economic health in the geographic
area or areas in which we operate.

We depend in part on wholesale brokers that
are not under our control to generate
loans.If we are not successful in
maintaining or expanding our broker network, our loan volume and
therefore our revenues could decline significantly. During the
year ended September 30, 2003, wholesale brokers originated
approximately 24% of the mortgage loans closed or purchased by
us based on total dollar value. Our employees originated the
remainder of our loans. None of these brokers are contractually
obligated to do business with us and, in fact, the brokers also
have relationships with our competitors who actively compete
with us in efforts to expand broker relationships.

We must depend on brokers to be accurate in
their representations regarding compliance and loan quality and
may incur losses if representations are
inaccurate.In addition to
depending on brokers to generate mortgage loans, we depend on
brokers to be accurate in their representations and warranties
regarding compliance with regulations and the quality of the
loans to be funded. During 1997, we suffered losses due to
broker fraud predominantly with respect to two loans. Primarily
due to the misrepresentations made by brokers on two loans, the
values of each of the properties securing the loans were
overstated by approximately $100,000. In addition, the assets
and employment status of each of the two borrowers appear to
have been misrepresented. We estimate that these
misrepresentations cost us approximately $400,000. In order to
address this situation, we restructured our pre-funding quality
control procedures. Shortly after the change in procedures, our
loan volume generated through brokers decreased causing
additional losses.

We depend on programs that purchase and
guarantee loans.Generally, the
institutional investors that purchase mortgage loans that we
originate generate funds by selling mortgage-backed securities.
This funding mechanism is largely dependent upon the
continuation of programs administered by national
government-sponsored mortgage entities, such as Freddie Mac,
Fannie Mae and Ginnie Mae, which provide the context for, and
facilitate the issuance of, such securities. We also sell a
small portion of our loans, less than 1%, directly to Fannie
Mae. Although we are not aware of any proposed changes in these
programs, the discontinuation of, or a significant reduction in,
the operations of such programs could have a material adverse
effect on our operations. In addition, the sponsor may change
the mortgage loan products eligible for these

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programs from time to time. Changes could affect
the profitability of specific types of mortgage loan products by
changing the administrative costs of purchasing or originating
the mortgage loans or other aspects of the programs.


Our competitors in the mortgage banking
industry are often larger making it more difficult for us to
compete successfully.We face
strong competition in originating, purchasing and selling
mortgage loans and related mortgage servicing rights. Our
competition is principally from savings and loan associations,
other mortgage companies, commercial banks and, to a lesser
degree, credit unions and insurance companies, depending upon
the type of mortgage loan product offered. We compete with these
entities by striving to provide timely service to mortgage
brokers and borrowers and develop competitive products. Many of
these institutions have greater financial resources than we do
and maintain a significant number of branch offices in the areas
in which we conduct operations. Increased competition for
mortgage loans from other lenders may result in a decrease in
the volume of mortgage loans that we are able to originate and
purchase. If we are unable to compete effectively, our
operations and financial condition could be materially and
adversely affected.

Real property with environmental problems
securing our loans may cause us to incur
liability.In the course of our
business, we sometimes acquire residential real estate that
served as collateral for loans that are in default. It is
possible that hazardous substances or waste, contaminants or
pollutants could be present on such properties and not
discovered until after we have taken possession. In such event,
we might be required to remove such substances from the affected
properties at our expense. The cost of such removal could
substantially exceed the value of the affected properties or the
loans secured by such properties. There can be no assurance that
we would have adequate remedies against the prior owners or
other responsible parties, or that we would not find it
difficult or impossible to sell the affected real properties
either prior to or following such removal. These costs could
have a material adverse effect on our operations and financial
condition.

Most of our assets are pledged to secure
debt leaving few if any assets that might be distributed to
shareholders in liquidation.Due
to our financing needs, with the occasional exception of loans
funded by us, all of our mortgage assets will be used to secure
purchase agreements, bank borrowings or other credit
arrangements for at least the near future. We hope to be able to
fund more loans ourselves at some point in the future, but may
never be able to do so on a significant scale. At most times,
our debt under the line of credit is approximately equal to the
value of our mortgage loan assets. Therefore, such mortgage
assets would not be distributed to stockholders in the event of
liquidation, except to the extent that the market value of the
assets exceeds amounts due our creditors. The market value of
the mortgage assets will fluctuate as a result of market factors
such as interest rates and prepayment rates as well as the
supply of, and demand for, such mortgage assets. In the event of
the bankruptcy of a counter-party with whom we have an
agreement, we might experience difficulty recovering our pledged
mortgage assets, which may adversely affect our operations and
financial condition.

We could be required to sell mortgage
assets under adverse market
conditions.If we are not able to
renew or replace credit facilities as they come up for renewal,
we could be required to sell mortgage assets under adverse
market conditions and, as a result, could incur permanent
capital losses. A sharp rise in interest rates or increasing
market concern about the value or liquidity of mortgage assets
in which we have a significant investment will reduce the market
value of the mortgage assets, which would likely cause lenders
to require additional collateral. A number of such factors in
combination may cause difficulties for us including a possible
liquidation of a major portion of our mortgage assets at
disadvantageous prices with consequent losses, which would have
a material adverse effect on our financial status and could
render us insolvent. Additionally, although we intend generally
to sell our mortgage assets within ninety days or less of
generation or purchase because such assets will be pledged under
financing agreements, our ability to sell mortgage assets to
obtain cash will be greatly limited. Our inability to sell such
assets could have a material adverse effect on our operations
and financial condition.

We may need additional equity financing,
which may or may not be available, to expand our business and to
reduce our interest costs.Our
primary operating cash requirement is the funding or payment of
interest expense incurred on borrowings. We also must fund
general operating and administrative expenses and

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from time to time capital expenditures. We
currently fund these cash requirements primarily through our
lines of credit and the sale of loans. Our current plan is to
decrease our reliance on the lines of credit and increase the
volume of loan sales. Our ability to implement this business
strategy will depend upon our ability to increase
stockholders equity thereby establishing a reserve, which
may be used to fund loans. There can be no assurance that we
will be able to raise additional equity on favorable terms. We
cannot presently estimate the amount and timing of additional
equity financing requirements because such requirements are tied
to, among other things, our growth. If we were unable to raise
such additional capital, our ability to expand and our results
of operations and financial condition could be adversely
affected.


Defaults in mortgage loans or
characteristics of property securing the mortgages may adversely
affect our ability to sustain the volume of
mortgages.We fund mortgage loans
by drawing on our line of credit, then as soon as possible and
typically within fifteen days, sell the loan in the secondary
market. We use the proceeds of the sale of a loan to repay the
amount borrowed to fund that loan. Thus, the composition of
mortgage loans we hold changes from day to day. There are also
loans that for one reason or another we do not sell, but hold.
This is rare, but does happen from time to time. During the time
we hold any mortgage loans, we are subject to increased credit
risks, including risks of borrower defaults and bankruptcies and
special hazard losses that are not covered by standard hazard
insurance, such as those occurring from earthquakes or floods.
In the event of a default on any mortgage loan we hold, we will
bear the risk of loss of principal to the extent that the value
of the secured property and any payments from an insurer or
guarantor are less than the amount owed on the mortgage loan and
the costs of realizing on the collateral. Any loans in default
will also cease to be eligible collateral for our borrowings,
which means we will have to finance the loan out of other funds
until it is ultimately liquidated. Although we intend to
establish reserves in amounts we believe are adequate to cover
these risks, there can be no assurance that any such reserves
will be sufficient to offset losses on mortgage loans in the
future. Even assuming that properties securing mortgage loans we
hold provide adequate security for such mortgage loans, there
will likely be delays, which could be substantial, in
prosecuting foreclosures. State and local statutes and rules may
delay or prevent foreclosure on, or sale of, the mortgaged
property and may limit revenues in which case proceeds we
receive may not be sufficient to repay all amounts due on the
related mortgage loan. Some properties that collateralize our
mortgage loans may have unique characteristics or may be subject
to seasonal factors that could materially prolong the time
period required to resell the property.

Real estate is illiquid and its value is
dependent on conditions beyond our
control.The fair market value of
the real property underlying any mortgage we acquire may
decrease. The value is largely dependent on factors beyond our
control and may be affected by adverse changes in national or
local economic conditions. The value may also be affected by the
need to comply with environmental laws or the ongoing need for
capital improvements, particularly in older structures. National
disasters could result in unusual loss, as could adverse changes
in zoning laws and other factors that are beyond our control.

We are liable for representations and
warranties made to purchasers and
insurers.In the ordinary course
of business, we make representations and warranties to the
purchasers and insurers of mortgage loans and the related
mortgage servicing rights regarding compliance with laws,
regulations and program standards. In broker-generated loans, we
generally receive similar representations and warranties from
the brokers from whom we purchase the loans. If any of these
representations and warranties is inaccurate, we may be required
to repurchase the corresponding mortgage loans and/or may be
liable for damages. Although we were not required to repurchase
any loans during the last year, for the two previous years, we
were required to repurchase one loan each year. Prior to that,
we typically were required to repurchase two to three loans each
year. These loans averaged approximately $165,000. In some
cases, a portion of the costs of a repurchase are covered by our
errors and omissions insurance. Some or all of the costs are
also often recovered upon the sale of the collateral for the
loan or by ultimate repayment. There can be no assurances that
we will not experience greater losses in the future.

Mortgage loans are subject to significant
government regulation.Federal,
state and local governmental authorities regulate our activities
as a lender. Our subsidiary, Ocean West Enterprises, is a
licensed lender under the California Department of Corporations
Residential Mortgage Lenders Act and is similarly licensed in
the 29 states in which we do business. The Truth in Lending Act,
and Regulation Z promulgated there

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under, mandate that mortgage lenders meet
requirements designed to provide consumers with uniform,
understandable information on the terms and conditions of
mortgage loans and credit transactions. The Equal Credit
Opportunity Act prohibits creditors from discriminating against
applicants on the basis of race, color, sex, age or marital
status, among other restrictions and requirements. In instances
in which the applicant is denied credit, or the rate or charge
for a mortgage loan increases as a result of information
obtained from a consumer credit agency, the Fair Credit
Reporting Act of 1970 requires the lender to supply the
applicant with a name and address of the reporting agency. The
Real Estate Settlement Procedures Act and the Debt Collection
Practices Act require us to file an annual report with HUD. If
we fail to comply with any of these regulations, we could be
prohibited from engaging in operations which would have a
material adverse effect on our results of operations and
financial condition.


Our business is concentrated in the
California area.Based on the
number of loans funded, 59% of our mortgage loan originations
and purchases are typically secured by property in the
California area. Although we are working to diversify our
holdings, there is no assurance that we will be successful in
entering any other markets. Even if we do expand to new markets,
there is no assurance that we will be able to generate revenues
exceeding the costs associated with activities in the new
markets or that the business activity in those new markets will
match that achieved in the Southern California area. Whether or
not we enter into new geographic markets, general trends in the
economy and the real estate market in the California area will
significantly affect our results of operations and financial
condition for the foreseeable future.

We are dependent on the services of key
personnel.Our business is
substantially dependent on the efforts of Marshall
Mark Stewart, our President, and Daryl Meddings, our
Executive Vice President and Chief Financial Officer. We have
entered into employment agreements with both of them, which are
described in the Management section of this report.
However, under the employment agreements either of them may
terminate employment on thirty days notice. Loss of either of
their services could have a material adverse effect on our
operations.

Mark Stewart and Daryl Meddings control the
Company.Ocean West has four
classes of stock authorized in its Certificate of Incorporation
and currently has three classes of voting stock that are issued
and outstanding. Although each holder of common shares,
Class B common shares and currently outstanding Preferred
Shares is entitled to one vote for each share of stock held, the
holders of Class B common shares are entitled to elect 75%
of the members of the board of directors of Ocean West which is
presently one member out of two. Holders of common shares and
currently outstanding Preferred Shares, together with holders of
Class D common shares and any additional series of voting
Preferred Shares which are created, are only entitled to elect
25% of the members of the board of directors, presently one
member. Thus, holders of Class B common shares have the
ability to control the board of directors and, therefore, Ocean
West. Mark Stewart and Daryl Meddings, the founders of Ocean
West Enterprises, together own 100% of the issued and
outstanding Class B common shares and will, therefore,
control votes by holders of Class B common shares. In
addition, they own 72% of the issued and outstanding common
shares and will therefore also elect the remaining director so
long as they hold more than 50% of the number of issued and
outstanding common shares. On all matters other than the
election of directors, Mark Stewart and Daryl Meddings together
control 73% of the issued and outstanding shares of voting stock
of Ocean West and therefore will control the Company.

No payment of dividends on common shares is
expected in the near future.Ocean
West recently became active and has not paid dividends. We have
not historically paid dividends to our common shareholders,
although we have paid dividends on outstanding preferred stock.
Ocean West will be required to pay dividends on all currently
issued classes of Preferred Stock. Dividends on Series C
shares are 12% per annum or $12 per share and based on $100,000
in investment total $12,000 per year. Dividends on Series E
shares are 18% per annum or $45 per share and based on $170,000
in investment total $30,600 per year. Dividends on Series F
shares are 14% per annum or $14 per share and based on $105,000
in investment total $14,700 per year. Dividends on Series G
shares are 24% per annum or $24 per share and based on $200,000
in investment total $48,000 per year. Dividends on Series I
shares are 15% per annum or $15 per share and based on $12,500
in investment total $1,875 per year. Dividends on Series L
shares are 12% per annum or $120 per share and based on
$1,000,000 in investment total $120,000 per year. Dividends on
Series M shares were 12%

22



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##### 



per annum or $120 per share and based on $500,000
in investment total $60,000 per year. Dividends on all our
Preferred Stock in the aggregate total $287,175 annually less
$60,000 for the redemption of the Series M preferred,
assuming no changes in outstanding preferred stock. Ocean West
has no present plans to institute a policy of declaring
dividends on any class other than Preferred Shares. In the
foreseeable future, our capital requirements will likely consume
all operating profits and other available cash. There is no
guarantee that we will pay dividends in the future or will pay
dividends in excess of those owed on the Preferred Shares.


We have issued and may issue additional
Preferred Shares which have preferences over common shares.Our Certificate of Incorporation
authorizes the issuance of Preferred Shares with designations,
rights and preferences as determined from time to time by its
Board of Directors. Currently, there are 5,855 Preferred Shares
in six series outstanding. The Board of Directors is empowered,
without shareholder approval, to issue additional series of
Preferred Shares with dividends, liquidation, conversion, voting
or other rights that could adversely affect the rights of the
holders of common shares. The voting rights of any Preferred
Shares, however, are limited by the Certificate of Incorporation
and cannot exceed the voting rights of any common shares. The
issuance of preferred shares can be used as a method of
discouraging, delaying or preventing a change of control of
Ocean West.

We currently do not meet certain corporate
governance requirements imposed by the Sarbanes-Oxley Act and
are not eligible to have our shares listed on NASDAQ, AMEX or
the NYSE.The Sarbanes-Oxley Act
of 2002 (Sarbanes-Oxley Act) was signed into law by
President Bush on July 30, 2002 in response to public
concerns regarding corporate accountability in connection with
the recent accounting scandals at Enron and WorldCom. The stated
goals of the Sarbanes-Oxley Act are to increase corporate
responsibility, to provide for enhanced penalties for accounting
and auditing improprieties at publicly traded companies and to
protect investors by improving the accuracy and reliability of
corporate disclosures pursuant to the securities laws. The
Sarbanes-Oxley Act generally applies to all companies, both U.S.
and non-U.S., that file or are required to file periodic reports
with the Securities and Exchange Commission (SEC),
under the Securities Exchange Act of 1934 (Exchange
Act). The Sarbanes-Oxley Act includes very specific
additional disclosure requirements and new corporate governance
rules, requires the SEC and securities exchanges to adopt
extensive additional disclosure, corporate governance and other
related rules. Of the new requirements imposed by the
Sarbanes-Oxley Act, among others, we currently have no
independent directors on our board of directors, no
audit committee, compensation committee nor nomination committee
and we do not have any independent financial experts
on our board of directors. As a result, we currently would not
be eligible to have our shares listed on the NASDAQ, AMEX or
NYSE, even if we were to meet the other listing requirements of
such self-regulatory organizations. This may have the effect of
depressing the prevailing market price of our common shares on
the OTC Bulletin Board.

Future sales of shares by substantial
shareholders may adversely affect the price of shares.Pursuant to the Company
registration statement (file number 333-86484) which became
effective on August 12, 2002, currently there are 2,248,676
shares registered and available for public sale. The remaining
outstanding common shares, including the 210,096 Class B
common shares, which may be converted to common shares,
numbering 3,547,524, are restricted securities as
defined in Rule 144 promulgated under the Securities Act of
1933. The restricted shares constitute approximately 61% of the
issued and outstanding common shares including shares that would
be issued upon conversion of the Class B common shares.
Sales of securities by affiliates of Ocean West may also be
subject to Rule 144 resale limitations. Rule 144
provides a safe harbor from registration requirements for some
sales of restricted securities or securities held by affiliates.
Currently, Mark Stewart, Daryl Meddings and Agape Foundation
Trust hold all of the restricted common shares. In general,
under Rule 144, if adequate public information on Ocean
West is available, beginning ninety days after the date of this
prospectus, a person who has satisfied a one year holding period
may sell, during any three month period, up to 1% of the then
outstanding common shares for companies listed on the OTC
Bulletin Board. Sales under Rule 144 are also subject to
restrictions relating to manner of sale and notice. Sales of
restricted securities by a person who is not an affiliate of
Ocean West under the Securities Act and who has satisfied a two
year holding period may be made without regard to volume
limitations, notice or other requirements of Rule 144.
Management is unable to predict the effect that sales made
pursuant to Rule 144 or other exemptions under the 1933 Act may
have on the prevailing market price of the registered common
shares, or when such sales may begin under Rule 144.

23



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##### 



INDEPENDENT AUDITORS REPORT

To the Board of Directors

Ocean West Holding


Corporation and Subsidiary


Tustin, California


We have audited the consolidated balance sheet of
Ocean West Holding Corporation and Subsidiary (the
Company) as of September 30, 2003 and the
related consolidated statements of operations,
stockholders equity (deficit) and cash flows for the year
ended September 30, 2003. These consolidated financial
statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

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

In our opinion, the consolidated financial
statement referred to above presently fairly, in all material
respects, the financial position of Ocean West Holding
Corporation and Subsidiary as of September 30, 2003 and the
results of their operations and their cash flows for the year
ended September 30, 2003, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statement
has been prepared assuming that the Company will continue as a
going concern. As discussed in Note 1 to the financial
statements, the Company has suffered recurring losses from
operations, has an accumulated deficit and was not in compliance
with certain loan covenants under one of its warehouse lines of
credit as of September 30, 2003, that raise substantial
doubt about the Companys ability to continue as a going
concern. Managements plans in regard to these matters are
also described in Note 1. The consolidated financial statements
do not include any adjustments that might result from the
outcome of these uncertainties.



| |                             
| | ----------------------------
| | /s/ HEIN + ASSOCIATES LLC.  
| | CERTIFIED PUBLIC ACCOUNTANTS

Orange, California

December 30, 2003


24



---



##### 



INDEPENDENT AUDITORS REPORT

To the Board of Directors

Ocean West Holding


Corporation and Subsidiary


Tustin, California


We have audited the consolidated balance sheet of
Ocean West Holding Corporation and Subsidiary (the
Company) as of September 30, 2002, and the
related consolidated statements of operations,
stockholders equity (deficit) and cash flows for the
six-month period ended September 30, 2002 and year ended
March 31, 2002. These consolidated financial statements are
the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

The accompanying consolidated financial
statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has suffered
recurring losses from operations, has a net capital deficiency,
is not in compliance with the net capital requirements of the
U.S. Department of Housing and Urban Development and other
regulatory agencies, and is not in compliance with the covenants
under its warehouse lines of credit, all factors that raise
substantial doubt about its ability to continue as a going
concern. Managements plans in regard to these matters are
also described in Note 1. The consolidated financial statements
do not include any adjustments that might result from the
outcome of these uncertainties.

In our opinion, the consolidated financial
statements referred to above presently fairly, in all material
respects, the financial position of Ocean West Holding
Corporation and Subsidiary as of September 30, 2002, and
the results of its operations and its cash flows for the
six-month period ended September 30, 2002 and the year
ended March 31, 2002, in conformity with accounting
principles generally accepted in the United States of America.

/s/ STONEFIELD JOSEPHSON, INC.




CERTIFIED PUBLIC ACCOUNTANTS


Irvine, California

December 17, 2002


25



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##### 



Item 7.     Financial
Statements.

OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

|                                     |  |               |            |               |  |   |            | 
|------------------------------------ |  | ------------- | ---------- | ------------- |  | - | ---------- | 
|                                     |  | September 30, |            | September 30,
|                                     |  | 2003          |            | 2002         
|                                     |  |               |            |              
|ASSETS                              
|Current assets:                      |  |               |            |               |  |   |            | 
|Cash and cash equivalents            |  | $             | 457,969    |               |  | $ | 187,862    | 
|Restricted cash                      |  |               | 3,010      |               |  |   | 116,477    | 
|Receivable from loans sold           |  |               | 6,711,495  |               |  |   | 19,319,204 | 
|Mortgage loans held for sale         |  |               | 1,427,818  |               |  |   | 1,616,812  | 
|Stock subscription receivable        |  |               |           |               |  |   | 500,000    | 
|Due from related party               |  |               | 45,000     |               |  |   | 49,605     | 
|Prepaid and other current assets     |  |               | 984,319    |               |  |   | 444,068    | 
|                                     |  |               |            |               |  |   |            | 
|Total current assets                 |  |               | 9,629,611  |               |  |   | 22,234,028 | 
|                                     |  |               |            |               |  |   |            | 
|Property and equipment,net           |  |               | 357,522    |               |  |   | 372,058    | 
|                                     |  |               |            |               |  |   |            | 
|Other assets:                        |  |               |            |               |  |   |            | 
|Originated mortgage servicing rights |  |               | 44,163     |               |  |   | 37,393     | 
|Loans held for investment            |  |               | 480,300    |               |  |   |           | 
|Property held for sale               |  |               |           |               |  |   | 65,144     | 
|Deposits                             |  |               | 62,630     |               |  |   | 22,548     | 
|                                     |  |               |            |               |  |   |            | 
|Total other assets                   |  |               | 587,093    |               |  |   | 125,085    | 
|                                     |  |               |            |               |  |   |            | 
|                                     |  | $             | 10,574,226 |               |  | $ | 22,731,171 | 
|                                     |  |               |            |               |  |   |            | 

See accompanying independent auditors
reports and notes to consolidated financial statements.

26



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##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY

CONSOLIDATED BALANCE SHEETS 
(Continued)

|                                                                                                                                         |  |               |            |               |  |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | ------------- |  | - | ---------- | -
|                                                                                                                                         |  | September 30, |            | September 30,
|                                                                                                                                         |  | 2003          |            | 2002         
|                                                                                                                                         |  |               |            |              
|LIABILITIES AND STOCKHOLDERS EQUITY
    (DEFICIT)                                                                                      
|Current liabilities:                                                                                                                     |  |               |            |               |  |   |            |  
|Accounts payable and accrued expenses                                                                                                    |  | $             | 1,487,333  |               |  | $ | 1,580,326  |  
|Client trust payable                                                                                                                     |  |               | 3,010      |               |  |   | 116,477    |  
|Due to stockholder                                                                                                                       |  |               | 38,647     |               |  |   |           |  
|Current maturities of long-term debt                                                                                                     |  |               | 829,375    |               |  |   | 125,705    |  
|Current maturities of capital lease obligations                                                                                          |  |               | 63,022     |               |  |   | 83,108     |  
|Current maturities of notes payable 
    stockholders                                                                                   |  |               |           |               |  |   | 443        |  
|Warehouse lines of credit                                                                                                                |  |               | 8,032,976  |               |  |   | 20,016,846 |  
|                                                                                                                                         |  |               |            |               |  |   |            |  
|Total current liabilities                                                                                                                |  |               | 10,454,363 |               |  |   | 21,922,905 |  
|                                                                                                                                         |  |               |            |               |  |   |            |  
|Long-term liabilities:                                                                                                                   |  |               |            |               |  |   |            |  
|Long-term debt, less current maturities                                                                                                  |  |               | 85,000     |               |  |   | 124,577    |  
|Capital lease obligations, less current maturities                                                                                       |  |               | 53,181     |               |  |   | 11,453     |  
|Accrued expenses                                                                                                                         |  |               |           |               |  |   | 60,000     |  
|Amount due to related party                                                                                                              |  |               | 15,000     |               |  |   | 15,000     |  
|Notes payable  stockholders, less
    current maturities                                                                                |  |               | 230,000    |               |  |   | 466,959    |  
|                                                                                                                                         |  |               |            |               |  |   |            |  
|Total long-term liabilities                                                                                                              |  |               | 383,181    |               |  |   | 677,989    |  
|                                                                                                                                         |  |               |            |               |  |   |            |  
|Total liabilities                                                                                                                        |  |               | 10,837,544 |               |  |   | 22,600,894 |  
|                                                                                                                                         |  |               |            |               |  |   |            |  
|Stockholders equity (deficit):                                                                                                          |  |               |            |               |  |   |            |  
|Preferred stock, $0.01 par value; 10,000,000
    shares authorized:                                                                      |  |               |            |               |  |   |            |  
|Series C, 1,000 shares issued and outstanding                                                                                            |  |               | 100,000    |               |  |   | 100,000    |  
|Series D, no shares issued and outstanding                                                                                               |  |               |           |               |  |   |           |  
|Series E, 680 shares issued and outstanding                                                                                              |  |               | 170,000    |               |  |   | 170,000    |  
|Series F, 1,050 shares issued and outstanding                                                                                            |  |               | 105,000    |               |  |   | 105,000    |  
|Series G, 2,000 shares issued and outstanding                                                                                            |  |               | 200,000    |               |  |   | 200,000    |  
|Series I, 125 shares issued and outstanding                                                                                              |  |               | 12,500     |               |  |   | 12,500     |  
|Series K, no shares issued and outstanding                                                                                               |  |               |           |               |  |   |           |  
|Series L, 1,000 shares issued and outstanding                                                                                            |  |               | 1,000,000  |               |  |   | 1,000,000  |  
|Series M, 5,000 shares authorized, 0 and 500
    shares issued and outstanding, respectively                                             |  |               |           |               |  |   | 5          |  
|Class B common stock; $0.01 par value,
    5,000,000 authorized, 210,096 shares issued and outstanding                                   |  |               | 2,101      |               |  |   | 2,101      |  
|Class D common stock; $0.01 par value,
    600,000 shares authorized, none issued and outstanding                                        |  |               |           |               |  |   |           |  
|Common stock, $0.01 par value; 30,000,000 shares
    authorized; 5,586,104 and 5,585,104 shares issued and
    outstanding, respectively |  |               | 55,861     |               |  |   | 55,851     |  
|Additional paid-in capital                                                                                                               |  |               | 1,543,194  |               |  |   | 2,041,949  |  
|Accumulated deficit                                                                                                                      |  |               | (3,451,974 | )             |  |   | (3,557,129 | )
|                                                                                                                                         |  |               |            |               |  |   |            |  
|Total stockholders (deficit) equity                                                                                                     |  |               | (263,318   | )             |  |   | 130,277    |  
|                                                                                                                                         |  |               |            |               |  |   |            |  
|                                                                                                                                         |  | $             | 10,574,226 |               |  | $ | 22,731,171 |  
|                                                                                                                                         |  |               |            |               |  |   |            |  

See accompanying independent auditors
reports and notes to consolidated financial statements.

27



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##### 



OCEAN WEST HOLDING CORPORATION

AND SUBSIDIARY


CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |           | 
|-------------------------------------------------------------------------------------------- | ----------------------------------------- | ------------- | ---------- | ---------------- |  | ---------- | --------- | --------- | - | - | ---------- | --------- | 
|                                                                                             |                                           | Year Ended    |            | Six Months Ended |  | Year Ended
|                                                                                             |                                           | September 30, |            | September 30,    |  | March 31, 
|                                                                                             |                                           | 2003          |            | 2002             |  | 2002      
|                                                                                             |                                           |               |            |                  |  |           
|Revenues:                                                                                    |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Revenues from origination and sale of mortgage
    loans and commissions, net                |                                           | $             | 13,156,597 |                  |  | $          | 5,430,917 |           |   | $ | 10,549,324 |          
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Operating expenses:                                                                          |                                           |               |            |                  |  |            |           |           |   |   |            |          
|                                                                                             | Salaries and wages                        |               |            | 5,764,547        |  |            |           | 2,483,760 |   |   |            | 5,272,014 | 
|                                                                                             | Payroll taxes                             |               |            | 885,945          |  |            |           | 336,676   |   |   |            | 715,127   | 
|                                                                                             | Other general and administrative expenses |               |            | 5,971,636        |  |            |           | 2,497,676 |   |   |            | 4,712,739 | 
|                                                                                             | Depreciation and amortization             |               |            | 194,383          |  |            |           | 91,677    |   |   |            | 132,338   | 
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Total operating expenses                                                                     |                                           |               | 12,816,511 |                  |  |            | 5,409,789 |           |   |   | 10,832,218 |          
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Income (loss) from operations                                                                |                                           |               | 340,086    |                  |  |            | 21,128    |           |   |   | (282,894   | )        
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Other Income (expense)                                                                       |                                           |               |            |                  |  |            |           |           |   |   |            |          
|                                                                                             | Stock Issuance Expense                    |               |            |                 |  |            |           | (220,954  | ) |   |            |          | 
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Total other income (expense)                                                                 |                                           |               |           |                  |  |            | (220,954  | )         |   |   |           |          
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Income (loss) before provision for income
    taxes                                          |                                           |               | 340,086    |                  |  |            | (199,826  | )         |   |   | (282,894   | )        
|Provision for income taxes                                                                   |                                           |               | 18,203     |                  |  |            | 1,600     |           |   |   | 1,600      |          
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Net income (loss)                                                                            |                                           |               | 321,883    |                  |  |            | (201,426  | )         |   |   | (284,494   | )        
|Dividends on preferred shares                                                                |                                           |               | (216,728   | )                |  |            | (99,888   | )         |   |   | (195,948   | )        
|Net income (loss) applicable to common
    shareholders                                      |                                           | $             | 105,155    |                  |  | $          | (301,314  | )         |   | $ | (480,442   | )        
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Net income (loss) applicable to common
    shareholders per common share  basic and diluted |                                           | $             | 0.02       |                  |  | $          | (0.06     | )         |   | $ | (0.11      | )        
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          
|Weighted average number of common shares
    outstanding  basic and diluted                 |                                           |               | 5,586,104  |                  |  |            | 5,300,409 |           |   |   | 4,414,112  |          
|                                                                                             |                                           |               |            |                  |  |            |           |           |   |   |            |          

See accompanying independent auditors
reports and notes to consolidated financial statements.

28



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##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS
EQUITY (DEFICIT)


Year Ended September 30, 2003, Six Months
Ended September 30, 2002

and Year Ended March 31, 2002


|                                                                |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|--------------------------------------------------------------- |  | --------------- | ----- | -------- |  | -------- | ------- | -------- |  | ------ | ------ | ------ |  | ------ | -------- | ------ |  |  | ----- | - |  | - | -------- | - |  |  | ----- | - |  | - | ------- | -
|                                                                |  |                
|                                                                |  | Preferred Stock
|                                                                |  |                 |       |          |  |          |         |         
|                                                                |  | Series C        |       | Series D |  | Series E |         | Series F
|                                                                |  | Shares          |       | Amount   |  | Shares   |         | Amount   |  | Shares |        | Amount |  | Shares |          | Amount
|                                                                |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |       
|Balance at April 1, 2001                                        |  |                 | 1,000 |          |  | $        | 100,000 |          |  |        | 1,500  |        |  | $      | 600,000  |        |  |  | 1,200 |   |  | $ | 300,000  |   |  |  | 1,250 |   |  | $ | 125,000 |  
|Redemption of Series L preferred for cash                       |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Dividends on preferred stock                                    |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Issuance of Series L preferred stock for cash                   |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Issuance of Class B common stock                                |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Conversion of Class B common stock to common
    stock          |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Redemption of common stock for cash                             |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Conversion of preferred stock to common stock                   |  |                 |       |          |  |          |         |          |  |        | (1,500 | )      |  |        | (600,000 | )      |  |  | (520  | ) |  |   | (130,000 | ) |  |  | (200  | ) |  |   | (20,000 | )
|Net income for the year ended March 31, 2002                    |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|                                                                |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Balance at March 31, 2002                                       |  |                 | 1,000 |          |  |          | 100,000 |          |  |        |       |        |  |        |         |        |  |  | 680   |   |  |   | 170,000  |   |  |  | 1,050 |   |  |   | 105,000 |  
|Series M preferred stock subscribed                             |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Dividends on preferred stock                                    |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Issuance of common stock                                        |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Issuance of warrants                                            |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Net loss for the six- month period ended
    September 30, 2002 |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|                                                                |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Balance at September 30, 2002                                   |  |                 | 1,000 |          |  |          | 100,000 |          |  |        |       |        |  |        |         |        |  |  | 680   |   |  |   | 170,000  |   |  |  | 1,050 |   |  |   | 105,000 |  
|Dividends on preferred stock                                    |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Redemption of Series M preferred stock                          |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Exercise of warrant to common stock                             |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Net Income for the year ended September 30,
    2003            |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|                                                                |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  
|Balance at September 30, 2003                                   |  |                 | 1,000 |          |  | $        | 100,000 |          |  |        |       |        |  | $      |         |        |  |  | 680   |   |  | $ | 170,000  |   |  |  | 1,050 |   |  | $ | 105,000 |  
|                                                                |  |                 |       |          |  |          |         |          |  |        |        |        |  |        |          |        |  |  |       |   |  |   |          |   |  |  |       |   |  |   |         |  

See accompanying independent auditors
reports and notes to consolidated financial statements.

29



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS
EQUITY (DEFICIT)


Year Ended September 30, 2003, Six Months
Ended September 30, 2002

and Year Ended March 31, 2002


|                                                       |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|------------------------------------------------------ |  | --------------- | ----- | -------- |  | -------- | ------- | -------- |  | ------ | ---- | ------ |  | ------ | ------- | ------ |  |  | ------ | - |  | - | -------- | - |  |  | ----- | - |  | - | --------- | -
|                                                       |  |                
|                                                       |  | Preferred Stock
|                                                       |  |                 |       |          |  |          |         |         
|                                                       |  | Series G        |       | Series I |  | Series K |         | Series L
|                                                       |  | Shares          |       | Amount   |  | Shares   |         | Amount   |  | Shares |      | Amount |  | Shares |         | Amount
|                                                       |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |       
|Balance at April 1, 2001                               |  |                 | 2,000 |          |  | $        | 200,000 |          |  |        | 550  |        |  | $      | 55,000  |        |  |  | 1,000  |   |  | $ | 120,000  |   |  |  | 881   |   |  | $ | 880,500   |  
|Redemption of Series L preferred for cash              |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  | (126  | ) |  |   | (125,500  | )
|Dividends on preferred stock                           |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Issuance of Series L preferred stock for cash          |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  | 300   |   |  |   | 300,000   |  
|Issuance of Class B common stock                       |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Conversion of Class B common stock to common
    stock |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Redemption of Common Stock for cash                    |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Conversion of preferred stock to common stock          |  |                 |       |          |  |          |         |          |  |        | (425 | )      |  |        | (42,500 | )      |  |  | (1,000 | ) |  |   | (120,000 | ) |  |  | (55   | ) |  |   | (55,000   | )
|Net income for the year ended March 31, 2002           |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|                                                       |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Balance at March 31, 2002                              |  |                 | 2,000 |          |  |          | 200,000 |          |  |        | 125  |        |  |        | 12,500  |        |  |  |       |   |  |   |         |   |  |  | 1,000 |   |  |   | 1,000,000 |  
|Series M preferred stock subscribed                    |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Dividends on preferred stock                           |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Issuance of Common stock                               |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Issuance of warrants                                   |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|                                                       |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Balance at September 30, 2002                          |  |                 | 2,000 |          |  |          | 200,000 |          |  |        | 125  |        |  |        | 12,500  |        |  |  |       |   |  |   |         |   |  |  | 1,000 |   |  |   | 1,000,000 |  
|Dividends on preferred stock                           |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Redemption of Series M Preferred Stock                 |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Exercise of warrant to common stock                    |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Net income for year ended September 30, 2003           |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|                                                       |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  
|Balance at September 30, 2003                          |  |                 | 2,000 |          |  | $        | 200,000 |          |  |        | 125  |        |  | $      | 12,500  |        |  |  |       |   |  | $ |         |   |  |  | 1,000 |   |  | $ | 1,000,000 |  
|                                                       |  |                 |       |          |  |          |         |          |  |        |      |        |  |        |         |        |  |  |        |   |  |   |          |   |  |  |       |   |  |   |           |  

See accompanying independent auditors
reports and notes to consolidated financial statements.

30



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS
EQUITY (DEFICIT)


Year Ended September 30, 2003, Six Months
Ended September 30, 2002

and Year Ended March 31, 2002


|                                                       |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|------------------------------------------------------ |  | --------------- | ---- | ------------ |  | ------------ | -- | ------ |  | ------ | ------- | ------ |  | - | ----- | - |  |  | --------- | - |  | - | ------ | -
|                                                       |  |                 |      |              |  |              |    |       
|                                                       |  | Preferred Stock |      | Class B      |  |             
|                                                       |  | Series M        |      | Common Stock |  | Common Stock
|                                                       |  | Shares          |      | Amount       |  | Shares       |    | Amount |  | Shares |         | Amount
|                                                       |  |                 |      |              |  |              |    |        |  |        |         |       
|Balance at April 1, 2001                               |  |                 |     |              |  | $            |   |        |  |        |        |        |  | $ |      |   |  |  | 4,387,600 |   |  | $ | 43,876 |  
|Redemption of Series L preferred for cash              |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Dividends on preferred stock                           |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Issuance of Series L preferred stock for cash          |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Issuance of Class B common stock                       |  |                 |      |              |  |              |    |        |  |        | 250,400 |        |  |   | 2,504 |   |  |  |           |   |  |   |        |  
|Conversion of Class B common stock to common
    stock |  |                 |      |              |  |              |    |        |  |        | (40,304 | )      |  |   | (403  | ) |  |  | 40,304    |   |  |   | 403    |  
|Redemption of Common Stock for cash                    |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  | (5,600    | ) |  |   | (56    | )
|Conversion of preferred stock to common stock          |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  | 774,000   |   |  |   | 7,740  |  
|Net income for the year ended March 31, 2002           |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|                                                       |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Balance at March 31, 2002                              |  |                 |     |              |  |              |   |        |  |        | 210,096 |        |  |   | 2,101 |   |  |  | 5,196,304 |   |  |   | 51,963 |  
|Series M preferred stock subscribed                    |  |                 | 500  |              |  |              | 5  |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Dividends on preferred stock                           |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Issuance of Common stock                               |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  | 388,800   |   |  |   | 3,888  |  
|Issuance of warrants                                   |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|                                                       |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Balance at September 30, 2002                          |  |                 | 500  |              |  |              | 5  |        |  |        | 210,096 |        |  |   | 2,101 |   |  |  | 5,585,104 |   |  |   | 55,851 |  
|Dividends on preferred stock                           |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Redemption of Series M Preferred Stock                 |  |                 | (500 | )            |  |              | (5 | )      |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Exercise of warrant to common stock                    |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  | 1,000     |   |  |   | 10     |  
|Net income for year ended September 30, 2003           |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|                                                       |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  
|Balance at September 30, 2003                          |  |                 |     |              |  | $            |   |        |  |        | 210,096 |        |  | $ | 2,101 |   |  |  | 5,586,104 |   |  | $ | 55,861 |  
|                                                       |  |                 |      |              |  |              |    |        |  |        |         |        |  |   |       |   |  |  |           |   |  |   |        |  

See accompanying independent auditors
reports and notes to consolidated financial statements.

31



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS
EQUITY (DEFICIT)


Year Ended September 30, 2003, Six Months
Ended September 30, 2002

and Year Ended March 31, 2002


|                                                               |  |                    |           |                     |  |       |            |   |  |   |          |  
|-------------------------------------------------------------- |  | ------------------ | --------- | ------------------- |  | ----- | ---------- | - |  | - | -------- | -
|                                                               |  | Additional Paid-in |           |                     |  |      
|                                                               |  | Capital            |           | Accumulated Deficit |  | Total
|                                                               |  |                    |           |                     |  |      
|Balance at April 1, 2001                                       |  | $                  | 364,472   |                     |  | $     | (2,775,363 | ) |  | $ | 13,485   |  
|Redemption of Series L preferred stock for
    cash            |  |                    |           |                     |  |       |            |   |  |   | (125,500 | )
|Dividends on preferred stock                                   |  |                    |           |                     |  |       | (195,958   | ) |  |   | (195,958 | )
|Issuance of Series L preferred stock for cash                  |  |                    |           |                     |  |       |            |   |  |   | 300,000  |  
|Issuance of Class B common stock                               |  |                    | (2,504    | )                   |  |       |            |   |  |   |         |  
|Conversion of Class B common stock to common
    stock         |  |                    |           |                     |  |       |            |   |  |   |         |  
|Redemption of common stock for cash                            |  |                    | (9,944    | )                   |  |       |            |   |  |   | (10,000  | )
|Conversion of preferred stock to common stock                  |  |                    | 959,760   |                     |  |       |            |   |  |   |         |  
|Net income for the year ended March 31, 2002                   |  |                    |           |                     |  |       | (284,494   | ) |  |   | (284,494 | )
|                                                               |  |                    |           |                     |  |       |            |   |  |   |          |  
|Balance at March 31, 2002                                      |  |                    | 1,311,784 |                     |  |       | (3,255,815 | ) |  |   | (302,467 | )
|Series M preferred stock subscribed                            |  |                    | 499,995   |                     |  |       |            |   |  |   | 500,000  |  
|Dividends on preferred stock                                   |  |                    |           |                     |  |       | (99,888    | ) |  |   | (99,888  | )
|Issuance of common stock                                       |  |                    | 227,170   |                     |  |       |            |   |  |   | 231,058  |  
|Issuance of warrants                                           |  |                    | 3,000     |                     |  |       |            |   |  |   | 3,000    |  
|Net loss for the six-month period ended
    September 30, 2002 |  |                    |           |                     |  |       | (201,426   | ) |  |   | (201,426 | )
|                                                               |  |                    |           |                     |  |       |            |   |  |   |          |  
|Balance at September 30, 2002                                  |  |                    | 2,041,949 |                     |  |       | (3,557,129 | ) |  |   | 130,277  |  
|Dividends on preferred stock                                   |  |                    |           |                     |  |       | (216,728   | ) |  |   | (216,728 | )
|Redemption of Series M Preferred                               |  |                    | (499,995  | )                   |  |       |            |   |  |   | (500,000 | )
|Exercise of Warrant to Common Stock                            |  |                    | 1,240     |                     |  |       |            |   |  |   | 1,250    |  
|Net Income for the year ended September 30,
    2003           |  |                    |           |                     |  |       | 321,883    |   |  |   | 321,883  |  
|                                                               |  |                    |           |                     |  |       |            |   |  |   |          |  
|Balance at September 30, 2003                                  |  | $                  | 1,543,194 |                     |  | $     | (3,451,974 | ) |  | $ | (263,318 | )
|                                                               |  |                    |           |                     |  |       |            |   |  |   |          |  

See accompanying independent auditors
reports and notes to consolidated financial statements.

32



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended September 30, 2003 Six Months
Ended September 30, 2002


and Year Ended March 31, 2002


|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | ------------- |  | --------- | ---------- | - |  | - | ---------- | -
|                                                                                                        |  | September 30, |             | September 30, |  | March 31,
|                                                                                                        |  | 2003          |             | 2002          |  | 2002     
|                                                                                                        |  |               |             |               |  |          
|Cash flows provided by (used for) operating
    activities:                                             |  |               |             |               |  |           |            |   |  |   |            |  
|Net income (loss)                                                                                       |  | $             | 321,883     |               |  | $         | (201,426   | ) |  | $ | (284,494   | )
|Adjustments to reconcile net income (loss) to
    net cash provided by (used for) operating activities: |  |               |             |               |  |           |            |   |  |   |            |  
|Depreciation and amortization                                                                           |  |               | 194,383     |               |  |           | 91,677     |   |  |   | 132,338    |  
|Loss on sale of property                                                                                |  |               | 39,040      |               |  |           |           |   |  |   |           |  
|Compensation expense for stock sold                                                                     |  |               |            |               |  |           | 220,954    |   |  |   |           |  
|Changes in operating assets and
    liabilities:                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|(Increase) decrease in assets:                                                                          |  |               |             |               |  |           |            |   |  |   |            |  
|Restricted cash                                                                                         |  |               | 113,467     |               |  |           | (7,630     | ) |  |   | 60,884     |  
|Mortgage loans held for sale                                                                            |  |               | 12,607,709  |               |  |           | 44,672     |   |  |   | 4,523,355  |  
|Receivable from loans sold                                                                              |  |               | (291,306    | )             |  |           | (8,235,272 | ) |  |   | 4,257,873  |  
|Other current assets                                                                                    |  |               | (553,545    | )             |  |           | (123,306   | ) |  |   | 65,922     |  
|Deposits                                                                                                |  |               | (40,082     | )             |  |           | 6,727      |   |  |   | 76,580     |  
|Increase (decrease) in
    liabilities:                                                                 |  |               |             |               |  |           |            |   |  |   |            |  
|Accounts payable and accrued expenses                                                                   |  |               | (266,460    | )             |  |           | 356,308    |   |  |   | (525,323   | )
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Net cash provided by (used for) operating
    activities                                                |  |               | 12,125,089  |               |  |           | (7,847,296 | ) |  |   | 8,307,135  |  
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Cash flows used for investing
    activities:                                                           |  |               |             |               |  |           |            |   |  |   |            |  
|Collection (issuance) of notes receivable                                                               |  |               | 4,605       |               |  |           | (49,605    | ) |  |   | 34,641     |  
|Proceeds from the sale of property                                                                      |  |               | 26,104      |               |  |           |           |   |  |   |           |  
|Purchases of property and equipment                                                                     |  |               | (43,383     | )             |  |           | (61,489    | ) |  |   | (55,146    | )
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Net cash used for investing activities                                                                  |  |               | (12,674     | )             |  |           | (111,094   | ) |  |   | (20,505    | )
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Cash flows (used for) provided by financing
    activities:                                             |  |               |             |               |  |           |            |   |  |   |            |  
|Net (repayments) borrowings under warehouse
    lines of credit                                         |  |               | (11,983,871 | )             |  |           | 7,612,802  |   |  |   | (8,485,197 | )
|Proceeds from notes payable and long-term debt                                                          |  |               | 915,888     |               |  |           | 146,233    |   |  |   |           |  
|Payments on notes payable and long-term debt                                                            |  |               | (251,795    | )             |  |           | (55,845    | ) |  |   | (52,411    | )
|Payments on capital lease obligations                                                                   |  |               | (108,297    | )             |  |           | (53,847    | ) |  |   | (85,792    | )
|Advances from stockholder                                                                               |  |               | 38,647      |               |  |           |           |   |  |   |           |  
|Payments on notes-payable  stockholder                                                                 |  |               | (237,402    | )             |  |           |           |   |  |   |           |  
|Proceeds from sale of common stock                                                                      |  |               |            |               |  |           | 10,104     |   |  |   |           |  
|Proceeds from sale of warrants                                                                          |  |               |            |               |  |           | 3,000      |   |  |   |           |  
|Proceeds from exercise of warrants                                                                      |  |               | 1,250       |               |  |           |           |   |  |   |           |  
|Proceeds from notes payable-stockholder                                                                 |  |               |            |               |  |           | 466,902    |   |  |   |           |  
|Proceeds from issuance of preferred stock                                                               |  |               | 500,000     |               |  |           |           |   |  |   | 300,000    |  
|Redemption of preferred stock                                                                           |  |               | (500,000    | )             |  |           |           |   |  |   | (110,500   | )
|Redemption of common stock                                                                              |  |               |            |               |  |           |           |   |  |   | (10,000    | )
|Preferred stock dividends                                                                               |  |               | (216,728    | )             |  |           | (99,888    | ) |  |   | (195,958   | )
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Net cash (used for) provided by financing
    activities                                                |  |               | (11,842,308 | )             |  |           | 8,029,461  |   |  |   | (8,639,858 | )
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Net increase (decrease) in cash and cash
    equivalents                                                |  |               | 270,107     |               |  |           | 71,071     |   |  |   | (353,228   | )
|Cash and cash
    equivalents, beginning of year                                                        |  |               | 187,862     |               |  |           | 116,791    |   |  |   | 470,019    |  
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Cash and cash
    equivalents, end of year                                                              |  | $             | 457,969     |               |  | $         | 187,862    |   |  | $ | 116,791    |  
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Supplemental disclosure of cash flow
    information:                                                   |  |               |             |               |  |           |            |   |  |   |            |  
|Interest paid                                                                                           |  | $             | 519,500     |               |  | $         | 361,155    |   |  | $ | 1,089,640  |  
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  
|Income taxes paid                                                                                       |  | $             | 800         |               |  | $         | 800        |   |  | $ | 800        |  
|                                                                                                        |  |               |             |               |  |           |            |   |  |   |            |  

See accompanying independent auditors
reports and notes to consolidated financial statements.

33



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


CONSOLIDATED STATEMENT OF CASH
FLOWS  (Continued)

Supplemental schedule of non-cash investing
and financing activities:

During the year ended September 30, 2003,
the Company incurred capital lease obligations of $129,939 for
equipment.

During the year ended September 30, 2003,
the Company reclassified $480,300 of loans from loan sale
receivable to loans held for investment.

During the six months ended September 30,
2002, the Company entered into a subscription agreement to issue
500 shares of Series M preferred stock for total
consideration of $500,000.

During year ended March 31, 2002, the
Company incurred capital lease obligations of $130,920 for
equipment.

See accompanying independent auditors
reports and notes to consolidated financial statements.

34



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


(1) Summary of Significant Accounting
Policies:

Basis of Presentation:

Ocean West Holding Corporation (OWHC) was
organized in the State of Delaware on August 15, 2000 as a
holding company with negligible assets and liabilities. During
March 2002, OWHC acquired all of the issued and outstanding
shares of preferred and common stock of Ocean West Enterprises,
Inc. dba Ocean West Funding (OWE) in an exchange of
shares. Since the shareholders of OWE are the controlling
shareholders of OWHC after the exchange, the transaction was
treated as an acquisition by OWE, and the historical financial
statements reflect the operations of OWE.

Since inception through September 30, 2003,
the Company has suffered recurring losses from operations, we
have incurred aggregate net losses of $3,452,000. In addition,
the Company was not in compliance with certain loan covenants
under one of its warehouse lines of credit as of
September 30, 2003. These circumstances raise substantial
doubt about our ability to continue as a going concern, as
described in the explanatory paragraph on our independent
auditors report on the September 30, 2003
consolidated financial statements, which are included with this
annual report.

Management believes that cash flows from
operations will be sufficient to meet the Companys current
liquidity and capital needs at least through fiscal 2004. To
compensate for the reduction in loan volume due to the rising
interest rate market that began in July 2003, the Company has
reduced fixed overhead primarily through staff reductions.
Management believes the Company can now meet its liquidity and
capital needs at current production levels. However management
is currently exploring possible liquidity sources either through
additional borrowings or potential capital partners to enable
the Company to increase its loan production. Additionally,
management believes a development of a market in the
Companys stock should aid in increasing capital. The
Company intends to retain earnings for the foreseeable future to
help increase liquidity. Future offerings are possible, although
the Company does not currently have any specific offering plans.

Nature of Business:

OWE, a California C corporation, was
incorporated in November 1988 in the State of California for the
purpose of engaging in mortgage banking activities. The OWE is
involved in the process of originating, packaging, and funding
of HUD and other government-insured loans and
non-government-insured loans in the United States. HUD-insured
loans comprised 9.2%, 24% and 21% of total loans originated by
the Company during the year ended September 30, 2003, the
six months ended September 30, 2002 and year ended
March 31, 2002, respectively. Certain of the
non-government-insured loans are sold servicing
retained whereby the Company receives a fee for servicing
the loans. Based on the number of loans funded, 59% of our
mortgage loan originations and purchases are typically secured
by property in the California area.

OWHC and OWE are collectively referred to as the
Company.

Principles of Consolidation:

The consolidated financial statements include the
accounts of OWHC and its wholly owned subsidiary, OWE. All
significant intercompany accounts and transactions have been
eliminated in consolidation.

Risks and Uncertainties:

The Company originates HUD and other
government-insured loans in the United States, generating
revenue from the origination, sale, and servicing of these
loans. Significant changes in interest rates or the underlying

35



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


economic condition of the United States or any
specific region of the United States real estate market could
have a materially adverse impact on the Companys
operations.

Use of Estimates:

The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues
and expenses during the reported periods. Significant estimates
made by the Companys management include, but are not
limited to, the realizability of mortgage loans held for sale,
mortgage servicing rights and property held for sale, the
collectibility of notes receivable, and the recoverability of
property and equipment through future operating profits. Actual
results could materially differ from those estimates.

Concentration of Credit Risk:

The Company maintains, at times, cash balances at
certain financial institutions in excess of amounts insured by
federal agencies.

For the year ended September 30, 2003, six
months ended September 30, 2002 and year ended
March 31, 2002 four buyers purchased 27%, 15%, 11% and 10%
(September 30, 2003) two buyers purchased 15% and 12%
(September 30, 2002), and 17%, and 12% (March 31,
2002), of loans funded.

Cash and Cash Equivalents:

For the purpose of the statement of cash flows,
the Company considers all highly liquid holdings with maturities
of three months or less at the time of purchase to be cash
equivalents.

Restricted Cash:

Restricted cash represents amounts deposited in
escrow for the Company to pay expenses for the benefit of a
borrower who advanced funds to the Company.

Mortgage Loans Held for Sale:

Mortgage loans held for sale to investors are
stated at the lower of cost or market value computed on the
aggregate method by residential loan type (unrealized losses are
offset by unrealized gains) and are evaluated at the end of each
year, and are determined by outstanding commitments from
investors or current investor yield requirements. The amount by
which cost exceeds market value is accounted for as a valuation
allowance and any changes in the valuation allowance are
included in the determination of net income. As of
September 30, 2003 and September 30, 2002, there was
no valuation allowance required as cost was estimated not to
exceed at fair market value. A substantial portion of loans was
sold to investors within 30 days subsequent to
September 30, 2003 and September 30, 2002.

Property and Equipment:

Property and equipment are stated at cost, less
accumulated depreciation. Depreciation is recorded using the
straight-line method over the estimated useful lives of the
related assets, ranging from three to thirty years. Depreciation
expense related to property and equipment was $187,894, $88,151,
and $124,054 for the year ended September 30, 2003, six
months ended September 30, 2002 and year ended
March 31, 2002,

36



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


respectively. Maintenance and repairs are charged
to operations when incurred. Major betterments and renewals are
capitalized. Gains or losses are recognized upon sale or
disposition of assets.

Property Held For Sale:

Property held for sale at September 30, 2002
consisted of one residential property, which was recorded at the
lower of cost or fair value less cost to sell. During the
quarter ended June 30, 2003, the Company sold this property
for $26,104. A loss on the sale of $39,040 was recorded.

Long-Lived Assets:

The Company accounts for its long-lived assets in
accordance with SFAS No. 144, Accounting For The
Impairment or Disposal of Long-Lived Assets which requires
that long-lived assets and certain identifiable intangibles to
be held and used by any entity be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Pursuant to
SFAS 144, management of the Company assesses the
recoverability of property and equipment by determining whether
the depreciation of such assets over their remaining lives can
be recovered through projected undiscounted cash flows. The
amount of impairment, if any, is measured based on fair value
(projected discounted cash flows) and is charged to operations
in the period in which such impairment is determined by
management. To date, management has not identified any
impairment of property and equipment. There can be no assurance,
however, that market conditions or demands for the
Companys services will not change which could result in
future long-lived asset impairment.

Mortgage Servicing:

The Company recognizes as separate assets or
liabilities the obligation to service mortgage loans for others,
through loan origination, by allocating total costs incurred
between the loan and the servicing rights retained based on
their relative fair values. Amortization of mortgage service
assets or rights (MSRs) is based on the ratio of net
servicing income received in the current period to total net
servicing income projected to be realized from the MSRs.
Amortization of mortgage service liabilities (MSLs)
is based on the ratio of net servicing costs paid in the current
period to total net servicing costs projected to be paid from
the MSL. Projected net servicing income is in turn determined by
the estimated future balance of the underlying mortgage loan
portfolio, which declines over time from prepayments and
scheduled loan amortization. The Company estimates future
prepayment rates based on current interest rate levels, other
economic conditions and market forecasts, as well as relevant
characteristics of the servicing portfolio, such as loan types,
interest rate stratification and recent prepayment experience.
MSRs are periodically evaluated for impairment, which is
recognized in the statement of operations during the applicable
period through additions to an impairment reserve. For purposes
of performing its impairment evaluation, the Company stratifies
its servicing portfolio on the basis of certain risk
characteristics including loan type and interest rate. The
Company has determined that no impairment allowance is needed as
of September 30, 2003, September 30, 2002 and
March 31, 2002.

For the year ended September 30, 2003
$13,259 was capitalized as mortgage servicing rights. No
mortgage servicing rights were capitalized during the six months
ended September 30, 2002 and year ended March 31,
2002. Amortization expense related to mortgage servicing rights
for the year ended September 30, 2003 was $6,489 and for
the six months ended September 30, 2002 and year ended
March 31, 2002, was $3,526 and $8,284, respectively.

37



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


Revenue and Cost Recognition:

Revenue from the sale of loans is recognized at
the time the loans are sold or when the Company has shipped the
loan file to independent investors consistent with the criteria
established in SFAS No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of
Liabilities. At this point, all of the services required
to be performed for such revenues have been completed. Loan
origination costs and incremental direct costs are deferred and
recognized over the term of the loan as an adjustment of the
loan yield until the loan is sold. Incremental direct costs
include credit reports, appraisal fees, document preparation
fees, wire fees, tax and filing fees, funding fees and
commissions. When the loan is sold and service is released, the
unamortized loan origination costs and incremental direct
selling costs are netted against the revenue and recorded to the
statement of operations. Revenue from the servicing of loans is
recognized as earned.

Basic and Diluted Loss Per
Share:

In accordance with SFAS No. 128,
Earnings Per Share, the basic loss per common share
is computed by dividing net loss available to common
stockholders after reducing net income by preferred stock
dividend, by the weighted average common shares outstanding
during the period. Diluted earnings per share reflect per share
amounts that would have resulted if diluted potential common
stock had been converted to common stock. Common stock
equivalents, which consist of 3,000,000 shares of warrants, have
not been included in the earnings per share computation for the
six months ended September 30, 2002, as the amounts are
anti-dilutive. There were no anti-dilutive securities at
September 30, 2003 or March 31, 2002.

Advertising:

The Company expenses advertising costs as
incurred. The advertising costs for the year ended
September 30, 2003, the six months ended September 30,
2002 and the year ended March 31, 2002 was $1,123,178,
$452,311, and $922,380, respectively.

Income Taxes:

The Company accounts for income taxes under SFAS
No. 109, Accounting for Income Taxes. Under the
asset and liability method of SFAS No. 109, deferred tax
assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under SFAS
No. 109, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period
the enactment occurs. A valuation allowance is provided for
certain deferred tax assets if it is more likely than not that
the Company will not realize tax assets through future
operations.

Fair Value of Financial
Instruments:

The Company has adopted SFAS No. 107,
Disclosures About Fair Value of Financial
Instruments. SFAS No. 107 requires disclosure of fair
value information about financial instruments when it is
practicable to estimate that value.

For certain of the Companys financial
instruments including cash, receivables, and accounts payable
and accrued expenses, the carrying amounts approximate fair
value due to their short maturities. The amounts

38



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


shown for notes payable also approximate fair
value because current interest rates and terms offered to the
Company for similar debt are substantially the same.

New Accounting
Pronouncements:

In June 2002, the FASB issued Statement
No. 146, Accounting for Costs Associated with Exit or
Disposal Activities. This statement nullifies EITF Issue
No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring).
Statement No. 146 is different from EITF Issue
No. 94-3 in that Statement No. 146 requires that a
liability be recognized for a cost associated with an exit or
disposal activity only when the liability is incurred, that is
when it meets the definition of a liability in the FASBs
conceptual framework. Statement No. 146 also establishes
fair value as the objective for initial measurement of
liabilities related to exit or disposal activities. In contrast,
under EITF Issue 94-3, a company recognized a liability for an
exit cost when it committed to an exit plan. Statement
No. 146 is effective for exit or disposal activities that
are initiated after December 31, 2002. The adoption of
Statement No. 146 can be expected to impact the timing of
liability recognition associated with any future exit activities.

In November 2002, the FASB issued FASB
Interpretation No. 45 (FIN45), Guarantors
Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness to Others. This
interpretation elaborates on the disclosures to be made by a
guarantor in interim and annual financial statements about its
obligations under guarantees issued. FIN 45 also clarifies that
a guarantor is required to recognize, at inception of a
guarantee, a liability for the fair value of the obligation
undertaken. The Company was required to adopt FIN 45 on
December 31, 2002. The adoption of FIN 45 did not have a
material effect on the Companys financial position or
results of operations.

In May 2003, the FASB issued SFAS 150,
Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity, effective
for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning
of the first interim period beginning after June 15, 2003.
This statement establishes standards for how an issuer
classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that
an issuer classify a freestanding financial instrument that is
within its scope as a liability (or an asset in some
circumstances). The adoption of SFAS 150 will not have an
impact on the Companys consolidated financial position,
results of operations or cash flows.

Reclassifications:

Certain prior year balances have been
reclassified to conform with current year presentation. Such
classifications had no effect on net income.

39



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


(2) Property and Equipment:

A summary is as follows:

|                                               |  |               |           |               |  |   |           |  
|---------------------------------------------- |  | ------------- | --------- | ------------- |  | - | --------- | -
|                                               |  | September 30, |           | September 30,
|                                               |  | 2003          |           | 2002         
|                                               |  |               |           |              
|Office equipment and leasehold improvements    |  | $             | 474,465   |               |  | $ | 434,000   |  
|Property under capital lease (Note 6)          |  |               | 610,768   |               |  |   | 480,827   |  
|Furniture and fixtures                         |  |               | 140,552   |               |  |   | 137,636   |  
|Automobiles                                    |  |               | 12,000    |               |  |   | 12,000    |  
|                                               |  |               |           |               |  |   |           |  
|                                               |  |               | 1,237,785 |               |  |   | 1,064,463 |  
|Less accumulated depreciation and amortization |  |               | (880,263  | )             |  |   | (692,405  | )
|                                               |  |               |           |               |  |   |           |  
|                                               |  | $             | 357,522   |               |  | $ | 372,058   |  
|                                               |  |               |           |               |  |   |           |  

(3) Originated Mortgaging Servicing
Rights:

A summary is as follows:

|                             |  |               |        |               |  |   |        |  
|---------------------------- |  | ------------- | ------ | ------------- |  | - | ------ | -
|                             |  | September 30, |        | September 30,
|                             |  | 2003          |        | 2002         
|                             |  |               |        |              
|Balance, beginning of period |  | $             | 37,393 |               |  | $ | 40,919 |  
|Additions, net               |  |               | 13,259 |               |  |   |       |  
|Amortization                 |  |               | (6,489 | )             |  |   | (3,526 | )
|                             |  |               |        |               |  |   |        |  
|Balance, end of period       |  | $             | 44,163 |               |  | $ | 37,393 |  
|                             |  |               |        |               |  |   |        |  

The estimated fair market value of mortgage
servicing rights approximated their respective book values as of
September 30, 2003 and September 30, 2002. The fair
market value was determined by discounting estimated net future
cash flows from loan servicing using discount and repayment
rates that approximate current market rates.

(4) Stock Subscription
Receivable:

During the period ended September 30, 2002,
the Company entered into an agreement to sell 500 shares of
Series M preferred stock for $500,000. The funds were
received in October 2002. During the last two quarters of the
year ended September 30, 2003 the Company redeemed all of
the 500 shares of Series M preferred for $500,000.



|    |                           
|--- | --------------------------
|(5) | Warehouse Lines of Credit:

At September 30, 2002, the Company had a
$15,000,000 mortgage loan purchasing warehouse line with First
Collateral Services, collateralized by the related mortgage
loans receivable with a carrying value of $18,927,137 at
September 30, 2002. Interest was due monthly at the bank
reference rate plus an established percentage (totaling 4.3% at
September 30, 2002). At September 30, 2002, the
outstanding balance under the warehouse line of credit was
$18,226,626. First Collateral ceased providing the Company funds
under the line effective April 30, 2003. The remaining
balance on the line ($864,266 at September 30, 2003) is
being paid off as the loans securing the line are sold.

40



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


The Company has an $8,000,000 mortgage loan
purchasing warehouse line of credit with Provident Consumer
Financial Services, collateralized by the related mortgage loans
receivable with a carrying value of $6,562,387 at
September 30, 2003. The line of credit is personally
guaranteed by the majority stockholders of the Company. Interest
is due monthly at the bank reference rate plus an established
percentage (totaling 5.61% at September 30, 2003). At
September 30, 2003 the outstanding balance under the
warehouse line of credit was $6,455,760.

The Company has another $5,000,000 mortgage loan
purchasing warehouse line of credit, collateralized by the
related mortgage loans receivable with a carrying value of
$734,177 and $1,858,879 as of September 30, 2003 and 2002,
respectively. The majority stockholders of the Company
personally guarantee the line of credit. Interest is due monthly
at prime plus an established percentage ranging from 3.0% to
4.5%, respectively. Each advance is to be repaid within
45 days of the advance. At September 30, 2003 and 2002
the outstanding balance under this warehouse line of credit was
$712,950 and $1,794,220, respectively.

The warehouse line of credit has restrictions as
to the types of loans (and the maximum amounts per individual
loans) for which said line can be used. Furthermore, the line
can only be used to fund 98% of loan amounts, as defined; the
remaining 2% must be funded by the Company utilizing its own
cash resources.

The warehouse line of credit agreement contains
restrictive covenants relating to net worth, tangible net worth,
and various ratios, as defined. Violations of the restrictive
covenants have been waived by the lender, which continues to
provide financing. At the end of each quarterly reporting
period, the lender reviews the operating results of the Company
prior to waiving the covenant violations.

Interest expense incurred under the warehouse
lines of credit was $437,606, $338,086, and $1,043,040 for the
year ended September 30, 2003, six months ended
September 30, 2002 and year ended March 31, 2002,
respectively, and is included in revenue from origination and
sale of mortgage loans and commissions, net on the statement of
operations.



|    |                                                  
|--- | -------------------------------------------------
|(6) | Long-Term Debt and Capital Lease
    Obligations:



| |               
| | --------------
| | Long-Term Debt

A summary of long-term debt is as follows:

|                                                                                                                                                                                                                                                              |  |               |        |               |  |   |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------ | ------------- |  | - | ------ | 
|                                                                                                                                                                                                                                                              |  | September 30, |        | September 30,
|                                                                                                                                                                                                                                                              |  | 2003          |        | 2002         
|                                                                                                                                                                                                                                                              |  |               |        |              
|Note payable to a related party, originally
    bearing interest at 15% per annum, payable in monthly interest
    installments with all unpaid principal and interest due
    March 1, 2007. At September 30, 2002, the interest
    rate was reduced to 12% |  | $             | 35,000 |               |  | $ | 35,000 | 
|Note payable to a related party, originally
    bearing interest at 24% per annum, payable in monthly interest
    installments with all unpaid principal and interest due
    March 1, 2007. At September 30, 2002, the interest
    rate was reduced to 12% |  |               | 50,000 |               |  |   | 50,000 | 
|Note payable to finance company for insurance,
    bearing interest at 7.75%, payments of $6,171 are due monthly,
    including interest through February 2004                                                                                                |  |               | 24,375 |               |  |   |       | 
|Note payable to bank bearing interest at 4.5% due
    November 7, 2003. Secured by certificate of deposit(A)                                                                                                                                                  |  |               | 75,000 |               |  |   |       | 

41



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002




| |                           
| | --------------------------
| | Long-Term Debt (Continued)

|                                                                                                                                                                                                                                                            |  |               |          |               |  |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | -------- | ------------- |  | - | -------- | -
|                                                                                                                                                                                                                                                            |  | September 30, |          | September 30,
|                                                                                                                                                                                                                                                            |  | 2003          |          | 2002         
|                                                                                                                                                                                                                                                            |  |               |          |              
|Note payable to an individual, bearing interest
    at 12% per annum, payable in monthly interest installments with
    all unpaid principal and interest due December 1, 2003(A)                                                                           |  |               | 280,000  |               |  |   |         |  
|Note payable to an individual, bearing interest
    at 12% per annum, payable in monthly interest installments with
    all unpaid principal and interest due March 1, 2004                                                                                 |  |               | 200,000  |               |  |   |         |  
|Note payable to an individual, bearing interest
    at 12% per annum, payable in monthly interest installments with
    all unpaid principal and interest due November 1, 2003(A)                                                                           |  |               | 250,000  |               |  |   |         |  
|Note payable to bank bearing interest at 3.9%,
    due November 3, 2002. Secured by certificate of deposit
    Note was paid off in November of 2002                                                                                                        |  |               |         |               |  |   | 80,000   |  
|Note payable to a bank, bearing interest at
    8.375% per annum; payable in monthly installments of $334,
    including interest, through August 2028; secured by deed of
    trust. Note was paid off in June of 2003 upon sale of related
    property   |  |               |         |               |  |   | 41,374   |  
|Note payable to a bank, bearing interest at 12%
    per annum, payable in monthly installments of $3,165, including
    interest, through February 2003 and personally guaranteed by the
    President of the Company. Note was paid off in January of 2003 |  |               |         |               |  |   | 15,363   |  
|Note payable to finance company for insurance,
    bearing interest at 7.75%, payments of $5,818 are due monthly,
    including interest through February 2003. Note was paid off in
    February of 2003                                                   |  |               |         |               |  |   | 28,545   |  
|                                                                                                                                                                                                                                                            |  |               |          |               |  |   |          |  
|                                                                                                                                                                                                                                                            |  |               | 914,375  |               |  |   | 250,282  |  
|Less current maturities                                                                                                                                                                                                                                     |  |               | (829,375 | )             |  |   | (125,705 | )
|                                                                                                                                                                                                                                                            |  |               |          |               |  |   |          |  
|                                                                                                                                                                                                                                                            |  | $             | 85,000   |               |  | $ | 124,577  |  
|                                                                                                                                                                                                                                                            |  |               |          |               |  |   |          |  



|    |                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------
|(A) | These loans have not been paid as of their due
    dates. Management is in the process of negotiating extended
    terms.

The following table summarizes the aggregate
maturities of long-term debt:

|                           |            |   |         |         | 
|-------------------------- | ---------- | - | ------- | ------- | 
|Years ending September 30, |            |   |         |        
|                           | 2004       |   | $       | 829,375 | 
|                           | 2005       |   |         | 0       | 
|                           | 2006       |   |         | 0       | 
|                           | 2007       |   |         | 85,000  | 
|                           | 2008       |   |         | 0       | 
|                           | Thereafter |   |         | 0       | 
|                           |            |   |         |        
|                           |            | $ | 914,375 |        
|                           |            |   |         |        

Interest expense incurred under long-term debt
obligations amounted to $37,647, $14,771, and $26,889 for the
year ended September 30, 2003, the six months ended
September 30, 2002 and the year ended 2001, respectively.

42



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002




| |                           
| | --------------------------
| | Long-Term Debt (Continued)

Interest expense incurred under related party
debt obligations amounted to $11,628, $2,551, and $1,180 for the
year ended September 30, 2003, the six months ended
September 30, 2002 and the year ended 2001, respectively.



| |               
| | --------------
| | Capital Leases

The Company leases certain equipment under
capital leases, which expire through 2006, with effective
interest rates ranging from 14% to 18.37%. These leases are
secured by related equipment costing $610,768 (see Note 2).
The assets are depreciated over their estimated useful lives.
Depreciation of the assets of $121,184, $56,925, and $65,277 was
included in depreciation and amortization for the year ended
September 30, 2003, the six months ended September 30,
2002 and the year ended March 31 2002, respectively.
Accumulated depreciation of the assets of $404,158 and $282,973
is included in accumulated depreciation and amortization in the
accompanying balance sheets at September 30, 2003 and
September 30, 2002, and the year ended March 31, 2002,
respectively.

The following is a schedule by years of future
minimum lease payments required under the capital lease together
with the present value of the net minimum lease payments:

|                                            |      |   |         |        | 
|------------------------------------------- | ---- | - | ------- | ------ | 
|Years ending September 30,                  |      |   |         |       
|                                            | 2004 |   | $       | 76,413 | 
|                                            | 2005 |   |         | 43,622 | 
|                                            | 2006 |   |         | 15,537 | 
|                                            |      |   |         |       
|Total minimum lease payments                |      |   | 135,572 |       
|Less amount representing interest           |      |   | 19,369  |       
|                                            |      |   |         |       
|Present value of net minimum lease payments |      |   | 116,203 |       
|Less current maturities                     |      |   | 63,022  |       
|                                            |      |   |         |       
|                                            |      | $ | 53,181  |       
|                                            |      |   |         |       

Interest expense incurred under capital lease
obligations amounted to $11,961, $2,017 and $11,256 for the year
ended September 30, 2003, the six months ended
September 30, 2002 and the year ended March 31, 2002,
respectively.

43



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


(7) Notes Payable 
Stockholders:

|                                                                                                                                                                                                            |  |               |         |               |  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ------------- |  | - | ------- | -
|                                                                                                                                                                                                            |  | September 30, |         | September 30,
|                                                                                                                                                                                                            |  | 2003          |         | 2002         
|                                                                                                                                                                                                            |  |               |         |              
|Note payable to stockholder, non-interest
    bearing. Note was paid off during 2003                                                                                                                        |  | $             |        |               |  | $ | 237,402 |  
|Note payable to stockholder, bearing interest at
    13% per annum payable in monthly interest installments with all
    unpaid principal and interest due June 30, 2008                                    |  |               | 45,000  |               |  |   | 45,000  |  
|Note payable to stockholder, bearing interest at
    14% per annum payable in monthly payments of $2,203 including
    principal and interest; with all unpaid principal and interest
    due April 1, 2017 |  |               | 185,000 |               |  |   | 185,000 |  
|                                                                                                                                                                                                            |  |               |         |               |  |   |         |  
|                                                                                                                                                                                                            |  |               | 230,000 |               |  |   | 467,402 |  
|Less current maturities                                                                                                                                                                                     |  |               |        |               |  |   | (443    | )
|                                                                                                                                                                                                            |  |               |         |               |  |   |         |  
|                                                                                                                                                                                                            |  | $             | 230,000 |               |  | $ | 466,959 |  
|                                                                                                                                                                                                            |  |               |         |               |  |   |         |  



| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | The following table summarizes the aggregate
    maturities of notes payable  stockholders:

|                           |            |   |         |         | 
|-------------------------- | ---------- | - | ------- | ------- | 
|Years ending September 30, |            |   |         |        
|                           | 2004       |   | $       |        | 
|                           | 2005       |   |         | 848     | 
|                           | 2006       |   |         | 1,128   | 
|                           | 2007       |   |         | 1,369   | 
|                           | 2008       |   |         | 46,573  | 
|                           | Thereafter |   |         | 180,082 | 
|                           |            |   |         |        
|                           |            | $ | 230,000 |        
|                           |            |   |         |        

(8) Commitments and
Contingencies:



| |                 
| | ----------------
| | Operating Leases



| |                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company leases its facilities and certain
    equipment under noncancellable operating leases that expire
    through the year 2008. These agreements generally provide that
    the Company pay operating costs such as taxes, insurance, and
    maintenance.
|
| | Future annual minimum payments under operating
    leases are as follows:                                                                                                                                                                                          

|                           |      |   |           |         | 
|-------------------------- | ---- | - | --------- | ------- | 
|Years ending September 30, |      |   |           |        
|                           | 2004 |   | $         | 429,330 | 
|                           | 2005 |   |           | 456,738 | 
|                           | 2006 |   |           | 436,162 | 
|                           | 2007 |   |           | 431,664 | 
|                           | 2008 |   |           | 71,944  | 
|                           |      |   |           |        
|                           |      | $ | 1,825,838 |        
|                           |      |   |           |        

44



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


Rental expense under operating leases for the
year ended September 30, 2003, the six months ended
September 30, 2002 and the year ended March 31, 2002
was $922,410, $391,887, and $666,312 respectively.



| |           
| | ----------
| | Litigation

In the normal course of business, the Company is
involved in various legal actions. It is the opinion of
management that none of these legal actions will have a material
effect on the financial position or results of operations of the
Company.



| |                      
| | ---------------------
| | Consulting Agreements

As part of the Series D preferred stock
purchase agreement (see Notes 9 and 14), the Company
entered into a financial consulting agreement whereby the
Series D preferred stockholder is entitled to consulting
fees of $6,000 per month. See Notes 9 and 14. The agreement
expires upon the redemption of the Series D preferred stock.



| |                      
| | ---------------------
| | Employment Agreements

On October 1, 1999, the Company entered into
employment agreements with its President and its Executive Vice
President (collectively, the Employees). These
agreements provide for an annual base salary of not less than
$300,000 each for a five-year term plus certain additional
benefits. Also, the agreements call for the Company to create
deferred compensation accounts for each of the
Employees and to credit an amount equal to 20% of the
Companys pre-tax profits to the accounts for each Employee
for each year or portion of year in the case of a termination of
an Employee. The Employees are entitled to receive such amounts
annually or within 30 days of termination. The Company is
obligated to pay these amounts upon liquidation of the Company
or upon termination, except for termination for just cause,
which is defined in the agreements. No amounts are accrued for
the deferred compensation as the Company has either had no
pre-tax profits or the Employees have waived their rights to the
deferred compensation. Also, the Employees have waived their
rights to their complete base salary as stated in this agreement.

(9) Preferred Stock:

In 2002, concurrent with the acquisition between
OWHC and OWE, 10,000,000 shares of preferred stock were
authorized. The Company may divide the preferred stock into any
number of series and the Board of Directors shall fix the
designation and number of shares of each series. The Company
established the same series as was outstanding at the time of
acquisition. All conversions of preferred shares to common
shares were calculated by dividing the value of the preferred
shares by five and multiplying by four.

Currently, the Company has established the
following series of preferred stock.



| |                              
| | -----------------------------
| | Preferred Stock,
    Series C

In 1993, the Board of Directors authorized the
issuance of up to 1,000 shares of Series C preferred stock
at $100 per share. At September 30, 2003,
September 30, 2002 and March 31, 2002, 1,000 shares of
the Series C preferred stock were outstanding. The
Series C preferred stock is non-voting and is redeemable by
the Company. The redemption price will include an annual rate of
return of 12% on the original issuance price. The Series C
preferred stock shall have a preference over the common stock of
the Company. The Company has been paying a monthly dividend at
an annual rate of 12% in lieu of the increased redemption price.
Dividends of $12,000 were declared and paid for the year ended
September 30, 2003. Dividends of $6,000 and

45



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


$12,000, were declared and paid for the six
months ended September 30, 2002 and year ended
March 31, 2002, respectively.



| |                              
| | -----------------------------
| | Preferred Stock,
    Series D

In 1997, the Board of Directors authorized the
issuance of up to 1,500 shares of Series D preferred stock
at $400 per share. During March 2002, all of the outstanding
shares (1,500) were converted into 480,000 common shares. The
Series D preferred stock is voting and is redeemable by the
Company. The Series D preferred stock shall have a
preference in liquidation over the common stock of the Company
but shall be subject to the preference in liquidation of the
Series C preferred stock. The Series D preferred stock
entitles the holder to receive, on a cumulative basis, dividends
at an annual rate of 3%, payable on a monthly basis. Dividends
of $10,000 were declared and paid for the six months ended
September 30, 2002, and dividends of $10,500 were declared
and paid for the year ended March 31, 2002. In connection
with the original purchase of the Series D preferred stock,
the Company entered into a financial consulting agreement
whereby the Series D preferred stockholder was entitled to
$6,000 per month until such time that the Series D
preferred stock was redeemed by the Company (see Notes 8 and
14). Redemption took place during fiscal year ended
March 31, 2002.



| |                              
| | -----------------------------
| | Preferred Stock,
    Series E

In 1997, the Board of Directors authorized the
issuance of up to 1,200 shares of Series E preferred
stock at $250 per share. During March 2002, 520 of the
outstanding Series E preferred shares were converted into
104,000 common shares. At September 30, 2003,
September 30, 2002, and March 31, 2002,
680 shares, of Series E preferred stock were
outstanding. The Series E preferred stock is non-voting and
is redeemable at the Companys option. The redemption price
shall equal the issuance price. The Series E preferred
stock shall have a preference in liquidation over the common
stock of the Company but shall be subject to the preference in
liquidation of the Series C and D preferred stock. The
Series E preferred stock entitles the holder to receive, on
a cumulative basis, dividends at an annual rate of $45 per
share, payable on a monthly basis. Dividends of $30,600 were
paid for the year ended September 30, 2003. Dividends of
$33,100 were declared and paid for the six months ended
September 30, 2002, and $54,000 were declared and paid for
the year ended March 31, 2002.



| |                              
| | -----------------------------
| | Preferred Stock,
    Series F

In 1998, the Board of Directors authorized the
issuance of up to 1,250 shares of Series F preferred stock
at $100 per share. During March 2002, 200 of the outstanding
Series F preferred shares were converted to 16,000 common
shares. At September 30, 2003, September 30, 2002 and
March 31, 2002, 1,050 shares of Series F
preferred stock were outstanding. The Series F preferred
stock is voting and is redeemable at the Companys option.
The redemption price shall equal the issuance price. The
Series F preferred stock shall have a preference in
liquidation over the common stock of the Company but shall be
subject to the preference in liquidation of the Series C,
D, and E preferred stock. The Series F preferred stock
entitles the holder to receive, on a cumulative basis, dividends
at an annual rate of $14 per share, payable on a monthly basis.
Dividends of $14,700 were declared and paid for the year ended
September 30, 2003. Dividends of $7,530 were declared and
paid during the six months ended September 30, 2002, and
dividends of $17,500 were declared and paid for the year ended
March 31, 2002.

46



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002




| |                              
| | -----------------------------
| | Preferred Stock,
    Series G

In 1999, the Board of Directors authorized the
issuance of up to 2,000 shares of Series G preferred stock
at $100 per share. At September 30, 2003,
September 30, 2002 and March 31, 2002, 2,000 shares of
Series G preferred stock were outstanding. The
Series G preferred stock is voting and is redeemable at the
Companys option. The redemption price shall equal the
issuance price plus any unpaid dividends. The Series G
preferred stock shall have a preference in liquidation over the
common stock of the Company but shall be subject to the
preference in liquidation of the Series C, D, E, and F
preferred stock. The Series G preferred stock entitles the
holder to receive, on a cumulative basis, dividends at an annual
rate of $24 per share, payable on a monthly basis. Dividends of
$50,000 were declared and paid for the year ended
September 30, 2003. Dividends of $25,000 were declared and
paid for the six months ended September 30, 2002, and
dividends of $50,000 were declared and paid for the year ended
March 31, 2002.



| |                              
| | -----------------------------
| | Preferred Stock,
    Series I

In 1999, the Board of Directors authorized the
issuance of up to 550 shares of Series I preferred
stock at $100 per share. During March 2002, 425 shares of
Series I preferred stock were converted into
34,000 shares of common stock. At September 30, 2003,
September 30, 2002 and March 31, 2002, 125 shares
of Series I preferred stock were outstanding. The
Series I preferred stock is voting and is redeemable at the
Companys option. The redemption price shall equal the
issuance price plus any unpaid dividends. The Series I
preferred stock shall have a preference in liquidation over the
common stock of the Company but shall be subject to the
preference in liquidation of the Series C, D, E, F and G
preferred stock. The Series I preferred stock entitles the
holder to receive, on a cumulative basis, dividends at an annual
rate of $15 per share, payable on a monthly basis. Dividends of
$1,875 were declared and paid for the year ended
September 30, 2003, $3,438 were declared and paid for the
six months ended September 30, 2002, and dividends of
$8,250 were declared and paid for the year ended March 31,
2002.



| |                              
| | -----------------------------
| | Preferred Stock,
    Series K

In 1999, the Board of Directors authorized the
issuance of up to 1,000 shares of Series K preferred
stock at $120 per share. During March 2002, all
1,000 shares outstanding were converted into 96,000 common
shares. The Series K preferred stock is voting and is
redeemable at the Companys option. The redemption price
shall equal the issuance price plus any unpaid dividends. The
Series K preferred stock shall have a preference in
liquidation over the common stock of the Company but shall be
subject to the preference in liquidation of the Series C,
D, E, F, G, and I preferred stock. The Series K preferred
stock entitles the holder to receive, on a cumulative basis,
dividends at an annual rate of 5%, payable on a monthly basis.
The Company declared and paid dividends of $3,000 for the year
ended March 31, 2002.



| |                              
| | -----------------------------
| | Preferred Stock,
    Series L

In 1999, the Board of Directors authorized the
issuance of up to 1,000 shares of Series L preferred
stock at $1,000 per share. During the fiscal year ended
March 31, 2002, 55 shares of Series L preferred stock
were converted into 44,000 shares of common stock. Also
during fiscal year ended March 31, 2002, the Company sold
300 shares of series L preferred stock for $300,000
and redeemed 126 shares for $125,500. At September 30,
2003, September 30, 2002 and March 31, 2002,
1,000 shares of Series L preferred stock were
outstanding. The Series L preferred stock is voting and is
redeemable at the Companys option. The redemption price
shall equal the issuance price plus any unpaid dividends. The
Series L preferred stock shall have a preference in
liquidation over the common stock of the Company but shall be
subject to the preference in liquidation of the Series C,
D, E, F, G, I, and K preferred stock. The Series L
preferred stock entitles the

47



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


holder to receive, on a cumulative basis,
dividends at an annual rate of $120 per share, payable on a
monthly basis. Dividends of $70,317 were declared and paid for
the year ended September 30, 2003, $15,000 were declared
and paid for the six months ended September 30, 2002, and
dividends of $24,600 were declared and paid for the year ended
March 31, 2002.



| |                              
| | -----------------------------
| | Preferred Stock,
    Series M

In 2002, the Board of Directors authorized
issuance of up to 5,000 shares of Series M preferred
stock at $1,000 per share. During the period ended
September 30, 2002, the Company sold 500 shares of
series M preferred stock for $500,000. The series M
preferred stock is voting and is redeemable at the
Companys option. The redemption price shall equal the
issuance price plus any unpaid dividends. The Series M
preferred stock shall have a preference in liquidation over the
common stock of the Company but shall be subject to the
preference in liquidation of the Series C, D, E, F, G, I,
K, and L preferred stock. The Series M preferred stock
entitles the holder to receive, on a cumulative basis, dividends
at an annual rate of $120 per share, payable on a monthly
basis. During the last two fiscal quarters of the year ended
September 30, 2003, the company redeemed all
500 shares of Series M for $500,000 to the holder.
During the year ended September 30, 2003, dividends were
paid in the amount of $37,237.

(10) Common Stock and Warrants:

In March 2002, concurrent with the acquisition
between OWHC and OWE, a stock split of 140 to one occurred. This
transaction has been reflected for all periods presented.

During the year ended March 31, 2002, the
Company redeemed 40 shares (5,600 post split) of
common stock for $10,000.

During August 2002 and in connection with the
effective date of the S-1 filing, the Company issued
388,800 shares and 3,000,000 common stock purchase
warrants, collectively valued at $234,058 based upon an
independent appraisal. The value, net of cash consideration
received, was recorded as a charge to earnings of $220,954
during the six months ended September 30, 2002.

Each warrant entitles the holder to purchase one
common share. The exercise price is $1.25 per share. The
warrants expired June 12, 2003.

(11) Class B Common Stock

Concurrent to the acquisition between OWHC and
OWE, the Company issued Class B common stock to the holder
of OWE common stock in a ratio of 1 to 8. In March
2002, 250,400 shares of Class B common stock were
issued. Concurrently, 40,304 shares of Class B common
stock were converted into the same number of common shares.

(12) Mortgage Loan Servicing:

Mortgage loans serviced by the Company amounting
to approximately $6.4 million, $2.8 million, and
$3.5 million at September 30, 2003, September 30,
2002 and March 31, 2002, respectively, are not included in
the accompanying balance sheets. Funds held in trust on behalf
of the owners of such serviced loans are also not reflected in
the accompanying balance sheets. The Company subcontracts its
servicing through a third-party sub-servicer. Either party may
cancel the contract with 120 days written notice. Loan
sub-servicing fees are based on a fixed monthly fee per
outstanding loan being serviced.

48



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


(13) Provision For Income
Taxes:

The income tax provision for the year ended
September 30, 2003 and six months ended September 30,
2002 and the year ended March 31, 2002 differed from the
amounts computed by applying the U.S. Federal tax rate of
34 percent to the income (loss) from operations before
provision (benefit) for income taxes as a result of the
following:

|                                                        |  |               |          |               |  |            |         |   |  |   |         |  
|------------------------------------------------------- |  | ------------- | -------- | ------------- |  | ---------- | ------- | - |  | - | ------- | -
|                                                        |  | Year Ended    |          | Six Months    |  | Year Ended
|                                                        |  | September 30, |          | September 30, |  | March 31, 
|                                                        |  | 2003          |          | 2002          |  | 2001      
|                                                        |  |               |          |               |  |           
|Computed expected tax benefit                         |  | $             | 115,629  |               |  | $          | (67,900 | ) |  | $ | (96,000 | )
|Increase (decrease) in income taxes
    resulting from: |  |               |          |               |  |            |         |   |  |   |         |  
|Non-deductible expenses                                 |  |               | 11,552   |               |  |            | 82,600  |   |  |   | 16,000  |  
|State taxes, net of Federal benefit                     |  |               | 12,014   |               |  |            | 1,100   |   |  |   | (17,000 | )
|(Decrease) increase in valuation allowance              |  |               | (120,992 | )             |  |            | (14,200 | ) |  |   | 98,600  |  
|                                                        |  |               |          |               |  |            |         |   |  |   |         |  
|                                                        |  | $             | 18,203   |               |  | $          | 1,600   |   |  | $ | 1,600   |  
|                                                        |  |               |          |               |  |            |         |   |  |   |         |  

The tax effect of temporary differences that give
rise to significant portions of deferred tax assets and
liabilities at September 30, 2003 and 2002, are as follows:

|                                 |  |           |          |           |  |   |          |  
|-------------------------------- |  | --------- | -------- | --------- |  | - | -------- | -
|                                 |  | September |          | September
|                                 |  | 2003      |          | 2002     
|                                 |  |           |          |          
|Deferred tax assets:             |  |           |          |           |  |   |          |  
|Net operating loss carryforwards |  | $         | 727,826  |           |  | $ | 790,200  |  
|Accrued vacation                 |  |           | 10,290   |           |  |   | 25,600   |  
|Less valuation allowance         |  |           | (572,208 | )         |  |   | (693,200 | )
|                                 |  |           |          |           |  |   |          |  
|Deferred tax assets              |  |           | 165,908  |           |  |   | 122,600  |  
|                                 |  |           |          |           |  |   |          |  
|Deferred tax liabilities:        |  |           |          |           |  |   |          |  
|Deferred costs                   |  |           | (114,417 | )         |  |   | (51,000  | )
|Other                            |  |           | (51,491  | )         |  |   | (71,600  | )
|                                 |  |           |          |           |  |   |          |  
|Deferred tax liability           |  |           | (165,908 | )         |  |   | (122,600 | )
|                                 |  |           |          |           |  |   |          |  
|Net deferred tax asset           |  | $         |         |           |  | $ |         |  
|                                 |  |           |          |           |  |   |          |  

The net change in the total valuation allowance
for the year ended September 30, 2003 and the six month
ended September 30, 2002 and the year ended March 31,
2002 was a (decrease) increase of $(120,992), $(83,200),
and $97,000, respectively.

At 2003, the Company has net operating loss
carryforwards (NOLs) of approximately $1,853,000,
for Federal income tax reporting purposes and approximately and
$1,108,000 for state reporting purposes, expiring in various
years through 2020.

On September 11, 2002, the Governor of
California signed into law new tax legislation that suspends the
use of NOL carryforwards into tax years beginning on or after
January 1, 2002 and 2003. Should the Company have taxable
income for the year ending September 30, 2004, it may not
look to California net operating losses generated in prior years
to offset taxable income. This suspension will not apply to tax
years beginning in 2005 and beyond.

49



---



##### 



OCEAN WEST HOLDING CORPORATION AND
SUBSIDIARY


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

YEAR ENDED SEPTEMBER 30, 2003, SIX MONTHS
ENDED SEPTEMBER 30, 2002 AND THE YEAR ENDED MARCH 31,
2002


(14) Related-Party
Transactions:

During fiscal year ended March 31, 2002,
holders of Series L preferred stock redeemed 15 shares for
$15,000. The amount was not paid by the end of the year;
therefore, it is showing as amounts due to related party.

The Company paid consulting fees to stockholders
of its Series D preferred stock. Total consulting fees paid
totaled $72,000 for year ended March 31, 2002, (see Notes 8
and 9).

The Company advanced funds in the amount of
$57,605 to an entity owned by a stockholder of the Company.
Funds will be repaid through services rendered. Services
rendered in relation to this amount were $12,605 leaving a
balance of $45,000 at September 30, 2003.

(15) Profit Sharing Plan:

The Company has a 401(k) profit sharing plan
covering substantially all of its employees. Any matching or
profit sharing contributions are determined annually at the
discretion of management and vest at the rate of 20% per year of
employment starting the second year. For the 2001 plan year,
management elected to make a matching contribution equal to 10%
of amounts contributed by an employee to a maximum of $250 per
employee. Total matching contributions for the year ended
March 31, 2002 totaled $5,758, which will be expensed when
paid. No matching or profit sharing contributions were made
during the year ended September 30, 2003 or during the
six-month period ended September 30, 2003.

50



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##### 





|        |                                                                                               
|------- | ----------------------------------------------------------------------------------------------
|Item 8. | Changes in and Disagreements with
    Accountants on Accounting and Financial
    Disclosures.

Previously reported and not reported here in
accordance with the Instructions to Item 304 of
Regulation S-B.



|         |                         
|-------- | ------------------------
|Item 8A. | Controls and Procedures.

As of the end of the period covered by this
annual report on Form 10-KSB, the Company carried out an
evaluation, under the supervision and with the participation of
the Companys Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures pursuant to
Exchange Act Rule 15d-1-5. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded
that the Companys disclosure controls and procedures are
effective in timely alerting them to material information
relating to the Company (including its consolidated subsidiary)
required to be included in reports the Company files with the
SEC pursuant to the Securities Exchange Act of 1934. Subsequent
to the date of that evaluation, there have been no significant
changes in the Companys internal controls or in other
factors that could significantly affect the internal controls.



PART III




|        |                                                                                                                         
|------- | ------------------------------------------------------------------------------------------------------------------------
|Item 9. | Directors, Executive Officers, Promoters
    and Control Persons; Compliance with Section 16(a) of the
    Exchange Act.



| |                                                                              
| | -----------------------------------------------------------------------------
| | Executive Officers and Directors of Ocean
    West and Ocean West Enterprises

|                    |  |                                                                                       |  |                                                                                      
|------------------- |  | ------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------
|                    |  |                                                                                       |  | Position with                                                                        
|Name                |  | Position with Ocean West(1)                                                           |  | Ocean West Enterprises                                                               
|                    |  |                                                                                       |  |                                                                                      
|Marshall L. Stewart |  | President, Chief Executive Officer, Director                                          |  | President, Chief Executive Officer, Director                                         
|Daryl S. Meddings   |  | Executive Vice President, Chief Financial
    Officer, Secretary/ Treasurer, Director |  | Executive Vice President, Chief Financial
    Officer, Secretary/ Treasurer, Director



---



|    |                                                                 
|--- | ----------------------------------------------------------------
|(1) | All persons listed were appointed to such
    positions in 2000.

Officers serve at the discretion of the Board of
Directors. Directors hold office until the next annual meeting
of shareholders and until their successors have been elected and
accept office.

Marshall J. Stewart,
47, has worked in the mortgage industry since 1982. He was
founder of Ocean West Enterprises and has been President, a
director and an owner since 1988. Prior to founding Ocean West
Enterprises, from 1986 to 1988, Mr. Stewart was a Vice
President of Westport Savings Bank in Laguna Beach, California.
His responsibilities included overseeing the mortgage banking
department, secondary marketing and the Laguna Bank Savings
branch. Prior to joining Westport Savings Bank, from 1984 to
1986, he was Production Manager of Irvine City Savings in
Newport Beach, California and had the responsibilities of
staffing and training the loan origination department and
overseeing production, underwriting, funding, shipping and the
sale of funded loans to institutional investors such as FNMA and
FHLMC. Mr. Stewart received his B.A. in English with a
minor in Business Administration from California State
University in Fullerton, California in 1980.

Daryl S. Meddings,
39, was also a founder of Ocean West Enterprises and has been
Executive Vice President, Chief Financial Officer, Secretary/
Treasurer and a director and an owner since 1988. As Chief
Financial Officer at Ocean West Enterprises, Mr. Meddings
implemented and monitors accounting and financial reporting
system. Other duties include budget planning, expense control,
commercial banking relationships and oversight of quality
control, loan servicing and loss mitigation. From late 1987 to
1988, Mr. Meddings was a production manager with Westport
Savings Bank in Laguna Beach, California. His duties included
establishing both retail and wholesale production departments
and recruiting, hiring and training mortgage origination
personnel. Prior to that, he began his career in mortgage
banking in 1986 as a loan officer at Pro Mortgage Services in
Diamond Bar, California and worked his way up to top producer at
Irvine City Savings in Irvine, California. Mr. Meddings
received his B.S. in Finance, Real Estate and Insurance with a
concentration in Real Estate from California Polytechnic State
University-Pomona in 1987.

51



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##### 





| |                                                   
| | --------------------------------------------------
| | Significant Employee of Ocean West
    Enterprises

Richard Burr, 59,
has been Vice President of Operations and Chief Operating
Officer of Operations of Ocean West Enterprises since October
2002. Mr. Burr has worked in the mortgage industry since
1983. Prior to joining Ocean West Enterprises, from 1997 to
2002, Mr. Burr was Branch Development Manager for American
Home Loans and from 1993 to 1997, Mr. Burr was Senior Vice
President Director of Broker Operations for Citicorp Mortgage in
St. Louis, Missouri. From 1986 to 1993, Mr. Burr
served as Senior Vice President and Chief Operations Officer of
Imperial Credit Industries Inc., and prior to that was Senior
Vice President of Imperial Bank Mortgage, part of the management
team who took that company public, becoming Imperial Credit
Industries Inc. From 1983 to 1986, Mr. Burr was a branch
manager for Metmor Financial in San Diego.



| |                                                      
| | -----------------------------------------------------
| | Compliance with Section 16(a) of the
    Exchange Act

Section 16(a) of the Securities Exchange Act
of 1934, as amended (the Exchange Act), requires the
Companys executive officers, directors and persons who own
more than ten percent of a registered class of the
Companys equity securities to file reports of ownership
and changes in ownership with the SEC. Executive officers,
directors, and greater-than-ten percent stockholders are
required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on the
Companys review of the copies of such forms received by it
and written representations from the Companys reporting
persons, the Company believes that all of the Companys
reporting persons have filed their respective Section 16(a)
forms for the year ended September 30, 2003.



| |               
| | --------------
| | Code of Ethics

The Company has adopted a Code of Ethics that
applies to its principal executive officer, principal financial
officer, principal accounting officer or controller or persons
performing similar functions. A copy of the Companys Code
of Ethics will be furnished, without charge, to any person who
requests such copy by writing to the Secretary, Ocean West
Holding Corporation, 15991 Redhill Avenue, Suite 110,
Tustin, California 92780.



|         |                        
|-------- | -----------------------
|Item 10. | Executive Compensation.

The following table shows information concerning
all compensation paid for services to the Company in all
capacities during the year ended September 30, 2003, the
six month period ended September 30, 2002 and the fiscal
years ending March 31, 2002 and 2001 or accrued within the
current fiscal year as to the Chief Executive Officer and each
of the other two most highly compensated executive officers of
the Company who served in such capacity at the end of the last
fiscal year (the Named Executive Officers) whose
total annual salary and bonus exceeded $100,000:

Summary Compensation Table

|                                   |  |      |          |                     |  |              |         |                 |  |  |   |  |  |  |        | 
|---------------------------------- |  | ---- | -------- | ------------------- |  | ------------ | ------- | --------------- |  |  | - |  |  |  | ------ | 
|                                   |  |      |          |                    
|                                   |  |      |          | Annual Compensation
|                                   |  |      |          |                    
|                                   |  |      |          |                     |  | Other Annual
|Name and Principal Position        |  | Year |          | Salary($)           |  | Bonus($)     |         | Compensation($)
|                                   |  |      |          |                     |  |              |         |                
|Marshall L. Stewart                |  |      | 09/30/03 |                     |  |              | 170,000 |                 |  |  | 0 |  |  |  | 0      | 
|President, Chief Executive Officer |  |      | 09/30/02 |                     |  |              | 84,375  |                 |  |  | 0 |  |  |  | 24,988 | 
|                                   |  |      | 03/31/02 |                     |  |              | 180,000 |                 |  |  | 0 |  |  |  | 0      | 
|                                   |  |      | 03/31/01 |                     |  |              | 180,000 |                 |  |  | 0 |  |  |  | 0      | 
|                                  
|Daryl Meddings                     |  |      | 09/30/03 |                     |  |              | 170,000 |                 |  |  | 0 |  |  |  | 44,779 | 
|Executive Vice President,          |  |      | 09/30/02 |                     |  |              | 77,133  |                 |  |  | 0 |  |  |  | 3,575  | 
|Chief Financial Officer            |  |      | 03/31/01 |                     |  |              | 180,000 |                 |  |  | 0 |  |  |  | 0      | 
|                                   |  |      | 03/31/01 |                     |  |              | 180,000 |                 |  |  | 0 |  |  |  | 0      | 
|                                  
|Richard Burr                       |  |      | 09/30/03 |                     |  |              | 128,000 |                 |  |  | 0 |  |  |  | 1,515  | 
|Vice President of Operations       |  |      |          |                     |  |              |         |                 |  |  |   |  |  |  |        | 

Ocean West Enterprises has entered into
substantially identical employment agreements with each of
Marshall Stewart, its President, and Daryl Meddings, its
Executive Vice President and Chief Financial

52



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##### 



Officer. The term of each agreement is five years
beginning on October 1, 1999. Ocean West Enterprises may
terminate the agreement for just cause or if it
ceases operations; the employees may terminate the agreement on
thirty days notice. Each employee is entitled to a base annual
salary of $300,000 with amounts not paid to be considered
deferred compensation. Mr. Stewart and Mr. Meddings
have waived their rights to salaries not paid in fiscal year
ended September 30, 2003, the six months ended
September 30, 2002 and the year ended March 31, 2002
and no compensation has been deferred.


In addition, Ocean West Enterprises agreed to
create an Officers Deferred Compensation Account for Marshall
Stewart and Daryl Meddings on October 1, 1999. Each is
entitled to receive an amount equal to 20% of net profit before
taxes each year. Each of them is entitled to such amounts
annually or within thirty days of termination of employment.
Mr. Stewart and Mr. Meddings have waived their rights
to such amounts in fiscal year ended September 30, 2003, the six
months ended September 30, 2002 and the year ended
March 31, 2002 and no amounts have been accrued under these
accounts. There are currently no other officers eligible for
this benefit.

Our two current directors, Marshall Stewart and
Daryl Meddings, are employees of the Company and are not
separately compensated for their services as directors.



| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Compensation Committee Interlocks and
    Insider Participation in Compensation Decisions

For all years referenced in the Summary
Compensation Table, two shareholders of Ocean West Enterprises,
Mark Stewart and Daryl Meddings, determined executive
compensation. Ocean West has not paid any compensation to date
and does not expect to pay any in the near future.



|         |                                                                                                        
|-------- | -------------------------------------------------------------------------------------------------------
|Item 11. | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder
    Matters.

Persons and groups owning in excess of five
percent of our Common Stock are required to file certain reports
with the SEC disclosing such ownership pursuant to the Exchange
Act. Based upon such reports, as of September 30, 2003,
management knows of no persons other than those identified below
who were beneficial owners of more than five percent of the
outstanding shares of Common Stock.

The following table sets forth information with
respect to beneficial ownership of issued and outstanding stock
and warrants of Ocean West by each director, the Chief Executive
Officer of the Corporation, the other named executive officers,
all executive officers and directors as a group and beneficial
owners of more than five percent of the outstanding shares of
Common Stock as of December 30, 2003:

|                                                                                               |  |                                                                   |  |                       |         |                  |  |  |      | 
|---------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------- |  | --------------------- | ------- | ---------------- |  |  | ---- | 
|                                                                                               |  |                                                                   |  | Total                 |         |                 
|                                                                                               |  |                                                                   |  | Number of             |         |                 
|                                                                                               |  |                                                                   |  | Securities            |         | Percent         
|                                                                                               |  |                                                                   |  | Owned                 |         | of              
|Name of Beneficial Owner                                                                       |  | Title of Class                                                    |  | Beneficially          |         | Class(1)        
|                                                                                               |  |                                                                   |  |                       |         |                 
|Daryl S. Meddings(2)(4)                                                                        |  | Common Shares Class B Common Shares
    Series L Preferred        |  | 1,954,340 105,048 210 |         | 35.0% 50% 21.0% 
|Marshall L. Stewart(2)(3)                                                                      |  | Common Shares Class B Common Shares
    Series L Preferred        |  | 1,942,340 105,048 205 |         | 34.8% 50% 20.5% 
|Agape Foundation Trust(5)                                                                      |  | Common Shares                                                     |  |                       | 553,224 |                  |  |  | 9.9% | 
|Cheyenne Properties, Inc.(6)                                                                   |  | Common Shares                                                     |  |                       | 480,000 |                  |  |  | 8.6% | 
|Total number of shares owned by directors and
    executive officers as a group (2 persons)(7) |  | Common Shares Class B Common Shares
    Series L Preferred Shares |  | 4,118,616 210,096 415 |         | 71.1% 100% 41.5%



---



|    |                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Our preferred stock consists of
    Series C,E,F,G,I,L and M. Series C and E are non
    voting stock and redeemable to the Company. Series F
    through M are voting stock as well as redeemable to the Company.

53



---



##### 





|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Except as otherwise indicated the mailing address
    of each person shown is c/o Ocean West Holding Corporation,
    15991 Redhill Avenue, Tustin, California 92780.
|   
|(3) | Includes 1,942,340 shares of Class A common
    stock, 105,048 shares of Class B common stock and 205
    shares of Series L preferred stock.                        
|   
|(4) | Includes 1,954,340 shares of Class A common
    stock, 105,048 shares of Class B common stock and 210
    shares of Series L preferred stock.                        
|   
|(5) | The mailing address is, 607 West Pathfinder
    Trail, Anaheim, CA 92807-4706.                                                                                       
|   
|(6) | The mailing address is, 219 NE 100th Avenue,
    Portland, OR 97220-4426.                                                                                            
|   
|(7) | Includes 3,896,680 shares of Class A common
    stock, 210,096 shares of Class B common stock and 415
    shares of Series L preferred stock.                        



|         |                                                    
|-------- | ---------------------------------------------------
|Item 12. | Certain Relationships and Related
    Transactions.

Ocean West Enterprises redeemed fifteen shares of
Series L Preferred Stock for $15,000 eight from Marshall
Stewart and seven from Darryl Meddings, the two controlling
shareholders, during its fiscal year ended March 31, 2002.

Douglas M. Sharp, an agent of Agape Foundation
Trust which benefits his children and which holds 9.9% of the
common shares, purchased residential real estate from Ocean West
Enterprises. The appraised value of the real estate was $420,000
and we received it as a result of a default on a loan in March
of 1998. The property was purchased with a note with original
principal amount of $375,000 which matures in April 2005 and
bears interest at 7.5% per annum. Interest is payable monthly
and principal at maturity of the note. Mr. Sharp defaulted
on the note; Ocean West took the property back and has sold it
for approximately $405,000.



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

1.     Exhibits.

|        |      |                        |  |                                                                                                                       |  |                                                                                                                                                                                            
|------- | ---- | ---------------------- |  | --------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |                        |  |                                                                                                                      
|No.     |      | Description of Exhibit |  | Location                                                                                                             
|        |      |                        |  |                                                                                                                      
|        | 3.1  |                        |  | Certificate of Incorporation of Ocean West
    Holding Corporation                                                    |  | Previously filed as an exhibit to the
    Registration Statement of Ocean West Holding Corporation
    (File No. 333-95927) filed on February 1, 2000.                                     
|        | 3.2  |                        |  | Bylaws of Ocean West Holding Corporation                                                                              |  | Previously filed as an exhibit to the
    Registration Statement of Ocean West Holding Corporation
    (File No. 333-95927) filed on February 1, 2000.                                     
|        | 4.1  |                        |  | Common Stock Purchase Warrant Agreement Between
    Ocean West Holding Corporation and Registrar and Transfer Company |  | Previously filed as an exhibit to the
    Registration Statement of Ocean West Holding Corporation
    (File No. 333-86484).                                                               
|        | 16.1 |                        |  | Letter from Stonefield Josephson dated
    November 7, 2003                                                           |  | Previously filed as an exhibit to Form 8K,
    dated October 29, 2003, Changes in Registrants
    Certifying Accountant                                                                   
|        | 21.1 |                        |  | Subsidiaries of the Registrant                                                                                        |  | Previously filed as an exhibit to Pre-Effective
    Amendment No. 3 to the Registration Statement of Ocean West
    Holding Corporation (File No. 333-95927) filed on
    January 28, 2002.
|        | 31.1 |                        |  | Certificate of Chief Executive Officer pursuant
    to section 302 of the Sarbanes-Oxley Act of 2002                  |  | Filed herewith.                                                                                                                                                                            

54