SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20459
                                  FORM 10-KSB

(X) Annual  Report  Pursuant to Section 13 or 15(d) of the  Securities  and
     Exchange Act of 1934.
                      For the Year Ended December 31, 1999

( )  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: 333-06328

                 STERLING FINANCIAL SERVICES OF FLORIDA I, INC.
                 ----------------------------------------------
             (Exact name of Registrant as specified in its Charter)

      FLORIDA                                            65-0716464
      -------                                            ----------
(State of or other jurisdiction of                    (IRS Employer I.D. No.)
incorporation or organization)

                  239 Halliday Park Drive, Tampa, Florida 33612

                     Address of Principle Executive Offices:

                              (813) 932-2228

                Registrant's telephone number, including area code:

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

                                      NONE

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

                                      NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange act of 1934 during
the  preceding 12 months (or for such other shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. ___ Yes _X_No

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

Issuer's  revenues  for the most recent  fiscal year:  $2,589,338  (for the year
ended December 31, 1999)

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant  at  December  31, 1999 was $0.  Shares of common  stock held by each
officer and director and by each person who owns more that 5% of the outstanding
common  stock  has been  excluded  in that  such  persons  may be  deemed  to be
affiliates.  This  determination  of  affiliate  status  is  not  necessarily  a
conclusive determination for other purposes.

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
stock, as of January 31, 2001.

                               1,000 Common Shares

                   Documents Incorporated By Reference - NONE

          Transitional small business disclosure format. ___ Yes _X_No


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                       Sterling Financial Services of Florida I, Inc.
                                  FORM 10 - KSB

                                Table of Contents

     PART I.
              ITEM 1. Business                               3
              ITEM 2. Properties                            12
              ITEM 3. Legal Proceedings                     12
              ITEM 4. Submission of Matters to a Vote of    12

     PART II

              ITEM 5. Market for the Common Equity and
              ITEM 6. Management's Discussion and Analysis
              ITEM 7. Financial Statements                  18
              ITEM 8. Changes In and Disagreements With     34

     PART III

              ITEM 9  Directors, Executive Officers,
              ITEM 10 Executive Compensation                35
              ITEM 11 Security Ownership of Certain         36
                      Beneficial Owners and Management
              ITEM 12 Certain Relationships and Related     36
              ITEM 13 Exhibits, Financial Statement         38

                      Signatures                            39



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                                     PART I.

ITEM 1 - BUSINESS

      Sterling  Financial  Services of Florida I, Inc. ("we",  "us",  "our") was
formed in January 1997 under the laws of the State of Florida primarily to offer
a package of financial services to the sub-prime mobile home industry, including
originating,  purchasing and  refinancing for our own account retail mobile home
installment  sales  contracts (the  "Contracts")  created in connection with the
financing of used as well as new mobile homes (the "Homes"),  selling  Contracts
to other  lenders and  providing  certain  floor plan  financing  to mobile home
dealers (the "Dealers") (collectively, the "Financing Activities"). In addition,
we may also (1) purchase, refurbish and lease or sell new or used Homes; (2) buy
and improve land for  development of mobile home parks,  buy and sell such parks
or  provide  financing  to others  for such  purposes;  and (3)  purchase  other
sub-prime financial companies in the mobile home lending business (collectively,
the "Other Activities").

      During the period from our  inception to June 30, 1999,  we were  offering
subscriptions for a maximum $9,900,000 of secured notes payable in the principal
amount of $1,000 each (the  "Notes").  The Notes  provide  for monthly  interest
payments  at the rate of 10.5% per annum,  may be prepaid in whole or in part at
any time without  premium or penalty,  and are payable in full on June 30, 2002.
During the respective years ended December 31, 1999 and 1998, we sold $3,977,000
and  $4,362,000 of Notes under this  offering.  As of December 31, 1999, we have
$9,888,000 of Notes outstanding.  Pursuant to requests by note holders, in 1999,
we repaid  approximately  $63,000 of Notes. In addition,  subsequent to December
31,  1999,  we have  repaid  additional  Notes  having a  principal  balance  of
approximately $110,000.

      In March 2000,  we  commenced a second  offering,  whereby we are offering
through a private  placement  memorandum,  subscriptions  for a maximum of 3,000
secured notes in the principal amount of $1,000 each (the "PPM Notes").  The PPM
Notes provide for monthly interest payments at the rate of 10% per annum, may be
prepaid  in whole or in part at any time  without  premium or  penalty,  and are
payable  in full on March 31,  2005.  Through  January  31,  2001,  we have sold
approximately $1,243,000 of PPM Notes.

      The  proceeds  from the sale of the Notes and the PPM Notes have been used
principally to fund the following:

(1)  our net losses (see "Risk Factors")
(2)  our Financing and Other Activities
(3)  our property and equipment purchases and
(4)  various other  advances we have made to  affiliated  entities (see "Certain
     Relationships and Related Transactions")

The Notes and the PPM Notes are  secured by a first lien on the assets  acquired
with the proceeds from their sale or other assets  acquired with funds  obtained


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from the  repayment,  sale or  refinancing  of such  assets  (these  assets  are
collectively referred to as the "Collateral").  The primary source of payment on
the Notes will be payments  made by sub-prime  borrowers on the  Contracts  (see
"Mobile Home Finance  Industry - Sub-Prime  Market  Segment" for definition of a
sub-prime borrower).

      In August 1998,  we purchased a 25%  interest in Parkwood  Estates  Mobile
Home  Park,  L.C.  ("Parkwood").  Parkwood,  which is related to us by virtue of
Anthony Sutter's 75% ownership interest in Parkwood (Mr. Sutter is our President
and majority  stockholder)  used these funds to purchase Parkwood Estates Mobile
Home Park,  a mobile home park  located in  Hillsborough  County,  Florida  (the
"Park").  In  addition  to our  investment  in  Parkwood,  we have made  various
interest  bearing  advances  to  Parkwood  to fund  their  cash flow  needs (see
"Certain Relationships and Related Transactions").

Risk Factors

An investment in the Notes involves various risks, including the following:

o    We have incurred significant losses since our inception and anticipate that
     we will continue to incur operating losses for the foreseeable  future.  In
     addition,  as of December  31,  1999,  we have a  stockholders'  deficit of
     approximately  $1,868,000,  and we do not currently have the funds in place
     to meet certain obligations which are due in 2001 and beyond.  Accordingly,
     and unless we are successful in selling  substantially all of the PPM Notes
     being offered,  we may not be able to meet our payment obligations in 2001.
     Also,  in order  for us to  ultimately  pay the  Notes and the PPM Notes in
     full,  we must  generate  future net income  and cash flows  sufficient  to
     offset the losses we have experienced to date.

o        Because  most of the  borrowers  under  the  Contracts  are  considered
         sub-prime,  the risk of default on the  Contracts is greater than if we
         originated Contracts with "A" or prime credit borrowers.

o        Over the past  several  years,  lenders  to  sub-prime  borrowers  have
         experienced increased rates of delinquency, default and credit losses.

o    There are various  conflicts of interest  resulting  from the  relationship
     between  Sterling  Financial  Services,  Inc., a Florida  corporation  (the
     "Servicing Company") and us.

o        Increased competition in the sub-prime mobile home finance business and
         deviations  from  credit  underwriting  guidelines  could  result in us
         originating  Contracts  with a greater  risk of loss.  Although we have
         established  certain  guidelines with minimum  acceptable  criteria for
         Contract  origination,  there  is no  limitation  upon  the  number  of
         Contracts which can deviate from these guidelines.

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o    There are  limited  sources  available  for the  payment  of  interest  and
     principal on the Notes.

o    The  value of the  Collateral  will be less than the  principal  due on the
     Notes.

o    No public or other  market for the Notes  exists  and we do not  anticipate
     that one will develop in the future.

o    Our  success  will,  to a large  extent,  depend on the quality of services
     provided by Mr. Sutter and the  Servicing  Company's  employees.  We do not
     have an  employment  contract  with Mr. Sutter and the loss of his services
     could materially adversely affect our business.

o    Because  all of our  operations  are  concentrated  on the  west  coast  of
     Florida,  a downturn in this area's  economy could hurt our ability to grow
     and could  adversely  affect our  results  of  operations  inasmuch  as the
     creditworthiness  of our borrowers  and/or  prospective  borrowers could be
     impaired.  Although we believe  Florida's  economy  will  continue to grow,
     there can be no assurance this will occur.

MOBILE HOME FINANCE INDUSTRY

      Sub-Prime Market Segment

      We operate in the  sub-prime  segment of the mobile home  finance  market,
focusing on financing homes sold to sub-prime borrowers. A sub-prime borrower is
a purchaser of a home who does not qualify for  traditional  A or prime  credit,
which in general  means  that the  borrower  does not have all of the  following
characteristics:  (i) a long  credit  history and no  defaults,  (ii) at his/her
current job for at least 18 months,  (iii) can easily  finance a Home  through a
traditional financial institution, such as a bank, (iv) usually a homeowner, and
(v) typical  risk of loan loss is less than 3% and whose  typical cost of credit
is prime plus 1% to 3%. Sub-prime  borrowers are generally rated "B," "C" or "D"
based upon the degree of variance from the foregoing characteristics.

      It has been our  experience  that  lenders to sub-prime  borrowers  impose
interest  rates  significantly  higher than lenders to prime  borrowers.  To the
extent this  interest rate  differential  continues,  Contracts  financed in the
sub-prime market segment will have the potential for higher yields, but, because
sub-prime borrowers are not as creditworthy as prime borrowers,  these Contracts
also  present  greater risk of default and loss.  Accordingly,  the net yield on
sub-prime contracts may be less than that on prime contracts.

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<PAGE>

      Competition

      Although there is some competition in the mobile home finance business, we
believe  that  there  are  few  competitors  providing  financing  to  sub-prime
purchasers of Homes. The sub-prime market is highly  fragmented and, to date, is
served  by only a few  non-traditional  consumer  finance  sources.  Because  we
provide financing to borrowers who cannot qualify for traditional financing,  we
do not believe that we compete with most  commercial  banks,  savings and loans,
credit unions and other  consumer  lenders that apply more  traditional  lending
criteria to the credit approval process. Historically, these traditional sources
of mobile  home  financing  (some of which  are  larger  and have  significantly
greater financial resources) have not served our sub-prime market segment to any
significant  extent.   However,  if  these  and  other  companies  expand  their
activities in the market served by us, the competition for suitable Contracts in
that market will  continue to intensify,  which could have an adverse  effect on
us.

      In  connection  with  the  origination  of  Contracts,  we will  encounter
competition  from persons or entities that may have objectives  similar in whole
or in part to ours. These competitors may be substantially better financed,  and
have  reputations and public  awareness of their operations that are more widely
known and  accepted.  The pressure of such  competition  may require that we pay
more for  Contracts it originates  or  purchases,  or result in our  originating
Contracts of lesser  quality,  which could  reduce or eliminate  payments to our
note holders.

ORIGINATION AND SERVICING OF CONTRACTS

      We  have  engaged  the  Servicing  Company  to  provide  all  services  in
connection  with  Contract  origination  and  servicing.  The  agreement  may be
terminated  by either  party  without  cause upon 15 days'  notice.  Because the
Servicing  Company must operate  within the  guidelines  established  by us, all
management and operational  decisions made by the Servicing  Company will be the
same as would be made if we made such decisions  directly.  A description of our
guidelines  is set forth below.  None of our funds are  deposited or kept in any
account  commingled  with funds of the Servicing  Company or any other person or
entity (See "Business - Relationship with Servicing Company").

      Origination

      The Servicing Company will contact  borrowers,  as well as park owners and
Dealers,  to advise them of our program for Contract  origination.  In addition,
print  advertising  directed  at  individual  borrowers  may be used.  We do not
anticipate  that it will be  dependent  upon one or a few park owners or Dealers
for  identifying  potential  borrowers.  Also, we  anticipate  that park owners,
Dealers or potential  borrowers  will contact us regarding the  availability  of
financing,  and we will  make a credit  application  available  directly  to the
borrower.

      When the credit application from the borrower is received, an investigator
will review the application  and obtain the applicant's  credit bureau and other
information.

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<PAGE>

      Contract  origination  guidelines include the following minimum acceptable
criteria:

o    Employment history - at least six months on the job;

o    Income - depends on the amount of the loan and the debt to income  ratio of
     the borrower (see below);

o    Time at residence - at least one year at current residence;

o    Debt to income ratio - personal  debt cannot  exceed 50% of the  borrower's
     net income;

o    Bankruptcy  - all debts must have been fully  discharged  at least one year
     prior to application for the loan;

o    Child support - if the borrower is paying child support, it will be treated
     as a  personal  debt and  factored  into the debt to income  ratio;  if the
     borrower is receiving child support, such income will only be considered if
     court mandated;

o    Repossessions  - must have occurred at least one year prior to  application
     for the loan;

o    Liens/judgments - will be decided on a case-by-case basis, depending on the
     type of lien or judgment, the amount involved and the age thereof;

o    Previous delinquencies,  collections and charge-offs - will be decided on a
     case-by-case basis with consideration  taken for mitigating  circumstances,
     such as divorce, disability,  extended illness or layoff due to downsizing;
     and

o    Co-buyers and  co-signers - will also be subject to the minimum  acceptable
     criteria set forth above.

      There are no fixed criteria pursuant to which material  deviation of these
guidelines  will be  permitted.  However,  no Contract  will be  originated to a
borrower  deviating  from these  guidelines for which there are not an increased
down payment or a co-signer meeting the guidelines, or both. The additional down
payment  required  will  increase  with  the  increase  in  deviation  from  the
guidelines,  although  there is no fixed formula for  determining  the amount of
increased down payment required.

      Prior to the  origination  of the  Contract,  we review the  financing  to
determine the following:  (i) all required documentation has been included, (ii)
the math is correct, (iii) regulatory requirements have been satisfied, (iv) the
amount financed does not exceed the maximum loan allowed, and (v) any conditions
imposed have been  satisfied.  We will contact the insurance  carrier to confirm
insurance.

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      Servicing

     Billing.  The Servicing Company generates monthly statements which are sent
to the borrower.

     Collections.  We have  established  certain  collection  guidelines,  which
guidelines  will not  necessarily be followed in all cases and which are subject
to modification at any time.

      When a delinquency  occurs,  a collector  will make a call by the eleventh
day of the delinquency.  If no response is received,  a Notice of Default Letter
will be sent to the borrower on the sixteenth  day. If the account has still not
been brought current, a collector will personally visit the delinquent borrower.
If the borrower is unable to make all required  payments on a current  basis,  a
collector may make reasonable payment  arrangements to cure the delinquency.  If
all of these collection  processes are not successful,  the repossession process
commences immediately.

      Repossessions  and  Resale  Department.  Either the  borrower  voluntarily
agrees to vacate the Home,  or we contact an attorney  to effect an  involuntary
repossession.  All costs  associated with the  repossession are an obligation of
the borrower. To effect an involuntary repossession, in general, the borrower is
first  given  written  notice  of  intent  to  repossess,  and a period of time,
generally five days, to cure all defaults.  If the defaults are not cured within
said time  period,  a  complaint  is filed and a  judgment  obtained.  After the
judgment  is  obtained,  a writ of  possession  is  obtained  and  given  to the
appropriate law enforcement agencies,  who evict the borrower from the Home. The
Home will be renovated as necessary  and sold in its then current  location,  if
possible, or moved to a Dealer's lot or another park for resale.

      Laws limiting or prohibiting deficiency judgments, Federal bankruptcy laws
and numerous  other related  federal and state laws may interfere with or affect
the  ability  of a secured  party to  repossess  Collateral  and/or to enforce a
deficiency  judgment.  For example, in a Chapter 13 proceeding under the Federal
Bankruptcy  Code, a court may prevent a lender from  repossessing a mobile home,
and,  as part of the  rehabilitation  plan,  reduce  the  amount of the  secured
indebtedness to the market value of the Home at the time of bankruptcy,  leaving
the  lender  as  a  general   unsecured   creditor  for  the  remainder  of  the
indebtedness.  A bankruptcy court may also reduce the monthly payments due under
a  Contract  or  change  the  rate of  interest  and  time of  repayment  of the
indebtedness.  This may limit our ability to receive full payments on a Contract
or to repossess  collateral in the event of default under a Contract,  which may
decrease funds available to make payments on the Notes.

SALE OF CONTRACTS

      We may from time to time sell blocks of  Contracts  to other  lenders.  No
such sales have occurred as of the date of this Form 10-KSB.

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FLOOR PLAN FINANCING

      We  provide  financing  to  Dealers  for  Homes  held for  resale  to Home
purchasers (called floor plan financing). We anticipate that this financing will
be at effective  interest rates ranging from 14% to 24% (the A.P.R. may be less,
but the effective  rate  includes  additional  interest  payments in the form of
points  or  similar  charges   allowed  by  law).   Advances  under  floor  plan
arrangements  are  secured  by the  Homes  purchased  with the  proceeds  of the
borrowing  and generally are due on the earlier of the date the Home is sold, or
six months from the  inception  of the advance  (although we may elect to extend
maturities indefinitely).

OTHER ACTIVITIES

      We may also: (1) purchase,  refurbish and lease or sell new or used Homes;
(2) buy and improve land for development of mobile home parks, buy and sell such
parks or provide  financing to others for such purpose;  and (3) purchase  other
sub-prime financial companies in the mobile home lending business. In connection
therewith,  in 1998 we purchased a 25% interest in Parkwood  Estates Mobile Home
Park, L.C.  ("Parkwood")  which owns a mobile home park in Hillsborough  County,
Florida  (Anthony  Sutter,  our  majority  stockholder  and  President  owns the
remaining 75% of Parkwood).  In addition, we have purchased a significant amount
of new home  inventories,  which  are being  sold  substantially  at this  park.
Finally, we own and rent Homes located in the Halliday Village Mobile Home Park,
which is wholly-owned  by Anthony Sutter.  We anticipate that we may continue to
engage in such activities if we become aware of favorable opportunities.

MARKETING

      With the exception of advertising expenses incurred in 1999 to help market
the sale of Homes and repossessed mobile homes, we have not had to engage in any
significant  marketing  activities because of the relatively high demand for the
financing  we provide and the lack of  significant  competition  to provide such
financing.  However,  we regularly contact Dealers  throughout Florida to advise
them of the availability of our financing program.

MARKET AREA

      There  are a large  number  of Home  purchases  in  Florida  and  there is
significant  wealth in Florida because of the nature and size of the population.
We believe that Florida currently  benefits from a strong economy.  According to
the Florida Chamber of Commerce,  Florida is the fourth largest  consumer market
in  the  U.S.  In  1993,  Florida's  population  was  over  13.4  million,  with
approximately  70% of new arrivals in the 18 to 44 age bracket.  Florida emerged
as a major economic  force in the U.S. in the 1980's.  By the end of the decade,
Florida  had  become  the  nation's  leader  in major  new  plant  locations  or
expansions.  In addition,  Florida has  consistently  been a  pacesetter  in new
business  incorporation,  and has the largest number of manufacturing  plants in
the Southeast.  Numerous economists predict moderate but continued steady growth
in Florida's economy.

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      However,  because we have limited our operations to Florida, a downturn in
the Florida economy could adversely affect our results of operations inasmuch as
the  creditworthiness  of our borrowers  and/or  prospective  borrowers could be
impaired. Although we believe Florida's economy will continue to grow, there can
be no  assurance  this  will  occur.  The  resulting  lack of  diversity  in the
geographic  area in which we operate may increase the risk of loss to us and our
note holders because adverse economic conditions, which may occur in Florida but
not  elsewhere  in the  country,  will  have a  greater  adverse  affect  on our
operations, and thus our ability to make payments on the Notes and the PPM Notes
than if we operated in a broader geographic area.

CHANGES IN PROGRAMS, PRODUCTS, POLICIES AND PROCEDURES

      Factors such as increased  competition  in the industry and other industry
trends described above, as well as other reasons, may cause us from time to time
to review and change our financing programs,  products and services offered, and
other business  policies and procedures.  To the extent there are future changes
in these areas, we may originate Contracts or be subject to other circumstances,
which may increase  the risk of loss to our note  holders.  We will  continually
review these areas and reserve the right to change any criteria  related thereto
described herein or otherwise as we deem appropriate.

CONSUMER FINANCE LAWS AND REGULATIONS

      Our  business  activities,  particularly  our  Financing  Activities,  are
subject to regulation  and licensing  under various  Federal,  Florida and local
consumer  finance  statutes,  regulations and ordinances.  These laws, rules and
regulations: (i) govern the way we can operate; (ii) limit the interest rate and
other  charges that may be imposed by, or prescribe  certain other terms of, the
Contracts  that we originate;  and (iii) define our rights to repossess and sell
Collateral.  If we fail to comply with these laws and  regulations,  we could be
required to cease operations or be subject to fines and penalties, and borrowers
under the Contracts could have civil remedies  against us and defenses under the
Contracts  which  could  adversely  affect our ability to enforce our rights and
collect payment of sums due  thereunder,  all of which could eliminate or reduce
our cash flow and thereby our ability to make payments to our note holders. Also
there is no  assurance  laws and  regulations  under  which we operate  will not
become more restrictive; this could reduce our cash flow and thereby our ability
to make payments on the Notes and the PPM Notes.

RELATIONSHIP WITH SERVICING COMPANY

      Servicing Agreement

      We have entered into a Servicing  Agreement with the Servicing Company, to
provide all services in connection with Contract origination and servicing.  The
Servicing  Agreement is for an initial term  commencing  January 1, 1997 through


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June 30, 2002,  after which date it may be extended at our sole  discretion upon
such terms and  conditions  and for such periods as mutually  agreed between the
Servicing Company and us. Either party may terminate the Servicing Agreement for
any reason upon 15 days' advance notice.

      We pay the  Servicing  Company  an  amount  equal to all  expenses  of the
Servicing  Company  computed on an accrual  basis  ("Actual  Costs") plus twenty
percent (20%) of Actual Costs for services  rendered.  If the Servicing  Company
provides similar  services to other entities in the future,  this agreement will
be modified whereby we will pay the Servicing Company: (i) for any out-of-pocket
cash  expenditures,  such  as  attorneys'  fees  and  court  costs  incurred  in
connection  with  origination  and  servicing  of  our  Contracts  (the  "Direct
Expenses"),  and (ii) for their  pro-rata  amount of Actual  Costs  less  Direct
Expenses  - with such  pro-ration  based  upon the ratio of the total  number of
Contracts  held by each  entity to the total  number  of  Contracts  held by all
entities.

      We anticipated  that we would loan up to $75,000 to the Servicing  Company
for the purchase  and/or lease of office  space,  office  equipment,  trucks and
automobiles, however to date this transaction has not been consummated.

      Reason for Using the Servicing Company

      A separate servicing company was formed for administrative convenience. If
we  continue  to grow,  additional  employees  may  need to be hired to  perform
servicing  functions.  In addition,  if affiliated entities are formed, the same
employees  performing servicing functions for us would perform similar servicing
functions for such entities.  If there were no separate servicing company,  such
employees would be considered to be employees of us and the affiliated entities,
requiring  separate  paychecks and related income tax filings and deposits to be
made by each separate entity.

      Conflicts of Interest

      Anthony A. Sutter, our sole officer and director, and the sole officer and
director of the Servicing  Company,  may engage for his own account,  or for the
account of others, including affiliated entities (see "Certain Relationships and
Related  Transactions"),  in other business ventures; some of which may have the
same investment objectives as us, and therefore compete with us.

      To the  extent we  compete  with other  businesses,  including  affiliated
entities,  competition  for origination of suitable  Contracts would  intensify,
which could have an adverse effect on us because we may originate Contracts with
a greater risk of loss. In turn,  this could  adversely  affect the value of our
collateral, and therefore also adversely effect our note holders by reducing the
funds available to make payments on the Notes and the PPM Notes.

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      This competition for origination of Contracts creates a potential conflict
of interest  because it is  anticipated  that the  Servicing  Company,  which is
responsible for originating Contracts, will provide similar origination services
to any  affiliated  entities  formed by Mr. Sutter or his  affiliates  which are
engaged in businesses similar to that of us. An additional  conflict of interest
with  respect  thereto  exists  because we and the  Servicing  Company  are both
managed  by Mr.  Sutter.  Accordingly,  there  is no  assurance  that  decisions
concerning  Contract  origination  and other  matters  will be made  which  more
favorably impact us than the affiliated entities, increasing the risk of default
on the Notes and the PPM Notes.

      In order to minimize  the  foregoing  conflicts  of  interest,  we and the
Servicing Company have agreed that if we and affiliated entities both have funds
available  for  Contract  origination,   Contracts  will  be  originated  on  an
alternating  basis,  meaning  first  we will  originate  a  Contract,  then  the
affiliated  entities  will  originate a Contract (or  Contracts if there is more
than one  affiliated  entity  with funds  available),  then we will  originate a
Contract, and so on.

EMPLOYEES

     Because  we use the  Servicing  Company,  we have  only one  employee,  Mr.
S\utter. Our management and the employee are the same individual.  Mr. Sutter is
not  represented  by a  collective  bargaining  agreement  nor is he bound by an
employment agreement (see Business - Risk Factors).

ITEM 2 - PROPERTIES

      Our executive  offices are located at 12408 North Florida  Avenue,  Tampa,
Florida. Prior to April 1998, the office was leased from Halliday Village Mobile
Home Park, Inc. ("Halliday"), an entity wholly owned by our majority stockholder
and President under an informal  arrangement  requiring  monthly rent of $2,200.
Subsequent to April 1998,  our rent has been paid by the  Servicing  Company and
then charged to us through the management  fees we pay to the Servicing  Company
(see "Certain Relationships and Related Transactions").

ITEM 3 - LEGAL PROCEEDINGS

      NONE

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

      NONE

                                       12
<PAGE>

                              PART II.

ITEM 5 - MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      NONE

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

OVERVIEW

      We are  primarily in the business of  originating  and  purchasing  retail
mobile home installment sales contracts created in connection with the financing
of  manufactured  homes.  We also purchase for resale new and used mobile homes,
own and rent mobile homes located at Halliday and have a 25% ownership  interest
in the Park (see  "Business - other  Activities")  Our operations are located in
Tampa, Florida and substantially all of our customers are Florida residents.

      Readers  are  referred  to  the  cautionary  statement,   which  addresses
forward-looking statements made by us.

RESULTS OF OPERATIONS

      Revenues  increased  approximately  $2,173,000  or 522%  to  approximately
$2,589,300 for the year ended December 31, 1999 from $416,400 for the year ended
December 31, 1998.  Mobile home sales  generated  approximately  $1,763,900  (or
68.1%) and $34,900 (or 8.3%) of total 1999 and 1998 revenues, respectively. This
increase  during the year ended  December  31,  1999 was  primarily  a result of
increased  activity relative to the sale of Homes at the Park.  Interest and fee
revenues  generated  approximately  $712,900  (or 25.9%) of total 1999  revenues
compared with  approximately  $276,100 (or 66.3%) of total 1998 revenues.  These
revenues  increased  primarily  as a direct  result of the  increase  in finance
contracts  outstanding and an increase in dealer floor plan financing during the
years ended  December  31, 1999 and 1998.  Included in interest and fee revenues
are financing  contract and dealer floor plan interest and fees of approximately
$621,750  in 1999 and  $201,000  in 1998.  Also  included  in  interest  and fee
revenues is interest  earned on cash  equivalents of  approximately  $50,400 and
$72,000  in 1999 and  1998,  respectively,  and  interest  earned  on  affiliate
receivables (to Parkwood and various other entities owned by Anthony Sutter, our
President and majority  stockholder) of approximately $34,700 in 1999 and $3,400
in 1998 (see "Certain Relationships and Related Transactions").  Rental revenues
generated  from our Homes located at Halliday (see  "Certain  Relationships  and
Related  Transactions")  approximated  $112,600  and  $93,500  in 1999 and 1998,
respectively.

                                       13
<PAGE>

      During the year ended December 31, 1999 and December 31, 1998, we incurred
expenses  of  approximately  $3,533,600  and  $1,188,700,   respectively.   This
represents an increase in expenses of approximately $2,344,800 or 197%.

This increase in expenses resulted from the following:

o    Approximately  60% of the  increase  resulted  from the increase in cost of
     mobile homes sold, which approximated $1,426,700 during the year ended 1999
     as compared  with a total of  approximately  $24,700  during the year ended
     1998.  The increase of  approximately  $1,402,000 is a direct result of the
     increase in volume of mobile homes sold primarily to residents of the Park.

o    Approximately  27% of the increase  resulted  from the increase in interest
     expense, which approximated  $1,127,100 and $481,400 during the years ended
     1999 and 1998,  respectively.  This increase of $645,700, or 134%, resulted
     (1)  because  the  balance  of the  Notes  (which  pay  interest  at 10.5%)
     increased  from  $1,612,000  at December 31, 1997 to $9,888,000 at December
     31,  1999 and (2) because  amortization  of deferred  debt  issuance  costs
     increased from  approximately  $94,100 for the year ended December 31, 1998
     to $233,300 for the year ended  December 31, 1999.  This increase  resulted
     because deferred debt issuance costs (principally  commissions paid to NASD
     brokers) increased significantly between December 31, 1997 and December 31,
     1999 as a result of the aforementioned sales of the Notes.

o    Approximately  4% of the increase  resulted  from an increase in management
     fees paid to the Servicing Company (see "Certain  Relationships and Related
     Transactions").  Management fees increased from approximately  $442,300 for
     the year ended  December  31, 1998 to  approximately  $542,800 for the year
     ended  December 31, 1999.  This  increase is  reflective of the increase in
     expenses  incurred by the Servicing  Company made necessary  because of our
     growth in originations and related servicing.

o    Approximately 4% of the increase  resulted from the incurrence of sales and
     marketing  expenses  for the first time.  These  expenses,  which  resulted
     substantially from advertising and commissions related to the sale of Homes
     at the Park, approximated $95,600 or approximately 5% of mobile home sales.

o    Approximately  3% of the increase  resulted  from losses we  recognized  on
     sales of, and other writedowns  on,repossessed  mobile homes. There were no
     such losses in 1998, however these losses may continue in the future as our
     portfolio of finance receivables increases and/or matures.

o    Approximately 2% of the increase resulted from an increase in our allocable
     share of the losses  generated by the Park in 1999.  Our 25% portion of the
     losses at the Park increased from approximately $14,400 for the four months
     ended  December  31, 1998 to $59,000 for the year ended  December 31, 1999.
     These losses,  as well as the remaining 75% of the losses  allocated to the
     Park's  majority  owner  (Anthony  Sutter,  who is also our  President  and
     majority  stockholder) are being funded by advances from us under a line of
     credit arrangement (see "Certain Relationships and Related Transactions").

                                       14
<PAGE>

      The net losses incurred  during the respective  periods ended December 31,
1999 and 1998  were  $944,226  and  $772,257,  respectively.  The  losses  arose
substantially  because our revenue  generating assets did not provide sufficient
income to cover fixed expenses arising  substantially from interest expense, and
management fees paid to the Servicing Company.

LIQUIDITY AND CAPITAL RESOURCES

      Operating  activities  used  $1,330,060  and $1,024,227 of cash during the
respective  years ended  December 31, 1999 and 1998. The cash was used primarily
to fund the net losses for such  periods less certain  non-cash  expenses  (e.g.
depreciation  and  amortization of deferred debt issuance costs) and to purchase
mobile home  inventories  (which  increased by  approximately  $672,000) that we
anticipate will be sold at the Park.

      In addition,  we used cash of  approximately  $2,926,000 and $2,190,400 to
fund the  following  investing  activities  during the  respective  years  ended
December 31, 1999 and 1998:

o    Purchases of property and equipment  required cash outlays of approximately
     $2,300 and $103,100 during the respective years ended December 31, 1999 and
     1998. Our 1998 expenditures for property and equipment arose primarily from
     $83,000 of costs we incurred to purchase  and/or  refurbish  certain mobile
     homes  we use  to  generate  rental  revenues  at  Halliday  (see  "Certain
     Relationships  and Related  Transactions").  No mobile homes were purchased
     for rental in 1999,  nor do we  anticipate  that we will  purchase any such
     rental mobile homes in the foreseeable future. In addition, and pursuant to
     our current  arrangement  with Halliday,  we have no obligation to maintain
     and/or  renovate  our  mobile  homes;  rather  this  obligation  rests with
     Halliday.  As  such,  and  unless  we  experience  significant  growth,  we
     anticipate  that our future  outlays for  property  and  equipment  will be
     minimal.

o    Purchases  of assets  not yet placed in service  required  cash  outlays of
     approximately  $99,900 in 1999. We paid this amount for the  development of
     certain accounting and servicing software,  which we placed into service in
     2000.

o    Improvements   to  repossessed   mobile  homes  required  cash  outlays  of
     approximately  $24,200 in 1999. These  improvements were necessary to ready
     certain repossessed mobile homes for sale.

                                       15
<PAGE>

o    During the years  ended  December  31, 1999 and 1998,  we  invested  and/or
     advanced, funds of approximately $251,200 and $616,600, respectively to the
     Park.  The latter  amount  includes  $561,000  for our  purchase of our 25%
     interest in the Park,  and  advances of $55,000 to fund the Park's 1998 net
     loss and other cash outlays. The advances we made in 1999 funded the Park's
     net loss (approximately  $236,000) and other cash outlays. The advances are
     unsecured,  bear interest at a fixed rate of 12.9% per annum and contain no
     specified repayment terms as to principal and interest.  As of December 31,
     1999, the Park has not repaid any of these advances and/or accrued interest
     to us (see "Certain Relationships and Related Transactions").

o    During  the  years  ended  December  31,  1999 and  1998,  we used  cash of
     approximately  $3,139,600  and  $1,722,500,  respectively  to originate and
     purchase finance and floor plan receivables.  At December 31, 1999, finance
     receivables  had terms of 5 to 30 years and  interest  rates  ranging  from
     12.9% to 17.9%.  We are  attempting  to limit our exposure to interest rate
     spread by investing funds in finance and floor plan receivables as proceeds
     are received from the Notes and the PPM Notes since the cost of these funds
     is significantly higher than the yield on cash and cash equivalents.

The above mentioned cash outlays for investing  activities were partially offset
by  proceeds  we  received  from  the  sales of  repossessed  mobile  homes  and
repayments of finance and floor plan receivables.

In  total,  we  expended  cash  of  approximately   $4,256,000  and  $3,214,600,
respectively  for  operating and  investing  activities in 1999 and 1998.  These
outlays have been primarily funded by the net proceeds we received from issuance
of Notes in 1999,  1998 and 1997 of  approximately  $3,583,000,  $3,925,000  and
$1,662,000,  respectively.  We had offered approximately $9,900,000 of Notes for
sale, and sold  substantially all of these notes as evidenced by our outstanding
balance of secured notes payable of $9,888,000 at December 31, 1999. Because the
costs of debt issuance (substantially commissions paid to brokers), approximated
10% of the Notes sold,  we actually  received cash of  approximately  $8,900,000
from the sale of the Notes.

      The net impact of the above operating,  investing and financing activities
was that cash and cash equivalents  decreased from  approximately  $1,282,900 at
December 31, 1998 to approximately $552,300 at December 31, 1999.

      Because we anticipated that we would continue to have significant net cash
outflows for investing and financing  activities in the foreseeable  future,  we
commenced a second  offering in March 2000  whereby we offered to sell PPM Notes
of $3,000,000. Through January 31, 2001, we had sold approximately $1,243,000 of
these  notes,   and  we  are  continuing  to  offer  the  remaining   notes  via
broker/dealers  who are members of the NASD (we pay commissions of approximately
10% of the proceeds  received  from these notes).  In spite of this,  because of
continuing  operating  losses  and  other  investing  expenditures  in 2000,  we
currently do not have the cash in place to fund continuing  operating losses and
satisfy certain obligations which are due in 2001 and beyond.

                                       16
<PAGE>

      In order for us to  continue to expand our Dealer  base and  portfolio  of
finance receivable  contracts,  and to ultimately pay the Notes and PPM Notes in
full,  we will have to generate  significant  earnings and cash from  operations
and/or secure  additional  capital  resources  (e.g.  other debt or equity).  No
assurance  can be given that we will be able to generate  profitable  results of
operations or that additional  capital  resources will be available or available
on reasonable terms. Also, if we are unable to originate receivable contracts in
an amount and at a pace that  approximates  the amount and the pace that capital
is raised  through  the sale of the PPM Notes  (and/or  any other debt or equity
financing we raise), we anticipate that our losses and deficit would increase as
the interest  earned on the capital  raised will not be  sufficient to cover the
cost of the interest on the PPM Notes.

CAUTIONARY STATEMENT

        This Form  10-KSB,  press  releases  and  certain  information  provided
periodically  in  writing  or  orally  by our  officers  or our  agents  contain
statements which  constitute  forward-looking  statements  within the meaning of
Section 27A of the Securities  Act, as amended and Section 21E of the Securities
Exchange Act of 1934. The words expect, anticipate, believe, goal, plan, intend,
estimate and similar  expressions and variations thereof if used are intended to
specifically identify forward-looking  statements.  Those statements appear in a
number  of  places  in this  Form  10-KSB  and in  other  places,  particularly,
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations,  and include  statements  regarding  our  intent,  belief or current
expectations or the intent,  belief or current  expectations of our directors or
officers  with respect to, among other  things:  (i) our  liquidity  and capital
resources;  (ii) our  financing  opportunities  and plans  and (iii) our  future
performance  and  operating  results.  Investors and  prospective  investors are
cautioned that any such forward-looking  statements are not guarantees of future
performance  and involve risks and  uncertainties,  and that actual  results may
differ  materially from those projected in the  forward-looking  statements as a
result of  various  factors.  The  factors  that might  cause  such  differences
include,  among  others:  (i)  any  material  inability  of us  to  successfully
identify,  consummate and integrate the  acquisition  of finance  receivables at
reasonable  and  anticipated  costs,  (ii)  any  material  inability  of  us  to
successfully  develop  our  products;  (iii) any adverse  effect or  limitations
caused by  governmental  regulations;  (iv) any adverse  effect on our continued
cash flow and ability to obtain  acceptable  financing  in  connection  with its
growth plans; (v) any increased  competition in business;  (vi) any inability of
us to  successfully  conduct our business in new markets;  and (vii) other risks
including  those  identified  in our  filings  with the  SEC.  We  undertake  no
obligation to publicly update or revise the forward  looking  statements made in
this Form 10-KSB, to reflect events or circumstances after the date of this Form
10-KSB or to reflect the occurrence of unanticipated events.

                                       17
<PAGE>

Impact of Inflation and Changing Prices

    Because the Notes and the PPM Notes bear interest at fixed rates,  increased
costs of borrowed funds would not be expected to have a material  adverse impact
on our  results  of  operations  unless  alternative  source  of  financing  are
required. In this case,  inflationary  increases could result in higher interest
rates  which  could have a material  adverse  impact on our  ability to grow our
business.  In addition,  inflation  could also  adversely  affect our  operating
expenses.

ITEM 7 - FINANCIAL STATEMENTS

                                TABLE OF CONTENTS

--------------------------------------------------------------------------------

                                                              Page

Independent Auditors' Report                                   19

Financial Statements:

      Balance Sheet as of December 31, 1999                    20

      Statements of Operations for the years ended December
         31, 1999 and 1998                                     21

      Statements of Stockholders' Deficit for the years ended
         December 31, 1999 and 1998                            22

      Statements of Cash Flows for the years ended December
         31, 1999 and 1998                                     23

      Notes to Financial Statements                            24




--------------------------------------------------------------------------------




                                       18
<PAGE>



                  [Letterhead of Kingery, Crouse, & Hohl, P.A.]

INDEPENDENT AUDITORS' REPORT

To the Stockholders of Sterling Financial Services of Florida I, Inc.:

We have audited the accompanying balance sheet of Sterling Financial Services of
Florida I, Inc.  (the  "Company")  as of  December  31,  1999,  and the  related
statements  of  operations,  stockholders'  deficit and cash flows for the years
ended  December  31,  1999  and  1998.   These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of the Company as of December 31,
1999,  and the  results of its  operations  and cash  flows for the years  ended
December 31, 1999 and 1998 in conformity  with accounting  principles  generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note A to the
financial  statements,  the Company has incurred  significant  operating  losses
since its inception and has a stockholders'  deficit as of December 31, 1999. In
addition,  the Company will require a significant  amount of capital and/or debt
financing to meet certain  obligations,  which are due in 2001 and beyond. These
factors,  among others,  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  A.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.

As discussed in Notes F and G to the financial statements, there are significant
transactions  with related  parties.  These  transactions  include,  but are not
limited to, payment of management fees and advances to various affiliates.

Kingery, Crouse, & Hohl, P.A.

November 30, 2000
Tampa, FL.



                                       19
<PAGE>

                 STERLING FINANCIAL SERVICES OF FLORIDA I, INC.

                      BALANCE SHEET AS OF DECEMBER 31, 1999

--------------------------------------------------------------------------------


ASSETS

Cash and cash equivalents                                       $ 552,279
                                                             -------------

Receivables:
  Finance - net                                                 3,864,893
  Mobile home floor plan                                          265,686
  Affiliate                                                       251,815
  Interest and fees
  Other                                                             5,943
                                                             -------------
    Total receivables                                           4,493,103
                                                             -------------

Inventories                                                     1,105,720
                                                             -------------

Investment in and advances to Parkwood Estates
   Mobile Home Park, L.C.                                         794,407
                                                             -------------

Other assets:
   Deferred debt issuance costs - net                             675,761
   Repossessed mobile homes                                       133,672
   Assets not yet placed in service                                99,931
                                                             -------------
      Total other assets                                          909,364
                                                             -------------

TOTAL                                                          $8,084,880
                                                             =============

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES:

Secured notes payable                                          $9,888,000
Accrued and other liabilities                                      63,900
                                                             -------------
      Total liabilities                                         9,951,900
                                                             -------------

STOCKHOLDERS' DEFICIT:

Common  stock,  no  par  value,  10,000  shares
   1,000 shares issued and outstanding                              1,000
Deficit                                                        (1,868,020)
                                                             -------------
      Total stockholders' deficit                              (1,867,020)
                                                             -------------

TOTAL                                                          $8,084,880
                                                             =============

--------------------------------------------------------------------------------

See notes to financial statements



                                       20
<PAGE>


                 STERLING FINANCIAL SERVICES OF FLORIDA I, INC.

                  STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
                           DECEMBER 31, 1999 AND 1998

--------------------------------------------------------------------------------


                                                        1999              1998
                                                        ----              ----
REVENUES:

Mobile home sales                                     $1,763,894      $  34,900
Interest and fee                                                        276,144
Rental                                                   112,579         93,527
Other                                                                    11,868
                                                     ------------   ------------
  Total revenues                                       2,589,338        416,439
                                                     ------------   ------------

OPERATING EXPENSES:

Cost of mobile homes sold                              1,426,651         24,692
Interest expense                                       1,127,112        481,383
Management fees - related party                          542,845        442,328
Sales and marketing                                       95,645
Costs of rental - substantially all to related party      75,104        112,091
Professional fees                                         65,027         40,602
Loss on repossessed mobile homes                          61,383              -
Equity in loss of Parkwood Estates
  Mobile Home Park, L.C.- related party                   58,969         14,429
Depreciation expense                                      26,856         21,877
Other                                                     53,972         51,294
                                                     ------------   ------------
  Total operating expenses                             3,533,564      1,188,696
                                                     ------------   ------------

NET LOSS                                              $(944,226)    $  (772,257)
                                                     ============   ============

LOSS PER COMMON SHARE (Basic and diluted)             $ (944.23)    $   (772.26)
                                                     ============   ============

--------------------------------------------------------------------------------

See notes to financial statements.

                                       21
<PAGE>


                 STERLING FINANCIAL SERVICES OF FLORIDA I, INC.

                       STATEMENTS OF STOCKHOLDERS' DEFICIT
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                     Common Stock
                                 Shares       Amount        Deficit        Total
                                ----------   ---------   -------------  -------------
<S>                             <C>           <C>        <C>            <C>
Balances at December 31, 1997       1,000      $1,000    $  (151,537)   $  (150,537)

Net loss                                                    (772,257)      (772,257)
                                ----------   ---------   -------------  -------------

Balances at December 31, 1998       1,000       1,000       (923,794)      (922,794)

Net loss                                                    (944,226)      (944,226)
                                ----------   ---------   -------------  -------------

Balances at December 31, 1999       1,000      $1,000    $(1,868,020)   $(1,867,020)
                                ==========   =========   =============  =============
</TABLE>

--------------------------------------------------------------------------------

See notes to financial statements.


                                       22
<PAGE>


                 STERLING FINANCIAL SERVICES OF FLORIDA I, INC.

     STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

--------------------------------------------------------------------------------

                                                          1999          1998
                                                          ----          ----

CASH FLOWS FROM OPERATING ACTIVITIES:
      Net loss                                        $  (944,226)   $ (772,257)
     Adjustment to reconcile net loss to net
       cash used by operating Activities:
       Depreciation                                        26,856        21,877
       Amortization of deferred debt issuance             233,304        94,057
       Loss on repossessed mobile homes                    61,383             -
       Equity in loss of Parkwood Estates Mobile
         Home Park, L.C.                                   58,969        14,429
       Increase in inventories                           (672,123)     (421,597)
       Increase in accrued and other liabilities            7,566        48,184
       Increase in interest and other receivables        (101,789)       (8,920)
                                                     ------------  -------------
NET CASH USED BY OPERATING ACTIVITIES                  (1,330,060)   (1,024,227)
                                                     ------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property and equipment                  (2,322)     (103,187)
      Purchases of assets not yet placed in               (99,931)            -
      Improvements to repossessed mobile homes            (22,807)            -
      Proceeds from sales of repossessed mobile           176,723        31,506
      Investment in and advances to Parkwood
        Estates Mobile Home Park L.C.                    (251,198)     (616,607)
      Finance and floor plan receivables
        originated and purchased                       (3,837,314)   (1,722,543)
      Repayments of finance and floor plan
        receivables                                     1,110,885       220,459
                                                      ------------ -------------
CASH USED BY INVESTING ACTIVITES                       (2,925,964)   (2,190,372)
                                                     ------------  -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from issuance of secured notes           3,977,000     4,362,000
      Repayments of secured notes payable                 (63,000)            -
      Decrease (increase) in affiliate receivables          5,463      (244,728)
      Cash paid for deferred debt issuance costs         (394,066)     (436,200)
                                                     ------------  -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES               3,525,397     3,681,072
                                                     ------------  -------------

NET (DECREASE) INCREASE IN CASH AND CASH
 EQUIVALENTS                                             (730,627)      466,473

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR            1,282,906       816,433
                                                     ------------  -------------

CASH AND CASH EQUIVALENTS, END OF YEAR                $   552,279   $ 1,282,906
                                                     ============  =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  - Interest paid                                     $   493,447   $   387,326
                                                     ============  =============

SUPPLEMENTAL  DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES - During
the years ended December 31, 1999 and 1998 respectively,  approximately $263,600
and $117,000 of finance  receivables  were  reclassified  to repossessed  mobile
homes when certain of our  customers  defaulted on their obligations to us.

--------------------------------------------------------------------------------

See notes to financial statements.



                                       23
<PAGE>




                       STERLING FINANCIAL SERVICES OF FLORIDA I, INC.

                     NOTES TO FINANCIAL STATEMENTS AS OF AND

                       FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

--------------------------------------------------------------------------------



NOTE A - FORMATION AND OPERATIONS OF THE COMPANY

Sterling  Financial  Services  of  Florida  I,  Inc.  ("we",  "us",  "our")  was
incorporated  under the laws of the state of Florida on January 3, 1997.  We are
primarily  engaged in the business of originating  and purchasing  retail mobile
home  installment  sales  contracts  created in connection with the financing of
manufactured  homes.  We also own and rent mobile homes  located in the Halliday
Village  Mobile Home Park,  and have a 25%  ownership  interest in a mobile home
park located in  Hillsborough  County,  Florida (see Note F). Our operations are
located in Tampa,  Florida and  substantially  all of our  customers are Florida
residents.

Going Concern

The  accompanying  financial  statements  have been  prepared on a going concern
basis,  which  contemplates  the  realization of assets and the  satisfaction of
liabilities  in the normal  course of  business.  We have  incurred  significant
losses  since  our  inception  and  anticipate  that we will  continue  to incur
operating  losses for the foreseeable  future.  In addition,  as of December 31,
1999 we have a  stockholders'  deficit of  approximately  $1,868,000,  and as of
November 30, 2000 (the date of our independent  auditors' report) we do not have
the  funds in  place  to meet  certain  obligations,  which  are due in 2001 and
beyond.  Accordingly,  our ability to continue as a going  concern is  dependent
upon our ability to raise the necessary  debt and/or equity  financing to enable
us to meet our obligations and fund our anticipated  future operating  expenses.
As discussed in Note J, we are  currently  offering  $3,000,000 of secured notes
payable through a private placement  memorandum.  In addition,  we are currently
considering the possibility of selling a portion of our finance  receivables (we
are negotiating with several entities), and we may sell our interest in Parkwood
Estates Mobile Home Park,  LLC. If we are successful in raising funds, we intend
to use a portion of the proceeds to purchase  mobile homes at discounted  prices
from other companies and dealers in our industry,  and then market them for sale
at significantly higher prices than our cost basis. If successful, this strategy
could greatly improve our cash flow and results of operations. However, there is
no  assurance  that we will be  successful  in our efforts with respect to these
matters.  These factors among others  indicate that we may be unable to continue
as a going concern for a reasonable period of time.

Our  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and  classification of recorded asset amounts or the amounts and
classification  of  liabilities  that might be necessary  should we be unable to
continue as a going concern.


                                       24
<PAGE>

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

Our financial statements are prepared using the accrual method of accounting.

Revenue Recognition

We recognize  interest  income on finance  receivables and fees charged on floor
plan receivables using the interest (actuarial) method. Unearned finance charges
are rebated to customers under the Rule of 78's method.  The difference  between
income previously  recognized under the interest (actuarial) method and the rule
of 78's method is recognized as an adjustment to interest  income at the time of
the  rebate.  Accrual of interest  income on finance  receivables  is  generally
suspended  when no payment has been  received  for ninety  days;  the accrual of
income is not resumed until management believes such interest is collectible.

We record  mobile  home sales and  related  costs of mobile  homes sold when the
closing has occurred and title has passed.

Use of Estimates

The preparation of financial  statements in accordance  with generally  accepted
accounting  principles requires us to make estimates and assumptions that affect
the reported  amounts of assets and  liabilities  and  disclosures of contingent
assets and  liabilities  at the date of the financial  statements.  The reported
amounts of revenues and expenses during the reporting  period may be affected by
the  estimates  and  assumptions  we are  required to make.  Estimates  that are
critical to the accompanying  financial statements include the appropriate level
of allowance  for credit  losses which can be  significantly  impacted by future
industry,  market,  and economic  trends and  conditions.  Actual  results could
differ significantly from our estimates.

Financial Instruments

We believe  the book value of our cash and cash  equivalents,  mobile home floor
plan  receivables,  and accrued and other  liabilities  approximates  their fair
values due to their short-term nature. In addition, we believe the book value of
our finance receivables and secured notes payable approximates their fair values
as the current interest rates on such items  approximate rates at which we could
negotiate  similar types of lending and/or  borrowing  arrangements.  It was not
practicable  to estimate  the fair value of our  investment  in and  advances to
Parkwood  and/or  our  affiliate  receivables  due to the lack of  similar  type
arrangements in the marketplace,  and because of the uncertainty surrounding the
date the amounts will be recovered.

Finance Receivables

Finance receivables,  that we intend to hold for the foreseeable future or until
maturity or payoff, are reported at their outstanding unpaid principal balances,
reduced by any charge-off or specific valuation accounts and net of any deferred
fees or costs on  originated  loans,  or  unamortized  premiums or  discounts on
purchased loans. We have entered into agreements with dealers that establish the


                                       25
<PAGE>

allowance  for credit losses  through  non-refundable  acquisition  discounts to
protect us from potential  losses  associated  with the financing of installment
sales contracts. All or a portion of these negotiated discounts are available to
absorb credit losses.  Credit loss experience,  contractual  delinquency of loan
receivables,  the value of underlying collateral and current economic conditions
are  factors we use in  negotiating  the  discounts  and  assessing  the overall
adequacy of the discounts to absorb losses.

We  have  attempted  to  maintain  the  allowance  at a  level  consistent  with
anticipated  loan charge offs, and if necessary we will charge earnings when the
negotiated  discounts do not appear adequate to absorb losses.  We calculate our
provision  for credit  losses based on changes in the present  value of expected
future cash flows of our loans discounted at the loan's effective  interest rate
in accordance with Financial Accounting Standards No. 114. At December 31, 1999,
we believe the unamortized  discount balance is adequate to cover potential loan
losses.  Accordingly,  the accompanying  statements of operations do not include
provisions for loan losses.

We generally initiate repossession  proceedings when an account is more than two
payments contractually past due, but the repossession process is accelerated for
loans which become delinquent in the first or second payment.

Inventories

Inventories,  which consist of mobile homes and related improvements, are valued
at the lower of cost or market.

Investment in Parkwood Estates Mobile Home Park, L.C. ("Parkwood")

We use the equity method to account for our 25% ownership interest in Parkwood.

Long-Lived Assets

We periodically  review our long-lived assets for indications of impairment.  If
the  value of an asset is  considered  impaired,  an  impairment  loss  would be
recognized.  At December 31, 1999, we believe all of our  long-lived  assets are
recoverable.

Property and Equipment

Our property and equipment is stated at cost.  Major additions are  capitalized,
while minor additions and maintenance and repairs which do not extend the useful
lives of our assets are expensed as  incurred.  Depreciation  is computed  using
either  an  accelerated  method or the  straight-line  method  over the  assets'
estimated useful lives of 5 to 27.5 years.

Deferred Debt Issuance Costs

Direct  costs  incurred to  register  and issue the  secured  notes  payable are
deferred and amortized to interest expense over the lives of the notes using the
interest method.

                                       26
<PAGE>

Advertising Costs

We  expense  advertising  costs  as  they  are  incurred.  Advertising  expenses
approximated  $54,000 and $2,000  during the years ended  December  31, 1999 and
1998, respectively.

Repossessed Mobile Homes

Repossessed  mobile  homes are  initially  recorded  at the lower of the assets'
estimated  fair market  value or the unpaid  balance of the related  loan at the
time of  repossession.  Costs of capital  improvements are added to the carrying
amount of the  repossessed  property,  to the  extent  they do not result in the
carrying amount exceeding net realizable value.

Income Taxes

We have elected to be taxed under Subchapter S of the Internal Revenue Code, and
accordingly,  we are not subject to income  taxes as our  results of  operations
flow through to our  stockholders  for  inclusion in their  personal  income tax
returns.

Loss Per Common Share

We compute  net loss per share in  accordance  with SFAS No. 128  "Earnings  per
Share"  ("SFAS No.  128") and SEC Staff  Accounting  Bulletin No. 98 ("SAB 98").
Under the  provisions  of SFAS No.  128 and SAB 98,  basic net loss per share is
computed by  dividing  the net loss  available  to common  stockholders  for the
period by the weighted  average number of common shares  outstanding  during the
period.  Diluted net loss per share is computed by dividing the net loss for the
period by the number of common and common equivalent shares  outstanding  during
the  period.  As of  December  31,  1999 and  1998,  we did not have any  common
equivalent  shares  outstanding.  The weighted  average  number of common shares
outstanding during the years ended December 31, 1999 and 1998 was 1,000.

Statement of Cash Flows

For  purposes of the  statement  of cash flows,  we consider  all highly  liquid
investments  purchased  with an original  maturity of three months or less to be
cash equivalents.

Reclassifications

Certain  amounts in the 1998  financial  statements  have been  reclassified  to
conform with their 1999 presentation.

                                       27
<PAGE>

NOTE C - FINANCE RECEIVABLES - NET

Finance receivables consist of the following at December 31, 1999:

   Finance receivables, gross                             $13,582,908
   Less unearned finance charges                           (9,538,625)
                                                          ------------
   Finance receivables, principal                           4,044,283
   Less allowance for loan losses (See Note B- Finance
          Receivables)                                       (179,390)
                                                          ------------
   Finance receivables, net                               $ 3,864,893
                                                          ============

At December 31, 1999,  our finance  receivables  have terms ranging from 5 to 30
years and stated  interest  rates  ranging from 12.9% to 17.9%.  At December 31,
1999, no accrual of interest had been suspended on finance receivables.

Principal collections on finance receivables  approximated $216,000 for the year
ended  December 31, 1999.  These  collections  approximated  7.5% of the average
outstanding  principal balance for 1999.  Contractual  maturities of the finance
receivables by year are approximately as follows:

      Years Ending
      December 31,                                       Amounts
      ------------                                       -------
           2000                                     $    697,000
           2001                                          697,000
           2002                                          697,000
           2003                                          697,000
           2004                                          697,000
           Thereafter                                 10,098,000
                                                    ------------
           Total                                     $13,583,000
                                                    ============

Changes in the allowance  for credit  losses during the year ended  December 31,
1999 were as follows:

      Beginning balance                                $ 131,235
      Additions to loan loss reserves arising
        from discounts on purchased loans                 62,464
      Discounts accreted to income (see Note B-
        Finance Receivables)                                   0
      Finance receivables charged off                    (14,309)
                                                      -----------

      Ending balance                                   $ 179,390
                                                      ===========

      % of  finance receivables                              4.6%
                                                      ===========


                                       28
<PAGE>

NOTE D - PROPERTY AND EQUIPMENT-NET

Property and equipment consists of the following at December 31, 1999:

    Rental mobile homes                                 $      215,702
    Furniture, fixtures and office equipment                    69,307
    Less accumulated depreciation                              (55,002)
                                                        ---------------
    Property and equipment - net                        $      230,007
                                                        ===============



NOTE E - SECURED NOTES PAYABLE

Secured  notes  payable  bear  interest  at 10.5%,  require  interest to be paid
monthly and mature in full on June 30, 2002.  The notes,  which are secured by a
first lien on our  installment  sales  contracts,  may be prepaid in whole or in
part at any time without  premium or penalty.  We had registered $9.9 million of
such notes and as of the  termination  date of the offering  (June 30, 1999) had
sold substantially all of these notes.  Approximately  $63,000 of the notes were
repaid in 1999 at the respective  note holder's  request.  In addition,  through
November 30, 2000 (the date of our independent auditors' report), we have repaid
additional notes having a principal balance of approximately $99,800.

NOTE F - INVESTMENT IN AND ADVANCES TO PARKWOOD

We have a 25% ownership  interest in Parkwood,  which was formed in 1998 for the
purpose  of  purchasing,  and  leasing  Parkwood  Estates  Mobile  Home  Park in
Hillsborough  County,  Florida.  The  remaining 75% interest is owned by Anthony
Sutter  (our   President  and  majority   stockholder).   Summarized   financial
information  for Parkwood as of and for the year ended December 31, 1999 and for
the period ended December 31, 1998 is as follows:


                                       29
<PAGE>

                            SUMMARIZED BALANCE SHEET

ASSETS

Property and equipment                                 $ 2,243,596
Loan acquisition costs, net                                 29,162
Other                                                       18,894
                                                       ------------

Total                                                  $ 2,291,652
                                                       ============

LIABILITIES AND MEMBERS' CAPITAL

Mortgage notes payable to Bank of America              $ 1,696,103
Due to affiliate                                           306,198
Accrued and other liabilities                               21,340
                                                       ------------
   Total liabilities                                     2,023,641
                                                       ============

Members' Capital:
Sterling Financial Services of Florida I, Inc.             488,209
Anthony Sutter                                            (220,198)
                                                       ------------
   Total members' capital                                  268,011
                                                       ------------

Total                                                  $ 2,291,652
                                                       ============


                       SUMMARIZED STATEMENT OF OPERATIONS

                                              1999                    1998
                                           ----------              ----------
 Revenue                                   $  196,501             $  50,666
 Operating expenses                          (432,379)             (108,384)
                                           ----------              ----------
 Net Loss                                  $ (235,878)            $ (57,718)

The  due to  affiliate  above  arises  from  advances  under  a line  of  credit
arrangement  with us,  whereby as of December 31, 1999, we had agreed to advance
Parkwood up to $350,000 to fund cash flow needs (we have periodically  increased
this borrowing amount as Parkwood's circumstances warranted). Advances under the
arrangement  accrue interest at a fixed rate of 12.9%, are unsecured and have no
specified repayment terms. During the years ended December 31, 1999 and 1998, we
recognized interest income of approximately $20,000 and $1,000,  respectively as
a result of such advances.  None of the advances and/or related accrued interest
receivable  has been paid by Parkwood  through  December 31,  1999;  accordingly
interest and fees receivable includes approximately $21,000 due from Parkwood as
of December 31, 1999.

                                       30
<PAGE>

Through  November  30,  2000 (the  date of our  independent  auditors'  report),
Parkwood had borrowed approximately $460,000 from us under this arrangement.

NOTE G - OTHER RELATED PARTY TRANSACTIONS

We have  advanced  the  following  funds to  various  entities  owned by Anthony
Sutter, our President and majority stockholder as of December 31, 1999:

        Oak Bend Mobile Home Park                $   123,231
        Hidden Oaks Mobile Home Park                  43,250
        SFS, Inc.                                     29,679
        Halliday Mobile Home Park                     20,855
        Regency Oaks Mobile Home Park                 18,500
        Sterling Homes, Inc.                          16,300
                                                 ------------
        Total                                    $   251,815
                                                 ============

With the exception of the advance to SFS, Inc.,  which is non-interest  bearing,
all of the advances bear interest of 12.9% and have no specified repayment terms
as to principal or interest.  Also, all of the advances are unsecured except for
the advances to Oak Bend Mobile Home Park which are secured by a second mortgage
on such entity's land and improvements. During the years ended December 31, 1999
and 1998, we recognized  interest  income of  approximately  $14,500 and $2,400,
respectively from the above affiliates.  At December 31, 1999, interest and fees
receivable in the accompanying balance sheet includes  approximately  $16,000 of
accrued interest owed from these affiliates.

We have entered into an agreement with Sterling Financial Services,  Inc. ("SFS,
Inc."), a related party by virtue of Anthony Sutter's  ownership of such entity,
whereby SFS, Inc. manages our operations and provides all services in connection
with  origination  and  servicing of  receivables.  As  consideration  for these
services,  we pay SFS,  Inc. a  management  fee of 120% of its annual  expenses.
Management  fees  paid  to SFS,  Inc.  including  direct  and  indirect  charges
allocated to us, during the years ended December 31, 1999 and 1998  approximated
$543,000 and $442,000 respectively.

Prior to April  1998,  we leased  certain  office  space for our  administrative
operations,  under an oral agreement, from Halliday Village M.H.P. ("Halliday"),
a related party by virtue of Anthony Sutter's  ownership.  This space was leased
on a month-to-month  basis for $2,200 per month.  Subsequent to April 1998, this
arrangement  was changed  whereby our rent was paid by SFS,  Inc.;  accordingly,
subsequent to this date such expenses are included in management  fees discussed
above.

Prior to November 1999, we also rented certain lots from Halliday under month to
month  arrangements  for 18 mobile  home rental  units we own.  During the years
ended  December  31, 1999 and 1998,  we paid rents to Halliday of  approximately
$75,000 and $95,000 respectively.  Beginning in November 1999, we began to lease
these mobile homes  directly to Halliday for aggregate rent of $2,300 per month.
We  received  approximately  $4,600  under  this  arrangement  for the months of
November and December 1999; these amounts, along with the rentals received under
our prior  arrangement,  are  included in rental  revenues  in the  accompanying
statements of operations.


                                       31
<PAGE>


NOTE H - PROFORMA NET LOSS AS IF THE COMPANY WAS A "C" CORPORATION


If we had elected to be taxed as a "C"  corporation  we would have been required
to record a provision or benefit for income  taxes.  The  following  information
presents the  proforma net losses for the years ended  December 31 1999 and 1998
as if we were a "C"  corporation.  The  presentation  used is in accordance with
Financial Accounting Standards Statement No. 109, "Accounting for Income Taxes".

                                                1999            1998
                                                ----            ----

Loss before income taxes                    ($944,226)        ($772,257)
      Income tax expense (benefit)                  0                 0
                                            ----------        ----------

      Net loss                              ($944,226)        ($772,257)
                                            ==========        ==========

No benefit for income taxes has been assumed above because the  realizability of
such  benefit,  and the  related  deferred  income  tax  asset,  do not meet the
required recognition standards established by SFAS 109.

NOTE I - CONCENTRATIONS OF CREDIT RISK

Financial instruments,  which potentially subject us to concentrations of credit
risk  consist  primarily  of  receivables,  the  investment  in and  advances to
Parkwood  and cash and cash  equivalents.  As of  December  31,1999 we have made
advances  of  approximately  $558,000 to  entities  wholly or majority  owned by
Anthony Sutter.  Because of this, and since substantially all of our receivables
and our  investment in and advances to Parkwood arise from customers or entities
located in Florida,  it is at least reasonably possible that we could experience
a severe  impact on our  operations  if the Florida  economy had a downturn.  We
believe  risk with  respect to finance and mobile home floor plans is  partially
mitigated  because  the  receivables  are  collateralized  by the  mobile  homes
purchased by our customers.

With respect to cash balances,  we maintain all of our cash and cash equivalents
at one high quality FDIC insured  institution,  which  accounts at times,  might
exceed  federally  insured  limits.  We have not  experienced any losses in such
accounts.

NOTE J - SUBSEQUENT EVENT

In March 2000, we offered, through a private placement memorandum, subscriptions
for a maximum of 3,000 secured notes in the principal amount of $1,000 each. The
notes bear simple  interest at the rate of 10% per annum (the notes are interest
only,  payable monthly,  through March 31, 2005, at which time all principal and
any  accrued  interest is payable in full).  The notes,  which may be prepaid in
whole or in part at any time  without  premium or penalty,  will be secured by a
first lien on the assets acquired with the proceeds of the notes.  The notes are
being offered on best efforts,  no minimum basis,  by brokers who are members of
the National  Association of Security Dealers.  As such, there will be no escrow


                                       32
<PAGE>

of any of the  proceeds of the offering  and we will have the  immediate  use of
such funds to finance our operations. Through November 30, 2000 (the date of our
independent  auditors' report),  we have sold approximately  $1,043,000 of notes
under this private placement memorandum.  The offering is for a period of twelve
months (or  through  March 7,  2001),  which  termination  date may be  extended
through June 30, 2001 at our discretion.

-----------------------------------------------------------------------

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                                       33
<PAGE>

ITEM 8 -  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURES

      NONE

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                                       34
<PAGE>



                                    PART III.

ITEM  9  -  DIRECTORS,   EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

      Set forth  below is  certain  information  as of  December  31,  1999 with
respect to any persons known to us to be the beneficial owner of more than 5% of
our Common Stock and of the Common Stock owned by our sole officer and director.

                                                  Amount and
                                                   Nature of
                                                  Beneficial
 Name of Beneficial Owner    Title of Class        Ownership       % of Class

Anthony A. Sutter                Common                  800              80%

Judith   Estrin,   Trustee;      Common                  200              20%
                                                         ---              ---

All officers and  directors                              800              80%
as a group (1 person)                                    ===              ===
----------------------------

     Anthony  A.  Sutter,  age 49 has  been  ours  and the  Servicing  Company's
President, Chief Executive Officer, Secretary, Treasurer and Sole Director since
inception. He has also been the sole officer and director of Sterling Properties
Management,  Inc., a Tampa,  Florida property management  company,  and for four
Florida  corporations  owning  mobile  home parks in Florida  (Halliday  Village
Mobile Home Park, Inc., Oak Bend Mobile Home Park, Inc., Hidden Oaks Mobile Home
Park, Inc., and Regency Oaks Mobile Home Park,  Inc.). As previously  mentioned,
Mr.  Sutter also owns a 75% interest in the Park.  He received a B.S.  degree in
Accounting and Economics from St. Louis University, St. Louis, Missouri in 1973.
He has been involved in the residential  housing  business for 27 years,  during
which time he has owned, managed and operated many properties,  including mobile
home parks.

     We do not  have  a  written  employment  agreement  with  Mr.  Sutter.  The
Servicing  Company,  based upon available funds, with no other limitation,  will
pay all  compensation  paid to Mr. Sutter.  No compensation has been paid to Mr.
Sutter directly by us since our inception.

ITEM 10 - EXECUTIVE COMPENSATION

      Name               Position                         Compensation

      Anthony A. Sutter  President, Chief Executive           NONE
                         Officer, Secretary, Treasurer
                         and Sole Director

                                       35
<PAGE>

      We do not directly pay salaries to  Management.  Management  would receive
salaries from the Servicing  Company,  which salaries would be allocated between
Affiliated  Corporations  and us (see  "Business -  Relationship  with Servicing
Company - Servicing Agreement").  Mr. Sutter receives no salary from us, nor did
he receive  any  salary  from the  Servicing  Company  in 1999.  Accordingly  no
officer,   director  or  employee  of  the  Corporation  receives   compensation
attributable to services rendered to us in excess of $100,000 per year. However,
because the  Servicing  Company is an S  Corporation,  Mr.  Sutter  periodically
receives distributions of cash from the Servicing Company.

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      Set forth  below is  certain  information  as of  December  31,  1999 with
respect to any persons known to us to be the beneficial owner of more than 5% of
our Common Stock and of the Common Stock owned by our sole officer and director.

                                                  Amount and
                                                   Nature of
                                                  Beneficial
 Name of Beneficial Owner    Title of Class        Ownership       % Of Class

Anthony A. Sutter                Common                  800              80%

Judith   Estrin,   Trustee;      Common                  200              20%
                                                         ---              ---

All officers and  directors                              800              80%
as a group (1 person)                                    ===              ===


ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Mr. Sutter is President, Chief Executive Officer, Secretary,  Treasurer and
Sole  Director  of both  the  Servicing  Company  and us.  Mr.  Sutter  owns the
controlling  interest in both the Servicing Company and us. Mr. Sutter also owns
all or a majority of the  following  entities  with which we have,  or have had,
transactions:

           Entity                               %age owned by Mr. Sutter

      Hidden Oaks Mobile Home Park             100%
      Regency Oaks Mobile Home Park            100%
      Sterling Homes, Inc.                     100%
      Halliday Village Mobile Home Park        100%
      Oak Bend Mobile Home Park                100%
      Parkwood Estates Mobile Home Park L.C.    75%

                                       36
<PAGE>

We have advanced the following  amounts to some of the entities  mentioned above
(see separate  disclosure  below  relative to our  investment in and advances to
Parkwood Estates Mobile Home Park L.C.:

                                             1999                   1998
                                             ----                   ----

      Oak Bend Mobile Home Park            $123,231              $      -
      Hidden Oaks Mobile Home Park           43,250                 8,000
      The Servicing Company                  29,679               226,978
      Halliday Village Mobile Home Park      20,855                     -
      Regency Oaks Mobile Home Park          18,500                 6,000
      Sterling Homes, Inc.                   16,300                16,300
                                          ----------              -------
      Total                                $251,815              $257,278
                                          ==========              =======

With  the  exception  of  the  advance  to  the  Servicing  Company,   which  is
non-interest  bearing,  all of the advances bear interest at 12.9%,  and have no
specified  repayment  terms  as to  principal  and  interest.  Also,  all of the
advances  are  unsecured  except for the  advances to Oak Bend Mobile Home Park,
which are secured by a second  mortgage on such entity's land and  improvements.
During the years ended December 31, 1999 and 1998, we recognized interest income
of approximately  $14,500 and $2,400,  respectively under the above advances. At
December 31, 1999, interest and fees receivable includes  approximately  $16,000
of accrued interest owed from these entities.

      Pursuant to the Servicing  Agreement,  the  Servicing  Company acts as our
agent.  During the years ended  December 31, 1999 and December 31, 1998, we paid
management  fees of  approximately  $542,800 and $442,300,  respectively  to the
Servicing Company under the terms of the Servicing Agreement.  For a description
of the Servicing Agreement,  see "Business - Relationship with Servicing Company
- Servicing Agreement."

      Our executive  offices are located at 12408 North Florida  Avenue,  Tampa,
Florida.  Pursuant to an oral  agreement,  prior to April  1998,  we leased this
space from Halliday, on a month-to-month basis for $2,200 per month.  Subsequent
to April 1998, this  arrangement was changed whereby the Servicing  Company paid
our rent to Halliday and  accordingly,  subsequent to such date,  these expenses
are included in the management fees discussed above.

      Prior  to  November   1999,  we  also  rented  lots  from  Halliday  under
month-to-month  arrangements  for 18 mobile home rental units we own. During the
respective  years  ended  December  31,  1999 and  1998,  we paid  lot  rents of
approximately   $75,000  and  $95,000  to  Halliday  under  these  arrangements.
Beginning  in  November  1999,  we  made  the  decision  to  enter  an  informal
arrangement with Halliday,  whereby Halliday has agreed to rent all of our units
from us.  Accordingly,  subsequent to November  1999, we no longer  receive rent
payments from individual tenants and no longer pay lot rent to Halliday;  rather
we receive mobile home rent from Halliday in the amount of approximately  $2,300
per month. As a result  thereof,  we recognized  approximately  $4,600 of rental
income from  Halliday  during the year ended  December 31, 1999.  This amount is
included in rental  revenues in the  accompanying  statements of operations (see
Financial Statements).

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         During the year ended December 31, 1998, we purchased a 25% interest in
Parkwood Estates Mobile Home Park, L.C. for approximately $561,000. In addition,
we initially  agreed to advance the Park up to a maximum of $350,000 to fund its
cash flow needs.  Because of  continuing  losses at the Park (100% of which have
been  funded  by us under  the  aforementioned  arrangement)  we have  routinely
increased the amount that the Park is able to borrow from us. As of December 31,
1999 and 1998,  we had advanced  approximately  $306,000 and $55,000 to the Park
under this  arrangement.  In addition,  as of January 31, 2001,  we had advanced
approximately  $500,000 to the Park.  The advances bear  interest at 12.9%,  are
unsecured  and have no specified  repayment  terms as to principal and interest.
During the years ended  December 31, 1999 and 1998, we recognized  approximately
$20,000 and $1,000 of interest income on these advances.  None of this interest,
and or the advances, have been paid to us by the Park and accordingly,  interest
and  fees  receivable  includes  approximately  $21,000  due from the Park as of
December 31, 1999.

ITEM 13-EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                 FORMS 8-K

Exhibits - None.
--------
Financial Statement Schedules - None.
-----------------------------
Reports on Form 8-K - None.
--------------------




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                                   SIGNATURES

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

                            STERLING FINANCIAL SERVICES OF FLORIDA I, INC.

                  By:       ____________________________________________________
                            Chief Executive Officer

Dated:  February 15, 2001


      In accordance  with Exchange Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dated indicated.

SIGNATURE                   TITLE                            DATE
---------                   -----                            ----

                            Director, Chief Accounting        February 15, 2001
                            Officer



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