U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB


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

                    For Fiscal Year Ended: December 31, 2002

                                       or

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

For the transition period from                       To
                              ----------------------    ------------------------


Commission file number        000-29549
                       ---------------------------------------------------------

                         Northeast Mortgage Corporation
                 (Name of small business issuer in its charter)

             Nevada                                         86-0972558
-------------------------------------                  --------------------
   State or other jurisdiction of                        (I.R.S. Employer
   incorporation or organization                         Identification No.)


               800 Main Street South, Southbury, Connecticut 06488
--------------------------------------------------------------------------------
               (Address of principal executive offices) (zip code)


Issuer's telephone number                               (203) 262-6110
                                                       ---------------


Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act:

                          Common Stock Par Value $0.001
                                (Title of class)




<PAGE>



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

                                                                 Total pages: 20
                                                                            ----
                                                          Exhibit Index Page: 13
                                                                            ----

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

         State  issuer's  revenues for its most recent fiscal year.  $11,239,309
                                                                    ------------

         As of August 21, 2003,  there were 4,000,000 (1 vote per share) Common,
4,600,000 Series A Preferred,  for a total of 8,600,000 votes. All shares have a
par value of $0.001. The aggregate market value of the Registrant's voting stock
held by non-affiliates of the Registrant was approximately  $200 computed at the
par value of the stock.


                             DOCUMENTS INCORPORATED BY REFERENCE

         If the following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the Form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):
NONE

         Transitional  Small Business  Disclosure Format (check one): Yes ; No X
















                                        2

<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Number and Caption                                                                                       Page
PART I

<S>         <C>                                                                                               <C>
Item 1.     Description of Business                                                                               4

Item 2.     Description of Property                                                                               4

Item 3.     Legal Proceedings                                                                                     5

Item 4.     Submission of Matters to a Vote of Security Holders                                                   5


PART II

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

Item 6.     Management's Discussion and Analysis or Plan of Operations                                            6

Item 7.     Financial Statements                                                                                  9

Item 8.     Changes in and Disagreements With Accountants on Accounting and
            Financial Disclosure                                                                                  9

PART III

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

Item 10.    Executive Compensation                                                                               11

Item 11.    Security Ownership of Certain Beneficial Owners and Management                                       12

Item 12.    Certain Relationships and Related Transactions                                                       13

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

Item 14.    Controls and Procedures                                                                              14

</TABLE>


                                        3

<PAGE>

                                     PART I

--------------------------------------------------------------------------------
                         ITEM 1 DESCRIPTION OF BUSINESS
--------------------------------------------------------------------------------

General

         The Company is engaged primarily in the mortgage banking business.  Its
principal  activity is the origination  and sale of mortgage loans.  The Company
does not retain the right to service any of the mortgage loans sold to permanent
investors.  The Company,  as a non  supervised  mortgagee,  also  originates FHA
insured Title II mortgages which are sold to permanent investors.

History

         The Company was  incorporated  under the laws of the State of Nevada on
July 25, 1997.  The Company  ceased all operating  activities  during the period
from July 25, 1997 to October 20, 1999 and was considered dormant.  From October
20,  1999 to March 26,  2002,  the  Company  was in the  development  stage.  On
February  25,  2002,  the  Company  changed  its  name  to  Northeast   Mortgage
Corporation  in  anticipation  of its  acquisition  of the  assets of  Northeast
Mortgage,  LLC, a Connecticut  limited liability company. On March 27, 2002, the
Company  completed  the  acquisition  of the assets of Northeast  Mortgage,  LLC
pursuant to a Contribution  Agreement dated October 30, 2001. The Company,  with
offices in Southbury,  Connecticut; Easton, Massachusetts;  Scottsdale, Arizona:
and Philadelphia, PA, is a mortgage lender.

--------------------------------------------------------------------------------
                         ITEM 2 DESCRIPTION OF PROPERTY
--------------------------------------------------------------------------------

         We  operate  out  of  four  leased   offices   located  in   Southburg,
Connecticut,  Phoenix,  Arizona,  Mesa, Arizona and Easton,  Massachusetts.  The
information for each location is contained in the table below:

     Location              Size (sq. ft.)    Monthly Rent        Lease Term

800 Main Street South         10,795           $12,011         Five year lease
Southburg, CT  06488                                           Commencing 2/1/99

3550 North Central Avenue      5,350            $8,248         Five year lease
Suite 1205                                                     Commencing 5/1/01
Phoenix, AZ  85012

                                        4

<PAGE>




7303 E. Main Street            2,160            $2,717         Three year lease
Suite 114                                                      Commencing 9/1/00
Mesa, AZ  85207

45 Bristol Drive                 650            $1,240         Month to month
Suite 101
Easton, MA  02375

--------------------------------------------------------------------------------
                            ITEM 3 LEGAL PROCEEDINGS
--------------------------------------------------------------------------------

         The Company is involved in various legal actions  arising in the normal
course of business. The Company is a party in the following pending matters:

         In Luciano et al v. Northeast Mortgage,  LLC, the Plaintiff is suing as
a result of an alleged breach of a commitment to lend $180,000, as well as other
tort related claims.  The Plaintiff does not have an attorney and  consequently,
the nature and basis of the claims are difficult to determine from the pleadings
that have been filed to date.  The  Company  intends to  vigorously  defend this
action and has joined co-defendant IndyMac Mortgage Holdings,  Inc. in retaining
legal counsel to represent its  interests.  A Motion to Dismiss the  Plaintiff's
claims has been granted and the Plaintiff has filed several motions to reinstate
the claims.  Due to the fact that the litigation has never  progressed  past the
initial  stages,  the  Company  is  unable  to  evaluate  the  likelihood  of an
unfavorable  outcome or estimate the amount, if any, of any potential losses. No
provision has been made in the financial statements related to this claim.

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

         There were no matters submitted to a vote of shareholders.


                                     PART II

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

                                        5

<PAGE>

         Our common stock is not listed or quoted at the present time, and there
is no public market for our common stock. There are currently 29 shareholders of
our common stock and 3 holders of our preferred stock. There can be no assurance
that a public  market  for our  common  stock  will ever  develop.  We intend to
qualify our common stock for trading on the OTC  Bulletin  Board or other public
market after the Registration Statement becomes effective.

         We have  no  options  or  warrants  outstanding  at the  current  time.
However,  we do have 1,000,000  shares that are subject to our 2001 Stock Option
Plan. We also have 4,600,000 shares of Series A Preferred Stock outstanding each
of which is  callable  by the  Company at a price of $1.00 per share until March
27, 2003 and are then  convertible  by the holders,  at their  option,  into one
share of common stock.

         An amount of  200,000  of the  currently  outstanding  shares of common
stock are registered in the registration  statement.  We are not registering the
4,600,000 shares underlying the Series A Preferred Stock. Such shares may become
eligible for sale under Rule 144 beginning on March 22, 2003.

--------------------------------------------------------------------------------
                       ITEM 6 MANAGEMENT'S DISCUSSION AND
                         ANALYSIS OR PLAN OF OPERATIONS
--------------------------------------------------------------------------------

Acquisition

         In the fourth  quarter of 2000,  Brian  Rogerson and Daniel  Hodges met
while Mr. Hodges was seeking a mortgage for his personal residence. The mortgage
discussions  evolved into  negotiations  between Mr.  Hodges on behalf of Knight
Investment Ltd., and Mr. Rogerson on behalf of Northeast Mortgage, LLC as to our
acquisition of Northeast  LLC. The terms of the merger were initially  agreed to
in  the  fourth  quarter  of  2001.  No  third  parties  were  involved  in  the
negotiations and no finders fee or other  remuneration was paid to a third party
as a result of the acquisition.  On March 27, 2002 we acquired all of the assets
of Northeast  Mortgage LLC. As a result of the acquisition,  we issued 3,000,000
shares of our common stock and 4,600,000  shares of our Series A Preferred stock
to the former  members of Northeast LLC and the business of Northeast LLC became
our business.  On February 25, 2002, we filed Articles of Amendment to amend and
restate our Articles of Incorporation to change our name from Knight  Investment
Ltd. to Northeast Mortgage Corporation in anticipation of the acquisition.

         We are engaged primarily in the mortgage banking business,  and as such
originate and sell mortgage  loans.  Our mortgage  loans are  principally  prime
credit quality  first-lien  mortgage loans secured by  single-family  residences
although we also offer home equity loans both in conjunction with newly produced
prime credit quality first mortgages and as a separate product. In addition,  we
offer sub-prime credit quality first-lien single-family mortgage loans.


                                        6

<PAGE>

         Before our  acquisition  of Northeast LLC we were an inactive  publicly
registered shell corporation and had no significant assets or operations.

PLAN OF OPERATION

         During the fiscal year ended December 31, 2002,  Northeast  focused its
resources in further  establishing a presence in the financial services industry
as a regional mortgage banker.  Its primary goals were to increase the number of
loans originated while controlling and then reducing salaries and other expenses
required to facilitate  the closing of the mortgage  transaction.  In January of
2000  Northeast  established  its own  telemarketing  department to increase the
number of leads available to its sales staff while also  decreasing  advertising
related expenses.  A new Mesa, Arizona office was established in the second half
of 1999. That office has established  itself locally in 2000 and has generated a
profit  for  2002.  In  addition  to  taking  the  necessary  steps to  increase
production we eliminated  and  consolidated a number of salary  positions  while
also  restructuring  the  compensation  plans of all salespeople in an effort to
improve earnings.

2002 as  Compared  to 2001  Results of  Operations  and  Analysis  of  Financial
Condition

         Revenues  increased 21% from $8,934,868 for the year ended December 31,
2001 to  $11,239,309  for the year ended  December  31, 2002.  This  increase in
revenues  was due to an  increase  in the  loans  originated  and  funded  loans
amounts.  General and administrative  expenses increased 28% from $7,646,495 for
the year ended  December 31, 2001 to $9,762,644  for the year ended December 31,
2002. This increase in expenses was due to the increase in activity.  Net income
was $172,095 in 2002 compared to net income of $219,862 for 2001 - a decrease in
net  income of 22%.  The  decrease  in net  income  was mainly the result of the
difference  in income tax  treatment of the Company from 2001  compared to 2002.
Northeast  Mortgage,  LLC. had no income tax expense for 2001 because the income
passed  through to the  individual  members who paid income tax on that  income.
Since the acquisition and recapitalization of Northeast Mortgage,  LLC. occurred
during  2002,  the Company  recorded the federal and state income tax expense on
the 2002  financial  statements.  These income taxes total $132,600 for the year
ended December 31, 2002. We expect our  advertising  expenses to remain constant
since the majority of our ongoing  expense  related to  advertising  is budgeted
through our internal  telemarketing  department.  We do not foresee any material
increases in costs in the near future.

         We originated 1,896 loans in 2001 for a total of $287,898,853 in funded
loan  amounts  resulting in an increase of 56% in units closed and 87% in funded
loan amounts as compared to the same period in 2000.

         We originated 2,265 loans in 2002 for a total of $364,927,990 in funded
loan  amounts  resulting in an increase of 19% in units closed and 27% in funded
loan amounts as compared to the same period in 2001.

Seasonality

         The mortgage banking industry is generally  subject to seasonal trends.


                                        7

<PAGE>


We are subject to this  seasonality.  Production  tends to  decrease  during the
summer and increase during the fall, winter, and spring.

Market Risk

         Interest   rates  are  the  primary  market  risk  the  Company  faces.
Increasing  interest rates tend to decrease the number of loans  originated.  We
compensate  for interest rate  increases by offering  variable  rate  mortgages,
sub-prime  loans,  and equity  loans,  which tend to gain in  popularity  during
periods of increased interest rates. In periods of decreasing  interest increase
the number of loans originated during the decreasing rate trend.  Investors whom
the  Company  sells its loans  compete  for its  business  therefore  decreasing
interest  rate  environment  has  only  a  positive  effect  on its  results  of
operations effect only.

Liquidity and Capital Resources

         We expect that we will be able to satisfy our cash requirements for the
next twelve  months from our existing cash flow.  Unlike many mortgage  bankers,
Northeast's  loss  experience due to defaulted  mortgages is nil due to the fact
that most of the loans are already sold to buyers prior to  placement.  However,
the  mortgage  payables  and  receivables  levels at the end of any given fiscal
period  fluctuate  tremendously  since the Company may or may not sell its short
term portfolio  that is being  seasoned  depending on the market for such loans.
Internally, our main source of liquidity is chiefly from operations and not from
investment or sale of equity.

         We fund our mortgage banking financing activities in large part through
our banking lines of credit, sometimes also referred to as "warehouse lines". We
had  available   committed  and  uncommitted   credit   facilities   aggregating
approximately  $42.5 million as of December 31, 2002. We have a $7,500,000  line
of credit with Peoples Bank and a $35,000,000 line of credit with Horizons Bank.
As of December 31, 2002 there was $7,383,061  outstanding  with Peoples Bank and
$28,630,208  outstanding  with Horizons  Bank. As of December 31, 2001 there was
$3,611,268  outstanding  with  Peoples  Bank and  $22,799,474  outstanding  with
Horizons  Bank.  The increase in the  outstanding  lines of credit was due to an
increase in loan  activity.  The  Peoples  Bank line of credit is at the Federal
Discount  Rate plus 2.75%.  Our  Horizons  Bank line of credit is scaled and for
conforming  loans is Prime Rate minus .25% for the first 30 days, Prime Rate for
31 to 60 days, Prime Rate plus 1% from 61 to 90 days and Prime Rate plus 3% over
90 days.  The rate for sub-  prime  loans is Prime Rate plus 2% for the first 90
days and Prime Rate plus 3% over 90 days.  Our ability to continue to  originate
and fund  mortgage  loans  is  dependent  on  continued  access  to  capital  on
acceptable  terms.  Our credit lines require us to repay the amount we borrow to
fund a loan  generally  within 30 to 90 days after the loan is closed or when we
receive payment from the sale of the funded loan,  whichever occurs first. These
borrowings  are repaid  with the  proceeds  received  by us from the sale of our
originated  loans  to  institutional  investors.  Until  the  loan is sold to an
investor and  repayment of the loan is made under the credit  lines,  the credit
line  provides  that the  funded  loan is  pledged  to  secure  our  outstanding
borrowings. The lines of credit contain certain covenants limiting indebtedness,
liens,  mergers,  changes in  control  and sales of assets  and  requires  us to
maintain minimum net worth and other financial ratios.

                                        8

<PAGE>

Employees

         We do not expect any material change in the number of employees.

--------------------------------------------------------------------------------
                           ITEM 7 FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

         The  financial  statements  of the Company and  supplementary  data are
included beginning  immediately following the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.

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

         There are not and have not been any  disagreements  between the Company
and its  accountants  on any  matter  of  accounting  principles,  practices  or
financial statements disclosure.


                                    PART III

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

Executive Officers and Directors

         The  following  table sets forth the names,  positions  and ages of the
individuals who will serve as our directors and executive officers following the
combination.  All directors are elected at each annual meeting and serve for one
year and until their successors are elected and qualify. Officers are elected by
the Board of Directors,  and their terms of office are at the  discretion of the
Board.

     Name of Director/Officer         Age       Position(s) With Company

     Brian Rogerson                   37        Chairman and President
     Sean Rogerson                    35        Director, Vice President and COO
     Anthony Gabriele                 37        Director and Secretary
     Daniel L. Hodges                 37        Director

                                        9

<PAGE>

Brian Rogerson

         Mr.  Rogerson  formed  Northeast  Mortgage LLC in October 1996 with his
brother  Sean  Rogerson  and his  associate  Anthony  Gabriele.  From 1991 until
October  1996 he was vice  president  of Retail  Lending at  Fairfield  Mortgage
Corporation. Prior to Fairfield he was a Senior Loan Officer at United Financial
Funding and a loan officer and account executive with Family Financial Services,
Inc.  Mr.  Rogerson  earned a B.S. in  Management  and Finance from Sacred Heart
University in May 1986.

Sean Rogerson

         Mr.  Rogerson  formed  Northeast  Mortgage LLC in October 1996 with his
brother  Brian  Rogerson and his  associate  Anthony  Gabriele.  From 1992 until
October  1996, he was a Senior Loan Officer at Fairfield  Mortgage  Corporation.
Prior to Fairfield Mr.  Rogerson was with Gateway Bank where he upgraded  branch
computer networks and trained employees in the automated  functions and programs
used by the bank.  He was also a specialist  in IRA and SEP accounts at Bankmart
and a Charge Back Supervisor at the Bank and New England.

Anthony Gabriele

         Mr. Gabriele formed Northeast Mortgage LLC in October 1996 with Messrs.
Brian and Sean Rogerson.  From 1995 until the formation of Northeast Mortgage in
1996, Mr. Gabriele was a Loan Officer at Fairfield Mortgage  Corporation.  Prior
to joining  Fairfield,  he was a Sales Manager for Comtek  International and was
responsible for the organization  and development of international  trade events
in Russia,  Romania and Germany.  In May 1986 Mr.  Gabriele  earned a Bachelor's
degree in Business Economics from Southern Connecticut State University.

Daniel Hodges

         Daniel Hodges was the sole  Director,  President,  and Secretary of the
Company prior to the acquisition of Northeast LLC. From 1995 to 1999, Mr. Hodges
was president and director of Solomon  Consulting  Corp.,  which  specialized in
corporate and securities  consulting.  Mr. Hodges is also currently on the board
of directors of two charitable  organizations as well as a number of blank check
companies  similar to ours. Mr. Hodges  received his B.S.  Degree from Thomas A.
Edison State College in Trenton,  New Jersey in 1990. He also  graduated in 1992
from the U.S. Air Force Undergraduate Pilot Training program and currently holds
the rank of Captain in the Arizona Air National  Guard where he is an instructor
in the F16 fighter.  Mr. Hodges also serves as an officer and or director on the
reporting Issuers listed below.

A Better Way Financial Corporation       Amazing Investments, Inc.
American Frontiers Marketing Company     Arcadia Investments, Inc.
Caprock Canyon Investments, Inc          Cedar Grove Marketing, Inc.
Coyote Canyon Corporation                Easy Living Investments, Inc.
Equality Investments, Inc.               Essential Solutions, Inc.

                                       10

<PAGE>



Fantastic Financial Corporation          Feather Valley Financial, Inc.
Freedom Financial Corporation            Granite Cliffs Incorporated
Harvest Valley Ventures, Inc.            Monumental Marketing, Inc.
Neighborhood Investments, Ltd.           Preferred Investments, Inc.
Private Access, Inc.                     Spring Valley Management Corporation
Stone Field Management Company           Stonewall Financial, Ltd.
Sweetwater Investing, Inc.               Walnut Valley Ventures, Inc.
Western Financial Corporation            Horse Resources, Inc.
White Oak Corporation                    Essential Laser Concepts Ltd.
Buccaneer Marketing & Investments        Deerwood, Inc.
Everyday Assembly Productions, Inc.      Forgotten Investments Company, Inc.
Green Clover Luck Corporation            Green Oaks Concepts, Ltd.
In Full Affect, Inc.                     K.B. Far Incorporation
Market Integrity, Inc.                   Nascent Technology, Inc.
Par 3 Services, Inc.                     Passover Management International, Inc.
Profits Emporium, Inc.                   Ring of Fire Marketing, Ltd.
Seminar Strategies & Marketing, Inc.     Silver Rose Development, Inc.
Social Engagements, Inc.                 Superior Global Services, Inc.
Triumphant Endeavors, Inc.

--------------------------------------------------------------------------------
                         ITEM 10 EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------

         The following table sets forth all compensation paid by us to the chief
executive officer and the four most highly  compensated  executive  officers for
services rendered during the last three completed fiscal years.

                                            Summary Compensation Table
<TABLE>
<CAPTION>
                                                           Long-Term
                                                      Compensation Awards
                                                      -------------------
                                     Annual          Restricted   Securities     All Other
Name and                         Compensation (1)       Stock     Underlying   Compensation
Principal Position    Year      Salary($)  Bonus($)   Awards($)  Options/SARs     (1)(2)
-------------------   ----      ---------  --------   ---------  ------------  ------------
<S>                   <C>       <C>        <C>        <C>        <C>           <C>
Brian Rogerson        2002        645,877       -            -            -          26,750
President             2001        230,000       -            -            -          29,000
                      2000         79,000       -            -            -          28,900

Sean Rogerson         2002        408,127       -            -            -          16,852
Vice President        2001        164,000       -            -            -          14,000
                      2000         36,000       -            -            -          12,500
</TABLE>

                                       11

<PAGE>

<TABLE>
<CAPTION>
<S>                   <C>       <C>        <C>        <C>        <C>           <C>
Anthony Gabriele      2002        353,500       -            -            -          15,505
Secretary             2001        156,000       -            -            -          14,000
                      2000         29,000       -            -            -          13,000
</TABLE>

(1)      Amounts paid to Messrs.  Rogerson,  Rogerson and Gabriele  were made as
         distributions  from Northeast  Mortgage,  LLC prior to the contribution
         transaction.

(2)      Amounts paid for automobiles and insurance therefore.

Director Compensation

         Directors  currently receive no cash compensation for their services in
that capacity.  Reasonable out-of-pocket expenses may be reimbursed to directors
in connection with attendance at meetings.

--------------------------------------------------------------------------------
                 ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
                                 AND MANAGEMENT
--------------------------------------------------------------------------------

Principal Shareholders

         The table  below sets forth  information  as to each  person  owning of
record or who was known by the Company to own  beneficially  more than 5% of the
8,600,000 votes as of August 21, 2003, including options to acquire stock of the
Company that are currently  exercisable  or will be within the next 60 days, and
information as to the ownership of the Company's  Stock by each of its directors
and executive  officers and by the directors and executive  officers as a group.
Except as otherwise  indicated,  all shares are owned directly,  and the persons
named in the table have sole voting and investment  power with respect to shares
shown as beneficially owned by them.

Principal Stockholders and Stockholdings of Management

     Name and Address of            Shares Beneficially           Percent of
     Beneficial Owner (1)         Owned After Acquisition       Common Stock (2)
     --------------------         -----------------------       ----------------
     Brian Rogerson (3)                  4,180,000                   48.6%
     Sean Rogerson (4)                   1,900,000                   22.1%
     Anthony Garbriele (5)               1,520,000                   17.7%
     Daniel L. Hodges                      800,000                   9.30%

All Officers and Directors as a group    8,400,000                   97.7%

(1)      The address of record for Messrs.  Rogerson's  and Gabriele is 800 Main
         Street  South,  Southbury,  CT 06488.  For Mr.  Hodges,  the address of
         record is 1815 N. Placita Buendia, Tucson, AZ 85749.


                                       12

<PAGE>



(2)      Applicable ownership  percentages were based on 4,000,000 common shares
         issued and  outstanding  as of August 21,  2003,  together  with shares
         issuable upon  conversion of Series A Preferred Stock to the applicable
         stockholder.  Shares  of  common  stock  issuable  upon  conversion  of
         securities within 60 days after August 21, 2003 are deemed  outstanding
         for  computing   percentage   ownership  of  the  person  holding  such
         convertible security,  but are not deemed outstanding for computing the
         percentage of any other person.

(3)      Includes  2,530,000  shares of common stock issuable upon conversion of
         Series A Preferred Stock held by Mr. Rogerson.

(4)      Includes  1,150,000  shares of common stock issuable upon conversion of
         Series A Preferred Stock held by Mr. Rogerson.

(5)      Includes  920,000  shares of common stock  issuable upon  conversion of
         Series A Preferred Stock held by Mr. Gabriele.

--------------------------------------------------------------------------------
             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------------------------------

         There are none to report.

--------------------------------------------------------------------------------
                   ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------------

         (a) The following documents are filed as part of this report.

1. Financial Statements                                                     Page

Report of Robison, Hill & Co., Independent Certified Public Accountants......F-2
Balance Sheets
  December 31, 2002, and 2001................................................F-3
Statements of Income
  For the Years Ended December 31, 2002, and 2001............................F-5
Statement of Stockholders' Equity
  For the Years Ended December 31, 2002, and 2001............................F-6
Statements of Cash Flows
  For the Years Ended December 31, 2002, and 2001............................F-7
Notes to Financial Statements
  December 31, 2002, and 2001................................................F-8


2.     Financial Statement Schedules

                                       13

<PAGE>




         All  schedules  are  omitted  because  they are not  applicable  or the
required information is shown in the financial statements or notes thereto.

3.     Exhibits
         The following exhibits are included as part of this report:
Exhibit
Number                     Title of Document
--------------------------------------------------------------------------------

3.1      Articles of Incorporation(1)

3.2      Amended Articles of Incorporation(1)

3.3      Bylaws(1)

3.4      Amended Articles of Incorporation(2)

31.1     Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

31.2     Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

32.1     Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.

32.2     Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.


         (1)      Incorporated   herein  by  reference  from  Registrant's  Form
                  10SB12G, Registration Statement, dated February 16, 2000.

         (2)      Incorporated  herein by reference from  Registrant's Form 8-K,
                  dated April 11, 2002

--------------------------------------------------------------------------------
                        ITEM 14. CONTROLS AND PROCEDURES
--------------------------------------------------------------------------------

         The Company's Chief Executive  Officer and Chief Financial Officer have
concluded,  based on an evaluation  conducted within 90 days prior to the filing
date of this  annual  report  on Form 10- KSB,  that  the  Company's  disclosure
controls and  procedures  have  functioned  effectively  so as to provide  those
officers the information necessary whether:

         (i) this annual report on Form 10-KSB contains any untrue  statement of
         a material fact or omits to state a material fact necessary to make the
         statements made, in light of the

                                       14

<PAGE>



         circumstances  under which such  statements  were made,  not misleading
         with  respect  to the  period  covered  by this  annual  report on Form
         10-KSB, and

         (ii) the financial statements, and other financial information included
         in this annual  report on Form 10-KSB,  fairly  present in all material
         respects the financial condition,  results of operations and cash flows
         of the  Company as of, and for,  the periods  presented  in this annual
         report on Form 10-KSB.

         There  have  been no  significant  changes  in the  Company's  internal
controls or in other factors since the date of the Chief Executive Officer's and
Chief  Financial  Officer's  evaluation  that could  significantly  affect these
internal controls,  including any corrective actions with regards to significant
deficiencies and material weaknesses.


































                                       15

<PAGE>


--------------------------------------------------------------------------------
                                   SIGNATURES
--------------------------------------------------------------------------------

         Pursuant to the  requirements  of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                          NORTHEAST MORTGAGE CORPORATION

Dated: September 18, 2003                 By  /S/     Brian Rogerson
                                          ------------------------------
                                          Brian Rogerson
                                          President, Principal Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant  and in the  capacities  indicated on this 18th day of September,
2003.

Signatures                                        Title

/S/     Brian Rogerson
---------------------------------------
Brian Rogerson                            President, Principal Executive Officer


/S/     Sean Rogerson
---------------------------------------
Sean Rogerson                             Vice-President, Principal Financial
                                          Officer


/S/     Anthony Gabriele
---------------------------------------
Anthony Gabriele                          Secretary


/S/     Daniel L. Hodges
---------------------------------------
Daniel L. Hodges                          Director









                                       16

<PAGE>
                         NORTHEAST MORTGAGE CORPORATION

                                      - : -

                          INDEPENDENT AUDITOR'S REPORT

                           DECEMBER 31, 2002 and 2001



<PAGE>






                                    CONTENTS



Independent Auditor's Report................................................F-1

Financial Statements:

         Balance Sheets
         December 31, 2002 and 2001.........................................F-2

         Statements of Income
         Years Ended December 31, 2002 and 2001.............................F-4

         Statements of Stockholders Equity
         Years Ended December 31, 2002 and 2001.............................F-5

         Statements of Cash Flows
         Years Ended December 31, 2002 and 2001.............................F-6

Notes to Financial Statements
         December 31, 2002 and 2001.........................................F-7





<PAGE>





--------------------------------------------------------------------------------
Robison, Hill & Co.                              Certified Public Accountants
A PROFESSIONAL CORPORATION
                                                 Brent M. Davies, CPA
                                                 David O. Seal, CPA
                                                 W. Dale Westenskow, CPA
                                                 Barry D. Loveless, CPA

                          INDEPENDENT AUDITOR'S REPORT



Northeast Mortgage Corporation

         We have audited the accompanying  balance sheets of Northeast  Mortgage
Corporation  as of  December  31, 2002 and 2001 and the  related  statements  of
income,  stockholders  equity,  and cash flows for the years then  ended.  These
financial   statements  are  the   responsibility  of  the  Northeast   Mortgage
Corporation  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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  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 Northeast Mortgage
Corporation  as of December 31, 2002 and 2001, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.


                                                    Respectfully submitted,



                                                    /s/ Robison, Hill & Co.
                                                    Certified Public Accountants

Salt Lake City, Utah
July 18, 2003

                                       F-1

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                          December 31,
ASSETS:                                                                             2002                2001
                                                                             ------------------  ------------------
Current Assets:
<S>                                                                          <C>                 <C>
     Cash                                                                    $          481,576  $          106,030
     Mortgages Receivable                                                            36,753,559          26,829,190
     Accounts Receivable                                                                577,767             639,156
     Employee Advances                                                                  146,328              72,756
     Prepaid Expenses                                                                         -              10,000
                                                                             ------------------  ------------------

          Total Current Assets                                                       37,959,230          27,657,132
                                                                             --------------------------------------

Fixed Assets - Net                                                                      218,547             211,812
                                                                             ------------------  ------------------

Other Assets:
     Deposits                                                                           182,573             152,841
     Notes Receivable - Second Mortgages                                                 52,800              52,800
     Customer Lists - Net                                                               277,172             431,119
     Deferred Tax Assets                                                                 32,674                   -
                                                                             ------------------  ------------------

          Total Other Assets                                                            545,219             636,760
                                                                             ------------------  ------------------

          Total Assets                                                       $       38,722,996  $       28,505,704
                                                                             ==================  ==================
</TABLE>












                                       F-2

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                                 BALANCE SHEETS
                                   (Continued)
<TABLE>
<CAPTION>

                                                                                          December 31,
LIABILITIES & STOCKHOLDERS' EQUITY                                                  2002                2001
                                                                             ------------------  ------------------
Current Liabilities:
<S>                                                                          <C>                 <C>
     Note Payable - Bank                                                     $           67,600  $           67,600
     Warehouse Line of Credit                                                        36,013,269          26,410,742
     Accounts Payable and Accrued Expenses                                              680,728             317,670
     Capital Lease Obligation - Current                                                  24,458                   -
     Income Taxes Payable                                                               165,274                   -
     Shareholder Payables                                                                     -              61,822
                                                                             ------------------  ------------------

          Total Current Liabilities                                                  36,951,329          26,857,834
                                                                             ------------------  ------------------

Long Term Liabilities:
     Notes Payable-Bank                                                                 489,222             556,536
     Capital Lease Obligation - Long Term                                                19,016                   -
                                                                             ------------------  ------------------

          Total Long Term Liabilities                                                   508,238             556,536
                                                                             ------------------  ------------------

          Total Liabilities                                                          37,459,567          27,414,370
                                                                             ------------------  ------------------

Stockholders' Equity
     Preferred Stock, par value $.001, 10,000,000 shares
          Authorized, 4,600,000 shares issued at December 31, 2002
          And -0- shares issued at December 31, 2001                                      4,600                   -
     Common Stock, par value $.001, 100,000,000 shares
          Authorized, 4,000,000 shares issued at December 31, 2002
          And 1,000,000 shares issued at December 31, 2001                                4,000               1,000
     Additional Paid-In Capital                                                       1,082,734           1,090,334
     Retained Earnings                                                                  172,095                   -
                                                                             ------------------  ------------------

          Total Stockholders' Equity                                                  1,263,429           1,091,334
                                                                             ------------------  ------------------

          Total Liabilities and Stockholders' Equity                         $       38,722,996  $       28,505,704
                                                                             ==================  ==================
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       F-3

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                    2002                2001
                                                                             ------------------  ------------------

<S>                                                                          <C>                 <C>
Revenues                                                                     $       11,239,309  $        8,934,868
                                                                             ------------------  ------------------

Operating Expenses:
     Sales and Marketing                                                                698,574             656,871
     General and Administrative                                                       9,762,644           7,646,495
                                                                             ------------------  ------------------

      Total Operating Expenses                                                       10,461,218           8,303,366
                                                                             ------------------  ------------------

Net Operating Income                                                                    778,091             631,502

Other Income (Expense):
  Interest Income                                                                       381,586              12,954
  Interest Expense                                                                     (854,982)           (424,594)
                                                                             ------------------  ------------------

Net Income Before Income Taxes                                                          304,695             219,862


Income Tax (Expense) Benefit
  Current Federal Tax                                                                  (128,818)                  -
  Current State Tax                                                                     (36,456)                  -
  Deferred Income Tax                                                                    32,674                   -
                                                                             ------------------  ------------------

Net Income                                                                   $          172,095  $          219,862
                                                                             ==================  ==================

Basic & Diluted Income Per Share                                             $           0.03    $           0.22
                                                                             ==================  ==================

Weighted Average Shares                                                               6,825,257           1,000,000
                                                                             ==================  ==================
</TABLE>










    The accompanying notes are an integral part of these financial statements

                                       F-4

<PAGE>


                         NORTHEAST MORTGAGE CORPORATION
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
<TABLE>
<CAPTION>
                                                                                                     Additional
                                      Members'        Preferred Stock           Common Stock          Paid-in      Retained
                                       Equity        Shares      Amount       Shares      Amount      Capital      Earnings
                                      ---------    ----------   ---------   ----------   ---------   ----------    ---------
<S>                                   <C>          <C>          <C>         <C>          <C>         <C>           <C>
Balance at January 1, 2001 ........   $1,212,665         --     $    --           --     $    --     $     --      $    --

Net Income ........................     219,862          --          --           --          --           --           --

Distributions to Members ..........    (279,371)         --          --           --          --           --           --
                                      ---------    ----------   ---------   ----------   ---------   ----------    ---------

Balance as originally reported
   At December 31, 2001 ...........   1,153,156          --          --           --          --           --           --

Distributions to Members
   Subsequent to December 31, 2001      (61,822)         --          --           --          --           --           --

Adjustment to Retroactively
   Reflect Recapitalization .......   (1,091,334)        --          --      1,000,000       1,000    1,090,334         --
                                      ---------    ----------   ---------   ----------   ---------   ----------    ---------

Restated Balance
   At December 31, 2001 ...........        --            --          --      1,000,000       1,000    1,090,334         --

Issued stock in a asset acquisition
  agreement .......................        --       4,600,000       4,600    3,000,000       3,000       (7,600)        --

Net Income ........................        --            --          --           --          --           --        172,095
                                      ---------    ----------   ---------   ----------   ---------   ----------    ---------

Balance, December 31, 2002 ........   $    --       4,600,000   $   4,600    4,000,000   $   4,000   $1,082,734    $ 172,095
                                      =========    ==========   =========   ==========   =========   ==========    =========
</TABLE>


    The accompanying notes are an integral part of these financial statements

                                       F-5

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                    2002                2001
                                                                             ------------------  ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                          <C>                 <C>
Net Income                                                                   $          172,095  $          219,862
Adjustments to reconcile net loss to net cash
Provided by operating activities
Depreciation and Amortization                                                           244,738             129,344
(Increase) Decrease in Deferred Tax Asset                                               (32,674)                  -
(Increase) Decrease in Accounts Receivable                                               61,389            (338,940)
(Increase) Decrease in Employee Advances                                                (73,572)             83,461
(Increase) Decrease in Accrued Interest Receivable                                            -              61,596
(Increase) Decrease in Prepaid Expenses                                                  10,000             (10,000)
(Increase) Decrease in Mortgages Receivable                                          (9,924,369)        (13,319,289)
Net Borrowing under Line of Credit Arrangements                                       9,602,527          14,089,292
(Decrease) Increase in Customer Deposits                                                      -             (23,000)
(Decrease) Increase in Accounts Payable and Accrued Expenses                            363,055            (503,482)
(Decrease) Increase in Income Taxes Payable                                             165,274                   -
                                                                             ------------------  ------------------
      Net Cash Provided by Operating Activities                                         588,463             388,844
                                                                             ------------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Equipment                                                                   (97,526)                  -
(Increase) Decrease in Deposits                                                         (29,732)            (34,657)
                                                                             ------------------  ------------------
      Net Cash Used in Investing Activities                                            (127,258)            (34,657)
                                                                             ------------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments Under Bank Loan Agreement                                                      (67,314)            (89,727)
Payments on Shareholder Payables                                                        (61,819)           (279,371)
Net Borrowing Under Capital Lease Obligation                                             43,474                   -
                                                                             ------------------  ------------------
      Net Cash Used in Financing Activities                                             (85,659)           (369,098)
                                                                             ------------------  ------------------

Net (Decrease) Increase in Cash and Cash Equivalents                                    375,546             (14,911)
Cash and Cash Equivalents at Beginning of Period                                        106,030             120,941
                                                                             ------------------  ------------------
Cash and Cash Equivalents at End of Period                                   $          481,576  $          106,030
                                                                             ==================  ==================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
-------------------------------------------------
Cash paid during the year for:
  Interest                                                                   $          854,995  $          440,312
  Franchise and income taxes                                                 $                -  $                -
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None

   The accompanying notes are an integral part of these financial statements.

                                       F-6

<PAGE>

                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of accounting policies for Northeast Mortgage  Corporation
is presented to assist in understanding the Company's financial statements.  The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

Organization and Basis of Presentation

         The Company was  incorporated  under the laws of the State of Nevada on
July 25, 1997.  The Company  ceased all operating  activities  during the period
from July 25, 1997 to October 20, 1999 and was considered dormant.  From October
20,  1999 to March 26,  2002,  the  Company  was in the  development  stage.  On
February  25,  2002,  the  Company  changed  its  name  to  Northeast   Mortgage
Corporation  in  anticipation  of its  acquisition  of the  assets of  Northeast
Mortgage,  LLC, a Connecticut  limited liability company. On March 27, 2002, the
Company  completed  the  acquisition  of the assets of Northeast  Mortgage,  LLC
pursuant to a Contribution  Agreement dated October 30, 2001. The Company,  with
offices in Southbury,  Connecticut; Easton, Massachusetts;  Scottsdale, Arizona:
and Philadelphia, PA, is a mortgage lender.

         Since the former members of Northeast Mortgage,  LLC control 88% of the
Company  after  the  acquisition,   the  transaction  has  been  recorded  as  a
recapitalization of Northeast Mortgage,  LLC. The equity of the Company has been
restated  retroactively  to  reflect  the  recapitalization  on these  financial
statements.

Nature of Business

         The Company is engaged primarily in the mortgage banking business.  Its
principal  activity is the origination  and sale of mortgage loans.  The Company
does not retain the right to service any of the mortgage loans sold to permanent
investors.  The Company,  as a non  supervised  mortgagee,  also  originates FHA
insured Title II mortgages which are sold to permanent investors.

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.





                                       F-7

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  required  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Fixed Assets

         Fixed assets are recorded at cost.  Major renewals and improvements are
capitalized,  while  maintenance  and repairs are expensed when incurred.  As of
December 31, 2002, depreciation is computed as follows:
<TABLE>
<CAPTION>
                                                                                Accumulated
                               Cost              Method           Life         Depreciation             Net
                         -----------------  ----------------  ------------  -------------------  ------------------
Furniture and
<S>                      <C>                <C>               <C>           <C>                  <C>
Fixtures                 $         288,518    Accelerated       7 Years     $           202,885  $           85,633
Office Equipment                   512,605    Accelerated       5 Years                 379,691             132,914
                         -----------------                                  -------------------
                         $         801,123                                  $           582,576  $          218,547
                         =================                                  ===================  ==================

         As of December 31, 2001, depreciation is computed as follows:



                                                                                Accumulated
                               Cost              Method           Life         Depreciation             Net
                         -----------------  ----------------  ------------  -------------------  ------------------
Furniture and
Fixtures                 $         288,518    Accelerated       7 Years     $           172,533  $          115,985
Office Equipment                   415,080    Accelerated       5 Years                 319,253              95,827
                         -----------------                                  -------------------
                         $         703,598                                  $           491,786  $          211,812
                         =================                                  ===================  ==================
</TABLE>



                                       F-8

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Earnings per Share

         Basic earnings per share has been computed by dividing the earnings for
the period applicable to the common  stockholders by the weighted average number
of common  shares  outstanding  during the years.  The total number of shares at
December  31,  2002,  includes  4,000,000  common  shares  that are  issued  and
outstanding and 4,600,000  shares of Series A Convertible  Preferred  Stock. The
Series A shares are convertible to one share of common stock.

         There are no dilutive  outstanding common stock equivalents at December
31, 2002 and 2001.

Concentration of Credit Risk

         The Company's  financial  instruments that are exposed to concentration
of credit risk consist primarily of cash and mortgages  receivable.  The Company
places its cash investments with high credit quality institutions. At times such
investments  may be in  excess  of  the  FDIC  insurance  limit.  The  mortgages
receivable are secured by residential real estate.

Income Taxes

         The Company  accounts  for income  taxes under the  provisions  of SFAS
No.109,  "Accounting  for Income  Taxes." SFAS No.109  requires  recognition  of
deferred  income tax assets and  liabilities  for the expected future income tax
consequences,  based on enacted tax laws, of temporary  differences  between the
financial reporting and tax bases of assets and liabilities.

Comprehensive Income

         The Company does not have any accumulated  comprehensive  income items,
and therefore, is not required to report comprehensive income.

Advertising

         Advertising costs are expensed as incurred.

Revenue Recognition

         Revenue and related  costs are reflected in the accounts when earned or
incurred.

                                       F-9

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Recent Accounting Pronouncements

         In June 2001, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") 141, Business Combinations,
and SFAS 142,  Goodwill and  Intangible  Assets.  SFAS 141 is effective  for all
business  combinations  completed after June 30, 2001. SFAS 142 is effective for
fiscal years beginning after December 15, 2001;  however,  certain provisions of
this Statement apply to goodwill and other  intangible  assets acquired  between
July 1, 2001 and the  effective  date of SFAS  142.  Major  provisions  of these
Statements and their effective dates for the Company are as follows:

         (a)      All business  combinations  initiated after June 30, 2001 must
                  use  the  purchase  method  of  accounting.   The  pooling  of
                  interests  method  of  accounting  is  prohibited  except  for
                  transactions initiated before July 1, 2001.
         (b)      Intangible  assets acquired in a business  combination must be
                  recorded   separately   from   goodwill  if  they  arise  from
                  contractual  or other legal rights or are  separable  from the
                  acquired entity and can be sold, transferred, licensed, rented
                  or  exchanged,  either  individually  or as part of a  related
                  contract, asset or liability.
         (c)      Goodwill,  as well as intangible assets with indefinite lives,
                  acquired after June 30, 2001, will not be amortized.
         (d)      Effective January 1, 2002, all previously  recognized goodwill
                  and intangible  assets with indefinite lives will no longer be
                  subject to amortization.
         (e)      Effective January 1, 2002, goodwill and intangible assets with
                  indefinite  lives will be tested for  impairment  annually and
                  whenever there is an impairment indicator.
         (f)      Effective  January 1,  2002,  the  useful  life of  intangible
                  assets  with finite  lives will be  evaluated  each  reporting
                  period to determine whether events and circumstances warrant a
                  revision to the remaining period of amortization.
         (g)      All acquired  goodwill must be assigned to reporting units for
                  purposes of impairment testing and segment reporting.

         On January 1, 2002, the Company  adopted SFAS 142 and as required,  the
useful lives of the customer lists were evaluated and the remaining amortization
periods  adjusted  accordingly.  Prior to the  adoption of SFAS 142, the Company
amortized  the customer  lists over an estimated  useful life of fifteen  years.
Since the adoption of SFAS 142, the Company amortizes the customer lists over an
estimated useful life of five years.



                                      F-10

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Intangible Assets

         Intangible Assets consisted of the following at December 31, 2002:

     Intangible Asset                                        Amortization Period
Customer Lists                                  $       516,609          5 Years
Less accumulated amortization                          (239,437)
                                                ---------------
Total                                           $       277,172
                                                ===============

         Intangible Assets consisted of the following at December 31, 2001:


     Intangible Asset                                        Amortization Period
Customer Lists                                  $       516,609          5 Years
Less accumulated amortization                           (85,490)
                                                ---------------
Total                                           $       431,119
                                                ===============

         Total  amortization  expense for the year ended  December  31, 2002 and
2001 was $153,947 and $34,441.

NOTE 2 - MORTGAGES RECEIVABLE

         Mortgages  Receivable consist principally of real estate mortgage loans
originated and held for sale to permanent  investors.  They are held at lower of
cost or market. Market value is determined by the permanent investor commitment.
Also included in Mortgages  Receivable are private real estate  mortgages,  with
terms of three and six months, that bear interest at 13.99% per annum. The notes
are secured by residential  real estate located in the states of Connecticut and
Arizona and are financed through the Company. The fair value for these mortgages
receivable  approximate  carrying  amounts due to the short  maturities of these
instruments.

         Losses are  recorded as  incurred.  The Company  has no  provision  for
losses because it has never had a  delinquency.  The  probability  for a loss is
immaterial,  due to the fact  that the  loans  are sold to  permanent  investors
before funding.

NOTE 3 - CUSTOMER LISTS

         The Company  acquired its customer lists through  direct  purchase from
various vendors.

                                      F-11

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001
                                   (Continued)

NOTE 3 - CUSTOMER LISTS (Continued)

These are recorded at cost and  amortized  using the  straight  line method over
five years,  which is the  estimated  useful  life.  With the  formation  of the
Company's  telemarketing  department,  the customer lists are now a component of
the  Company's  data  base,  and  through  statistical  reports,  impairment  is
evaluated on an annual basis.

NOTE 4 - INCOME TAXES

         Deferred taxes result from temporary  differences in the recognition of
income and expenses for income tax reporting and financial  statement  reporting
purposes.  The Company had  deferred  tax benefits of $32,674 for the year ended
December 31,  2002.  These  deferred tax benefits are the result of  differences
between book and tax depreciation and amortization of intangible assets.

         The  difference  between the effective  income tax rate and the federal
statutory  income tax rate on the loss from continuing  operations are presented
below:
<TABLE>
<CAPTION>
                                                                                                   December 31,
                                                                                                        2002
                                                                                                 ------------------

<S>                                                                                              <C>
Expense (Benefit) at the federal statutory rate of 34%                                           $           93,645
Nondeductible expenses                                                                                        2,499
State Income Taxes                                                                                           36,456
Surtax Exemption                                                                                             (6,256)
Other                                                                                                         6,859
                                                                                                 ------------------
Effective Tax Expense                                                                            $          133,203
                                                                                                 ==================
</TABLE>

NOTE 5 - OPERATING LEASE COMMITMENTS

         The Company  leases  office space in  Southbury,  Connecticut;  Easton,
Massachusetts;   Scottsdale,   Arizona  and  Philadelphia,   Pennsylvania  under
agreements with terms of one to five years.  In addition to the base rents,  the
Company  is,  in  general,  responsible  for  paying  its pro rata  share of the
increases  in real  estate  taxes  and  operating  expenses  over the base  year
amounts.

         The Company  leases office  equipment  under  agreements  with terms of
three years.

         The following  summarizes  the future  minimum lease payments under all
noncancellable operating lease obligations:


                                      F-12

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001
                                   (Continued)

NOTE 5 - OPERATING LEASE COMMITMENTS (Continued)

                                    2003                                $321,943
                                    2004                                 164,822
                                    2005                                  50,367
                                    2006                                       -
                                    2007                                       -

NOTE 6 - DEPOSITS

         Included in deposits  are amounts  paid to  permanent  investors  under
indemnification  agreements  for loans sold and now serviced by said  investors.
Management expects no future indemnifications,  nor do they expect to repurchase
any loan sold,  and  accordingly,  no provision  has been made in the  financial
statements.

NOTE 7 - PROFIT SHARING PLAN

         On June 1, 1997,  the Company  (employer)  established  a 401(k) Profit
Sharing Plan.  Any full time employee who has completed  three months of service
and has  attained  age 21 is eligible to  participate.  The  employer can make a
discretionary matching contribution based on the employee elective contribution.
The contribution, if any, is determined each year. For 2002 and 2001, there were
no matching contribution made.

NOTE 8 - LINE OF CREDIT
<TABLE>
<CAPTION>
                                                                                             December 31,
                                                                                       2002               2001
                                                                                 ----------------- ------------------
<C>                                                                              <C>               <C>
$35,000,000 Line of Credit -Horizon Bank                                         $      28,630,208 $       22,799,474
    Interest at Prime plus 1% per annum
    Security interest in all business assets and personal guarantee
    of members and their spouses, Amended and restated
    February 18, 2003, Expires January 31, 2004

$7,500,000 Line of Credit - People's Bank                                                7,383,061          3,611,268
    Interest at Federal Discount Rate
    Security interest in all business assets and personal guarantee
    of  members and their spouses
    Expires July 31, 2004

                                                                                 ----------------- ------------------
                  Total Lines Of Credit                                          $      36,013,269 $       26,410,742
                                                                                 ================= ==================
</TABLE>


                                      F-13

<PAGE>



                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001
                                   (Continued)

NOTE 9 - NOTE PAYABLE - BANK

         On March 29, 2001, the Company  signed a credit  agreement with Newtown
Savings Bank (Bank).  The new agreement amends the Commercial Note and Revolving
Loan Agreement  dated December 4, 1997 wherein a revolving  credit  facility was
made  available to the Company by the Bank in the amount of one million  dollars
($1,000,000).

         The new  agreement,  with a  principal  sum of  $676,000  is payable in
fifty-nine (59) monthly principal payments of $5,633.33 plus interest commencing
April 29, 2001 with the final payment of the entire unpaid principal  balance of
$343,633.53 plus interest payable on March 29, 2006. Interest is calculated at a
variable  rate per  annum of two  percentage  points  above  the  Prime  Rate as
published by the Wall Street Journal.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

         The Company is involved in various legal actions  arising in the normal
course of business. The Company is a party in the following pending matters:

         In Luciano et al v. Northeast Mortgage,  LLC, the Plaintiff is suing as
a result of an alleged breach of a commitment to lend $180,000, as well as other
tort related claims.  The Plaintiff does not have an attorney and  consequently,
the nature and basis of the claims are difficult to determine from the pleadings
that have been filed to date.  The  Company  intends to  vigorously  defend this
action and has joined co-defendant IndyMac Mortgage Holdings,  Inc. in retaining
legal counsel to represent its  interests.  A Motion to Dismiss the  Plaintiff's
claims has been granted and the Plaintiff has filed several motions to reinstate
the claims.  Due to the fact that the litigation has never  progressed  past the
initial  stages,  the  Company  is  unable  to  evaluate  the  likelihood  of an
unfavorable  outcome or estimate the amount, if any, of any potential losses. No
provision has been made in the financial statements related to this claim.

NOTE 11 - RECAPITALIZATION

         On March 27, 2002,  the Company  consummated a transaction  in which it
acquired  substantially  all of the  assets of  Northeast  Mortgage,  LLC.  (the
"Acquisition").

         The  Company  had  1,000,000  shares of $.001 par  value  common  stock
outstanding prior to the acquisition. As a result of the acquisition, the former
members of Northeast Mortgage, LLC were issued 3,000,000 shares of the Company's
common stock and 4,600,000  shares of the Company's  Series A Preferred  Stock..
Following the acquisition,  the Company had 4,000,000 shares of common stock and
4,600,000 shares of Series A Preferred Stock issued and outstanding.


                                      F-14

<PAGE>


                         NORTHEAST MORTGAGE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001
                                   (Continued)

NOTE 11 - RECAPITALIZATION (Continued)

         The  former  principal  member  of  Northeast  Mortgage,  LLC  and  the
Company's current President, Brian P. Rogerson, became the principal stockholder
of the Company.  Mr. Rogerson now owns 1,650,000  shares of the common stock, or
approximately  41.25% of the  issued  and  outstanding  common  stock.  The only
significant  stockholder  of the  Company  other  than  the  former  members  of
Northeast  Mortgage,  LLC is Daniel L. Hodges,  who owns  800,000  shares of the
Company's  common  stock.  At the time of the  acquisition,  the  Company had no
assets or liabilities.

         Since the former members of Northeast Mortgage,  LLC control 88% of the
Company  after  the  acquisition,   the  transaction  has  been  recorded  as  a
recapitalization of Northeast Mortgage, LLC.

NOTE 12 - PREFERRED STOCK

         On  January  8,  2001,  the  Company  authorized  10,000,000  shares of
Preferred Stock,  designated as Series A and Series B Preferred Stock.  Series A
and Series B Preferred  Stock consist of 5,000,000  shares,  with a par value of
$.001  per  share.  On  January  18,  2002 the  Board of  Directors  approved  a
resolution that  designates the 5,000,000  shares of Series A shares as Series A
Convertible  Preferred  Stock,  with a par value of $.001 per share.  The Stated
Value of each  Series A  Preferred  Share is $.10.  The holders of shares of the
Series A Preferred Stock shall be entitled to receive  dividends when, if and as
declared by the Board of Directors. Each share of Series A Preferred Stock shall
be  convertible,  at the option of the holder,  into one share of the  Company's
common stock.

NOTE 13 - ACQUISITION

         On March 27, 2002 the Company  acquired  all of the assets of Northeast
Mortgage,  LLC  (NEM).  As a  result  of the  Acquisition,  the  Company  issued
3,000,000  shares of common  stock and  4,600,000  shares of Series A  Preferred
Stock to the  former  members of NEM and the  Acquisition  the  business  of NEM
became the Company's business.  On February 25, 2002, the Company filed Articles
of Amendment to amend and restate the  Articles of  Incorporation  to change the
name  from  Knight  Investment  Ltd.  to  Northeast   Mortgage   Corporation  in
anticipation of the Acquisition.

         The Company is engaged primarily in the mortgage banking business,  and
as such originate and sell mortgage  loans.  The mortgage loans are  principally
prime  credit  quality  first-lien   mortgage  loans  secured  by  single-family
residences   although  the  Company  also  offers  home  equity  loans  both  in
conjunction  with newly produced  prime credit quality first  mortgages and as a
separate  product.  In addition,  the Company  offers  sub-prime  credit quality
first-lien single-family mortgage loans.

         Before the  acquisition  of NEM,  the Company was an inactive  publicly
registered shell corporation and had no significant assets or operations.

                                      F-15