Mortgage Assistance Center Corp – ‘8-K’ for 5/10/05

On:  Thursday, 5/12/05, at 5:41pm ET   ·   As of:  5/13/05   ·   For:  5/10/05   ·   Accession #:  1010549-5-315   ·   File #:  0-21627

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                        39    132K 
 2: EX-2.0      Business Combination Agreement                        14     66K 

8-K   —   Current Report
Document Table of Contents

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 U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: May 10, 2005

MORTGAGE ASSISTANCE CENTER CORPORATION
(Exact Name of registrant as specified in its Charter)

   Florida                       000-21627                  06-1413994
------------------------          ------------------         -------------------
(State of Incorporation)          Commission File No.        (IRS Employer      
                                                             Identification No.)

2614 Main St., Dallas, TX                                     75226 
----------------------------------------                     -------------------
(Address of principal executive offices)                          (Zip Code)    

Registrant's telephone number (214) 670-0005                                    

SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

(Registrant's former name and address)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions below:                                                     

[_]  Written  communications  pursuant to Rule 425 under the  Securities Act (17
CFR 230.425)                                                          
[_]  Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)                                                           
[_]  Pre-commencement   communications  pursuant  to  Rule  14d-2(b)  under  the
Exchange Act (17CFR 240-14d-2(b))                                     
[_]  Pre-commencement   communications  pursuant  to  Rule  13e-4(c)  under  the
Exchange Act (17 CFR 240-13e-4(c))                                    

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Item 1.01         Entry into a Material Definitive Agreement                    
Item 2.01         Completion of Acquisition or Disposition of Assets            
Item 3.02         Unregistered Sales of Equity Securities                       

On May 10, 2005, we entered into a Business Combination Agreement to acquire all
of the issued and outstanding capital stock of Mortgage  Assistance  Corporation
("MAC"), a Texas corporation,  in exchange for Twelve Million (12,000,000)shares
of our common stock. We propose to acquire  7,500,000 MAC shares in exchange for
12,000,000 of our shares. We will issue 1.6 of our shares for each MAC share.   

We have authorized the issuance of up to 12,000,000 shares to 34 shareholders of
MAC in an exempt transaction under Section 4(2) and Regulation D Rule 506 of the
Securities  Act of 1933,  as amended (the  "Securities  Act").  These shares are
restricted  securities and may not be publicly resold absent  registration  with
the Securities and Exchange  Commission (SEC) or exemption from the registration
requirements of the Securities Act. MAC will become a wholly owned subsidiary of
our company when we complete the acquisition of all the MAC shares.             

As of May 10, 2005, we have received  6,896,556 MAC shares (92%) and have caused
11,034,489  (87.1%)  of our  shares to be issued  to three  individual  who will
comprise a control  group  consisting  of Dale Hensel,  Dan Barnett and Michelle
Taylor.  Together  they will  control  87.1% of the voting  common  stock of our
company. Dale Hensel is the sole officer and director of our company. Mr. Hensel
is the  President  and a director of MAC. Dan Barnett is the Vice  President and
director  of MAC.  Ms.  Taylor is a Vice  President  and  director  of MAC.  The
additional  MAC  shareholders  will have the  opportunity  to participate in the
share exchange under the terms of the Business  Combination  Agreement.  The MAC
shareholders  are not  obligated to exchange  their  shares.  Their  decision to
execute  the  Business  Combination  Agreement  will be  voluntary.  There  is a
possibility  that we may not acquire 100% of the MAC shares because the exchange
offer is voluntary.                                                             

A conflict  of  interest  existed at the time Mr.  Hensel  recommended  that our
company acquire all of the issued and  outstanding  capital stock of MAC because
Mr.  Hensel was our  company  president  and  director  and also the  president,
director  and  shareholder  of MAC. The  decisions  to acquire  MAC,  change our
corporate name, implement the reverse split and capital change were actions over
which  Mr.  Hensel  has  exercised  degrees  of  control  and in  which he had a
financial  interest by virtue of being a shareholder of MAC. As a result of this
conflict of  interest,  under  Section  607.0832 of Florida Law, the conflict of
interest  transactions were required to be disclosed to our shareholders.  Under
Florida law our shareholders were also required to authorize,  approve or ratify
the  transactions.  All of these  transactions were disclosed to, authorized and
approved by the written consent of our company's majority  shareholders who held
75.9%  of the  voting  stock.  At the  time  of  voting,  Mr.  Hensel  was not a
shareholder of our company and did not vote for approval of these transactions. 

The  number of shares  authorized  for  issuance  in this  Business  Combination
transaction  between our Company and the MAC shareholders was negotiated between
Mr. Hensel and MAC management in a transaction with  management.  The management
of our Company and MAC share a common  director and officer in Dale Hensel.  The
transaction  did not  represent  an  arms-length  transaction.  At that time the
transaction  was valued at $295,000  or $0.025 per share.  At that time a market
value for our Company's common shares was difficult to ascertain  because of the
limited and illiquid  market for our company  shares.  Presently,  our company's
shares are quoted on the NASD OTC  Electronic  Bulletin  Board  under the symbol
MTGC. The ask price for company shares is presently $1.25 per share.  Our common
stock market is limited,  illiquid and subject to price volatility.  There is no
active market for our common stock at this time.                                

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Item 5.01         Changes in Control of Registrant                              

Dale Hensel will continue to act as our principal corporate officer and director
until such time as he qualifies and appoints  additional  officers and directors
to fill  vacancies on the board of directors and officer  positions.  Mr. Hensel
anticipates  nominating Dan Barnett and Michelle  Taylor to officer and director
positions with our company, subject to qualification and consent.               

Shareholder  voting  control of our company will be vested in Dale  Hensel,  Dan
Barnett and Michelle Taylor, the principal officers,  directors and shareholders
of MAC,  who have  received a total of  11,034,489  (87.1%) of our shares in the
share exchange with MAC.                                                        

The  following  table  shows  the  shares  of our  common  stock  which  will be
beneficially owned Dale Hensel, Dan Barnett and Michelle Taylor after completion
of the MAC business combination,  as well as the principal shareholders (greater
than 5%) of the Company individually and, as to the directors and officers, as a
group.                                                                          

The number of shares  beneficially  owned by each person or entity is determined
under rules of the Securities and Exchange  Commission,  and the  information is
not necessarily  indicative of beneficial ownership for any other purpose. Under
such rules,  beneficial ownership includes any shares as to which the person has
the sole or shared  voting power or  investment  power and also any shares which
the  person  has the right to  acquire  as of a date  within  60 days  after the
relevant date through the exercise of any stock option or other right.          

Based on 12,664,603  shares issued and outstanding  after 12,000,000  shares are
issued under the Business Combination Agreement with MAC.                       

Table 1.          Beneficial  Ownership  after  our  share  are  issued  in  the
business combination agreement with MAC     

                                                            Percent of Class
Name and address                Number of Shares              Beneficially Owned
----------------                ----------------              ------------------

Dale J. Hensel(1)               5,031,058                            39.7%      

Dan Barnett(2)                  4,967,058                            39.2%      

Michelle Taylor(2)              1,036,375                             8.2%      

Total                           11,034,489                           87.1%      

All Directors and                                                               
Officers as a Group             5,031,058                            39.2%      

(1) Dale Hensel is our sole officer and director. He is a director and president
of MAC.                                                                         
(2) Dan Barnett and  Michelle  Taylor are  officers  and  directors  of MAC. Mr.
Hensel expects to nominate them to board and officer  positions with our company
in the near future, subject to qualification and consent.                       

Item 8.01         Other Events                                                  

Summary of MAC's Business Operations.                                           
-------------------------------------                                           

Mortgage Assistance  Corporation is a financial services company that purchases,
manages and resells first and second real estate mortgages and, or deed of trust
promissory notes. MAC purchases these mortgages at a substantial discount to the

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mortgage   obligation.   Additionally,   when  necessary,   it  will  foreclose,
rehabilitate  and, or sell the real estate securing the purchased  mortgages and
deed of trust promissory notes.                                                 

MAC purchases and manages pools of distressed real estate secured  mortgages and
promissory  notes. The types of mortgage pools acquired include  non-performing,
charged-off,  sub-prime mortgages,  typically between 90 days and two years past
due. The liens are secured by residential  real estate.  MAC acquires both first
and second  mortgages  or liens.  Approximately,  1% of the  acquired  loans are
subordinate  liens,  which bear risk of being reclassified as unsecured loans if
the  priority  lienholder   forecloses  on  the  real  estate.  These  pools  of
non-performing  real estate  mortgages  and notes are  purchased  from banks and
other lending  institutions.  Non-performing  loan pools are purchased in either
negotiated transactions or public bidding transactions.                         

MAC  principally  purchases  non-performing  first  lien loan  pools of  varying
amounts from banks and other lenders at a  significant  discount from the loans'
outstanding  legal  principal  balances,  the total of the aggregate of expected
future  sales price and the total  payments to be received  from the mortgage or
note obligors.  MAC acquires  portfolios  after a quantitative  and  qualitative
analysis of the underlying  mortgage,  the collateral and calculate the purchase
price of the  portfolio so that the  estimated  cash flow offers MAC an adequate
return  on the  acquisition  cost and  servicing  expenses.  After  the  company
purchases the loan pool, the process of debt resolution  commences.  The company
works the loan portfolio with the purpose of changing the  non-performing  loans
into either performing loans or forecloses on the real estate.  The company will
resell a substantial  portion of its  re-performing  loans in various sized loan
pools.  The  company  will be  required  to  foreclose  on certain  real  estate
properties  when  portfolio  loans  continue  in  default.  As a  result  of the
foreclosure  actions,  the company will own single  family real estate and other
real estate.  These properties may be  rehabilitated,  held and ultimately sold.
They  may be sold  for cash or MAC may  finance  the sale by use of real  estate
installment sale contract.                                                      

MAC also enters into joint  venture  agreements  from time to time with  various
investors in the purchase of loan pools.                                        

RISK FACTORS                                                                    

There Has Been An Volatile  Public  Market For Our Common Stock And The Price Of
Our Stock May Be Subject To Fluctuations.                                       

We cannot  assure you that a liquid  transparent  trading  market for our common
stock will develop or be sustained. You may not be able to resell your shares at
any price.  The market  price of our common  stock is likely to be volatile  and
could be subject to  fluctuations  in response to factors such as the following,
most of which are beyond our control:                                           

o        operating  results  that  vary  from  the  expectations  of  securities
analysts and investors;                                       
o        changes  in  expectations  as  to  our  future  financial  performance,
     including financial estimates by securities analysts and investors;
o        the  operations,  regulatory,  market and other risks discussed in this
section;                                                      
o        announcements  by us  or  our  competitors  of  significant  contracts,
         acquisitions,   strategic  partnerships,   joint  ventures  or  capital
commitments;                                                  
o        announcements  by third parties of  significant  claims or  proceedings
against us; and                                               
o        future sales of our common stock.                                      

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In addition,  the market for our stock has from time to time experienced extreme
price and volume  fluctuations.  These broad market  fluctuations  may adversely
affect the market price of our common stock in the future.                      

Risks Relating To Low-Price Stocks.                                             
-----------------------------------                                             

Because  our  stock is  quoted  on the NASD OTC  Electronic  Bulletin  Board and
subject to the Penny Stock  Regulations,  an investor  may find it  difficult to
dispose  of, or to obtain  accurate  quotations  as to the market  value of, our
Company's securities. The regulations governing low-priced or penny stocks could
limit the ability of  broker-dealers  to sell the Company's  securities and thus
the ability of the purchasers and  shareholders to sell their  securities in the
secondary market.                                                               

Limited Market Due To Penny Stock                                               
---------------------------------                                               

The Company's stock differs from many stocks, in that it is a "penny stock." The
Securities  and  Exchange  Commission  has adopted a number of rules to regulate
"penny  stocks."  These rules  include,  but are not limited to,  Rules  3a5l-l,
15g-1,  15g-2,  15g-3,  15g-4,  15g-5,  15g-6 and 15g-7 under the Securities and
Exchange Act of 1934, as amended.  Because our  securities  probably  constitute
"penny stock"  within the meaning of the rules,  the rules would apply to us and
our securities.  The rules may further affect the ability of owners of our stock
to sell their securities in any market that may develop for them. There may be a
limited   market  for  penny   stocks,   due  to  the   regulatory   burdens  on
broker-dealers.  The market among dealers may not be active.  Investors in penny
stock  often are  unable to sell  stock  back to the  dealer  that sold them the
stock. The mark-ups or commissions  charged by the broker-dealers may be greater
than any profit a seller may make.  Because of large dealer  spreads,  investors
may be unable to sell the stock immediately back to the dealer at the same price
the dealer sold the stock to the  investor.  In some  cases,  the stock may fall
quickly in value.  Investors  may be unable to reap any profit  from any sale of
the  stock,  if they  can sell it at all.  Stockholders  should  be aware  that,
according to the Securities and Exchange  Commission  Release No. 34- 29093, the
market for penny stocks has suffered in recent years from  patterns of fraud and
abuse.  These patterns include:  - Control of the market for the security by one
or a few broker-  dealers that are often  related to the  promoter or issuer;  -
Manipulation of prices through  prearranged  matching of purchases and sales and
false and misleading  press releases;  - "Boiler room" practices  involving high
pressure sales tactics and unrealistic price projections by inexperienced  sales
persons;  -  Excessive  and  undisclosed  bid-ask  differentials  and markups by
selling broker- dealers;  and - The wholesale  dumping of the same securities by
promoters and broker-  dealers after prices have been  manipulated  to a desired
level,  along with the  inevitable  collapse  of those  prices  with  consequent
investor losses. Furthermore, the "penny stock" designation may adversely affect
the  development  of any public market for the Company's  shares of common stock
or, if such a market develops, its continuation.  Broker-dealers are required to
personally  determine  whether an  investment  in "penny  stock" is suitable for
customers.  Penny  stocks  are  securities  (i) with a price of less  than  five
dollars per share; (ii) that are not traded on a "recognized" national exchange;
(iii)  whose  prices  are not quoted on the NASDAQ  automated  quotation  system
(NASDAQ-listed  stocks must still meet  requirement  (i)  above);  or (iv) of an
issuer with net tangible  assets less than $2,000,000 (if the issuer has been in
continuous  operation for at least three years) or $5,000,000  (if in continuous
operation for less than three years),  or with average  annual  revenues of less
than $6,000,000 for the last three years. Section 15(g) of the Exchange Act, and
Rule 15g-2 of the Commission require  broker-dealers  dealing in penny stocks to
provide potential investors with a document disclosing the risks of penny stocks
and to obtain a manually signed and dated written receipt of the document before
effecting any transaction in a penny stock for the investor's account. Potential
investors  in the  Company's  common  stock are  urged to  obtain  and read such

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disclosure  carefully before  purchasing any shares that are deemed to be "penny
stock." Rule 15g-9 of the Commission requires broker- dealers in penny stocks to
approve the  account of any  investor  for  transactions  in such stocks  before
selling  any  penny  stock  to  that  investor.   This  procedure  requires  the
broker-dealer to (i) obtain from the investor information  concerning his or her
financial  situation,  investment  experience  and investment  objectives;  (ii)
reasonably  determine,  based on that  information,  that  transactions in penny
stocks are  suitable  for the  investor  and that the  investor  has  sufficient
knowledge and experience as to be reasonably  capable of evaluating the risks of
penny stock  transactions;  (iii) provide the investor with a written  statement
setting forth the basis on which the  broker-dealer  made the  determination  in
(ii) above;  and (iv) receive a signed and dated copy of such statement from the
investor,  confirming  that it  accurately  reflects  the  investor's  financial
situation,  investment  experience and investment  objectives.  Compliance  with
these requirements may make it more difficult for the Company's  stockholders to
resell their shares to third parties or to otherwise dispose of them.           

Future Capital Needs Could Result In Dilution To Investors; Additional Financing
Could Be Unavailable Or Have Unfavorable Terms.                                 

Our Company's future capital requirements will depend on many factors, including
cash flow from  operations,  general  state of the economy,  available  mortgage
pools,  competing market  developments,  and the Company's ability to market its
proposed products  successfully.  It will be necessary to raise additional funds
through  equity  or debt  financings.  Any  equity  financings  could  result in
dilution to our Company's then-existing stockholders.  Sources of debt financing
may result in higher interest expense.  Any financing,  if available,  may be on
terms  unfavorable  to the  Company.  If adequate  funds are not  obtained,  the
Company may be required to reduce or curtail operations.                        

Need for Additional  Financing.  Our Company has no funds. Even if the Company's
future  available funds prove to be sufficient to pay for its  operations,  such
funds will  clearly  not be  sufficient  to enable MAC to exploit  its  business
opportunities. Thus, the ultimate success of the Company and MAC will depend, in
large part, upon its ability to raise additional capital.  There is no assurance
that additional capital will be available from any source or, if available, that
it can be obtained on terms  acceptable to the Company.  If not  available,  the
Company's  and MAC's  operations  will be limited to those that can be  financed
with its modest capital.                                                        

No Assurance of Success or Profitability. There is no assurance that the Company
or MAC will  generate  revenues  or  profits,  or that the  market  price of the
Company's outstanding shares will be increased by this business combination with
MAC.                                                                            

Limited Operating History                                                       
-------------------------                                                       

MAC has a limited operating history and our Company's and MAC's financial health
will be subject to all the risks inherent in the establishment of a new business
enterprise.  The likelihood of success of our company and MAC must be considered
in the light of the problems, expenses, difficulties,  complications, and delays
frequently  encountered  in  connection  with the  startup  and  growth of a new
business, and the competitive  environment in which we will operate. Our success
is dependent upon the successful financing and development of our business plan.
No assurance of success is offered. Unanticipated problems, expenses, and delays
are  frequently  encountered  in  establishing  a new business and marketing and
developing  products.   These  include,  but  are  not  limited  to,  financing,
competition,  the  need  to  develop  customers  and  market  expertise,  market
conditions,  sales,  marketing and governmental  regulation.  The failure of the
Company to meet any of these conditions  would have a materially  adverse effect
upon the Company and may force the Company to reduce or curtail  operations.  No
assurance  can be  given  that  the  Company  or MAC  can or will  ever  operate
profitably.                                                                     

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Caution Regarding Forward-Looking Information                                   
---------------------------------------------                                   

We have included  forward-looking  statements in this report.  For this purpose,
any  statements  contained in this report that are not  statements of historical
fact may be  deemed to be  forward  looking  statements.  Without  limiting  the
foregoing,  words  such as "may",  "will",  "expect",  "believe",  "anticipate",
"estimate",  "plan" or "continue" or the negative or other variations thereof or
comparable  terminology  are  intended to identify  forward-looking  statements.
These statements by their nature involve  substantial  risks and  uncertainties,
and actual  results  may differ  materially  depending  on a variety of factors.
Factors that might cause  forward-looking  statements to differ  materially from
actual  results  include,  among other  things,  overall  economic  and business
conditions,  demand  for the  Company's  products,  competitive  factors  in the
industries in which we compete or intend to compete,  and other uncertainties of
our future acquisition plans.                                                   

Given these uncertainties, readers of this Current Report Form 8-K and investors
are cautioned not to place undue  reliance on such  forward-looking  statements.
The Company  disclaims any  obligation to update any such factors or to publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.                      

REPORTS FILED WITH THE SEC                                                      

Our  Company  is a  reporting  company.  The public may read and copy the Annual
Report (Form 10-KSB) and any other  materials  filed by the Company at the SEC's
Public  Reference Room at 450 Fifth Street N.W.,  Washington,  D.C.  20549.  The
public may obtain  information on the operation of the Public  Reference Room by
calling the SEC at  1-800-SEC-0330.  The SEC  maintains  an  internet  site that
contains reports,  information  statements,  and other information regarding the
company at http://www.sec.gov.                                                  

Item 9.01         Financial Statements and Exhibits                             

(a) Financial Statements of business acquired.                                  

         We  have  attached  the  audited   financial   statements  of  Mortgage
Assistance Corporation (MAC), the Texas corporation.                            

(b) Pro Forma financial information.                                            

         We  have  attached  proforma  financial   information  for  comparative
purposes only which is not  indicative  of the  operating  results that actually
would have occurred had the MAC  acquisition  been  consummated  on December 31,
2004. These results are not intended to be a projection of future results and do
not  reflect  any  synergies   that  might  have  been  achieved  from  combined
operations.                                                                     

(c) Exhibits                                                                    

Exhibit No.       Description of Exhibit                                        

2.0               Business Combination Agreement dated May 10, 2005             

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SIGNATURES                                                                      

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.                                           

Dated: May 10, 2005                       MORTGAGE ASSISTANCE CENTER CORPORATION

                     /s/ Dale Hensel
                                          --------------------------------------
                   By: Dale Hensel
                    Title: President

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 MORTGAGE ASSISTANCE CORPORATION

FINANCIAL STATEMENTS

DECEMBER 31, 2004 AND 2003

WITH

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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 Mortgage Assistance Corporation
Financial Statements
Year Ended December 31, 2004
 and
Period from Inception (March 28, 2003) through December 31, 2003

Contents

Report of Independent Registered Public Accounting Firm......................F-3

Audited Financial Statements:                                                   

     Balance Sheets..........................................................F-4
     Statements of Operations................................................F-6
     Statements of Changes in Stockholders' Equity...........................F-8
     Statements of Cash Flows................................................F-9
     Notes to Financial Statements..........................................F-11

F-2 

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The Board of Directors                                                          
Mortgage Assistance Corporation                                                 
Dallas, Texas                                                                   

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We  have  audited  the  accompanying   balance  sheets  of  Mortgage  Assistance
Corporation  (A Texas  corporation)  as of December  31, 2004 and 2003,  and the
related statements of operations, changes in stockholders' equity and cash flows
for the year ended December 31, 2004, and period from inception (March 28, 2003)
through December 31, 2003. 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 the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are  appropriate  in the  circumstances,  but not the purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting. Accordingly, we express no such opinion. 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 Mortgage Assistance Corporation
as of December 31, 2004 and 2003, and the results of its operations,  cash flows
and changes in  stockholders'  equity for the year ended  December  31, 2004 and
period from  inception  through  December  31,  2003,  in  conformity  with U.S.
generally accepted accounting principles.                                       

--------------------------------------                                          
Sutton Robinson Freeman & Co., P.C.                                             
Certified Public Accountants                                                    

Tulsa, Oklahoma                                                                 
April 12, 2005                                                                  

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 Mortgage Assistance Corporation
Balance Sheets
December 31, 2004 and 2003

ASSETS
                                                     2004           2003
                                                    -----------    -----------
Current Assets                                                                  
Cash and cash equivalents                            $   572,884    $    76,533 
Portfolio assets, at cost (Notes 2 and 4)                764,868        586,228 
Accounts receivable-related parties (Note 7)              92,528         78,177 
Prepaid expenses                                          34,866         90,006 
                                                    -----------    -----------

                                                      1,465,146        830,944
                                                    -----------    -----------
Property And Equipment, at cost                                                 
Furniture, equipment & computers                          58,352         21,208 
Less accumulated depreciation                             11,133            806 
                                                    -----------    -----------

                                                         47,219         20,402
                                                    -----------    -----------
Investments And Other assets                                                    
Investment in public company (Note 11)                   295,000        295,000 
Investment in  MAP/MAC, LLC (Note 5)                      39,797           --   
Rent & utility deposits                                    3,000          3,000 
                                                    -----------    -----------

                                                        337,797        298,000
                                                    -----------    -----------

Total Assets                                         $ 1,850,162    $ 1,149,346 
                                                    ===========    ===========

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

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 Mortgage Assistance Corporation
Balance Sheets
December 31, 2004 and 2003

LIABILITIES AND STOCKHOLDERS' EQUITY            

                                                     2004           2003
                                                    -----------    -----------
Current Liabilities                                                             
Notes payable-individuals (Note 6)                   $   948,000    $   478,000 
Accounts payable-trade                                   151,751           --   
Accounts payable-others                                   89,784        137,784 
Accounts payable-related parties (Note 7)                 18,422         36,360 
Accrued fees & wages                                     188,344         98,955 
Accrued interest payable                                  32,024          1,387 
Other accrued liabilities                                  4,051            160 
Note payable-corporate acquisition (Note 11)                --          235,000 
Notes payable-stockholders (Note 7)                         --           66,963 
                                                    -----------    -----------

                                                      1,432,376      1,054,609
                                                    -----------    -----------
Long-term Debt                                                                  
Notes payable-individuals (Note 6)                       373,200        150,000 
                                                    -----------    -----------

Stockholders' Equity                                                            
Common stock, par value $0.001 per share;                                       
authorized 100,000,000 shares; issued 5,331,350                             
and 5,306,350 shares in 2004 and                                            
 2003, respectively                                       5,331          5,306
Additional paid-in capital                               448,646        326,024 
Retained earnings (deficit)                             (409,391)      (386,593)
                                                    -----------    -----------

                                                          44,586        (55,263)
                                                    -----------    -----------

Total Liabilities and Stockholders' Equity           $ 1,850,162    $ 1,149,346 
                                                    ===========    ===========

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

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 Mortgage Assistance Corporation
 Statement of Operations
Year December 31, 2004 and
Period from Inception (March 28, 2003) through December 31, 2003

                                                     2004           2003
                                                    -----------    -----------
Revenues                                                                        
Sales of portfolio assets (Note 2)                   $ 3,953,712    $      --   
Cost of portfolio assets sold (Note 2)                 2,786,562           --   
                                                    -----------    -----------
Gain on sale of portfolio assets                       1,137,150           --   
Servicing fees from affiliates and others (Note 7)        53,120           --   
Income from joint venture (Note 5)                        27,797           --   
Other income                                              15,413          6,141 
                                                    -----------    -----------
Total Revenues                                         1,233,480          6,141 
                                                    -----------    -----------

Expenses                                                                        
Sales Expenses                                                                  
Commission expense                                        32,707          5,000 
Travel, lodging & meals                                   38,304          1,173 
Due diligence cost & fees                                 10,072          1,890 
Property taxes                                             3,529           --   
                                                    -----------    -----------
                                                         84,612          8,063
                                                    -----------    -----------
General & Administrative Expenses                                               
Wages & contract labor                                   566,613        105,825 
Corporate expenses                                        83,085           --   
Legal & professional fees                                 71,959         38,746 
Office supplies & miscellaneous                           62,800         33,574 
Payroll taxes & employee benefits                         44,526          3,275 
Rent                                                      38,314         10,190 
Telephone & utilities                                     20,044          8,776 
Printing & postage                                        16,279          1,089 
Travel, lodging & vehicles                                12,121          6,066 
                                                    -----------    -----------
                                                        915,741        207,541
                                                    -----------    -----------
Other Expenses                                                                  
Interest expense                                         199,414         11,324 
Software development                                      46,646           --   
Depreciation expense                                       9,865            806 
Expired option fee (Note 11)                                --         (165,000)
                                                    -----------    -----------
                                                        255,925        177,130
                                                    -----------    -----------
Total Expenses                                         1,256,278        392,734 
                                                    -----------    -----------

Income (loss) before income taxes                        (22,798)      (386,593)

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

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 Mortgage Assistance Corporation
 Statement of Operations
Year December 31, 2004 and
Period from Inception (March 28, 2003) through December 31, 2003

                                                     2004           2003
                                                    -----------    -----------

Provision (benefit) for income taxes (Note 8)               --             --   
                                                    -----------    -----------
Net loss                                             $   (22,798)   $  (386,593)
                                                    ===========    ===========

Net loss per share (Note 10)                         $     (0.01)   $     (0.13)
                                                    ===========    ===========

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

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                         Mortgage Assistance Corporation                                 
                             Statement of Cash Flows                                     
                           Year December 31, 2004 and                                    
        Period from Inception (March 28, 2003) through December 31, 2003                 

                                                                      2004        2003   
                                                                   ---------   --------- 
                                                                                         
Cash Flows From Operating Activities                                                     
Net loss                                                           $ (22,798)  $(386,593)
                                                                   ---------   --------- 
Adjustments to reconcile net loss to net                                                 
cash provided (used) by operating activities                                             
Depreciation                                                           9,865         806 
Amortization of prepaid interest                                      71,740       9,260 
Amortization of deferred rent                                         10,767       2,500 
Income from joint venture                                            (27,797)       --   
Change in assets and liabilities, excluding effect of                                    
MSP acquisition                                                                          
(Increase) decrease in mortgage note receivable pools                225,775    (586,228)
(Increase) decrease in accounts receivable from related parties     (104,527)    (78,177)
(Increase) decrease in prepaid insurance                             (27,367)       (766)
(Increase) decrease in deposits                                         --        (3,000)
Increase (decrease) in accounts payable-trade                        150,408     137,784 
Increase (decrease) in accounts payable-others                       (58,195)       --   
Increase (decrease) in accounts payable-related parties             (106,026)     36,360 
Increase (decrease) in accrued fees & wages                           89,389      98,955 
Increase (decrease) in accrued interest                               30,637       1,387 
Increase (decrease) in other accrued liabilities                       3,891         160 
                                                                   ---------   --------- 

Total adjustments                                                    268,560    (380,959)
                                                                   ---------   --------- 

Net Cash Provided (Used) by Operating Activities                     245,762    (767,552)
                                                                   ---------   --------- 

Cash Flows From Investing Activities                                                     
Purchases of property and equipment                                  (24,695)    (19,858)
Investment in partnership                                            (12,000)       --   
Investment in public shell corporation                              (235,000)    (60,000)
                                                                   ---------   --------- 

Net Cash Used by Investing Activities                               (271,695)    (79,858)
                                                                   ---------   --------- 

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

                                      F-8                                                

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                         Mortgage Assistance Corporation                                 
                             Statement of Cash Flows                                     
                           Year December 31, 2004 and                                    
        Period from Inception (March 28, 2003) through December 31, 2003                 

                                                                      2004        2003   
                                                                   ---------   --------- 
Cash Flows From Financing Activities                                                     
Issuance of common stock                                              25,000     228,980 
Proceeds from issuance of debt to individuals                        470,000     628,000 
Proceeds from loans from stockholders                                 30,784      66,963 
Repayment of loans from stockholders                                  (3,500)       --   
                                                                   ---------   --------- 

Net Cash Provided by Financing Activities                            522,284     923,943 
                                                                   ---------   --------- 

Net Increase in Cash                                                 496,351      76,535 

Cash at Beginning of Period                                           76,533        --   
                                                                   ---------   --------- 

 Cash at End of Period                                             $ 572,884   $  76,535 
                                                                   =========   ========= 

Supplemental Disclosures                                                                 

Noncash Investing and Financing Activities:                                              
Stockholders' debt contributed to                                                        
additional paid-in capital                                         $  97,647   $    --   
Investment in public corporate shell financed by short-term debt   $    --     $ 235,000 
Equipment acquired by issuance of common stock                     $    --     $   1,350 

Cash Paid During the Year for:                                                           
Interest                                                           $    --     $     676 
Income taxes                                                       $    --     $    --   

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

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                         Mortgage Assistance Corporation                                                  
                  Statement of Changes in Stockholders' Equity                                            
                           Year December 31, 2004 and                                                     
        Period from Inception (March 28, 2003) through December 31, 2003                                  

                                                                     Additional                           
                                             Common        Par        Paid In     Retained                
                                             Shares       Value       Capital      Deficit       Total    
                                           ----------   ----------   ----------  -----------   ---------- 
                                                                                                          
Balances, March 28, 2003                         --     $     --     $     --    $      --     $     --   

Common shares issued:                                                                                     
For cash                                    5,204,000        5,204      223,776         --        228,980 

In lieu of rent                                20,000           20       19,980         --         20,000 

In lieu of interest                            81,000           81       80,919         --         81,000 

For computer equipment                          1,350            1        1,349         --          1,350 

Net loss                                         --           --           --       (386,593)    (386,593)
                                           ----------   ----------   ----------  -----------   ---------- 

Balances, December 31, 2003                 5,306,350        5,306      326,024     (386,593)     (55,263)

       Common shares issued for cash           25,000           25       24,975         --         25,000 

Stockholders' debt contributed                                                                            
  to additional paid in capital                  --           --         97,647         --         97,647 

Net loss                                         --           --           --        (22,798)     (22,798)
                                           ----------   ----------   ----------  -----------   ---------- 

Balances, December 31, 2004                 5,331,350   $    5,331   $  448,646  $  (409,391)  $   44,586 
                                           ==========   ==========   ==========  ===========   ========== 

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

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 1 - Organization and Nature of Business                                    
-----------------------------------                           

     Mortgage  Assistance  Corporation ("MAC" or the "Company") was incorporated
     in the  State of Texas  on March  28,  2003.  The  Company  is a  financial
     services  company  that  acquires,  manages,  and resells  first and second
     liens.   Additionally,   when   necessary   the  Company  will   foreclose,
     rehabilitate  and sell the homes that are securing the mortgage  notes that
were purchased.                                                       

     The Company  acquires and manages  pools of  distressed  real  estate-based
     mortgages.  The types of mortgage  pools acquired  include  non-performing,
     charged-off,  sub-prime  mortgage,  typically  between  ninety days and two
     years past due and secured by residential real estate. The Company acquires
     both  priority  ("first")  and  subordinate  ("second")  mortgage  loans or
     "liens".  Approximately  1% of the loans  acquired are  subordinate  liens,
     which bear the risk of being  reclassified  as an unsecured loan should the
     first lien holder foreclose on the property. The Company primarily acquires
     non-performing  first  lien loan pools of  varying  amounts  from banks and
     other lenders at a significant  discount from the loans'  outstanding legal
     principal amount, the total of the aggregate of expected future sales price
and the total payments to be received from obligors.                  

     After the Company acquires the loans, the process of resolution begins with
     the borrower,  changing the status of the non-performing  loans into either
     performing loans or foreclosing on the real estate. The Company will resell
     a substantial  portion of its  re-performing  loans in  various-sized  loan
     pools. The Company will be required to foreclose on certain properties when
     loans held in its  portfolio  continue to be in default.  As a result,  the
     Company will be engaged in owning  single-  family  dwellings  and possibly
     other real estate. Such foreclosed real estate will be held,  rehabilitated
where necessary, and sold.                                            

     The Company  commenced  full scale  operations  during the first quarter of
     2004. Through December 31, 2003, the Company had purchased three loan pools
     on the secondary  market and made nominal  collections  of delinquent  loan
     principal and interest.  Sales of loan pools had not been consummated,  nor
     were there any  foreclosures  of secured real estate  through  December 31,
2003.                                                                 

Note 2 - Summary of Significant Accounting Policies                             
------------------------------------------                    

Portfolio Assets:                                                     

     Portfolio  assets  are  held for sale  and  reflected  in the  accompanying
     financial  statements  as  mortgage  note  receivable  pools or real estate
     portfolios.  The following is a description of each  classification and the
related accounting policy accorded to each portfolio type:            

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 2 - Summary of Significant Accounting Policies (Continued)                 
------------------------------------------                    

Mortgage Note Receivable Pools:                                       

     Mortgage note receivable  pools consist  primarily of first lien distressed
     real estate based mortgages. The cost basis of loan pools acquired consists
     of  their  purchase  price  from  banks  or  other  sellers  plus  purchase
     commissions,  if any.  Loan pool costs are  allocated to  individual  loans
     based on the face  value of the  unpaid  principal  of the  loans and their
     performance  status based on the note's expected cash flow. Any payments of
     due diligence costs,  property taxes, or insurance  required are charged to
operations.                                                           

     Subsequent  to  acquisition,   the  adjusted  cost  of  the  mortgage  note
     receivable  pools is evaluated  for  impairment on a quarterly  basis.  The
     evaluation of  impairment  is  determined  based on the review of estimated
     future cash receipts, which represents the net realizable value of the note
     pool. Once it is determined that there is impairment, a valuation allowance
     is established for any impairment  identified through provisions charged to
     operations  in  the  period  the  impairment  is  identified.  The  Company
     determined  that no impairment  allowance was required at December 31, 2004
and 2003.                                                             

     The Company  recognizes gain or loss upon the resale or other resolution of
     mortgage loan pools based upon the difference  between the selling price of
     the loan pool and the cost basis of the  individual  loans  included in the
     pool being sold.  Collections of delinquent principal and interest payments
are credited against the cost basis of the respective loan.           

Real Estate Portfolios:                                               

     Real estate  portfolios  consist of real estate acquired by foreclosures of
     individual  mortgage notes  receivable.  Such portfolios are carried at the
     lower of cost or fair  value  less  estimated  costs  to sell.  The cost of
     foreclosed  real  estate  consists  of  original  loan costs plus any costs
     relating  to the  development  and  improvement  of the real estate for its
     intended use. The costs of foreclosure and any required refurbishment costs
     to bring the property to resaleable condition,  as well as any maintenance,
     taxes and insurance costs required during the holding period are charged to
     operations.  Income or loss is recognized  upon the disposal of real estate
     at date of closing,  based on the difference  between selling prices,  less
     commissions, and capitalized costs. Rental income, net of expenses, on real
     estate   portfolios  is  recognized  when  received.   Accounting  for  the
     portfolios  is on an individual  asset-by-asset  basis as opposed to a pool
basis.                                                                

     Subsequent to acquisition,  the amortized cost of real estate portfolios is
     evaluated for impairment on a quarterly basis. The evaluation of impairment
     is determined  based on the review of the estimated  future cash  receipts,

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 2 - Summary of Significant Accounting Policies  (Continued)                
------------------------------------------                    

     which represents the net realizable value of the real estate  portfolio.  A
     valuation  allowance is established for any impairment  identified  through
     provisions   charged  to  operations  in  the  period  the   impairment  is
     identified.  The Company  determined  that no allowance for  impairment was
required at December 31, 2004.                                        

Cash and Cash Equivalents:                                            

     The  Company  considers  all  highly  liquid  debt  or  equity  instruments
     purchased  with an original  maturity at the date of purchase of 90 days or
less to be cash equivalents.                                          

Fair Value of Financial Instruments:                                  

     The Company's financial instruments include cash,  receivables,  short-term
     payables, and notes payable. The carrying amounts of cash, receivables, and
     short-term payables  approximate fair value due to their short-term nature.
     The  carrying  amounts of notes  payable  approximate  fair value  based on
borrowing terms currently available to the Company.                   

Advertising Costs:                                                    

     Advertising  costs  are  expensed  as  incurred  as  selling,  general  and
administrative expenses in the accompanying statement of operations.  

Property and Equipment:                                               

     Property  and  equipment  acquired are  recorded at cost.  Depreciation  of
     property  and   equipment   is   determined   by  the  straight   line  and
     double-declining  balance methods over estimated  useful lives ranging from
two to seven years.                                                   

     Upon sale,  retirement  or other  disposal of property and  equipment,  the
     related cost and  accumulated  depreciation  are removed from the accounts.
     All gains or losses arising from the sale,  retirement or other disposition
of property or equipment are reflected in earnings.                   

     Maintenance,  repairs, renewals and betterments, in general, are charged to
     expense as incurred,  except that of major renewals and  betterments  which
    extend the life on an asset or increase the value thereof are capitalized.

Income Taxes:                                                         

     The Company  accounts  for income  taxes based on  Statement  of  Financial
     Accounting  Standards (SFAS) No. 109,  "Accounting for Income Taxes".  SFAS
     No. 109 requires the recognition of deferred tax assets and liabilities for

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 Notes to Financial Statements
December 31, 2004 and 2003

Note 2 - Summary of Significant Accounting Policies  (Continued)                
------------------------------------------                    

     the future tax consequences  attributable to temporary  differences between
     the financial statement carrying amounts of existing assets and liabilities
     and their  respective  tax bases.  In  addition,  SFAS No. 109 requires the
     recognition  of future  tax  benefits,  such as net  operating  loss  carry
     forwards,  to the extent that  realization  of such benefits is more likely
     than not. The amount of deferred tax liabilities or assets is calculated by
     applying  the  provisions  on enacted tax laws to  determine  the amount of
     taxes  payable  or  refundable  currently  or in  future  years.  Valuation
     allowances are established,  when necessary,  to reduce deferred tax assets
     when it is more likely than not that all or a portion of the  deferred  tax
asset will not be realized.                                           

Net Loss Per Share:                                                   

     The Company  computes net income (loss) per share in  accordance  with SFAS
     No. 128, Earnings per Share and SEC Staff Accounting  Bulletin No. 98 ("SAB
     98").  Under the  provisions  of SFAS No. 128 and SAB 98,  basic net income
     (loss) per share is calculated  by dividing net income (loss)  available to
     common stockholders for the period by the weighted average number of common
shares outstanding during the period.                                 

Use of Estimates:                                                     

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     the  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.                                                            

Reclassifications:                                                    

     Certain  prior year amounts have been  reclassified  to conform to the 2004
     presentation. These changes had no impact on previously reported results of
operations or stockholders' equity.                                   

Note 3 - Asset Acquisition                                                      
-----------------                                             

     Effective  January 1, 2004,  the  Company  acquired  the assets of Mortgage
     Solution Partners ("MSP"), a proprietorship owned by a principal officer of
     the Company. Under the terms of the agreement,  the Company acquired assets
     with a cost basis of $416,549, of which $404,415 represented the cost basis
     of certain  mortgage note  receivable  pools.  No cash was required for the
     acquisition,  with the  Company  assuming  debt of  $416,549,  including  a
     long-term  note  payable  obligation  to an  individual  in the  amount  of
$223,200.                                                             

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 4 - Portfolio Assets                                                       
----------------                                              

     Portfolio  assets were  comprised of the following at December 31, 2004 and
2003:                                                                 

                                                          2004        2003
                                                         ----------   ----------

     Mortgage note receivable pools                      $  554,642   $  586,228
   Real estate portfolios                                 150,976         --
   Other                                                   59,250         --
                                                         ----------   ----------

          Total portfolio assets                            764,868      586,228

   Valuation allowance for impairment                        --           --
                                                         ----------   ----------

          Net portfolio assets                           $  764,868   $  586,228
                                                         ==========   ==========

     Portfolio  assets  are  pledged  to secure  non-recourse  notes  payable to
individuals (See Note 6).                                             

Note 5 - Investment in Joint Venture                                            
---------------------------                                   

     Effective  September  30,  2004,  the  Company  acquired a 50%  interest in
     MAP/MAC,  LLC,  a joint  venture  with an  unrelated  party  formed for the
     purpose  of  acquiring  mortgage  note  receivable  pools in the  secondary
     market. The Company's investment in MAP/MAC, LLC is accounted for using the
equity method.                                                        

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 5 - Investment in Joint Venture (Continued)                                
---------------------------                                   

     A summary of the results of  operations  for the period ended  December 31,
   2004, and net assets at December 31, 2004 for MAP/MAC, LLC is as follows:

Results of operations:                                                
          Total revenues                                          $    176,378
          Operating profit                                              55,594
          Net income                                                    55,594

Net assets:                                                           
          Current assets                                          $    393,229
        Noncurrent assets                                               --
                                                                  ------------
          Total assets                                                 393,229

           Current liabilities                                         (313,635)
                                                                  ------------
                                                                  $     79,594
                                                                  ============

Note 6 - Notes Payable                                                          
-------------                                                 

     At December 31, 2004,  notes payable to  individuals  were comprised of the
following:                                                            

                                                             2004       2003
                                                             --------   --------

Loan due interest only monthly at 16%,                                
   maturing February 2006                                  $223,200   $   --

Loans due interest only on a monthly                                  
basis, maturing January 2005, with a                                  
     weighted average interest rate of 12.8%                  258,000    258,000

Loans due principal and accrued interest at                           
   10% at maturity in March 2005                            210,000       --

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 6 - Notes Payable (Continued)                                              
-------------                                                 

                                                          2004          2003
                                                         ----------   ----------

Loan due $50,000 January 2005, with balance                         
of $150,000 due March 2005, interest at 2%                          
payable monthly (10% beginning January 2005)                        
plus issuance of 50,000 shares of common                            
stock at inception and 5,000 shares monthly,                        
beginning November 2004, in lieu of additional                      
      interest                                           $  200,000   $  200,000

Loan due $50,000 January 2005, with balance                         
of $100,000 due February 2006, issuance of                          
30,000 shares of common stock at inception                          
and 1,800 shares monthly beginning April 2005                       
      through maturity in lieu of interest                  150,000      150,000

Loan due interest only on a monthly basis at 18%,                   
    maturing July 2005                                    150,000         --

Loans due interest only on a monthly or                             
quarterly basis at 10%, maturing March                              
      2005 through 2006                                     130,000       20,000
                                                         ----------   ----------

            Total                                         1,321,200      628,000

            Less portion due within one year                948,000      478,000
                                                         ----------   ----------

                                                         $  373,200   $  150,000
                                                         ==========   ==========

     The loans from individuals are secured by certain real estate mortgage note
receivable pools.                                                     

     As described  above,  the Company's  loans from  individuals  have interest
     rates  ranging  from 2% to 18% and/or  require  the  issuance  of shares of
     common stock in addition to or in lieu of interest,  using an assumed value
     of $1.00 per share.  In 2003,  81,000 shares of the Company's  common stock
     were issued to certain  individuals to satisfy loan interest  requirements.

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 6 - Notes Payable (Continued)                                              
-------------                                                 

     No shares of common  stock were  issued  under such  arrangements  in 2004,
     however accrued  interest payable at December 31, 2004 includes a provision
     for interest payable via future stock issuances.  At December 31, 2004, the
     Company was  obligated  for  approximately  $45,000  worth of future  stock
     issuances in order to satisfy interest requirements through maturity of the
related loans.                                                        

     The weighted  average  interest rate on debt to  individuals  was 17.1% and
20.0% for 2004 and 2003, respectively.                                

     At December 31, 2004,  maturities of notes payable to  individuals  were as
follows:                                                              

2005                            $948,000    
2006                             373,200    

Note 7 - Related Party Transactions                                             
--------------------------                                    

     During the periods ended December 31, 2004 and 2003, the Company engaged in
     certain  transactions  with the  Company's  three  principal  officers  and
     stockholders  and  with  three  affiliated  entities,   Mortgage  Solutions
     Partners ("MSP"), a proprietorship, Abovo Corporation, and Vision Ads, Inc.
     ("VA"),  a corporation  dba "Red Horse Realty",  all owned by the Company's
     Vice-President.  During the year ended  December 31, 2004, the Company also
     engaged  in  certain  transactions  with  two  other  affiliated  entities,
     MAP/MAC,  LLC (an  unincorporated  joint  venture) and Mortgage  Assistance
Center Corporation ("MACC").                                          

     In 2003, the Company earned $6,141 for advances to MSP for the purchase and
     management of mortgage note receivable pools acquired by MSP. Additionally,
     the Company  incurred fee expense of $20,259 to MSP for the  management and
     administration   of  certain   MAC  loans  by  MSP.   MSP  was  engaged  in
     substantially the same business as the Company.  MSP's assets were acquired
     by the  Company in a purchase  transaction  effective  January 1, 2004 (See
     Note 3). The Company had a  receivable  of $78,177 from MSP at December 31,
2003 which was eliminated in the purchase transaction.                

     Upon the  acquisition  of MSP,  the  Company  assumed  debts  owed to Abovo
     Corporation by MSP. Abovo  Corporation  engages in the purchase and sale of
     residential  real estate,  and often carries the note  receivable  with its
     purchasers.  In 2004, the Company began servicing Abovo  Corporation's real
estate loans and recognized $25,234 in service fee income.            

F-18

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 7 - Related Party Transactions (Continued)                                 
--------------------------                                    

     At  December  31,  2004,  the  Company  had an  account  payable  to  Abovo
Corporation of $18,422.                                               

     The Company and VA, a real estate  management  firm,  share certain  office
     space,  personnel and other administrative costs. The Company and VA record
     their  proportionate  share of the common  expenses  based on the  relative
     proportion of total personnel utilized by the two entities.  As a result of
     these transactions, VA owed the Company $19,490 at December 31, 2004, while
the Company owed VA $36,360 at December 31, 2003.                     

     Two of the Company's principal officers and stockholders made cash advances
     to,  and paid  certain  expenses  on behalf  of the  Company.  Such  unpaid
     advances  were  non-interest  bearing and due upon  demand and  amounted to
     $66,963 at December 31, 2003.  Effective December 31, 2004, the outstanding
     balance of debt owed to the officers, $97,647, was forgiven by the officers
and contributed to additional paid-in-capital.                        

     During  the  periods  ended  December  31,  2004 and  2003,  the  Company's
     principal  officers  did  not  receive  salaried   compensation  for  their
     services.  The Company paid an officer and stockholder  $69,050 and $17,500
     for  consulting  services  during the periods  ended  December 31, 2004 and
2003, respectively.                                                   

     During 2004, the Company paid certain expenses on behalf of MAP/MAC, LLC, a
     50%-owned joint venture of the Company (See Note 5) and Mortgage Assistance
     Center  Corporation,  a planned  merger  partner (See Note 11). The Company
     also charged  MAP/MAC,  LLC fees for  servicing  its note pools.  Such fees
     amounted to $21,279 for the year ended  December 31, 2004.  At December 31,
     2004, the Company had accounts  receivable from MAP/MAC and MACC of $27,261
and $42,860, respectively.                                            

Note 8 - Income Taxes                                                           
------------                                                  

     The deferred tax  consequences of temporary  differences in reporting items
     for  financial  statement  and  income  tax  purposes  are  recognized,  if
     appropriate. Realization of the future tax benefits related to the deferred
     tax assets is dependent on many factors, including the Company's ability to
     generate taxable income within the net operating loss carry forward period.
     Management  has  considered  these factors in reaching its conclusion as to
     the valuation allowance for financial  reporting  purposes.  The income tax
     effect of  temporary  differences  comprising  the  deferred tax assets and
     deferred tax liabilities on the accompanying balance sheets at December 31,
2004 and 2003 is a result of the following:                           

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 8 - Income Taxes (Continued)                                               
------------                                                  

                                                         2004         2003
                                                        ---------    ---------
Deferred tax assets:                                                  
          Federal tax operating loss carryforward       $  74,900    $  99,400
          Accrued fees and wages                           64,000       33,200
           Other                                            (3,800)      (1,800)
                                                        ---------    ---------

    Total gross deferred tax assets                       135,100      130,800

     Valuation allowance                                  (135,100)    (130,800)
                                                        ---------    ---------

        Net deferred tax assets                       $    --      $    --
                                                        =========    =========

     A  reconciliation  between the statutory  federal income tax rate (34%) and
     the  effective  rate of income tax expense  (benefit) for the periods ended
December 31, 2004 and 2003 follows:                                   

                                                         2004         2003
                                                        ---------    ---------

     Statutory federal tax rate                               (34%)        (34%)
Increase (decrease) in taxes resulting from:                          
     State tax, net of federal benefit                     --           --
       Increase (decrease) in valuation allowance              34           34
                                                        ---------    ---------

     Effective rate                                        --           --
                                                        =========    =========

     At December 31, 2004 the Company had an available net operating  loss carry
     forward of approximately  $220,000 to offset future taxable income. The net
operating loss will expire if not utilized by 2023.                   

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 9 - Lease                                                                  
-----                                                         

     The  Company  leases  space  for its  corporate  offices  under a  two-year
     operating  lease expiring in September  2005. The lease terms require total
     rentals of $56,285 in cash over the two-year  period plus 20,000  shares of
     the Company's  common stock in order to compensate  for  below-market  cash
     rent over the lease  term.  The lease is  guaranteed  by an  officer of the
Company.                                                              

     The lease requires the Company to pay all taxes,  insurance and maintenance
     costs  associated  with the leased  premises.  The lease contains a renewal
     option for an  additional  three years.  Rent expense  under this lease was
     $38,314  and  $10,190 for the  periods  ended  December  31, 2004 and 2003,
respectively.                                                         

     At December 31, 2004, minimum future cash rentals under this noncancellable
operating lease were $22,455.                                         

Note 10 - Earnings Per Share                                                    
------------------                                          

                                                  December 31,    December 31,
                                                  2004            2003
                                                  ------------    ------------
Primary earnings per share:                                           
            Common shares outstanding                5,331,350       5,306,350
                                                  ------------    ------------

            Weighted average shares outstanding      5,331,213       2,955,768
                                                  ------------    ------------

             Earnings (loss) per share             $      (0.01)   $      (0.13)
                                                  ============    ============

Fully diluted earnings per share:                                     
            Common shares outstanding                5,331,350       5,306,350
                                                  ------------    ------------

            Weighted average shares outstanding      5,331,213       2,955,768
                                                  ------------    ------------

             Earnings (loss) per share             $      (0.01)   $      (0.13)
                                                  ============    ============

F-21

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 11 - Proposed Business Combination                                         
-----------------------------                               

     In May 2003 the Company signed a letter  agreement with an unrelated  third
     party  to  acquire  the  common  shares  of  Mortgage   Assistance   Center
     Corporation  (formerly Safe  Alternatives  Corporation of America,  Inc.) a
     publicly traded (NASDQ) Florida  corporation.  Since July 1, 2002, MACC has
     not had assets or operating  activities.  Under the terms of the  agreement
     the Company  agreed to pay  $460,000 in varying  installments  to the third
     party by September 2003. The Company, after paying $165,000, failed to make
     the remaining  installment  payments and the  agreement  was  terminated in
     2004. The $165,000 was charged to operations in the period ending  December
31, 2003.                                                             

     On May 14, 2004 the Company executed a Letter of Intent with MACC,  whereby
     subject to the approval of MACC's  shareholders,  the Company offered to be
     acquired by MACC on the  following  terms and  conditions:  MACC board will
     call a  special  shareholders  meeting  or  obtain a  majority  shareholder
     consent in lieu of a special  meeting  according  to the  Florida  Business
Corporation Statutes and recommend and approve the following actions: 

          1.   Effect a reverse split of the MACC common shares on a One for Two
Hundred Fifty (1:250) basis;                      
          2.   Effect a corporate name change from Safe Alternatives Corporation
         of America, Inc. to Mortgage Assistance Center Corporation;
          3.   Change the  authorized  number of common shares to be issued from
175,000,000 to 50,000,000 shares;                 
          4.   Authorize  a  business  combination  whereby  MACC will  exchange
               12,000,000 post reverse split common shares for all of the issued
               and outstanding common stock of Mortgage Assistance  Corporation;
and                                               
          5.   Any such further  recommendations as may be considered reasonable
and in the best interest of the shareholders.     

     Under the terms of the  agreement,  the Company agreed to pay $175,000 to a
     third party agent and sign a promissory  note for  $120,000,  to be paid by
     June 15, 2004. Additionally the Company agreed to assume the responsibility
     to pay for certain  costs and  expenses  for  auditor's  fees,  legal fees,
     transfer agent fees and EDGAR filing fees incurred by MACC after  September
     2003.  Through  December 31, 2004, the Company had incurred $42,860 of such
     costs and  expenses,  and the  Company has  complied  with the terms of the
agreement as of the date of the auditor's report.                     

     To facilitate the merger or business combination with the Company and MACC,
     in  March  2004,  the  board  of  directors  of  MACC  resigned,   and  the
     shareholders elected Dale Hensel sole Director,  President, Chief Executive
     Officer and Chief  Financial  Officer.  Mr. Hensel is also President of the
Company.                                                              

     The  completion of the merger is expected to occur in the second quarter of
2005.                                                                 

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 11 - Proposed Business Combination (Continued)                             
-----------------------------                               

 The proforma combined balance sheet at December 31, 2004 is as follows:

                                      Mortgage
                         Mortgage     Assistance
                                     Assistance      Center       Proforma
                                     Corporation   Corporation     Combined*
                                      -----------   -----------    -----------

Assets                                                                
    Current Assets                    $ 1,465,146   $      --      $ 1,422,286

    Property and Equipment (Net)           47,219          --           47,219

    Investments & Other Assets            337,797          --           42,797
                                      -----------   -----------    -----------

    Total Assets                      $ 1,850,162   $      --      $ 1,512,302
                                      ===========   ===========    ===========

Liabilities & Equity (Deficit)                                        

    Current Liabilities               $ 1,432,376   $    68,731    $ 1,458,247

    Long-term Debt                        373,200          --          373,200

     Equity (Deficit)                       44,586       (68,731)      (319,145)
                                      -----------   -----------    -----------

    Total Liabilities & (Deficit)     $ 1,850,162   $      --      $ 1,512,302
                                      ===========   ===========    ===========

     *After  elimination  of  intercompany  balances  of  $42,860  and  cost  of
investment in public company of $295,000.                             

F-23

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 Mortgage Assistance Corporation
 Notes to Financial Statements
December 31, 2004 and 2003

Note 11 - Proposed Business Combination (Continued)                             
-----------------------------                               

     The proforma  combined  statement of operations for the year ended December
31, 2004 is as follows                                                

                                     Mortage
                        Mortgage      Assistance
                                    Assistance       Center       Proforma
                                    Corporation    Corporation     Combined*
                                     -----------    -----------    -----------

    Revenues                         $ 3,992,245    $      --      $ 3,992,245
                                     -----------    -----------    -----------

    Cost of  Portfolios Sold           2,786,562           --        2,786,562

Selling, General &                                                    
       Administrative Expenses         1,046,999         72,955      1,119,954

    Interest Expense                     199,414          2,321        201,735

Compensation expense related                                          
to common stock issuances                                       
       at less than fair value              --          838,736        838,736

Costs of acquisition                                                  
       of public company                    --             --          295,000

Other (income)                                                        
        expenses (net)                    (17,932)          --          (17,932)
                                     -----------    -----------    -----------

    Total Expenses                     4,015,043        914,012      5,224,055
                                     -----------    -----------    -----------

     Net Operating Income (loss)          (22,798)      (914,012)    (1,231,810)

  Benefit For Income Taxes                --             --             --
                                     -----------    -----------    -----------

     Net Loss                         $   (22,798)   $  (914,012)   $(1,231,810)
                                     ===========    ===========    ===========

F-24

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MORTGAGE ASSISTANCE CENTER CORPORATION
 (Formerly Safe Alternatives Corporation of America, Inc.)

 And

 MORTGAGE ASSISTANCE CORPORATION
 PRO FORMA COMBINED FINANCIAL STATEMENTS

 December 31, 2004

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Mortgage Assistance Center Corporation
 (Formerly Safe Alternatives Corporation of America, Inc.)
 TABLE OF CONTENTS

                                                                            Page
                                                                            ----
Report of Independent Public Accountant's on Examination of                     
   Pro Forma Adjustments ....................................................F-1

Financial Statements:                                                           

Pro Forma Combined Balance Sheet as of December 31, 2004=....................F-2

Pro Forma Combined Statement of Income for the                                  
   Year Ended December 31, 2004..............................................F-3

Notes to Pro Forma Combined Financial Statements.......................F-4 - F-5

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 Report of Independent Public Accountants on

Examination of Pro Forma Financial Information

To the  Board of  Directors  and  Stockholders  of  Mortgage  Assistance  Center
Corporation                                                                     

We have examined the pro forma adjustments  reflecting the transaction described
in Note 1 and the application of those adjustments to the historical  amounts in
the accompanying pro forma combined balance sheet of Mortgage  Assistance Center
Corporation  as of December 31, 2004,  and the pro forma  combined  statement of
income for the year then ended. The historical  condensed  financial  statements
are derived from the  historical  financial  statements  of Mortgage  Assistance
Center Corporation  (formerly Safe Alternatives  Corporation of America,  Inc.),
and Mortgage  Assistance  Corporation,  both of which we audited,  and appearing
elsewhere  herein.  Such pro  forma  adjustments  are  based  upon  management's
assumptions  described in Note 2. Our  examination  was made in accordance  with
standards  established by the American Institute of Certified Public Accountants
and,  accordingly,  included such  procedures as we considered  necessary in the
circumstances.                                                                  

The  objective  of this pro  forma  financial  information  is to show  what the
significant  effects  on the  historical  information  might  have  been had the
transaction  occurred  at an  earlier  date.  However,  the pro forma  condensed
financial statements are not necessarily indicative of the results of operations
or related  effect on financial  position  that would have been attained had the
above-mentioned transaction actually occurred earlier.                          

In  our  opinion,  management's  assumptions  provide  a  reasonable  basis  for
presenting the significant effects directly  attributable to the above mentioned
transaction  described  in  Note 1,  the  related  pro  forma  adjustments  give
appropriate effect to those  assumptions,  and the pro forma column reflects the
proper  application of those adjustments to the historical  financial  statement
amounts in the pro forma combined  balance sheet as of December 31, 2004 and the
pro forma combined statement of income for the year then ended.                 

Sutton Robinson Freeman & Co., P.C.                                             

Certified Public Accountants                                                    

April 12, 2005                                                                  
Tulsa, Oklahoma                                                                 

F-1 

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                     Mortgage Assistance Center Corporation                                                  
            (Formerly Safe Alternatives Corporation of America, Inc.)                                        
                        Pro Forma Combined Balance Sheet                                                     
                                December 31, 2004                                                            

                                                 Historical                                                  
                                                  Mortgage        Historical     Pro Forma                   
                                                 Assistance        Mortgage    Combining and                 
                                                   Center         Assistance   Consolidating    Pro Forma    
                                                Corporation      Corporation      Entries        Combined    
                                               -------------    -------------  -------------   ------------- 
                                                                                                             
ASSETS                                                                                                       
    Current Assets                             $        --      $   1,465,146  $     (42,860)  $   1,422,286 
    Property and Equipment (net)                        --             47,219           --            47,219 
    Investment and other assets                         --            337,797       (295,000)         42,797 
                                               -------------    -------------  -------------   ------------- 

      Total Assets                             $        --      $   1,850,162  $    (337,860)  $   1,512,302 
                                               =============    =============  =============   ============= 

LIABILITIES & STOCKHOLDERS' EQUITY                                                                           
Liabilities                                                                                                  
    Current Liabilities                        $      68,731    $   1,432,376  $     (42,860)  $   1,458,247 
    Long-Term Debt                                         0          373,200                        373,200 
                                               -------------   -------------                   ------------- 
                                                      68,731       1,805,576                       1,831,447 
                                               -------------   -------------                   ------------- 

Stockholders' Equity                                                                                         
    Stockholders' equity                             (68,731)          44,586       (295,000)       (319,145)
                                               -------------    -------------  -------------   ------------- 

    Total Liabilities & Stockholders' Equity   $        --      $   1,850,162  $    (337,860)  $   1,512,302 
                                               =============    =============  =============   ============= 

See Accountant's Report on Pro Forma Financial Information.                     
The  accompanying  notes to pro  forma  combined  financial  information  are an
integral part of these financial statements.                                    

F-2 

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                     Mortgage Assistance Center Corporation                                                
           (Formerly Safe Alternatives Corporation of American, Inc.)                                      
                        Pro Forma Statement of Operations                                                  
                      For the Year Ended December 31, 2004                                                 

                                                  Historical                                               
                                                   Mortgage       Historical                               
                                                  Assistance       Mortgage                                
                                                    Center        Assistance     Pro forma     Pro Forma   
                                                 Corporation     Corporation    Transactions   Combined    
                                                 ------------    ------------   ------------  ------------ 
                                                                                                           
Revenues                                         $       --      $  3,992,245                 $  3,992,245 
   Cost of Revenues                                      --         2,786,562                    2,786,562 
                                                 ------------    ------------                 ------------ 

Gross Profit                                             --         1,205,683                    1,205,683 
                                                 ------------    ------------                 ------------ 

Operating Expenses:                                                                                        
   Compensation expense related to common stock                                                            
   issuance at less than fair market value            838,736            --                        838,736 

   Selling, general & administrative expense          72,955       1,046,999                     1,119,954 

   Interest expense                                    2,321         199,414                       201,735 

   Merger related expenses                               --              --          295,000       295,000 

   Other (income) expense, net                           --           (17,932)                     (17,932)
                                                 ------------    ------------                 ------------ 

Operating Expenses                                    914,012       1,228,481                    2,437,493 
                                                 ------------    ------------                 ------------ 

Operating Income (Loss)                              (914,012)        (22,798)                  (1,231,810)

Income Tax Expense (Benefit)                             --              --                           --   
                                                 ------------    ------------                 ------------ 

Net Income (Loss)                                    (914,012)        (22,798)                  (1,231,810)

Weighted Average Shares Outstanding                   664,603       5,331,213                   12,664,603 
                                                 ============    ============                 ============ 

Loss Per Share                                   $      (1.38)   $      (0.01)                $      (0.10)
                                                 ============    ============                 ============ 

See Accountant's Report on Pro Forma Financial Information.                     
The  accompanying  notes to pro  forma  combined  financial  information  are an
integral part of these financial statements.                                    

F-3 

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MORTGAGE ASSISTANCE CENTER CORPORATION
 (Formerly Safe Alternatives corporation of America,
 Inc.)
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
 DECEMBER 31, 2004

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                 

     Summary  of Pro  Forma  Transactions  - The  December  31,  2004 pro  forma
     combined balance sheet of Mortgage  Assistance Center Corporation  ("MACC")
     has been  prepared  assuming the Company  consummated  the  acquisition  of
     Mortgage  Assistance  Corporation (MAC) on December 31, 2004. The pro forma
     combined statement of income for the year ended December 31, 2004, has been
     prepared  assuming the Company  consummated  the  transaction on January 1,
2004.                                                                 

2.   ACQUISITION OF MORTGAGE ASSISTANCE CORPORATION                             

     These  adjustments  give effect to the business  combination  on a purchase
     basis  of  Mortgage  Assistance  Corporation  at  January  1,  2004 for the
statements of income and at December 31, 2004 for the balance sheet.  

     To facilitate the merger or business  combination with the Company and MAC,
     in  March  2004,  the  board  of  directors  of  MACC  resigned,   and  the
     shareholders elected Dale Hensel sole Director,  President, Chief Executive
     Officer and Chief  Financial  Officer.  Mr. Hensel is also President of the
MAC.                                                                  

     On May 14, 2004 MAC executed a Letter of Intent with the  Company,  whereby
     subject to the approval of MACC's shareholders,  MAC offered to be acquired
     by MACC on the  following  terms and  conditions:  MACC  board  will call a
     special  shareholders  meeting or obtain a majority  shareholder consent in
     lieu of a special  meeting  according to the Florida  Business  Corporation
Statutes and recommend and approve the following actions:             

          1.   Effect a reverse split of the MACC common shares on a One for Two
Hundred Fifty (1:250) basis;                      
          2.   Effect a corporate name change from Safe Alternatives Corporation
         of America, Inc. to Mortgage Assistance Center Corporation;
          3.   Change the  authorized  number of common shares to be issued from
175,000,000 to 50,000,000 shares;                 
          4.   Authorize  a  business  combination  whereby  MACC will  exchange
               12,000,000 post reverse split common shares for all of the issued
and outstanding common stock of MAC; and          
          5.   Any such further  recommendations as may be considered reasonable
and in the best interest of the shareholders.     

     On May 14, 2004, majority  shareholder consent in lieu of a special meeting
     of  shareholders  approved the actions  required  above. As of December 31,
     2004, the Company's Articles of Incorporation had been amended for the name
     change and the reduction in authorized number of common shares. The reverse
stock split was initiated in May 2004.                                

F-4 

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MORTGAGE ASSISTANCE CENTER CORPORATION
 (Formerly Safe Alternatives of America, Inc.)
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
 DECEMBER 31, 2004

2.   ACQUISITION OF MORTGAGE ASSISTANCE CORPORATION (continued)                 

     Under the terms of the agreement,  MAC agreed to assume the  responsibility
     to pay for certain  costs and  expenses  for  auditor's  fees,  legal fees,
     transfer agent fees and EDGAR filing fees incurred by MACC after  September
     2003. Through December 31, 2004, MAC had incurred $42,860 of such costs and
     expenses,  and complied with the terms of the agreement through the date of
the auditor's report.                                                 

     The preceding  statements  with respect to the business  combination  are a
     brief summary thereof.  While the summary is accurate,  it does not purport
     to be complete and reference is made to the Schedule 14C and Form 8-K for a
     complete  statement  of the  Merger.  The  letter  of intent is filed as an
     Exhibit to the  Current  Report on Form 8-K and is  incorporated  herein by
this reference.                                                       

     The  historical  financial  statement  information  of Mortgage  Assistance
     Center Corporation and Mortgage Assistance  Corporation,  as of and for the
     year ended  December  31,  2004 is derived  from  their  audited  financial
statements, which were audited by us.                                 

F-5 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
Filed as of:		5/13/05							NT 10-Q
Filed on:		5/12/05							8-K/A
For Period End:		5/10/05		1		8
		4/12/05		11		35
		12/31/04		7		39			10KSB,  NT 10-K
		9/30/04		23					10QSB
		6/15/04		30
		5/14/04		30		38
		1/1/04		22		38
		12/31/03		9		32			10KSB,  NT 10-K
		3/28/03		10		19
		7/1/02		30
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