Office

Premier Mortgage Resources Inc. ("we", "us" or "the Company") currently maintains its principal office at 280 Windsor Highway, New Windsor, New York 12553 where its telephone number is (845)561-7770 and its facsimile number is (845)561-7749.

Organization/Historical Background

The Company was originally incorporated in Nevada on August 17, 1995 as "Mortgage Resources, Inc." The Company was inactive following its organization and its charter was revoked on April 26, 1997 by the State of Nevada for failure to file its 1996-1997 Annual List of Officers and Directors. Its charter was reinstated on August 20, 1997; however, during the period that its charter was revoked another corporation had taken the name "Mortgage Resources, Inc." and, therefore, the Company changed its name to "Premier Mortgage Resources, Inc." in order to secure reinstatement.

On April 22, 1998 (formalized on June 9, 1998) the Company entered into an Agreement and Plan of Reorganization with Donald S. Wilen, the sole stockholder of United National, Inc., the manager and holder of a 2% interest in United National Mortgage, LLC, a mortgage banker. On July 2, 1998, under that Plan, which was structured as a tax-free, stock-for-stock exchange pursuant to Section 358(a)(1)(B) of the Internal Revenue Code, the Company acquired all of the issued and outstanding shares of United National, Inc. in exchange for the issuance of 377,778 shares (after giving effect to the 1 for 6 reverse stock split effective on April 12, 1999) of the Company's Common Stock.

United National, Inc. was incorporated in the State of Nevada on November 21, 1997, and is a wholly owned subsidiary of the Company. It owns a 2% ownership in interest in United National Mortgage, LLC "UNM". United National, Inc. has entered into an agreement with UNM to acquire all of the ownership interest of UNM for nominal consideration immediately upon approval of the New York Banking Department of the change in control.

United National Mortgage, LLC is a New York limited liability company engaged in the mortgage banking business. As such, it is licensed by the New York State Department of Banking which requires that the owner of 9% or more of a mortgage banker be pre-approved by it. Pending approval by the New York State Department of Banking of the change in control, Donald Wilen, continues to own the 98% interest, and United National Inc. owns 2%. Donald Wilen will transfer his interest to United National, Inc. upon regulatory approval of the ownership change, without the payment of any further consideration.

Business- Corporate Structure

We are a holding company providing services and financing to our subsidiary, United National, Inc. United National, Inc. owns a 2% interest in United National Mortgage, LLC which offers mortgage banking.

Business Operations

Premier Mortgage Resources, Inc. - Parent

Premier Mortgage Resources, Inc is organized to act as a holding company responsible inter alia for raising funds for United National, Inc. and UNM. As a holding company, Premier Mortgage Resources, Inc. provides certain staff functions to its subsidiaries, but has no business operations. All business operations are conducted by UNM, which performs all line functions. The staff functions which the Company supplies to its subsidiaries includes overall management, strategic direction, financing, legal services, accounting and related services including cash management and budgeting, marketing, and public relations/advertising.

United National, Inc. - First Tier Subsidiary

United National, Inc., is wholly dependent on UNM and the level of its core business activity for its own revenues.

United National Mortgage, LLC, Second Tier Subsidiary To-Be-Acquired

Although the legal transfer of ownership is pending approval by the New York State Department of Banking, United National Mortgage, LLC is managed as a wholly owned subsidiary of United National, Inc., and operates as the mortgage banking division of Premier Mortgage Resources, Inc.

General Business Plan of UNM

United National Mortgage, LLC is in the residential mortgage banking business. Its primary focus has been the retail and wholesale origination and the sale of mortgage loans for one-to-four family properties. UNM is an approved loan correspondent with approximately twenty lenders such as Countrywide Credit, Provident Bank, Interfirst, IndyMac, and other national prime and subprime mortgage lenders. UNM originates loans and closes them in UNM's name using funds from a warehouse line of credit. UNM does not close loans unless one of our mortgage purchasers has given UNM an approval for the loan and has agreed to purchase the loan. After the closing of the loan, a package of documents is sent to the mortgage purchaser, the investor reviews the documents and purchases the loan by wiring the funds to our warehouse bank. The difference between the amounts we close the loan for and the amount the investor pays the warehouse line constitutes part of the profit on that particular transaction.

UNM's strategy is to expand its retail and wholesale loan origination business. Increased loan origination will expand its revenue base. UNM intends to continue to sell loans after closing to permanent investors and does not foresee our maintenance of the mortgage's servicing rights. Servicing is a process whereby a mortgage company collects the mortgage payment and any escrows for taxes and insurance from borrowers. Companies that service loans make a small fee on each transaction. UNM does not plan to enter the servicing business. UNM sells its right to collect the payments to the permanent investor to whom the loans have been sold. As a result, the company realizes immediate cash from the sale of these mortgage servicing rights. By selling the servicing rights, UNM does not run the risk of the underlying mortgage being refinanced by the borrower thus ending the income stream from servicing.

Management of UNM believes that its business plan of combining expanded loan origination along with the Company's continuing objective of improving operating efficiencies will place it in a strong competitive position in the mortgage industry.

The Retail Origination Division

Retail loan origination involves the direct solicitation of realtors, builders and other end borrowers for the origination of mortgage loans. UNM derives revenues from the premium that it receives when the loan is sold. Additionally, UNM derives revenues from fees charged directly to customers. Generally, that premium is shared on a negotiated basis with loan officers who procure the loan and assist in the loan origination process. UNM achieves this from wholly owned retail sales branches. We intend to pursue the opening of wholly owned retail branches as our primary method of expansion.

UNM also nominally engages in the origination and brokerage of loans on commercial real estate assets, including shopping centers, office properties and other commercial loans. It typically brokers (e.g. arranges for the loan from third-party lenders) these transactions. Transactions to date have not been material to UNM's results of operations. UNM's loan origination activities are conducted trough its corporate headquarter offices in New Windsor, New York. Current branch operations are located in New York, Connecticut, Massachusetts and New Jersey.

The Wholesale Origination Division

Wholesale loan origination involves the purchase of loans from mortgage brokers. UNM realizes revenue from the sale of such loans to investors for a price greater than the amount paid to the mortgage broker. UNM generally sells the loans to investors at pre-approved purchase prices which serves to reduce the risk of a loss on such sale(s). Wholesale loan origination tends to generate less revenues on a per transaction basis than retail origination, but expansion into the wholesale sector is less costly than retail origination because wholesale origination does not require the establishment of costly office space and the related overhead expense. The operation structure enables UNM to quickly enter new markets.

Loan Servicing

UNM's current plans do not include the servicing of loans that it originates since it plans to sell the servicing rights on loans it originates in order to generate additional cash flow on a current basis. Loan servicing consists of collecting principal and interest payments from borrowers, remitting aggregate principal and interest payments to investors, making cash advances when required, accounting for principal and interest, collecting funds for payment of mortgage-related expenses, such as taxes and delinquent mortgagors, conducting foreclosures and property dispositions in the event of unremedied defaults and generally administering the mortgage loans.

Quality Control

In order to ensure that UNM originates high quality mortgage loans, it has retained the services of a quality control company with an industry wide reputation to conduct evaluations of UNM's loan origination activities on a monthly basis.

Competition

The mortgage banking industry is highly competitive. UNM competes with other financial providers who have greater technical expertise, financial resources and marketing capabilities than United National, Inc. and UNM. Our competitors include institutions, such as mortgage banks, state and national banks, savings and loan associations, savings banks, credit unions and insurance companies and mortgage bankers. Some of UNM's competitors have financial resources that are substantially greater than those of UNM, including some competitors which have a significant number of offices in areas where UNM conducts its business. UNM competes principally by offering loans with competitive features, by emphasizing the quality of its services and by pricing its range of products at competitive rates.

Although the mortgage business is competitive, it is also fragmented in that no single lender has a significant market share of total origination volume. Overall mortgage origination volume is shared in varying percentages among commercial banks, savings and loan and mortgage banking companies. Historically, mortgage banks have had an estimated twenty to thirty percent share of total origination volume. Commercial banks, savings banks, savings and loan associations and mortgage banking companies service the bulk of residential mortgages. Management of UNM does not anticipate any significant changes in the market share described above in the near term.

Number of Employees

Premier Mortgage Resources, Inc. is a holding company and has no employees. United National, Inc. also has no employees. Presently, UNM has 21 employees working in the departments listed below, including branch managers.

Department/Job Function Number of Employees ----------------------- ------------------- Executives 2 Loan Officers 9 Support Staff 10 ---- Total 21

Cautionary Factors That May Affect Future Results

This registration statement contains some forward-looking statements. "Forward-looking statements" describe our current expectations or forecasts of future events. These statements do not relate strictly to historical or current facts. In particular, these include statements relating to future actions, prospective products, future performance or results of current and anticipated products, sales, efforts, the outcome of contingencies and financial results. Any or all of the forward-looking statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors, such as product acceptance, competition and marketing capabilities, will be important in determining future results. Consequently, no forward-looking statements can be guaranteed. Actual future results may vary materially.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in our 10-QSBs and 8 Ks.

We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business and our products. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could adversely affect us.

Limited Operating History. Although we were organized in August 1995, we had no business operations until the acquisition of United National, Inc. on July 2,

1998. United National, Inc.'s operating "subsidiary," United National Mortgage, LLC has been in business since October 1996. That limited liability company is the entity which produces the revenues for the Company group and it has not yet been profitable. Accordingly, investors should consider us to be essentially a new, developing company. As a new, developing company, our operations are subject to all of the risks inherent in the establishment of a new business enterprise, including the lack of significant operating history. There can be no assurance that our future operations will be profitable. Revenues and profits, if any, will depend upon various factors, including our ability to finance mortgage loans, secure mortgage loan applications, process mortgages, and generally do business in a sufficient volume to provide sufficient cash margins to cover our operating costs. Our securing of sufficient capital is crucial. Without sufficient capital we cannot meet our projected goals or accomplish our business plans; and such failure could have a material adverse affect on us and the value and price of our publicly traded securities.

Liquidity and Working Capital Risks; Need for Additional Capital to Finance Growth and Capital Requirements. We will seek additional funds and seek to raise additional capital from public or private equity or debt sources to: (i) provide working capital to meet our general and administrative costs until net revenues make the business self-sustaining; (ii) make acquisitions of existing mortgage brokers, mortgage processors, and mortgage bankers; and (iii) exploit and expand such acquisitions. We cannot give assurance that we will be able to raise any such capital on terms acceptable to us or at all. Such financing may be upon terms that are dilutive or potentially dilutive to our stockholders. If alternative sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans in accordance with the extent of available funding.

Effect of our future Issuance of Preferred Stock. Our authorized capital consists of 50,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock. Our Board of Directors, without any action by our shareholders, is authorized to designate and issue shares of Preferred Stock in such series as it deems appropriate and to establish the rights, preferences and privileges of such shares, including dividends, liquidation and voting rights. The rights of holders of shares of Preferred Stock that may be issued in the future may be superior to the rights granted to the holders of the then existing shares of Common Stock. Also, the ability of the Board of Directors to designate and issue such undesignated shares could impede or deter an unsolicited tender offer or takeover proposal regarding us and the issuance of additional shares having preferential rights could adversely affect the voting power and other rights of holders of our Common Stock.

Limitation of Liability and Indemnification of Officers and Directors. Our officers and directors are required to exercise good faith and high integrity in the management of Company affairs. Our Articles of Incorporation provide, however, that the officers and directors shall have no liability to the shareholders for losses sustained or liabilities incurred which arise from any transaction in their respective managerial capacities unless they violated it in good faith, engaged in intentional misconduct or knowingly violated the law, approved an improper dividend or stock repurchase, or derived an improper benefit from the transaction. As a result, a purchaser of the shares may have a more limited right to action than he would have had if such provision were not present. Our Articles and By-Laws also provide for the indemnification by the Company of the officers and directors against any losses or liabilities they may incur as a result of the manner in which they operate the Company's business or conduct the internal affairs, provided that in connection with these activities they act in good faith and in a manner which they reasonably believe to be in, or not opposed to, the best interests of the Company, and their conduct does not constitute gross negligence, misconduct or breach of fiduciary obligations. To further implement the permitted indemnification, we have entered into Indemnity Agreements with our current officers and directors and we will provide similar agreements for future officers and directors.

Dependence on Key Personnel. Our future success will depend largely on the efforts and abilities of our management, including especially Messrs. Cilento and Wilen. The loss of any of them or the inability to attract additional, experienced management personnel could have a substantial adverse affect on the Company; we have not obtained "key man" insurance policies on any of our management and do not expect to obtain it on any of our future management personnel, as employed. Our ability to implement our strategies depends upon our ability to attract highly talented managerial personnel. There can be no assurance that we will attract and retain such employees in the future. The inability to hire and/or loss of key management or technical personnel could materially and adversely affect our business, results of operations and financial condition.

Government Regulation. Our mortgage banking business is subject to substantial government regulation. We are required to secure and maintain various licenses from each state in which we conduct business. In addition, our business operations will be subject to all government regulations normally incident to conducting business (e.g., occupational safety and health acts, workmen's compensation statutes, unemployment insurance legislation, income tax and social security laws and regulations, environmental laws and regulations, consumer safety laws and regulations, etc.) as well as to governmental laws and regulations applicable to small public companies and their capital formation efforts. Although we will make every effort to comply with applicable laws and regulations, we can provide no assurance of our ability to do so, nor can we predict the effect of those regulations on our proposed business activities.

Anticipated Operating Losses. Assuming that we can obtain the financing to make acquisitions and exploit them, we most likely will continue to suffer operating losses until we can achieve a sufficient volume of mortgage loans to cover our operating costs.

Competition. The mortgage banking market is extremely competitive. UNM competes with other financial providers who have greater technical expertise, financial resources and marketing capabilities than United National, Inc. and UNM. We are uncertain whether UNM will be able to overcome competitive disadvantages that it will face as a small start up company with limited capital.