As filed with the Securities and Exchange Commission October 23, 2001
SEC Registration No. 333-67174
____________________________________________________________________________

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.

AMENDMENT NO. 1 TO
FORM SB-2 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

Mountain States Lending, Inc.
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(Exact Name of Small Business Issuer as Specified in its Charter)

Colorado 6163 84-1153946
------------------------- ---------------------------- -------------------
(State or Other Jurisdic- (Primary Standard Industrial (IRS Employer Iden-
tion of Incorporation) Classification Code Number) tification Number)

7435 East Peakview Avenue, Englewood, Colorado 80111
(303) 740-5455
-----------------------------------------------------
(Address and Telephone Number of Principal
Executive Offices and Principal Place of Business)

Mark E. Massa, President
7435 East Peakview Avenue, Englewood, Colorado 80111
(303) 740-5455
---------------------------------------------------------
(Name, Address and Telephone Number of Agent for Service)

Copies to:

Jon D. Sawyer, Esq.
Krys Boyle Freedman & Sawyer, P.C.
600 Seventeenth Street, Suite 2700 South Tower, Denver, Colorado 80202
(303) 893-2300

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Each Amount Maximum Maximum
Class of Secur- to be Offering Aggregate Amount of
ities to be Regis- Price Offering Registration
Registered tered per Unit Price Fee
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Common Stock 500,000 $1.00 $500,000 $200.00
No Par Value(2) Shares
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.

PROSPECTUS SUBJECT TO COMPLETION DATED OCTOBER 23, 2001
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The information in this Prospectus is not complete and may be
changed. The securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is
effective. This Prospectus is not an offer to sell these securi-
ties and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.

Mountain States Lending, Inc.

500,000 Shares of Common Stock

This is Mountain States Lending's initial public offering.
We are offering 500,000 shares on a best efforts 250,000 share
minimum, 500,000 share maximum, basis. The public offering price
of $1.00 per share was arbitrarily determined. Our officers will
sell the offering with no compensation or remuneration. The shares
will be offered until 90 days after the date of this Prospectus,
and this date may be extended up to an additional 90 days. In the
event the minimum number of shares is not sold, the proceeds will
be returned without interest.

This investment involves a high degree of risk. You should
purchase shares only if you can afford a complete loss. See
"Risk Factors" starting on page 5.

Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this Prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.

Offering Selling Proceeds
Price Commissions to Company
-------- ----------- ----------

Per Share $ 1.00 $ 0 $ 1.00
Total Minimum $250,000 $ 0 $250,000
Total Maximum $500,000 $ 0 $500,000

_________, 2001

TABLE OF CONTENTS

PAGE

Prospectus Summary .......................................... 3

Risk Factors ................................................ 5

Dilution .................................................... 10

Use of Proceeds ............................................. 11

Management's Discussion and Analysis ........................ 12

Business .................................................... 15

Management .................................................. 20

Security Ownership of Management and Principal
Shareholders .............................................. 23

Transactions With Management and Others ..................... 24

Description of Securities ................................... 25

Terms of Offering ........................................... 26

Legal Matters ............................................... 28

Experts ..................................................... 28

Additional Information ...................................... 28

Index to Financial Statements ............................... 29

PROSPECTUS SUMMARY

THE COMPANY

Mountain States Lending, Inc. was incorporated in November 1990 as a
Colorado corporation under the name Slam Dunk Enterprises, Inc. The
corporation was inactive until May 1998 when we started engaging in the
business of providing first and second mortgage financing under the name of
mMountain States Lending. During January 2001, we filed articles of amendment
with the Colorado Secretary of State changing the corporation's name to
Mountain States Lending, Inc.

We intend to continue to expand our mortgage financing business and, if
we are successful in raising additional financing, we also plan to accelerate
our entry into the business of selling manufactured homes in the Denver,
Colorado metropolitan area.

Our business to date has been providing first and second mortgage
financing for borrowers wishing to purchase or refinance a home. We act as a
broker to obtain this financing through our network of approximately 100 banks
and wholesale mortgage lending institutions. In June 1999, we received
approval from the Department of Housing and Urban Development to originate
government insured loans with the Federal Housing Authority.

We offer a full spectrum of mortgage loan financing options including
conventional loans, FHA loans, VA loans, jumbo loans, construction loans,
non-conforming loans, and sub-prime loans.

We have also recently decided to enter into the business of selling
manufactured homes, and we have purchased a 50% interest in 7 lots in Aurora,
Colorado with the intention of placing manufactured homes on the lots and then
selling the homes. We have decided that we will purchase our homes from
Heritage Homes of Nebraska, Inc., a manufactured homes builder. These homes
are built in modern production facilities under strict supervision. A
manufactured homes builder is generally able to purchase materials below the
cost of what local builders pay due to the volume of business they do. They
are also able to work every day regardless of the weather since they build the
homes indoors. These and other factors allow the manufactured homes builder
to produce homes for a price significantly below what site-built home builders
can, and management believes that the quality will meet or exceed the quality
of comparable priced site-built homes. We have also held discussions with
other manufactured home builders and we believe that there are other good
sources of homes if we cannot negotiate satisfactory terms with Heritage
Homes.

We have verbally agreed with Elkridge Homes, Inc., a Denver-area home
builder, to have Elkridge prepare the sites where the homes will be located,
obtain the necessary permits, install and tie in the utilities and otherwise
do everything necessary to prepare the home for sale. We will also offer an
incentive to the buyers to finance the home through our mortgage financing
business.

On January 26, 2001, we completed a 10 for 1 forward stock split. All
share amounts referred to herein have been retroactively adjusted to reflect
this stock split.

Our offices are located at 7435 East Peakview Avenue, Englewood, Colorado
80111, and our telephone number is (303) 740-5455.

OFFERING SUMMARY

Securities Offered: Minimum - 250,000 Shares
Maximum - 500,000 Shares

Common Stock Presently
Outstanding: 3,550,000 Shares

USE OF PROCEEDS

We will use any proceeds we receive from the sale of the common stock to
expand our mortgage business and to develop our planned manufactured homes
business.

FINANCIAL SUMMARY

The following financial summary should be read along with the financial
statements and accompanying notes appearing elsewhere in this Prospectus.

Summary Financial Data: The following table sets forth certain financial
data and is qualified in its entirety by reference to the financial statements
and notes thereto included in this Prospectus. The financial information for
the years ended December 31, 1999 and 2000 is derived from the audited
financial statements and the information for the six months ended June 30,
2001 and 2000 are derived from the unaudited financial statements for these
periods included in the Prospectus.

Balance Sheet Data:
At At
December 31, June 30,
2000 2001
------------ -----------
(Unaudited)

Current Assets $ 69,590 $129,624
Total Assets 134,881 324,188
Current Liabilities 54,824 166,695
Working Capital 14,766 (37,071)
Long-term Debt -0- -0-
Stockholders' Equity 80,057 157,493

Statement of Operations Data:

For the For the For the Six For the Six
Year Ended Year Ended Months Ended Months Ended
December 31, December 31, June 30, June 30,
2000 1999 2001 2000
------------ ------------ ------------ -----------
Revenues $840,564 $502,377 $550,957 $440,487
Cost of Loan Activities 379,312 212,442 223,021 203,267
Gross Profit 461,252 289,935 327,936 237,220
Operating Expenses 307,666 254,371 323,808 154,914
Other Income (Expense) (2,293) 3,543 (27,472) 4,066
Net Income 151,293 39,107 (23,344) 86,372

RISK FACTORS

Some of the statements contained in this Prospectus discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. Factors that could cause the results to differ include the risk
factors discussed below.

Investing in the shares is very risky. You should be able to bear a
complete loss of your investment. You should carefully consider the following
factors, among others:

WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO BASE AN INVESTMENT DECISION.

We started operations in May 1998 when Mark Massa, who had previously
spent over 6 years working as an independent mortgage broker, decided to
obtain office space, hire employees and loan officers, and begin originating
loans in the company's name. We have not commenced any operations in the
manufactured homes segment of our business. Because we have such a limited
operating history, it is difficult to evaluate our business and our prospects,
particularly in the manufactured homes segment.

WE FACE STRONG COMPETITION, WHICH COULD HARM OUR BUSINESS.

We will compete with other mortgage bankers, state and national banks,
thrift institutions and insurance companies for loan originations. The net
worths of these competitors range from approximately $25,000 for small loan
brokers to in excess of $100 million for large mortgage bankers. Many of
these organizations have more experience in the mortgage origination business
and may be better known and have more customers than we do. We may also be at
a disadvantage with many of our competitors because we do not have our own
financing for the loans we originate. Instead we act as a broker for our
network of approximately 100 banks and wholesale mortgage lending
institutions.

If we are able to enter into the manufactured homes business, we will be
competing with home builders of all sizes. We may be unable to compete
successfully against current and future competitors, and competitive pressures
may seriously harm our business.

THERE IS NO MARKET FOR OUR SHARES.

We are currently a private company so there is no public market for our
common stock. If this offering is successful, we will attempt to list our
common stock on the OTC Bulletin Board. We can provide no assurance that we
will complete our public offering, and even if we do, there is no assurance
that a market will develop in our common stock. Thus, investors in this
offering have substantial risk that they may never be able to sell their
shares. We also have no agreement with any broker/dealer to act as a market
maker for our shares, and there is no assurance that we will be able to find a
market maker.

IF WE LOSE MARK MASSA, OUR MORTGAGE ORIGINATION BUSINESS WILL BE ADVERSELY
AFFECTED.

The operation and growth of our mortgage origination business will be
substantially dependent on the effective service of our President, Mark Massa,
the person who developed the business to the point where it is today. We do
not have an employment agreement with Mr. Massa and we do not intend to
purchase "key person" life insurance on Mr. Massa. The loss of the services
of Mr. Massa would have a material adverse effect upon our planned business,
results of operation and financial condition.

OUR ABILITY TO OPERATE OUR MORTGAGE FINANCING BUSINESS WILL DEPEND ON ECONOMIC
CONDITIONS OF THE DENVER METROPOLITAN AREA.

The results of our mortgage financing business will depend primarily upon
the ability of our employees and the independent loan officers to originate
mortgage loans. This ability, in turn, is substantially dependent upon
current interest rate levels which affect the degree to which consumers obtain
new loans and refinance existing loans. For example, loan origination activity
is generally greater in a period of declining interest rates. Economic
conditions in the Denver metropolitan area also will have a significant effect
on the residential housing market and, therefore, on our loan origination
activity. The housing market in the Denver area has been strong for the last
ten years. There can be no assurance that such favorable economic conditions
will continue.

THE SUCCESS OF OUR MANUFACTURED HOMES BUSINESS WILL DEPEND UPON OUR ABILITY TO
FINANCE THE CONSTRUCTION OF THE HOMES AND THE ABILITY OF CONSUMERS TO FINANCE
THE PURCHASE OF THE HOMES.

We will need to obtain bank financing for the construction of the homes
and our customers will need to obtain mortgage financing for their purchase of
the homes. The availability, interest rate and other costs of such financing
are dependent on the lending practices of financial institutions, governmental
policies, and economic and other conditions, all of which are beyond our
control. Interest rates for manufactured home loans are sometimes higher than
loans for site-built homes. Additionally, manufactured home financing is at
times more difficult to obtain than conventional home mortgages. There can be
no assurance that affordable wholesale or retail financing for manufactured
homes will continue to be available on satisfactory terms. If such financing
were to become unavailable, such unavailability would have a material adverse
effect on our results of operations.

WE MAY HAVE TROUBLE OBTAINING LOTS WHERE WE CAN PLACE MANUFACTURED HOMES.

Manufactured housing communities and individual home placements are
subject to local zoning ordinances, building codes, and other local
regulations relating to utility service and construction of roadways. In the
past, property owners often have resisted the adoption of zoning ordinances
permitting the location of manufactured homes in residential areas. There can
be no assurance that we will be able to find an adequate number of lots where
manufactured homes can be built.

WE MAY BE UNABLE TO OBTAIN MANUFACTURED HOMES FROM THE MANUFACTURER ON A
TIMELY BASIS.

Our business will depend on the ability to obtain delivery of the
manufactured homes on a timely basis. If we are unable to do so, our business
will be adversely effected and we may lose potential customers.

WE DO NOT HAVE AN UNDERWRITER TO SELL OUR SHARES.

Our shares will be offered by Mark E. Massa and Timothy J. Brasel, our
officers and directors. We have not obtained an underwriter or selected
broker/dealers to assist us in offering our shares. Our officers and
directors have no experience in the offer and sale of securities, and,
consequently, they may be unable to complete the sale of the shares without
the assistance of a broker/dealer. In the event that we are able to complete
the offering of our shares, the establishment of a market in our shares will
be more difficult than it would have been with an underwriter, because there
will be no broker/dealer which is familiar with our business until we are able
to hold due diligence meetings with broker/dealer.

THE PURCHASE PRICE OF THE SHARES WAS ARBITRARILY DETERMINED.

The offering price of the shares was determined by us and does not
necessarily bear any relationship to our assets, book value, net worth or any
other established criteria of value. The purchase price of the shares should
not be regarded as indicative of the actual value of the shares being offered
by us.

THERE WILL BE SUBSTANTIAL DILUTION TO PURCHASERS OF THE SHARES.

Purchasers of our shares will suffer substantial and immediate dilution
of (i) $.9046 per share in pro forma net tangible book value per share,
assuming the minimum shares are sold and (ii) $.8488 per share in pro forma
net tangible book value per share assuming the maximum shares are sold.

NO DIVIDENDS ARE ANTICIPATED TO BE PAID IN THE IMMEDIATE FUTURE.

We have not paid any dividends on any of our outstanding common stock to
date and do not anticipate paying any dividends on our common stock in the
foreseeable future. We currently intend to retain all working capital and
earnings, if any, to finance the operations of our business and to expand our
business.

POSSIBLE FUTURE ISSUANCES OF STOCK BY US WOULD HAVE A POTENTIAL ANTI-TAKEOVER
EFFECT.

We have authorized capital stock of 20,000,000 shares of common stock, no
par value per share, and 5,000,000 shares of preferred stock, no par value per
share. As of the date of this Prospectus, there were 3,550,000 shares of
common stock issued and outstanding. Although, other than as disclosed
herein, there are no present plans, agreements or undertakings with respect to
our issuance of any shares of stock or related convertible securities, the
issuance of any such securities by us could have anti-takeover effects insofar
as such securities could be used as a method of discouraging, delaying or
preventing a change in our control. Such issuance could also dilute the
public ownership of us. Inasmuch as we may, in the future, issue authorized
shares of common stock or preferred stock without prior stockholder approval,
there may be substantial dilution to the interests of our stockholders.
However, given that we are authorized to issue more stock, there can be no
assurance that we will not do so. In addition, a stockholder's pro rata
ownership interest in us may be reduced to the extent of the issuance and/or
exercise of any options or warrants relating to the common stock or preferred
stock. The issuance of additional shares of common stock may have the effect

of rendering more difficult or discouraging an acquisition or change in our
control.

CERTAIN PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS DISCOURAGE A
CHANGE IN CONTROL OF OUR COMPANY.

As previously noted, pursuant to the certificate of incorporation, the
board of directors has the authority to issue up to 5,000,000 shares of
preferred stock without action by our stockholders in one or more series
having such preferences, rights and other provisions as the board of directors
may designate in providing for the issuance of such series. The preferred
stock may have rights or preferences superior to those of the common stock.
The certificate of incorporation and bylaws contain provisions which may
discourage certain transactions which involve an actual or threatened change
in our control.

OUR CERTIFICATE OF INCORPORATION PROVIDES INDEMNIFICATION AND LIMITATION OF
DIRECTORS' LIABILITY.

We currently do not have officer and director liability insurance and no
assurances can be given that such insurance will be obtained by us due to the
expense of such coverage or, if applied for, that we will qualify for such
insurance. Our certificate of incorporation contains a provision eliminating
the liability of a director to us or our stockholders for monetary damages for
any breach of duty in such capacity, except for liability (i) for any breach
of the director's duty of loyalty to us or our stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 7-108-40 of the Colorado
Business Corporation Act, or (iv) for any transaction from which the director
derived an improper personal benefit. We have been advised that it is the
position of the Securities and Exchange Commission that insofar as the
foregoing provisions may be invoked to disclaim liability for damages arising
under the securities laws, that such provisions are against public policy as
expressed in the securities laws and are therefore unenforceable.

WE HAVE THE RIGHT TO REJECT SUBSCRIPTIONS.

The shares are offered subject to our right to reject subscriptions in
whole or in part. Unless applicable state law dictates otherwise, subscribers
will not have any opportunity to obtain a refund of monies submitted with the
subscription for shares to be purchased in this offering.

THE STOCK IS CONSIDERED A PENNY STOCK AND INVESTORS MAY EXPERIENCE DIFFICULTY
IN RESELLING THE SHARES.

Our shares will be subject to Rule 15g-9 under the Exchange Act. That
rule imposes additional sales practice requirements on broker-dealers that
sell low-priced securities to persons other than established customers and
institutional accredited investors. For transactions covered by this rule, a
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. Consequently, the rule may affect the ability of broker-dealers to sell
our shares and may affect the ability of holders to sell our shares in the
secondary market. In addition, many states do not allow or place severe
restrictions on the resale of penny stocks.

SHARES ELIGIBLE FOR FUTURE SALE.

We currently have 3,550,000 shares outstanding and the following is a
breakdown of these shares:

* Free Trading No Shares
* Restricted:
Eligible for
sale under Rule
144 commencing
90 days after the
closing of this
Offering 1,750,000 Shares
Eligible for sale
under Rule 144
beginning in
January 2002 1,800,000 Shares
---------
* Total Restricted
Shares 3,550,000 Shares

We are unable to predict the effect that sales made in this offering or
under Rule 144 may have on the then prevailing market price of our shares. It
is likely that market sales of large amounts of these or other shares (or the
potential for those sales even if they do not actually occur) will have the
effect of depressing the market price of our shares.

DILUTION

As of June 30, 2001, the net tangible book value of our common stock was
$157,493 or $.0444 per share. Net tangible book value per share represents
the amount of our tangible assets less the amount of our liabilities divided
by the number of shares of common stock outstanding. Dilution is the
difference between the offering price of $1.00 and the net tangible book value
per share immediately after the offering.

Based on a price per share of $1.00 to investors in this offering, the
following table illustrates the approximate dilution to be incurred by public
investors:

Maximum Minimum
------- -------

Net Tangible Book Value per share before
offering $.0444 $.0444

Net Tangible Book Value per share after
offering .1512 .0954

Increase per share attributable to pay-
ments by new investors .1068 .051

Dilution of Net Tangible Book Value
per share to new investors .8488 .9046

Dilution per share as percentage of
price to new investors 84.88% 90.46%

The following table summarizes the comparative ownership and capital
contributions of existing shareholders and investors in this offering assuming
the maximum and minimum number of shares offered hereby are sold:

Maximum

Percent
Percent Total of Total Average
Shares of Total Consideration Consideration Price
Owned Shares Paid Paid Per Share
--------- -------- ------------- -------------- ---------

Current Shareholders 3,550,000 87.7% $ 31,000 5.8% $0.01
New Shareholders 500,000 12.3% $500,000 94.2% $1.00

Minimum

Percent
Percent Total of Total Average
Shares of Total Consideration Consideration Price
Owned Shares Paid Paid Per Share
--------- -------- ------------- -------------- ---------

Current Shareholders 3,550,000 93.4% $ 31,000 11.0% $0.01
New Shareholders 250,000 6.6% $250,000 89.0% $1.00

USE OF PROCEEDS

The net proceeds to be realized from this offering, after deducting
offering expenses payable by us which have not yet been paid, will approximate
$455,000 if the maximum offering is sold and $205,000 if the minimum offering
is sold. Management anticipates the net proceeds will be used substantially
as follows:

Minimum Maximum
-------- --------

Repayment of indebtedness $ 80,000 $ 80,000
Purchase lots for manufactured homes
business 25,000 75,000
Operating capital for mortgage
business 100,000 300,000
-------- --------
Total $205,000 $455,000
======== ========

We have three loans outstanding totaling $80,000 which bear interest at
nine percent per annum and are due on the earlier of the closing of this
offering or December 18, 2001. We used the proceeds of these loans as part of
the $125,000 which Mountain Eagle Homes, Inc. contributed to Eaglespan Homes
LLC to purchase seven undeveloped lots in Aurora, Colorado.

Assuming we are successful in selling homes on the seven lots we now have
a fifty percent interest in, we intend to purchase additional lots in the
Denver metro area. We intend to use the amount(s) indicated in the table
above to pay for such lots. If the proceeds set forth above, together with
existing working capital are not sufficient to purchase the lots, we intend to
borrow the remaining funds from shareholders on terms similar to the terms of
the loans we currently have outstanding. We have no contracts, agreements, or
understandings regarding the purchase of additional lots.

The operating capital for our mortgage business will be used to help us
fund and close loans in our own name. Approximately $50,000 of these funds
will be retained in cash to meet the FHA's cash requirements.

Management anticipates that upon completion of at least the minimum
offering, the proceeds will satisfy our projected cash requirements for at
least the next twelve months.

Pending utilization, management intends to make temporary investment of
the proceeds in bank certificates of deposit, interest-bearing savings
accounts, prime commercial paper or government obligations. Such investment
in interest-bearing assets, if continued for an excessive period of time
within the definition of the Investment Company Act of 1940, could subject us
to classification as an "investment company" under the Act and to
registration and reporting requirements thereunder.

MANAGEMENT'S DISCUSSION AND ANALYSIS

YEAR ENDED DECEMBER 31, 2000 VS. YEAR ENDED DECEMBER 31, 1999

RESULTS OF OPERATIONS

Our revenues increased from $502,377 in the year ended December 31, 1999
to $840,564 in the year ended December 31, 2000, a 67% increase. The increase
was due to the increase in loan closings, which in turn was due primarily to
the increase in the number of loan officers originating loans. We had 5 loan
officers on December 31, 1999 and 8 loan officers on December 31, 2000.
During the year ended December 31, 1999, we closed 145 loans and during the
year ended December 31, 2000 we closed 229 loans.

The cost of loan activities increased from $212,442 in the year ended
December 31, 1999, to $379,312 in the year ended December 31, 2000, a 79%
increase. This cost primarily represents the amounts paid as commissions to
the loan officers, and this amount increases as the number of loans closed
increases. Mark Massa, our President, originates approximately 25% to 30% of
our loans and his salary and bonuses are included under the salaries line item
in operating expenses. The remaining loans were originated by independent
loan officers and their commissions are included in the "cost of loan
activities" line item.

Our operating expenses increased from $254,371 in the year ended December
31, 1999 to $307,666 in the year ended December 31, 2000, a 21% increase.
This increase was due to cost associated with the increased level of loan
activity including an increase in administrative staff supporting the
business. We added one person in the administrative staff early in 2000.

Our net income increased from $39,107 in the year ended December 31, 1999
to $151,293 in the year ended December 31, 2000, a 287% increase. The
increase in net income was due to the increase in loan closings.

During the year ended December 31, 2000, we had a total of ten
transactions in securities we owned resulting in a gain of $1,110. The
details of these transactions are as follows: We sold 2,000 shares of
Beechport Capital Corp. that we had owned since 1998 for a gain of $310. We
sold 500 shares of Hollis Eden Pharmaceuticals that we had owned since 1998
for a loss of $247. We purchased a total of 8,500 shares of eMedSoft.com for
a total cost of $57,970 and we sold 4,000 of these shares for net proceeds of
$30,392 resulting in a net gain on sales of eMedSoft.com shares of $1,047.

SIX MONTHS ENDED JUNE 30, 2001 VS. SIX MONTHS ENDED JUNE 30, 2000

RESULTS OF OPERATIONS

Our revenues increased from $440,487 in the six months ended June 30,
2000 to $550,957 in the six months ended June 30, 2001, a 25% increase. The
increase was due to the increase in loan closings, which was due to a
significant increase in refinancings caused by the lower mortgage rates.
During the six months ended June 30, 2000 we closed 120 loans and during the
six months ended June 30, 2001 we closed 187 loans.

The cost of loan activities increased from $203,267 in the six months
ended June 30, 2000, to $223,021 in the six months ended June 30, 2001, a 9.7%

increase. This cost primarily represents the amounts paid as commissions to
the loan officers.

Our operating expenses increased from $154,914 in the six months ended
June 30, 2000 to $323,808 in the six months ended June 30, 2001, a 109%
increase. The primary reason for this increase is the increase in salaries,
which increased from $78,713 in 2000 to $217,365 in 2001. The primary reason
for this increase relates to the accounting treatment of Mark Massa's
compensation in 2000 when we were an S corporation. During the six months
ended June 30, 2000, Mr. Massa earned a salary of $30,000 and he earned
$86,372 which was our profit for the six months; resulting in total
compensation of $116,372. As of January 2001, we are no longer an S
corporation, and therefore, compensation paid to Mr. Massa is in the form of
salary and bonuses. During the six months ended June 30, 2001, Mr. Massa
earned approximately $150,000 as salary and bonuses. Therefore, Mr. Massa's
compensation actually increased by approximately $33,628 between the two six
month periods. The remaining increase in the salaries line item was
attributable to an increase in administrative staff supporting the mortgage
business.

Our net income decreased from $86,372 in the six months ended June 30,
2000 to ($23,344) for the six months ended June 30, 2001. There are two
primary reasons for the decline in net income. We were an S corporation in
2000, and the $86,372 shown as income in the 2000 period was earned income of
Mark Massa, the sole shareholder. In the 2001 period, all of Mark Massa's
income is included under the Salaries line item, which increased the operating
expenses. The second reason was the loss realized on investment of $26,768
which was recognized on January 1, 2001 when the securities we held were
distributed to Mark Massa. These securities were distributed to Mr. Massa
because at the time he was the sole shareholder and he was encouraged by legal
counsel to distribute the shares before we converted to a C corporation.

Effective in January 2001, the Company terminated its S Corporation
status. Retained earnings totaling $69,718 as of the date of conversion were
transferred to additional paid in capital. Distributions to the shareholders
were treated as dividends.

LIQUIDITY AND CAPITAL RESOURCES

Our working capital was $(37,071) at June 30, 2001, compared to $14,766
at December 31, 2000.

Our working capital was $14,766 at December 31, 2000 compared to $30,454
at December 31, 1999, or a decrease of $15,688.

Net cash provided by operating activities for the year ended December 31,
2000 was $154,006 compared to $51,000 for the prior year. The increase was
due primarily to the $112,186 increase in net income from 1999 to 2000.

Net cash used in investing activities decreased from $43,847 in 1999 to
$13,948 in 2000.

During the year ended December 31, 2000 we reported net cash used in
financing activities of $134,696 as compared to net cash provided by financing
activities of $2,808 in the year ended December 31, 1999. The primary reason
for the increase in cash used in financing activities was that we distributed
$142,699 to the sole shareholder during the year ended December 31, 2000.

Net cash provided by operating activities for the six months ended June
30, 2001 was $21,471 compared to $87,182 for the six months ended June 30,
2000. The decrease was due primarily due to the fact that we had a net income
of $86,372 in the 2000 period and a loss of ($23,344) in the 2001 period.

Net cash used in investing activities increased significantly from
$27,317 in the six months ended June 30, 2000 to $134,573 in the six months
ended June 30, 2001. The primary reason for this was the $130,000 that was
invested in our wholly-owned subsidiary, Mountain Eagle Homes, Inc.

Net cash provided by financing activities was $185,158 in the six months
ended June 30, 2001, compared to $32,674 used in financing activities in the
2000 period. During the 2001 period we received $105,000 from the sale of our
common stock and we received $80,000 which was loaned to us by certain
shareholders.

With respect to the manufactured homes segment of our business, we intend
to seek bank financing for the purchase price of the homes and for the site
preparation work. Timothy J. Brasel has agreed to personally guarantee the
loans. We intend to start with one home, and when we have an agreement to
sell that home we will start purchasing another one. During the next twelve
months, we don't intend to have more than two homes for sale at any one time.
Based on recent conversations with several banks in the Denver area, we
believe that we can find banks that will loan 100% of the purchase of a
manufactured home and the site preparation work so long as we have paid for
the lots.

As of the date of this Prospectus we have not made any commitments for
the purchase of homes. If we are able to sell our homes for a profit, we
expect to reinvest the cash flow generated to further develop this business.

BUSINESS

GENERAL

Mountain States Lending, Inc. was incorporated in November 1990 as a
Colorado corporation under the name Slam Dunk Enterprises, Inc. The
corporation was inactive until May 1998 when we started engaging in the
business of providing first and second mortgage financing under the name of
Mountain States Lending. During January 2001, we filed articles of amendment
with the Colorado Secretary of State changing the corporation's name to
Mountain States Lending, Inc.

During June 2001 we formed a wholly-owned subsidiary named Mountain Eagle
Homes, Inc. for the purpose of engaging in the business of selling pre-
manufactured modular homes. In connection with the pre-manufactured homes
business, Mountain Eagle Homes entered into a 50/50 partnership named
EagleSpan Homes, LLC on June 21, 2001, for the purpose of purchasing seven
undeveloped lots in Aurora, Colorado. The lots were purchased for a total
purchase price of $250,000. Our share of $125,000 was paid using $45,000 from
working capital and borrowing $80,000 from affiliates of Timothy J. Brasel.
Once the infrastructure is in place we intend to install pre-manufactured
homes on the lots and then sell the homes. As of the date of this Prospectus
we have not generated any revenues through EagleSpan Homes, LLC.

MORTGAGE LOAN BUSINESS

We offer a full spectrum of mortgage loan financing options including
conventional loans, FHA loans, VA loans, jumbo loans, construction loans,
non-conforming loans, and sub-prime loans.

Conventional loans are loans that conform to the underwriting guidelines
set forth by the Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation. FNMA and FHLMC are two of the largest major
secondary market facilities that buy convention loans. During 2000, these
loans comprised approximately 38% or our business.

Jumbo, non-conforming and sub-prime loans are loans that do not conform
to FNMA or FHLMC underwriting guidelines. Jumbo loans are typically involve
loan amounts over $275,000. Non-conforming loans are, for example, loans for
borrowers who are self-employed and may not be able to verify their income.
Sub-prime loans are generally loans for borrowers with less that perfect
credit. All of these loans in the aggregate comprised approximately 30% of
our business in 2000.

FHA loans are insured by HUD and typically allow for a 3% down payment
and generally have less stringent underwriting guidelines than either FNMA or
FHLMC. During 2000, FHA loans comprised approximately 28% of our business.

VA loans are guaranteed by the Veterans Administration. These loans are
available to most retired and active duty military personnel and usually allow
for no down payment when purchasing a home. During 2000, VA loans comprised
approximately 4% of our business.

We intend to generate revenues in the mortgage segment of our business by
the following means:

1. We charge the borrowers a loan origination fee at the time of the
loan closing. The amount of the fee is negotiated between us and
the borrower and depends in part upon the borrower's qualifica-
tions, and the circumstances of the loan. A loan origination
fee is common in the industry and usually varies between 0% and
2%, with 1% currently being the typical charge.

2. Since we do not fund the loans we originate, we pre-sell the loans
to wholesale lenders and we usually receive a premium of
approximately 1%, but it can range from 0% to 4%. This is sometimes
referred to as a yield spread premium or service release premium.
The service release premium is a payment for relinquishing the
rights to service the loan to someone else.

3. We usually charge each borrower a processing fee of $350 at the
loan closing to help offset the expense of having an in-house
processing staff.

4. Sometimes we charge loan discount points if the borrower desires a
lower interest rate or for other reasons. These typically range
from 0% to 2% of the loan amount, and we usually share this fee
with the actual lender.

Approximately 70% to 75% of our loans are originated by our seven
independent loan officers, and we pay them between 70% to 85% of these fees as
commissions. Each loan officer signs an agreement with the us which provides
the amount of compensation paid and that the loan officer will only originate
loans for Mountain States Lending. The agreements also state that the loan
officers are independent contractors. Our President, who also originates
loans, does not receive a commission but his compensation is based somewhat on
his production as described in the Management section of this Prospectus.
Based on our experience, an experienced loan officer should originate and
close 40 or more loans per year.

MANUFACTURED HOMES BUSINESS

We have recently established a wholly-owned subsidiary named Mountain
Eagle Homes, Inc. for the purpose of engaging in the business of selling
pre-manufactured modular homes. We have decided that we will purchase homes
from Heritage Homes of Nebraska, Inc., a manufactured homes builder located in
Wayne, Nebraska. These homes are built in modern production facilities under
strict supervision. A manufactured homes builder is generally able to purchase
materials below the cost of what local builders pay due to the volume of
business they do. They are also able to work every day regardless of the
weather since they build the homes indoors. These and other factors allow the
manufactured homes builder to produce homes for a price significantly below
what site-built home builders can, and the quality will meet or exceed the
quality of comparable priced site-built homes.

Modular homes define the system of building a conventional home in
sections for a specific customer and site. A new modular home is built with
the latest technology, yet it does have some limitations such as size. Each
modular section must be transported on roadways, therefore the maximum width
is limited per section. Some manufacturers also have standardized
construction features and techniques and cannot vary the systems. We intend
to use Heritage Homes to build the homes for at least our first project. They
specialize in homes in the 1000 to 2800 square foot range.

Before the home is delivered to the lot, the foundation and other
sitework must be completed. When the home is delivered either a crew from the
manufacturer or a crew hired by us will set the sections of the house onto the
foundation and bolt them together. Then a crew will trim out the connections
between the modules, such as carpet seaming at the doorways, siding on the end
of the home, and mating wall doors. Someone will also hook up the utilities
and install the ductwork, furnace and air conditioner in the basement, finish
outside stoops, steps, concrete work, yard work and the garage.

We intend to purchase undeveloped lots throughout the Denver metro area
with a focus on Aurora and the Bennett Watkins area about 20 miles east of
Denver. For our first project, we formed a 50/50 partnership with a
nonaffiliated entity and purchased 7 undeveloped lots in Aurora, Colorado for
$250,000. Our one-half of the investment was financed with an $80,000 loan
from affiliates of Timothy J. Brasel and $45,000 from working capital. All
costs and profits will be split 50/50 with our partner. The lots have been
zoned for single family homes and manufactured homes are allowed. Before we
can install our first home, we must first complete the roads, sewer, water and
utilities. We are currently accepting bids for this work.

We have held discussions with several Denver area banks and we believe
that we will be able to obtain 100% financing for the construction of 3 to 4
manufactured homes at one time. We plan to start with one home from Heritage
Homes, which we will select, setup and complete before we attempt to sell it.
As we are able to start selling these completed homes, we will buy additional
homes.

Mr. Brasel will work with local real estate agents that are familiar with
the areas where we plan to purchase the lots and build the homes. The listing
real estate broker will then prepare the sales material and handle the sales
campaign for the individual homes.

We will use a portion of the proceeds of this offering to purchase lots,
and the balance necessary to purchase the lots will be financed from working
capital and loans from shareholders on terms similar to the terms of the loans
we currently have outstanding. The purchase of the homes and the cost of
preparing the site for the home will be financed with bank loans that are
personally guaranteed by Mr. Brasel. Based on recent conversations with
several banks in the Denver area, we believe that we can find banks that will
loan 100% of the purchase of a manufactured home and the site work if the lots
are paid for.

We intend to start with homes that will sell in the $240,000 to $250,000
price range. Assuming that the market for manufactured homes in this price
range does not deteriorate significantly, we expect to build and sell at least
seven homes during the 12 months following the completion of this offering.
There is, of course, no assurance that the market will remain strong and that
we will be able to build and sell this many homes.

We have been holding discussions with several Denver homebuilders for the
purpose of selecting someone who would perform all of the services necessary
to complete the building of the homes and prepare them for sale. The builder
would prepare the lot which would include any excavation work, building the
foundation, adding the water well and septic system if necessary, setting up
the utilities, and building a garage if necessary. The builder would obtain
all necessary permits and the certificate of occupancy. Once the builder has
set the home on the site, he would tie in all utilities, finish the interior
and exterior, make any repairs necessary, stitch the house together and add
any porches or decks. He would do a rough grade of the lot and add any
exterior concrete such as sidewalks and driveways.

We will offer an incentive to buyers to finance their purchase of a home
through our mortgage financing business.

Timothy J. Brasel, a director of Mountain States Lending and President of
Mountain Eagle Homes, is the person primarily responsible for conducting the
manufactured homes segment of our business. If we are successful in this
business, we intend to have a full-time person to run this segment of our
business.

Mr. Brasel has limited experience in the real estate business. He has
purchased and sold with a partner four apartment buildings and two office
buildings, and he has built several homes for sale. He currently owns one
apartment building, one shopping center and several homes. He sold real
estate in Iowa for two years before moving to Colorado in 1982 and he
currently holds a real estate license for Colorado but he has put it on
inactive status.

He has just completed a duplex project with a partner in which he did the
following:

1. Purchased the lot.
2. Met with the city for its approval on the project.
3. Hired the persons to bring in the utilities.
4. Hired someone to build a full basement on the site.
5. Participated with the builder (Heritage Homes) in designing the
duplex.
6. Supervised the setting of the duplex on the site.

The duplex is 95% completed and one side has already been rented. Mr.
Brasel has made contacts in the real estate development business throughout
the years that he can call on in the event he has questions, but he has relied
mainly on his past experiences.

EMPLOYEES

We presently have four full-time employees. In addition, six full-time
loan officers currently work for Mountain States Lending as independent
contractors.

OFFICE FACILITIES

We lease a 2,400 square foot office condominium unit in Englewood,
Colorado from a limited liability company owned by Mark Massa, our President.
The monthly lease payments are $4,000. The lease expires on September 1,
2004.

LEGAL PROCEEDINGS

There are no pending material legal proceedings, and we are not aware of
any threatened legal proceedings to which we may become a party.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Directors and Officers of Mountain States Lending are as follows:

NAME AGE POSITIONS AND OFFICES HELD
---- -- --------------------------

Mark E. Massa 43 President and Director of
Mountain States Lending and
Director of Mountain Eagle Homes,
Inc.

Timothy J. Brasel 42 Director and President of
Mountain Eagle Homes, Inc.

There is no family relationship between any Director or Executive Officer
of Mountain States Lending.

We presently have no committees.

Set forth below are the names of all Directors and Executive Officers of
Mountain States Lending, all positions and offices with us held by each such
person, the period during which he has served as such, and the principal
occupations and employment of such persons during at least the last five
years:

MARK E. MASSA - PRESIDENT AND DIRECTOR. Mr. Massa has served as the
President and as a Director of Mountain States Lending since May 1998, and as
a Director of Mountain Eagle Homes, Inc. since June 2001. From December 1991
through 1998, he worked as an independent mortgage broker providing first and
second mortgage loans for borrowers primarily in Colorado. From 1983 to 1990,
he worked as a stock broker for several firms including J.W. Gant, Kober
Financial, and Private Investors Cartel.

TIMOTHY J. BRASEL - DIRECTOR. Mr. Brasel has served as a Director of
Mountain States Lending since January 2001, and President and Director of
Mountain Eagle Homes, Inc. since June 2001. Mr. Brasel devotes most of his
time managing his investments in securities and real estate. He also serves
as a director of six publicly held shells. These companies are ILMI
Corporation, Studio Capital Corp., Calneva Capital Corp., Zirconium Capital
Corp., Hightop Capital Corp., and Royal Belle Capital Corp. From December
1996 until September 1998, he served as President and a Director of Cypress
Capital, Inc., which completed an acquisition of Terra Telecommunications,
Inc. during September 1998. From September 1995 until January 1999, he served
as President and a Director of High Hopes, Inc. which completed an acquisition
of certain technology from Sanga e-Health LLC during January 1999. From May
1995 until August 1997, Mr. Brasel served as President and a director of
Universal Capital Corp., which completed an acquisition of Remarc
International Inc. during August 1997. From February 1996 until February
1997, Mr. Brasel served as President and a director of Capital 2000, Inc.
which completed an acquisition of United Shields Corporation in February 1997.
From July 1996 until December 1997, Mr. Brasel served as President and a
director of Mahogany Capital, Inc. which completed an acquisition of Pontotoc
Production Company, Inc. during December 1997. From July 1996 until May 1998,
Mr. Brasel served as President and a director of Walnut Capital, Inc., which

completed a merger with Links Ltd. during May 1998. From March 1990 until
September 1994, Mr. Brasel served as President, Secretary, Treasurer and a
Director of Prentice Capital, Inc., a publicly-held blank-check company which
completed an acquisition of Universal Footcare, Inc. From March 1990 until
August 1993, Mr. Brasel was President, Secretary and a Director of Brasel
Ventures, Inc., a publicly-held blank-check company, which completed an
acquisition of American Pharmaceutical Company. Since January 1987, Mr.
Brasel has been President and a Director of Bleu Ridge Consultants, Inc., a
business and management consulting firm located in Denver, Colorado. Mr.
Brasel received a Bachelor of Science Degree in Business Administration from
Morningside College, Sioux City, Iowa in 1980. During August 1999, the
Securities and Exchange Commission filed a complaint in the U.S. District
Court for the District of Colorado against Timothy J. Brasel and four other
defendants alleging violations of the registration and anti-fraud provisions
of the federal securities laws in connection with certain trading activities
in the securities of Simplex Medical Systems, Inc. Mr. Brasel has entered
into a settlement with the SEC in which Mr. Brasel has consented to an
injunction against future violations of Section 5 of the Securities Act of
1933, as amended, without admitting or denying any violations and the SEC has
agreed to dismiss all claims alleging violations of the anti-fraud provisions.
Mr. Brasel has also agreed to pay disgorgement, including interest, equal to
$34,695, and a civil penalty of $5,500.

Our Directors hold office until the next annual meeting of the
shareholders and until their successors have been elected and qualified.

The Officers of Mountain States Lending are elected by the board of
directors at the first meeting after each annual meeting of our shareholders,
and hold office until their death, or until they shall resign or have been
removed from office.

We presently have no audit, compensation or nominating committee.

The date of our next annual meeting will be determined by our board of
directors in accordance with Colorado law.

EXECUTIVE COMPENSATION

The following tables set forth information regarding executive
compensation for the our President and Chief Executive Officer. No other
executive officer received compensation in excess of $100,000 for any of the
years ended December 31, 2000 or 1999.

SUMMARY COMPENSATION TABLE

LONG-TERM COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------- ----------------- -------
SECURI-
TIES
RE- UNDERLY-
OTHER STRICT- ING ALL
ANNUAL ED OPTIONS OTHER
NAME AND PRINCIPAL COMPEN- STOCK /SARs LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION AWARD(S) (NUMBER) PAYOUTS SATION
------------------ ---- ------ ----- ------ -------- -------- ------- ------

Mark E. Massa 2000 $60,000 $142,699
President and (1)
Chief Executive 1999 $60,000 $ -0- -0- -0- -0- -0- $-0-
Officer
______________

(1) Represents S Corporation distributions.

OPTION/SAR GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 2000

PERCENT OF
TOTAL OPTIONS/
OPTIONS/ SARs GRANTED EXERCISE
SARs TO EMPLOYEES OR BASE EXPIRATION
NAME (NUMBER) IN FISCAL YEAR PRICE ($/SH) DATE
---- -------- -------------- ------------ ----------
Mark E. Massa -0- -0- $-0-

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES

SECURITIES
UNDERLYING VALUE OF UNEXER-
SHARES UNEXERCISED CISED IN-THE
ACQUIRED OPTIONS MONEY OPTIONS/
ON SARs AT FY-END SARs AT FY-END
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (NUMBER) REALIZED UNEXERCISABLE UNEXERCISABLE
---- -------- -------- -------------- ---------------
Mark E. Massa -0- -0- -0- -0-

Mark Massa currently is receiving a monthly salary of $12,000, and if his
commissions from loan originations exceeds $12,000, he receives a monthly
bonus of one-half of the amount of this excess. He also receives a monthly
bonus of 5% of the commissions generated by all other loan officers.

Timothy J. Brasel, who serves as President of our wholly-owned
subsidiary, Mountain Eagle Homes, Inc., receives no salary for his services,
but he will be paid thirty percent (30%) of the net profits on the homes sold
by Mountain Eagle Homes.

SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL SHAREHOLDERS

The following table sets forth, as of October 10, 2001, and as adjusted
for the sale of the shares offered by each person known by Mountain States
Lending to be the beneficial owner of five percent or more of our common
stock, all Directors individually and all Directors and Executive Officers of
Mountain States Lending as a group. As of October 10, 2001, we had 30
shareholders. Except as noted, each person has sole voting and investment
power with respect to the shares shown.

PERCENT OF CLASS
---------------------------------
AMOUNT OF PRIOR AFTER THIS OFFERING(1)
NAME AND ADDRESS OF BENEFICIAL TO THIS ----------------------
BENEFICIAL OWNER OWNERSHIP OFFERING MINIMUM MAXIMUM
------------------- ---------- -------- ------- -------

Mark E. Massa 1,500,000 42.3% 39.5% 37.0%
7435 East Peakview Ave.
Englewood, CO 80111

Timothy J. Brasel 1,375,000(1) 38.7% 36.2% 34.0%
5770 South Beech Court
Greenwood Village, CO
80121

Nasus Lesarb, Ltd. 375,000 10.6% 9.9% 9.3%
5790 South Beech Court
Greenwood Village, CO
80121

All Directors and 2,875,000(1) 81.0% 75.7% 70.1%
Executive Officers as
a Group (2 persons)
---------------------

(1) Includes 775,000 shares held by Brasel Family Partners, Ltd., for which
Mr. Brasel serves as general partner, 350,000 shares held by Mr.
Brasel's children, and 250,000 shares held by La Mirage Trust.

There are no known agreements, the operation of which may at a subsequent
date result in a change in control of Mountain States Lending.

TRANSACTIONS WITH MANAGEMENT AND OTHERS

During November 1990, Mark Massa purchased 1,750,000 shares of the our
common stock for a total consideration of $1,000.

Effective September 1, 1999, we entered into a lease with Mark Massa for
an office condominium which was owned by Mr. Massa. The initial monthly rent
was $2,500. On November 1, 2000, a new lease was entered into which requires
us to pay $4,000 per month in rent plus all operating expenses including
utilities, property taxes, maintenance and association fees. This lease
expires October 31, 2004. Our board of directors is of the opinion that the
terms of this lease are at least as favorable to us as could have been
obtained from unaffiliated parties.

On January 1, 2001, Timothy J. Brasel and his relatives purchased
1,500,000 shares of the our common stock for a total consideration of $30,000.
These shares were issued in the following names and amounts:

Brasel Family Partners, Ltd. 775,000 Shares
Nasus Lesarb, LTD 375,000 Shares
Tyler Jay Brasel 100,000 Shares
Colton Russell Brasel 100,000 Shares
Justin Thomas Brasel 150,000 Shares

During June 2001, three trusts for Timothy J. Brasel and his relatives
have loaned Mountain States Lending a total of $80,000 to help fund the
purchase of seven undeveloped lots in Aurora, Colorado. These loans bear
interest at nine percent (9%) and are payable on the earlier of December 18,
2001, or the closing of this offering.

During July 2001, Mr. Massa transferred 250,000 shares to LaMirage Trust,
a trust for which Timothy J. Brasel is a 50% beneficiary.

DESCRIPTION OF SECURITIES

COMMON STOCK

The authorized capital stock of Mountain States Lending consists of
20,000,000 shares of common stock, no par value. All shares have equal
voting rights and are not assessable. Voting rights are not cumulative, and,
therefore, the holders of more than 50% of our common stock could, if they
chose to do so, elect all the Directors.

Upon liquidation, dissolution or winding up of Mountain States Lending,
our assets, after the payment of liabilities and any liquidation preferences
on outstanding preferred stock, will be distributed pro rata to the holders of
the common stock. The holders of the common stock do not have preemptive
rights to subscribe for any of our securities and have no right to require us
to redeem or purchase their shares. The shares of common stock presently
outstanding are, and the shares of common stock to be sold pursuant to this
offering will be, upon issuance, fully paid and nonassessable.

Holders of common stock are entitled to share equally in dividends when,
as and if declared by the board of directors of Mountain States Lending, out
of funds legally available therefor. We have not paid any cash dividends on
our common stock, and it is unlikely that any such dividends will be declared
in the foreseeable future.

TRANSFER AND WARRANT AGENT

Corporate Stock Transfer, Inc., 3200 Cherry Creek Drive South, Suite 430,
Denver, Colorado 80209, serves as our Transfer Agent.

REPORTS TO STOCKHOLDERS

We plan to furnish our stockholders for each fiscal year with an annual
report containing financial statements audited by its independent certified
public accountants. Additionally, we may, in our sole discretion, issue
unaudited quarterly or other interim reports to our stockholders when we deem
appropriate.

PREFERRED STOCK

Mountain States Lending is authorized to issue 5,000,000 shares of
Preferred Stock, no par value. The Preferred Stock may be issued in series
from time to time with such designation, rights, preferences and limitations
as our board of directors may determine by resolution. The rights,
preferences and limitations of separate series of Preferred Stock may differ
with respect to such matters as may be determined by the board of directors,
including, without limitation, the rate of dividends, method and nature of
payment of dividends, terms of redemption, amounts payable on liquidation,
sinking fund provisions (if any), conversion rights (if any), and voting
rights. The potential exists, therefore, that preferred stock might be issued
which would grant dividend preferences and liquidation preferences to
preferred shareholders over common shareholders. Unless the nature of a
particular transaction and applicable statutes require such approval, the
board of directors has the authority to issue these shares without
shareholder approval. The issuance of Preferred Stock may have the affect of
delaying or preventing a change in control of Mountain States Lending without
any further action by shareholders. As of the date of this Prospectus, no
Preferred Stock is issued or outstanding.

TERMS OF OFFERING

This offering is being conducted by Mark E. Massa and Timothy J. Brasel,
Officers and Directors of Mountain States Lending, on a "best efforts,"
250,000 share minimum, 500,000 share maximum basis, at an offering price of
$1.00 per Share. No one has made any commitments to purchase any or all of
the shares. A commission will not be paid to us or to Messrs. Massa or Brasel
for sales effectuated by them.

All proceeds from subscriptions will be deposited by noon of the first
business day following receipt into an escrow account with Colorado Business
Bank, Denver, Colorado, as Escrow Agent pursuant to an Escrow Agreement
between Mountain States Lending and such Escrow Agent. After the sale of the
initial 250,000 shares, the remaining 250,000 shares will be offered on a
"best efforts" basis, but without any required escrow, until 90 days after the
date of this Prospectus, unless extended an additional 90 days, or such
earlier date as all such 500,000 shares are sold or we determine in our sole
discretion to discontinue the offering. Once 250,000 shares have been sold,
we may elect to have an initial closing to disburse the proceeds to us. We
may then elect to continue the offering until the maximum 500,000 shares have
been sold or the offering period is terminated. All checks for our shares
should be made payable to "Colorado Business Bank, Escrow Agent for Mountain
States Lending, Inc." In the event the minimum 250,000 shares are not sold
within the 90-day period (subject to the 90-day extension period described
above), funds will be refunded promptly to the subscribers in full without
deduction therefrom or interest thereon. During the 90-day offering period
and any extension, no subscriber will be entitled to a refund of any
subscription.

Messrs. Brasel and Massa will contact individuals with whom they have a
preexisting business or personal relationship and will offer to sell them our
common stock. They will provide potential investors with a copy of the
prospectus and a subscription agreement, answer questions about the offering
and then collect the executed subscription agreements and checks. These will
then be provided to the escrow agent for the offering.

Messrs. Brasel and Massa are exempt from the requirements to register as
brokers because they meet the requirements of Rule 3a4-1 under the Securities
Exchange Act of 1934. In particular, they are not subject to a statutory
disqualification; they are not being compensated in connection with this
offering; they are not an associated person of a broker or dealer; and they
meet the conditions of paragraph 3a4-1(a)(4)(ii) which requires the following:

1. They perform substantial duties for us otherwise than in connection
with this offering.
2. They have not been associated with a broker or dealer during the
past twelve months.
3. They have not participated in selling an offering of securities
during the past twelve months and do not intend to participate in
an offering during the next twelve months except for this offering.

PURCHASE OF SHARES BY OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS

Our Officers and Directors and persons associated with them may buy some
of the shares. While it is anticipated that Officers and Directors may
purchase up to 20% of the shares sold, such purchases may not be made in a

manner inconsistent with a public offering of our shares. Such purchases
could be made in order to reach the required offering amount. Any securities
purchased by Officers and Directors will be purchased for investment purposes
only and not for the purpose of redistribution. Moreover, it is not intended
that the proceeds from this offering will be utilized, directly or indirectly,
to enable anyone, including Officers and Directors, to purchase the shares
offered.

To the extent such persons purchase shares in the offering, the number of
shares required to be purchased by the general public such that the amount for
closing is reached will be reduced by like amount. Purchases by Officers and
Directors of up to 20% of the shares sold will result in management increasing
its control of Mountain States Lending. Consequently, this offering could
close with a substantially greater percentage of shares being held by present
shareholders and with lesser participation by the public than would otherwise
be the case.

PRICING THE OFFERING

There is no public market for our shares and there is no assurance that a
market will develop following the offering. The offering price of the shares
was determined by us with no recognized criteria of value, including our
current financial condition and its net tangible book value. In determining
the offering price and the number of shares to be offered, we considered such
factors as its limited operating history and general conditions of the
securities market. Accordingly, the offering price set forth on the cover
page of this Prospectus should not be considered an indication of the actual
value of Mountain States Lending. The price bears no relation to our assets,
book value, earnings or net worth or any other traditional criterion of value.

Inasmuch as we are offering the shares and a principal underwriter was
not retained for such purpose, our establishment of the offering price of the
shares has not been determined by negotiation with an underwriter as is
customary in such offerings. Thus, subscribers are subject to an increased
risk that the price of our securities has been arrived at arbitrarily.

Our decision not to retain a principal underwriter for this offering may
have an adverse effect on the development of a market in our shares. While
management expects to contact several brokerage films in order to interest
them in making a market in our securities, there is no assurance management
will be successful in obtaining marketmakers for our securities. Moreover,
even if such efforts are successful, there is no assurance an active market
will develop in our securities such that subscribers will be able to resell
their shares following this offering. Our securities will not be eligible for
listing on the NASDAQ system and, consequently, trading in our securities, if
any, will be limited to the OTC Bulletin Board or the "pink sheets" maintained
by the National Quotation Bureau, Inc. which reports quotations by brokers or
dealers making a market in particular securities.

LEGAL MATTERS

The legality of the securities of Mountain States Lending offered will be
passed on for us by Krys Boyle Freedman & Sawyer, P.C., 600 17th Street, Suite
2700 South Tower, Denver, Colorado 80202.

EXPERTS

The financial statements of Mountain States Lending included in this
Prospectus, to the extent and for the periods indicated in their report, have
been audited by Schumacher & Associates, Inc., Certified Public Accountants,
and are included herein in reliance on the authority of such firm as experts
in accounting and auditing in giving such reports.

ADDITIONAL INFORMATION

A Registration Statement on Form SB-2, including amendments thereto,
relating to the securities offered hereby has been filed by Mountain States
Lending with the Securities and Exchange Commission, Washington, D.C. This
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to Mountain States Lending and the securities offered
hereby, reference is made to such Registration Statement, exhibits and
schedules. Statements contained in this Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in
each instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. A copy of the Registration
Statement may be inspected without charge at the Commission's principal
offices in Washington, D.C., and copies of all or any part thereof may be
obtained from the Commission upon the payment of certain fees prescribed by
the Commission. The Registration Statement has been filed electronically
through the Commission's Electronic Data Gathering, Analysis and Retrieval
System and may be obtained through the Commission's Web site
(http://www.sec.gov).

No person is authorized to give any information or to make any
representation other than those contained in this Prospectus, and if given or
made such information or representation must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the securities
offered by this Prospectus or an offer to sell or a solicitation of an offer
to buy the securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction.

MOUNTAIN STATES LENDING, INC.
AND CONSOLIDATED SUBSIDIARY

FINANCIAL STATEMENTS

Page

Review Report of Independent Certified Public Accountants F-2

Consolidated Financial Statements at
June 30, 2001 (Unaudited):

Consolidated Balance Sheets F-3

Consolidated Statements of Operations F-4

Consolidated Statement of Changes in
Stockholder's Equity F-5

Consolidated Statements of Cash Flows F-6

Notes to Consolidated Financial Statements F-7

Report of Independent Certified Public Accountants F-14

Financial Statements at December 31, 2000:

Balance Sheets F-15

Income Statements F-16

Statement of Changes in Stockholder's Equity F-17

Statements of Cash Flows F-18

Notes to Financial Statements F-19

F-1

REVIEW REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Mountain States Lending, Inc.
Englewood, Colorado

We have reviewed the accompanying consolidated balance sheet of Mountain
States Lending, Inc. and Consolidated Subsidiary as of June 30, 2001, and the
related consolidated statements of operations and cash flows for the six
months then ended, in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is the
representation of the management of Mountain States Lending, Inc. and
Consolidated Subsidiary.

A review of interim financial statements consists principally of inquiries of
Company personnel responsible for financial matters and analytical procedures
applied to financial data. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles.

/s/ Schumacher & Associates, Inc.

Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, CO 80211

July 31, 2001

F-2

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

ASSETS
June 30, December 31,
2001 2000
----------- ------------
Current Assets:
Cash and equivalents $ 89,362 $ 17,306
Accounts receivable - 5,175
Notes receivable, current portion - 550
Investment in marketable securities - 28,587
Prepaid expenses and other current assets 40,262 17,972
----------- -----------
Total Current Assets 129,624 69,590

Property and equipment, net of accumulated
depreciation of $47,330 and $41,480 at
June 30, 2001 and December 31, 2000,
respectively (Note 7) 64,564 65,291
Investment 130,000 -
----------- -----------
Total Assets $ 324,188 $ 134,881
=========== ===========

LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities:
Accounts payable and accrued expenses $ 47,097 $ 17,784
Note payable, current portion (Note 3) 39,598 37,040
Note payable, related party (Note 9) 80,000 -
----------- -----------
Total Current Liabilities 166,695 54,824
----------- -----------
Total Liabilities 166,695 54,824
----------- -----------
Commitments (Notes 1,2,3,4,5,6,8,10 and 11) - -

Stockholder's Equity:
Preferred stock, no par value, 5,000,000
shares authorized, none issued and
outstanding - -
Common stock, no par value, 20,000,000
shares authorized, 3,550,000 issued and
outstanding at June 30, 2001 and
1,750,000 issued and outstanding at
December 31, 2000 106,000 1,000
Additional paid-in capital 74,837 5,119
(Depreciation) of marketable securities - (26,768)
Retained earnings (23,344) 100,706
----------- -----------
Total Stockholder's Equity 157,493 80,057
----------- -----------
Total Liabilities and Stockholder's
Equity $ 324,188 $ 134,881
=========== ===========

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

F-3

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

Six Months Six Months
Ended Ended
June 30, June 30,
2001 2000
----------- -----------
REVENUE:
Fees from loan activities $ 550,957 $ 440,487
Cost of loan activities 223,021 203,267
----------- -----------
Gross Profit 327,936 237,220
----------- -----------
OPERATING EXPENSES:
Salaries, payroll taxes and benefits 217,365 78,713
Depreciation 5,850 4,958
Advertising and promotion 10,639 5,705
Rent expense 26,427 15,577
Other operating expenses 63,527 49,961
----------- -----------
Total Operating Expenses 323,808 154,914
----------- -----------
Net Operating Income 4,128 82,306
----------- -----------
Other Income (Expenses):
Interest income 1,072 869
Interest (expense) (1,776) (2,389)
Realized loss on investment (26,768) -
Other income - 5,586
----------- -----------
Total Other Income (Expenses) (27,472) 4,066
----------- -----------
Net Income (Loss) $ (23,344) $ 86,372
=========== ===========
Net Income (Loss) per Common Share $ (.01) $ .05
=========== ===========

Weighted Average Number of Shares Outstanding 3,400,000 1,750,000
=========== ===========
Proforma Tax Expense and Earnings per Share

Net Income (Loss) before taxes $ (23,244) $ 86,372
Proforma provision for income taxes - 20,467
----------- -----------
Proforma Net Income (Loss) $ (23,244) $ 65,905
=========== ===========
Proforma Net Income (Loss) per Common Share $ (.01) $ .04
=========== ===========
Weighted Average Number of Shares
Outstanding 3,400,000 1,750,000
=========== ===========

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

F-4

MOUNTAIN STATES LENDING, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

From December 31, 1999 through June 30, 2001
(Unaudited)

Additional Other
Common Stock Paid-in Comprehensive Retained
No./Shares Amount Capital Income (Loss) Earnings Total
---------- -------- ---------- ------------- ---------- ----------

Balance at December 31,
1999 1,750,000 $ 1,000 $ 5,119 $ 11,249 $ 92,112 $ 109,480

Depreciation of marketable
securities - - - (38,017) - (38,017)

Distributions to
shareholder - - - - (142,699) (142,699)

Net income for the year
ended December 31, 2000 - - - - 151,293 151,293
--------- -------- -------- --------- --------- ---------
Balance at December 31,
2000 1,750,000 1,000 5,119 (26,768) 100,706 80,057

Issuance of common stock
at $.02 per share 1,500,000 30,000 - - - 30,000

Issuance of common stock
at $.25 per share 300,000 75,000 - - - 75,000

Distribution of marketable
securities - - - 26,768 - 26,768

Distributions to
shareholder - - - - (30,988) (30,988)

Conversion from Sub S
Chapter status to C
Corporation status - - 69,718 - (69,718) -

Net (loss) for the six
months ended June 30, 2001 - - - - (23,344) (23,344)
--------- -------- -------- --------- --------- ---------
Balance at June 30, 2001 3,550,000 $106,000 $ 74,837 $ - $ (23,344) $ 157,493
========= ======== ======== ========= ========= =========

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

F-5

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

Six Months Six Months
Ended Ended
June 30, June 30,
2001 2000
---------- ----------
Cash Flows from Operating Activities:
Net Income (Loss) $ (23,344) $ 86,372
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,850 4,958
Loss on investment 26,768 -
(Increase) decrease in:
Accounts receivable 5,175 (25,394)
Other (22,290) -
Increase in:
Accounts payable and accrued expenses 29,312 21,246
---------- ----------
Net Cash Provided by Operating Activities 21,471 87,182
---------- ----------

Cash Flows from Investing Activities:
Sale of marketable securities - 10,000
(Increase) decrease in notes receivable 550 (24,900)
Investment in subsidiary (130,000) -
(Acquisition) of property and equipment (5,123) (12,417)
---------- ----------
Net Cash (Used in) Investing Activities (134,573) (27,317)
---------- ----------

Cash Flows from Financing Activities:
Common stock issued 105,000 -
Distributions to stockholder (2,400) (48,913)
Increase in note payable, related party 80,000 -
Draws on line of credit, net 2,558 16,239
---------- ----------
Net Cash Provided by (Used in) Financing
Activities 185,158 (32,674)
---------- ----------
Net Increase in Cash 72,056 27,191

Cash, beginning of period 17,306 11,944
---------- ----------
Cash, end of period $ 89,362 $ 39,135
========== ==========
Interest paid $ 1,776 $ 2,389
========== ==========
Income tax paid $ - $ -
========== ==========

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

F-6

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
June 30, 2001 and December 31, 2000
(Unaudited)

(1) Summary of Significant Accounting Policies

This summary of significant accounting policies of Mountain States
Lending, Inc., (formerly Slam Dunk Enterprises, Inc.) (Company) and its
wholly-owned subsidiary, Mountain Eagle Homes, Inc., and 50% owned Eaglespan
Homes, LLC is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management who is responsible for their integrity and objectivity.
These accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.

(a) Organization and Principles of Consolidation

The consolidated financial statements include the accounts of the
companies listed above for the six months ended June 30, 2001 or since the
date of acquisition. All intercompany account balances have been eliminated
in the consolidation. The Company uses a December 31 year end.

The Company was incorporated under the laws of the State of Colorado on
September 12, 1990. During January 2001, the Company changed its name from
Slam Dunk Enterprises, Inc. to Mountain States Lending, Inc. The primary
business activity is loan origination and brokerage. The Company does not
customarily service any of the loans it originates.

Mountain Eagle Homes, Inc. (MEH) was incorporated under the laws of the
State of Colorado on June 1, 2001 for the purpose of manufacturing homes.
During June 2001, MEH and another entity formed Eaglespan Homes, LLC, and MEH
invested $130,000 in Eaglespan Homes, LLC to purchase real estate lots. There
were no operations during the period ended June 30, 2001 for Mountain Eagle
Homes, Inc. or Eaglespan Homes, LLC. Eaglespan has been accounted for using
the equity method.

(b) Per Share Information

Per share information is determined using the weighted average number of
shares outstanding during the periods after giving effect for the stock
splits.

Property and equipment are carried at cost, net of accumulated
depreciation. Depreciation is computed using principally accelerated methods
over the useful lives of the assets ranging from three to ten years. Building
improvements within the Company's office space are being depreciated over 15
years on the straight-line method.

F-7

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
June 30, 2001 and December 31, 2000
(Unaudited)

(1) Summary of Significant Accounting Policies, Continued

(d) Line of Credit

The Company maintains a line of credit with a financial institution of
$50,000. The line has an interest rate of prime plus two and one-half
percent. Interest is charged monthly and a variable payment is required each
month. At June 30, 2001 and December 31, 2000, the Company owed $39,598 and
$37,040, respectively, on this line.

(e) Concentrations of Credit Risks

(f) Cash Equivalents

The Company considers all short term investments in securities that
mature in 90 days or less to be cash equivalents.

(g) Allowance for Bad Debts

No provision for bad debts was recorded in the financial statements at
June 30, 2001 and 2000 since all accounts receivable were subsequently
collected.

(h) Use of Estimates in the Preparation of Financial Statements

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

F-8

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
June 30, 2001 and December 31, 2000
(Unaudited)

(1) Summary of Significant Accounting Policies, Continued

(i) Customer Funds

In the normal course of business, the Company collects the estimated
costs of credit reports and appraisal fees in advance from mortgage
applicants. These funds are deposited into a separate bank account.

(j) Revenue

Fees from loan activities are recorded when the loan closing or
settlement occurs. The recission rights of the borrower may extend the
settlement date 3-5 days after the closing event. If recission rights apply,
fees are recorded once the recission period ends. Payment of the Company's
fees may be at closing and/or directly from the investor.

(k) Income Taxes

The Company filed federal and state income taxes as a S corporation until
December 2000. Generally, a S corporation does not pay income tax on net
profit from business activities. S corporations pass through net income to
shareholders who report and pay income tax on their share of the profits.
Therefore, no provision for income tax was recorded in the accompanying
financial statements at December 31, 2000. Effective January, 2001, the
Company terminated its Sub S Chapter election.

As of June 30, 2001, the Company had net operating losses available for
carry forward of $23,344, expiring in years through 2021. Future utilization
of these carry overs may be limited due to changes in control of the Company.
As of June 30, 2001, the Company has total deferred tax assets of
approximately $4,669 due to operating loss carry forwards.

However, because of the uncertainty of the potential realization of these
tax assets, the Company has provided a valuation allowance for the entire
$4,669. Thus, no tax assets have been recorded in the financial statements as
of June 30, 2001.

(l) Related Party Transactions

The Company leases space in an office condominium complex from its sole
stockholder who owns the unit. The lease commenced in November 1, 2000 and
runs through October 31, 2004. The lease requires $4,000 per month in rent
plus all operating expenses including utilities, property taxes, maintenance
and association fees.

F-9

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
June 30, 2001 and December 31, 2000
(Unaudited)

(2) Common Stock

The Articles of Incorporation of the Company authorize issuance of a
maximum of 1,000,000 shares of no par value common stock. Effective January
22, 2001, the Articles of Incorporation were amended to increase the number of
authorized shares of common stock to 20,000,000. At December 31, 2000, there
were 1,750,000 shares of common stock issued and outstanding, all of which
were owned by its sole shareholder. Effective January 1, 2001, the Company
issued 1,500,000 restricted shares of its common stock to various individuals
for $30,000 cash. During March 2001, the Company sold in a private placement
300,000 shares of its common stock to 8 accredited and 19 non-accredited
investors, at an offering price of $.25 per share, for a total of $75,000 in
cash.

(3) Stock Split

Effective January 26, 2001, the Company effected a ten for one forward
stock split. All share amounts referred to herein have been retroactively
adjusted to reflect this stock split.

(4) Condensed Financial Statements

The financial statements included herein have been prepared by the
Company without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted as
allowed by such rules and regulations, and the Company believes that the
disclosures are adequate to make the information presented not misleading. It
is suggested that these financial statements be read in conjunction with the
December 31, 2000 audited financial statements and the accompanying notes
thereto. While management believes the procedures followed in preparing these
financial statements are reasonable, the accuracy of the amounts are in some
respects dependent upon the facts that will exist, and procedures that will be
accomplished by the Company later in the year.

The management of Mountain States Lending, Inc. believes that the
accompanying unaudited condensed financial statements contain all adjustments
(including normal recurring adjustments) necessary to present fairly the
operations and cash flows for the periods presented.

F-10

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
June 30, 2001 and December 31, 2000
(Unaudited)

(5) Marketable Securities

The Company owned securities traded in the public market that were
recorded at current market value at December 31, 2000. In January 2001, prior
to the termination of S Corporation status, the Company distributed these
securities to its sole shareholder as a dividend. The company then terminated
its S Corporation status. Realized losses were reported in the statement of
operations.

The Company filed federal and state income tax returns as a S corporation
until December 31, 2000, and therefore paid no tax. Effective January 2001,
the Company terminated its S corporation status and therefore there may be a
tax benefit or expense related to the unrealized gains or losses on
investments.
Tax
Before tax (Expense) Net of Tax
Amount Or Benefit Amount
---------- ---------- ----------
Unrealized Gains (Losses)
on Securities:

Year ended December 31, 2000
Unrealized holding (losses) $ (37,954) $ - $ (37,954)
Reclassification adjustment
for gains included in net
income (63) - (63)
---------- --------- ---------
Net unrealized (losses) on
securities $ (38,017) $ - $ (38,017)
---------- --------- ---------
Six months ended June 30, 2001
Realized losses from
distribution of securities 26,768 - 26,768
---------- --------- ---------
Net realized losses on
securities $ 26,768 $ - $ 26,768
---------- --------- ---------

Accumulated Unrealized Gains
(Losses) on Securities:
Balance at December 31, 1999 $ 11,249
Year ended December 31, 2000 (38,017)
---------
Balance at December 31, 2000 $ (26,768)

Six months ended June 30, 2001 26,768
---------
Balance at June 30, 2001 $ -
=========

F-11

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
June 30, 2001 and December 31, 2000
(Unaudited)

(6) Leases

Effective September 1, 1999, the Company entered into an operating lease
with its sole stockholder for office space facilities. Initial monthly rental
payments are $2,500 plus operating costs. Effective November 1, 2000, the
operating lease was renewed with monthly rental payments increasing to $4,000
per month, expiring September 2004. The Company also has two equipment leases
which require monthly payments of $210 and $390 for sixty months expiring in
2003 and 2005.

Future minimum rentals under all operating leases with terms exceeding
twelve months are as follows:

Year Ending
December 31,
2001 55,200
2002 55,200
2003 53,310
2004 40,680
2005 1,560
--------
Total $205,950
========

Rent expense for the six months ended June 30, 2001 and 2000 totaled
approximately $26,427 and $15,577, respectively.

(7) Property and Equipment

A summary of the Company's investment in property, equipment and
associated accumulated depreciation is as follows:

June 30, December 31,
2001 2000
---------- ------------
Building improvements $ 9,468 $ 9,468
Automated Teller Machines 13,496 13,496
Vehicle 36,000 36,000
Equipment 52,930 47,807
--------- --------
Total Property and Equipment 111,894 106,771
Less accumulated depreciation (47,330) (41,480)
--------- --------
Net Property and Equipment $ 64,564 $ 65,291
========= ========

(8) Loan Officer Agreements

The Company has entered into agreements with its loan officers whereby
the loan officers receive commissions, varying from 75% to 85% of loan
revenues remaining after any outstanding due and payable charges by lender at
time of closing. These agreements may be terminated with 15 days notice to
the other party.

F-12

MOUNTAIN STATES LENDING, INC.

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
June 30, 2001 and December 31, 2000
(Unaudited)

(9) Advertising and Promotion

Advertising expenses including marketing and promotional expenses
associated with its operations are expensed as incurred. During the six
months ended June 30, 2001 and 2000, advertising and promotion expenses
totaled $10,639 and $5,705, respectively.

(10) Notes Payable, Related Party

During June 2001, the Company borrowed $80,000 from a related party.
These notes bear interest at 9% per annum, are uncollateralized and are
payable on the earlier of December 18, 2001 or the completion of the initial
public offering.

(11) Sub S Chapter Distributions

During the six months ended June 30, 2000, the Company earned
approximately $86,000 which passed through directly to its sole shareholder.
During the six months ended June 30, 2001, the Company distributed
approximately $28,600 in marketable securities and $2,400 in cash to its sole
shareholder. Effective in January, 2001, the Company terminated its S
corporation status. All compensation subsequent to this change in status has
been recorded as salaries.

(12) Joint Venture

In June 2001, the Company's subsidiary, Mountain Eagle Homes, Inc.
entered into a joint venture agreement with another entity to purchase,
develop and sale property. Mountain Eagle Homes, Inc. is a 50% partner. At
June 30, 2001, the Company had invested a total of $130,000 in this joint
venture primarily for the purpose of purchasing seven lots in the Denver area.

(13) Conversion from Sub S Chapter Status to C Corporation Status

Effective in January 2001, the Company terminated its S corporation
status. Retained earnings totaling $69,718 as of the date of conversion were
transferred to additional paid in capital. Distributions to the shareholder
were treated as dividends.

F-13

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Mountain States Lending, Inc.,
Englewood, Colorado

We have audited the balance sheets of Mountain States Lending, Inc., (formerly
Slam Dunk Enterprises, Inc.) as of December 31, 2000 and 1999 and the related
income statements, changes in stockholder's equity, and cash flows for the
years ended December 31, 2000 and 1999. 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 generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mountain States Lending,
Inc., as of December 31, 2000 and 1999 and the results of operations, changes
in stockholder's equity and cash flows for the years ended December 31, 2000
and 1999 in conformity with generally accepted accounting principles.

Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, CO 80211

May 9, 2001

F-14

MOUNTAIN STATES LENDING, INC.

BALANCE SHEETS

ASSETS

December 31, December 31,
2000 1999
------------ ------------
Current Assets:
Cash and equivalents $ 17,306 $ 11,944
Accounts receivable 5,175 -
Notes receivable, current portion 550 91
Investment in marketable securities 28,587 49,716
Prepaid expenses and other current assets 17,972 12,316
--------- ---------
Total Current Assets 69,590 74,067

Property and equipment, net of accumulated
depreciation of $41,480 and $31,564 at
December 31, 2000 and 1999 respectively
(Note 7) 65,291 59,910
Notes receivable, net of current portion - 18,696
Other assets - 420
--------- ---------
Total Assets $ 134,881 $ 153,093
========= =========

LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities:
Accounts payable and accrued expenses $ 17,784 $ 14,576
Note payable, current portion (Note 3) 37,040 29,037
--------- ---------
Total Current Liabilities 54,824 43,613

Total Liabilities 54,824 43,613
--------- ---------
Commitments (Notes 1,2,3,4,6,7, and 9) - -

Stockholder's Equity:
Preferred stock, no par value, 5,000,000
shares authorized, none issued and
outstanding - -
Common stock, no par value, 20,000,000
shares authorized, 1,750,000 issued and
outstanding 1,000 1,000
Additional paid-in capital 5,119 5,119
Appreciation (depreciation) of marketable
securities (26,768) 11,249
Retained earnings 100,706 92,112
--------- ---------
Total Stockholder's Equity 80,057 109,480
--------- ---------
Total Liabilities and Stockholder's Equity $ 134,881 $ 153,093
========= =========

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

F-15

MOUNTAIN STATES LENDING, INC.

INCOME STATEMENTS

Year Ended Year Ended
December 31, December 31,
2000 1999
------------ ------------
REVENUE:
Fees from loan activities $ 840,564 $ 502,377
Cost of loan activities 379,312 212,442
----------- -----------
Gross Profit 461,252 289,935
----------- -----------

OPERATING EXPENSES:
Salaries, payroll taxes and benefits 160,087 135,035
Depreciation 9,916 11,064
Advertising and promotion 34,256 26,749
Rent expense 39,454 27,298
Other operating expenses 63,953 54,225
----------- -----------
Total Operating Expenses 307,666 254,371
----------- -----------

Net Operating Income (Loss) 153,586 35,564
----------- -----------

Other Income (Expenses):
Interest income 2,388 -
Interest (expense) (5,791) (3,153)
Gain from sales of marketable securities 1,110 0
Other income (expense) 0 6,696
----------- -----------
Total Other Income (Expenses) (2,293) 3,543
----------- -----------
Net Income (Loss) $ 151,293 $ 39,107
=========== ===========
Net Income (Loss) per Common Share $ .09 $ .02
=========== ===========

Weighted Average Number of
Shares Outstanding 1,750,000 1,750,000
=========== ===========

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

F-16

MOUNTAIN STATES LENDING, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

From December 31, 1998 through December 31, 2000

Additional Other
Common Stock Paid-in Comprehensive Retained
No./Shares Amount Capital Income (Loss) Earnings Total
---------- -------- ---------- ------------- ---------- ----------

Balance at December 31,
1998 1,750,000 $ 1,000 $ 5,119 $ 6,598 $ 53,005 $ 65,722

Appreciation of
marketable securities - - - 4,651 - 4,651

Net income for the year
ended December 31, 1999 - - - - 39,107 39,107
--------- ------ ------ -------- --------- ---------
Balance at December 31,
1999 1,750,000 1,000 5,119 11,249 92,112 109,480

Depreciation of
marketable securities - - - (38,017) - (38,017)

Distributions to
shareholder - - - - (142,699) (142,699)

Net income for the year
ended December 31, 2000 - - - - 151,293 151,293
--------- ------ ------ -------- --------- ---------
Balance at December 31,
2000 1,750,000 $1,000 $5,119 $(26,768) $ 100,706 $ 80,057
========= ====== ====== ======== ========= =========

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

F-17

MOUNTAIN STATES LENDING, INC.

STATEMENTS OF CASH FLOWS

Year Ended Year Ended
December 31, December 31,
2000 1999
------------ ------------
Cash Flows from Operating Activities:
Net Income $ 151,293 $ 39,107
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 9,916 11,064
(Increase) decrease in:
Accounts receivable (5,175) 5,098
Other (5,236) (8,154)
Increase in:
Accounts payable and accrued
expenses 3,208 3,885
----------- -----------
Net Cash Provided by Operating Activities 154,006 51,000
----------- -----------

Cash Flows from Investing Activities:
(Investment in) marketable securities (57,970) -
Sale of marketable securities 41,082 -
(Increase) in notes receivable (900) (35,751)
Repayments of notes receivable 19,137 16,964
(Acquisition) of property and
equipment (15,297) (25,060)
----------- -----------
Net Cash Provided by Investing Activities (13,948) (43,847)
----------- -----------
Cash Flows from Financing Activities:
Contributed capital - 5,119
(Repayments) to stockholder loan - (24,434)
Distributions to stockholder (142,699) -
(Repayment) of note payable, bank - (6,914)
Draws on line of credit, net 8,003 29,037
----------- -----------
Net Cash Provided by (Used in) Financing
Activities (134,696) 2,808
----------- -----------
Net Increase in Cash 5,362 9,961

Cash, beginning of period 11,944 1,983
----------- -----------
Cash, end of period $ 17,306 $ 11,944
=========== ===========
Interest paid $ 5,791 $ 3,153
=========== ===========
Income tax paid $ - $ -
=========== ===========

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

F-18

MOUNTAIN STATES LENDING, INC.

NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 2000

(1) Summary of Significant Accounting Policies

This summary of significant accounting policies of Mountain States
Lending, Inc., (formerly Slam Dunk Enterprises, Inc.) (Company) is presented
to assist in understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management who is
responsible for their integrity and objectivity. These accounting policies
conform to generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.

(a) General

The Company uses a December 31 year end.

(b) Per Share Information

Per share information is determined using the weighted average number of
shares outstanding during the periods after giving effect for the stock
splits.

(d) Line of Credit

The Company maintains a line of credit with a financial institution of
$50,000. The line has an interest rate of prime plus two and one-half
percent. Interest is charged monthly and a variable payment is required each
month. At December 31, 2000 and 1999, the Company owed $37,040 and $29,037,
respectively, on this line.

F-19

MOUNTAIN STATES LENDING, INC.

NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 2000

(1) Summary of Significant Accounting Policies, Continued

(e) Concentrations of Credit Risks

Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of temporary cash
investments and cash equivalents and trade accounts receivables. The Company
does not require collateral for its trade accounts receivables. The Company
has invested in marketable securities that potentially subject the Company to
concentrations of credit risk. The market values at December 31, 2000 and
1999 were $28,587 and $49,716, respectively.

(f) Cash Equivalents

The Company considers all short term investments in securities that
mature in 90 days or less to be cash equivalents.

(g) Allowance for Bad Debts

No provision for bad debts was recorded in the financial statements at
December 31, 2000 and 1999 since all accounts receivable were subsequently
collected.

(h) Use of Estimates in the Preparation of Financial Statements

(i) Customer Funds

F-20

MOUNTAIN STATES LENDING, INC.

NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 2000

(1) Summary of Significant Accounting Policies, Continued

(j) Revenue

(k) Income Taxes

The Company files federal and state income taxes as a S corporation.
Generally, a S corporation does not pay income tax on net profit from business
activities. S corporations pass through net income to shareholders who report
and pay income tax on their share of the profits. Therefore, no provision for
income tax is recorded in the accompanying financial statements.

(l) Related Party Transactions

The Company leases space in an office condominium complex from its sole
stockholder who owns the unit. The lease commenced in 1999 and runs through
September 2004. The lease requires $2,500 per month in rent plus all
operating expenses including utilities, property taxes, maintenance and
association fees. On November 1, 2000 a new lease was executed which runs
through October 31, 2004 with rent of $4,000 per month plus all operating
expenses.

(2) Common Stock

The Articles of Incorporation of the Company authorize issuance of a maximum
of 1,000,000 shares of no par value common stock. Effective January 22, 2001,
the Articles of Incorporation were amended to increase the number of
authorized shares of common stock to 20,000,000. At December 31, 2000, there
were 1,750,000 shares of common stock issued and outstanding, all of which
were owned by its sole shareholder. Effective January 1, 2001, the Company
issued 1,500,000 restricted shares of its common stock to various individuals
for $30,000 cash. During March 2001, the Company sold in a private placement
300,000 shares of its common stock to 8 accredited and 19 non-accredited
investors, at an offering price of $.25 per share, for a total of $75,000 in
cash. See note 10 for further details.

F-21

MOUNTAIN STATES LENDING, INC.

NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 2000

(3) Stock Split

Effective January 26, 2001, the Company effected a ten for one forward
stock split. All share amounts referred to herein have been retroactively
adjusted to reflect this stock split.

(4) Marketable Securities

The Company owns securities traded in the public market that are recorded
at current market value at December 31, 2000 and 1999. The effect of
unrealized gains and losses is recorded in stockholder's equity and also
reported in the statement of comprehensive income. When the investments are
sold, gains or losses are reported in the statement of operations and
adjustments made in the statement of comprehensive income.

The Company files federal and state income tax returns as a S corporation
and therefore pays no tax. Effective January 2001, the Company terminated its
S corporation status and therefore there may be a tax benefit or expense
related to the unrealized gains or losses on investments.

Tax
Before tax (Expense) Net of Tax
Amount Or Benefit Amount
---------- ---------- ----------

Unrealized Gains (Losses) On Securities:

Year ended December 31, 1999
Unrealized holding gains $ 4,651 $ - $ 4,651
Reclassification adjustment
for gains included in net income - - -
---------- --------- ---------
Net unrealized gains on securities $ 4,651 $ - $ 4,651
---------- --------- ---------
Year ended December 31, 2000
Unrealized holding (losses) $ (37,954) $ - $ (37,954)
Reclassification adjustment for
gains included in net income (63) - (63)
---------- --------- ---------
Net unrealized (losses) on securities $ (38,017) $ - $ (38,017)
---------- --------- ---------
Accumulated Unrealized Gains (Losses)
on Securities:
Balance at January 1, 1999 $ 6,598
Year ended December 31, 1999 4,651
---------
Balance at December 31, 1999 $ 11,249
Year ended December 31, 2000 (38,017)
---------
Balance at December 31, 2000 $ (26,768)
=========

F-22

MOUNTAIN STATES LENDING, INC.

NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 2000

(5) Leases

Future minimum rentals under all operating leases with terms exceeding
twelve months are as follows:

Year Ending
December 31,
2001 55,200
2002 55,200
2003 53,310
2004 40,680
2005 1,560
--------
Total $205,950
========

Rent expense for the years ended December 31, 2000 and 1999 totaled
approximately $39,454 and $27,298, respectively.

(6) Property and Equipment

A summary of the Company's investment in property, equipment and
associated accumulated depreciation at December 31 is as follows:

2000 1999
------------- ------------

Building improvements $ 9,468 $ 6,800
Automated Teller Machines 13,496 13,496
Vehicle 36,000 36,000
Equipment 47,807 35,178
--------- ---------
Total Property and Equipment 106,771 91,474
Less accumulated depreciation (41,480) (31,564)
--------- ---------
Net Property and Equipment $ 65,291 $ 59,910
========= =========

(7) Notes Receivable

During 1999, the Company made several notes receivable loans to
individuals on short and long-term basis. The notes are collateralized by
deeds of trust on real estate and mature from 2002 to 2029. Interest rates
range between 10.5% and 11%, and monthly payments of principal and interest
are required in a total amount of $171. These notes were paid in full in
2000. A note receivable was made in 2000 to one of the Company's employees.
Balances at December 31, 2000 and 1999 were $550 and $18,787, respectively.

F-23

MOUNTAIN STATES LENDING, INC.

NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 2000

(8) Loan Officer Agreements

(9) Advertising and Promotion

Advertising expenses including marketing and promotional expenses
associated with its operations are expensed as incurred. During the years
ended December 31, 2000 and 1999, advertising and promotion expenses totaled
$34,256 and $26,749, respectively.

(10) Subsequent Events

Effective January, 2001, the Company issued 1,500,000 shares of its
common stock in exchange for $30,000 cash. Also effective January, 2001, the
Company amended its Articles of Incorporation to increase the number of
authorized shares of common stock from 1,000,000 to 20,000,000 and to
authorize 5,000,000 shares of preferred stock. On January 26, 2001, the
Company effected a ten for one forward stock split. All shares amounts
referred to herein have been retroactively adjusted to reflect this stock
split. During March 2001, the Company sold in a private placement 300,000
shares of common stock to 8 accredited and 19 non-accredited investors, at an
offering price of $.25 per share, for a total of $75,000 in cash.

F-24

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The only statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, Director or Officer of the
Company is insured or indemnified in any manner against any liability which he
may incur in his capacity as such, is as follows:

(a) The Company has the power under the Colorado Business Corporation
Act to indemnify any person who was or is a party or is threatened to be made
a party to any action, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a Director,
Officer, employee, fiduciary, or agent of the Company or was serving at its
request in a similar capacity for another entity, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection therewith if he acted in good faith
and in a manner he reasonably believed to be in the best interest of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In case of an action
brought by or in the right of the Company such persons are similarly entitled
to indemnification if they acted in good faith and in a manner reasonably
believed to be in the best interests of the Company but no indemnification
shall be made if such person was adjudged to be liable to the Company for
negligence or misconduct in the performance of his duty to the Company unless
and to the extent the court in which such action or suit was brought
determines upon application that despite the adjudication of liability, in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification. In such event, indemnification is limited to
reasonable expenses. Such indemnification is not deemed exclusive of any
other rights to which those indemnified may be entitled under the Articles of
Incorporation, Bylaws, agreement, vote of shareholders or disinterested
directors, or otherwise.

(b) The Articles of Incorporation and Bylaws of the Company generally
allow indemnification of Officers and Directors to the fullest extent allowed
by law.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses of the offering, all of which are to be borne by
the Company, are as follows:

SEC Filing Fee ................................ $ 200.00
Printing Expenses ............................. 2,000.00
Accounting Fees and Expenses .................. 5,000.00
Legal Fees and Expenses ....................... 30,000.00
Blue Sky Fees and Expenses .................... 5,000.00
Miscellaneous ................................. 2,800.00
----------

Total .................................... $45,000.00
==========

II-1

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

During its past three fiscal years, the Registrant issued securities
which were not registered under the Securities Act of 1933, as amended (the
"Act"), as follows.

On January 1, 2001, the Company issued 1,500,000 shares of common stock
to five family members of Timothy J. Brasel, a director of the Company, for a
total cash consideration of $30,000. No underwriter or placement agent was
involved in the sales and no commissions were paid. With regard to these
sales, the Company relied on Section 4(2) of the Securities Act of 1933, as
amended. The shares were offered for investment only and not for the purpose
of resale or distribution, and the appropriate restrictive legend was placed
on the face of the certificates.

During March 2001, the Company sold in a private placement 300,000 shares
of common stock to 8 accredited and 19 non-accredited investors, at an
offering price of $0.25 per share, for an aggregate of $75,000 in cash. No
underwriter or placement agent was involved in the sales and no commissions
were paid. The sales were made in reliance on the exemption from registration
offered by Section 4(2) of the Securities Act of 1933. The investors were all
personal friends or business associates of either Timothy J. Brasel or Mark
Massa. The Company had reasonable grounds to believe that these persons (1)
were acquiring the shares for investment and not with a view to distribution,
and (2) had such knowledge and experience in financial and business matters
that they were capable of evaluating the merits and risks of their investment
and were able to bear those risks. Each investor received a private placement
memorandum and each investor completed a subscription agreement. An
appropriate restrictive legend is noted on the certificates representing such
shares, and stop-transfer instructions have been noted in the Company's
transfer records.

ITEM 27. EXHIBITS.

The following Exhibits are filed as part of this Registration Statement
pursuant to Item 601 of Regulation S-B:

EXHIBIT
NUMBER DESCRIPTION LOCATION
------- ----------- --------

3 Articles of Incorporation Previously filed

and Bylaws

3.1 Articles of Amendment to Previously filed
Articles of Incorporation

3.2 Articles of Incorporation Previously filed
of Mountain Eagle Homes,
Inc.

5 Opinion of Krys Boyle Filed herewith electronically
Freedman Scott & Sawyer,
P.C. regarding the legality
of the securities being
registered

II-2

10.1 Developer Agreement with To be filed by amendment
Heritage Homes of Nebraska,
Inc.

10.2 Promissory Note for $40,000 Filed herewith electronically
to the Charitable Remainder
Trust of Timothy J. Brasel

10.3 Promissory Note for $20,000 Filed herewith electronically
to the Charitable Remainder
Trust of Susan A. Brasel

10.4 Promissory Note for $20,000 Filed herewith electronically
to the Charitable Remainder
Trust of Mary Jane Brasel

10.5 Office Lease Filed herewith electronically

10.6 Agreement with Timothy J. Filed herewith electronically
Brasel

10.7 Escrow Agreement with Filed herewith electronically
Colorado Business Bank

21 Subsidiaries of the Previously filed
Registrant

23.1 Consent of Krys Boyle Contained in Exhibit 5
Freedman & Sawyer, P.C.

23.2 Consent of Schumacher & Filed herewith electronically
Associates, Inc., Certified
Public Accountants

ITEM 28. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the small business issuer will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

II-3

The undersigned small business issuer will:

(1) File, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) Reflect in the prospectus any facts or events which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; and

(iii) Include any additional or changed material information on the
plan of distribution.

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of securities at that time to be the initial bona
fide offering.

(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form SB-2, and authorized this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, in the City of Denver, State of
Colorado, on the 23rd day of October, 2001.

MOUNTAIN STATES LENDING, INC.

By:/s/ Mark E. Massa
Mark E. Massa, President

Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.

SIGNATURE TITLE DATE

/s/ Mark E. Massa President, Treasurer October 23, 2001
Mark E. Massa Principal Financial
and Accounting Officer)
and Director

/s/ Timothy J. Brasel Director October 23, 2001
Timothy J. Brasel