<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
              1934 for the quarterly period ended March 31, 2003.

                        Commission file number 000-29039

                       SECURITY ASSET CAPITAL CORPORATION
                       ----------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

             NEVADA                                              95-4729666
             ------                                         --------------------
  (State or Other Jurisdiction                                  (IRS Employer
of Incorporation or Organization)                            Identification No.)

             701 B, Street, Suite 1775, San Diego, California 92101
              -----------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (619) 232-9950
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

            Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports) and
(2) has been subject to such filing requirement for the past 90 days.

Yes [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

              69,444,210 of common stock shares as of May 19, 2003.
                                   ----------


Transitional Small Business Disclosure Format (check one):

Yes [ ] No [X]




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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                       SECURITY ASSET CAPITAL CORPORATION
                      CONSOLIDATED CONDENSED BALANCE SHEET
                                   (UNAUDITED)


                                                                  MARCH 31, 2003
                                                                  --------------
                                     ASSETS

CURRENT ASSETS

  CASH                                                             $      8,963
  LOAN PORTFOLIO ASSETS                                                  86,149
  PREPAID EXPENSES AND OTHER CURRENT ASSETS                               2,500
                                                                   -------------

             TOTAL CURRENT ASSETS                                        97,612


NOTES RECEIVABLE                                                        400,000
FIXED ASSETS, NET                                                        36,076
PATENTS AND PATENTS PENDING                                              10,000
OTHER ASSETS                                                             10,000
                                                                   -------------

                                                                   $    553,688
                                                                   =============

                      LIABILITIES & SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES

  ACCOUNTS PAYABLE                                                 $    337,553
  ADVANCES FROM RELATED PARTIES                                         199,840
  ACCRUED EXPENSES AND OTHER LIABILITIES                                826,399
  NOTES PAYABLE                                                       2,529,465
                                                                   -------------

  TOTAL CURRENT LIABILITIES                                           3,893,257
                                                                   -------------


SHAREHOLDERS' DEFICIT
  PREFERRED STOCK, $.001 PAR VALUE, 20,000,000 AUTHORIZED,
       3,176,654 ISSUED AND OUTSTANDING, TOTAL LIQUIDATION
       PREFERENCE $6,353,000                                              6,353
  COMMON STOCK, $.001 PAR VALUE, 250,000,000 SHARES AUTHORIZED,
       69,444,210 ISSUED AND OUTSTANDING                                 69,444
  ADDITIONAL PAID IN CAPITAL                                         20,427,538
  ACCUMULATED DEFICIT                                               (23,634,304)
  LESS TREASURY STOCK AT COST (175,000 SHARES)                         (208,600)
                                                                   -------------
             TOTAL SHAREHOLDERS' DEFICIT                             (3,339,569)
                                                                   -------------

                                                                   $    553,688
                                                                   =============

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


                                        2
<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                       FOR THE THREE MONTHS
                                                            ENDED MARCH 31,
                                                         2003          2002
                                                    -------------  -------------

PORTFOLIO REVENUES                                  $     15,390   $     11,146

EXPENSES
  PORTFOLIO                                               13,851          3,715
  GENERAL AND ADMINISTRATIVE                             454,351        508,776
                                                    -------------  -------------
                       TOTAL EXPENSES                    468,202        512,491
                                                    -------------  -------------

LOSS FROM OPERATIONS                                    (452,812)      (501,345)
                                                    -------------  -------------
OTHER
  INTEREST EXPENSE                                       (68,227)       (26,608)
  OTHER                                                       --             --
                                                    -------------  -------------

                       OTHER, NET                        (68,227)       (26,608)
                                                    -------------  -------------

NET LOSS                                            $   (521,039)  $   (527,953)
                                                    =============  =============

NET LOSS PER SHARE                                  $      (0.01)  $      (0.02)
                                                    =============  =============

WTD AVG SHARES USED TO COMPUTE NET LOSS PER SHARE     65,064,000     29,994,000
                                                    =============  =============


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

                                        3

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<TABLE>


                                             SECURITY ASSET CAPITAL CORPORATION
                                                      AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
                                             DEFICIT For the Three Months Ended
                                                       March 31, 2003
                                                        (Unaudited)
<CAPTION>


                                         Preferred Stock                Common Stock                Treasury Stock
                                  ----------------------------  ----------------------------  ----------------------------
                                      Stock          Amount         Stock         Amount         Stock          Amount
                                  -------------  -------------  -------------  -------------  -------------  -------------
<S>                                  <C>         <C>              <C>          <C>                 <C>       <C>
Balance, December 31, 2002           3,176,654   $      6,353     61,744,210   $     61,744        175,000   $   (208,600)
                                  -------------  -------------  -------------  -------------  -------------  -------------
Issuances of common stock:
   Consulting services:
   @$0.03 February 2003                     --             --      7,000,000          7,000             --             --
   @$0.03 March 2003                        --             --        700,000            700             --             --
Net loss for three months ended
   March 31, 2003                           --             --             --             --             --             --
                                  -------------  -------------  -------------  -------------  -------------  -------------
Balance, March 31, 2003              3,176,654   $      6,353     69,444,210   $     69,444        175,000   $   (208,600)
                                  =============  =============  =============  =============  =============  =============

continued below:

                                   Additional
                                     Paid-In      Accumulated
                                     Capital        Deficit         Total
                                  -------------  -------------   -------------

Balance, December 31, 2002        $ 20,204,238   $(23,113,265)   $ (3,049,530)
                                  -------------  -------------   -------------
Issuances of common stock:
   Consulting services:
   @$0.03 February 2003                203,000             --         210,000
   @$0.03 March 2003                    20,300             --          21,000
Net loss for three months ended
   March 31, 2003                           --       (521,039)       (521,039)
                                  -------------  -------------   -------------
Balance, March 31, 2003           $ 20,427,538   $(23,634,304)   $ (3,339,569)
                                  =============  =============   =============










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



                                        4

</TABLE>

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                       SECURITY ASSET CAPITAL CORPORATION
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                         FOR THE THREE MONTHS
                                                           ENDED MARCH 31,
                                                         2003          2002
                                                    -------------  -------------
CASH FLOWS FROM OPERATING ACTIVITIES:

NET CASH FLOWS FROM OPERATING ACTIVITIES            $    (28,037)  $    (40,706)


CASH FLOWS FROM INVESTING ACTIVITIES:

   ACQUISITION OF THE DEBT REGISTRY                           --       (100,000)


CASH FLOW FROM FINANCING ACTIVITIES:

   NET PROCEEDS FROM BORROWINGS - NOTES PAYABLE           37,000        140,706
                                                    -------------  -------------

              NET INCREASE/(DECREASE) IN CASH              8,963             --

              CASH AT THE BEGINNING OF THE PERIOD             --             --
                                                    -------------  -------------

              CASH AT THE END OF THE PERIOD         $      8,963   $         --
                                                    =============  =============


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

                                        5


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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------

BASIS OF PRESENTATION
---------------------
These condensed consolidated financial statements of Security Asset Capital
Corporation and subsidiaries (the Company) do not include all of the information
required by accounting principles generally accepted in the United States of
America for complete financial statements and should be read in conjunction with
the financial statements included in the Company's Form 10KSB for 2002. In the
opinion of management, the financial information set forth in the accompanying
condensed financial statements reflects all adjustments necessary for a fair
statement of the periods reported and all such adjustments were of a normal
recurring nature. Interim results are not necessarily indicative of results for
a full year.

PRINCIPLES OF CONSOLIDATION
---------------------------
The accompanying financial statements consolidate the accounts of Security Asset
Capital Corporation ("SACC") and its wholly owned subsidiaries, Security Asset
Management, Inc., Broadband Technologies, Inc., Universal View Corporation, the
DebtTrader.com and The Debt Registry. All significant intercompany accounts and
transactions have been eliminated in consolidation.

USE OF ESTIMATES
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 reported amounts of revenues and expenses during
the reporting period. Actual result could differ from those estimates.

LOAN PORTFOLIO ASSETS AND REVENUE RECOGNITION
---------------------------------------------
Loan Portfolio Assets represent liquidating loan portfolios of delinquent
accounts which have been purchased by SACC for resale and collection and are
stated at the lower of cost or current value. The cost of these Assets is the
actual amount spent for the purchase, including related brokerage commissions,
if any. Gains and losses from such sales are recorded when the Assets are sold.
The Company considers a sale to have taken place when there has been a transfer
of The Loan Portfolio Assets and where the Company surrenders control over the
Loan Portfolio Assets to the extent the consideration other then beneficial
interests in the transferred Loan Portfolio Assets is received in exchange for
the Loan Portfolio Assets.

CONVERSION OF DEBT
------------------
The Company has initiated a conversion of unsecured debt into shares of $2.00
Series A Convertible Redeemable Preferred Stock. The Company has authorized
20,000,000 shares, $0.001 par value of Preferred Stock which has a $2.00 per
share liquidation preference. The Preferred Shares issued in conversion are
valued at $2.00 per share. The converting shareholders have the right to convert
their Preferred Shares to common stock at $2.00 per share anytime between
September 30, 2002 and August 30, 2003. The preferred shares will be
automatically converted to common stock upon the closing of a public offering
with a value of at least $20,000,000.

NET LOSS PER SHARE
------------------
Basic net loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding during the reported periods. Diluted
net loss per share reflects the potential dilution that could occur if stock
options and other commitments to issue common stock were exercised. Outstanding
stock options during the periods presented were anti-dilutive and have been
excluded from the weighted average share computation.


                                        6

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis should be read in conjunction with the
selected historical financial data, financial statements and notes thereto and
the other historical financial information of Security Asset Capital Corporation
contained elsewhere in this Form 10-QSB. The statements contained in this Form
10-QSB that are not historical are forward looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act of 1934, including statements regarding Security Asset Capital
Corporation's expectations, intentions, beliefs or strategies regarding the
future. Forward-looking statements include Security Asset Capital Corporation's
statements regarding liquidity, anticipated cash needs and availability and
anticipated expense levels. All forward-looking statements included in this Form
10-QSB are based on information available to Security Asset Capital Corporation
on the date hereof, and Security Asset Capital Corporation assumes no obligation
to update any such forward-looking statement. It is important to note that
Security Asset Capital Corporation's actual results could differ materially from
those in such forward-looking statements.

OVERVIEW

Security Asset Capital Corporation (the "Company") was founded on September 22,
1993 and has operated within the asset liquidation industry. Its historic
primary operations through its wholly owned subsidiary, Security Asset
Management, Inc., a California corporation, have been the management of debt
receivable portfolios, which includes buying and selling of portfolios on a
wholesale and retail level. The Company is in the process of developing the
operations of The Debt Registry, Inc., a Nevada corporation that is a wholly
owned subsidiary of the Company that is developing a database which is an asset
ownership registration and tracking system for the asset liquidation and
purchasing industry as well as for financial institutions. The Company is also
in the process of developing an online system for collecting and resolving
consumer debt through a mechanized payment and bidding system. This unique,
patented process has been licensed to Security Asset Capital Corporation for the
consumer debt marketplace. In addition, Broadband Technologies, Inc., a Nevada
corporation that is a wholly owned subsidiary of the Company holds several
patents in connection with full screen, on demand video to be delivered via the
Internet.

The Company's revenues in 2003 have resulted from the collections on and sales
of debt portfolios. The Company is anticipating a shift in its operations
whereby a majority of its future revenue will be generated through its account
collection and resolution tool, The Debt Registry and Broadband Technologies.
Although the Company cannot guarantee, it expects to generate revenue through
its account collection and resolution tool by the first quarter of 2004 and The
Debt Registry by the end of 2004.

RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002

REVENUES
Revenues for the three months ended March 31, 2003 were derived completely from
collections on and sales of loan portfolio assets, which amounted to $15,390 as
compared to $11,146 for the same period during 2002, which revenue was derived
from the management of the Company's debt portfolio. Collection and sale
activities remain at a low level based on the age of the Company's owned
portfolio assets and management's focus on developing its debt resolution system
and the Debt Registry. Although our revenues have increased, the slowdown of the
United States economy has resulted in an increase in defaults in connection with
the debt receivables managed by Security Management Asset, Inc., the Company's
wholly owned subsidiary.

NET LOSS
Net loss for the three months ended March 31, 2003 was $521,039 as compared to
$527,953 for the same period during 2002. The slight reduction in net loss is
primarily the result of the $54,425 decrease in general and administrative
expenses due to curtailed overhead costs offset by increases in portfolio and
interest expenses for the comparable period in 2002.


                                        7
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
The Company has only a limited operating history and revenues and has had net
losses from operations. The Company's continued existence is dependent upon its
ability to resolve its liquidity problems, principally by the continued sale of
its Loan Portfolio Assets and by obtaining additional debt financing and equity
capital until such time the Company becomes profitable. The lack of financial
resources and liquidity raises substantial doubt about its ability to continue
as a going concern. The Company plans to continue funding its operations from
the further sale of its debt receivables portfolio and additional debt and
equity capital offerings. There is no assurance that management will be
successful in these endeavors.

ITEM 3.  CONTROLS AND PROCEDURES

As of March 31, 2003, an evaluation was performed under the supervision and with
the participation of the Company's management, including the Principal Executive
Officer and the Principal Accounting Officer, of the effectiveness of the design
and operation of the Company's disclosure controls and procedures. Based on that
evaluation, the Company's management, including the Principal Executive Officer
and the Principal Accounting Officer, concluded that the Company's disclosure
controls and procedures were effective as of March 31, 2003. There have been no
significant changes in the Company's internal controls or in other factors that
could significantly affect internal controls subsequent to March 31, 2003.

PART II OTHER INFORMATION

 Item 1. Legal proceedings - None

 Item 2. Changes in Securities - None

 Item 3. Defaults Upon Senior Securities - None

 Item 4. Submission of Matters to a Vote of Security Holders - None

 Item 5. Other Information - None

 Item 6. Exhibits and Reports of Form 8K

(a)         Exhibit Description

            99.1  Certification of the President and the Chief Financial Officer
                  of Security Asset Capital Corporation pursuant to 18 U.S.C.
                  Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

 (b) Reports on Form 8-K

            None.


                                   SIGNATURES

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

                                           Security Asset Capital Corporation

DATED:  May 20, 2003                       /s/ DARRELL MUSICK
                                           -------------------------------------
                                           Darrell Musick,
                                           President and Chief Executive Officer

                                        8

<PAGE>

                                  CERTIFICATION

          I, Darrell Musick, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Security Asset
Capital Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a) designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

         a) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

May 20, 2003

/s/ Darrell Musick
-------------------------------------
Darrell Musick
President and Chief Executive Officer