<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, 2001.

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
   -------          -------

Transitional Small Business Disclosure Format (check one):

Yes               No    X
   ------           --------

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                       SECURITY ASSET CAPITAL CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                 March 31, 2001


                                                      (UNAUDITED)   (AUDITED)
                                                       3/31/01      12/31/00
                                                     -------------------------

ASSETS

CCURRENT ASSETS
     CASH                                               136,901         3,443
     LOAN PORTFOLIO ASSETS                            1,936,794     1,949,598
     NOTES RECEIVABLE                                 1,200,000
     RELATED PARTY RECEIVABLES DIRECTORS                 46,289
     ACCOUNTS RECEIVABLE                                 42,289        21,571
                                                     -------------------------

           TOTAL CURRENT ASSETS                       3,315,984     2,020,901

RENTAL REAL EATATE (Net)                              3,093,404
FIXED ASSET (Netof Depreciation)                         78,250        72,107

OTHER ASSETS
     PATENTS AND PATENTS PENDING                      1,552,500     1,552,500
     DEFERRED FINANCING COST (Net)                      215,757       273,160
     GOODWILL                                         1,100,628     1,100,628
     MISCELLANEOUS ASSETS                                 2,675         2,845

           TOTAL OTHER ASSETS                         2,871,560     2,929,133

           TOTAL ASSETS                               6,265,794     8,115,545
                                                     =========================

LIABILITIES & SHAREHOLDERS EQUITY

LIABILITIES
CURRENT LIABILITIES
     ACCOUNTS PAYABLE                                   334,361       313,512
     NOTES PAYABLE Including Accrued Interest
       of $509,115 through March 31, 2001)            7,350,824     7,051,542
     ACCRUED EXPENSES & LIABILITIES                      75,057        44,041
     NOTES PAYABLE                                       50,000
     CURRENT PORTION OF LONG TERM DEBT                   38,326

     TOTAL CURRENT LIABILITIES                        7,760,242     7,497,421

LONG TERM DEBT (Excess of currennt portion)           2,336,745


           TOTAL LIABILITIES                          7,760,242     9,834,166

SHAREHOLDERS EQUITY
     COMMON STOCK, $.001 PAR VALUE, 25,000,000
       SHARES AUTHORIZED; ISSUED AND OUTSTANDING:
       1,923,377 SHARES AT MARCH 31, 2001                16,786        15,573
     ADDITIONAL CONTRIBUTED CAPITAL                   9,131,368     8,746,056
     TREASURY STOCK                                    (523,085)     (523,085)
     ACCUMULATED EARNINGS                            (9,542,909)   (2,527,929)
     FIRST QUARTER INCOME LOSS                         (559,822)   (7,429,236)
                                                     -------------------------
           TOTAL SHAREHOLDERS EQUITY                 (1,494,448)   (1,718,621)
                                                     -------------------------

           TOTAL LIABILITIES & SHAREHOLDERS EQUITY    6,265,794     8,115,545
                                                     =========================


<PAGE>

                       SECURITY ASSET CAPITAL CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED MARCH 31, 2001


                                                                     (UNAUDITED)
                                                                      3/31/01
                                                                    ------------

OPERATING REVENUES
     PORTFOLIO REVENUES                                                  51,213
     RENTAL REVENUES                                                     68,922

           TOTAL OPERATING REVENUE                                      120,135

 EXPENSES
     PORTFOLIO EXPENSES                                                  27,207
     RENTAL EXPENSE                                                      38,674
     GENERAL AND ADMINISTRATIVE                                         737,255
     MORTGAGE INTEREST                                                  233,126
     DEPRECIATION                                                        50,000
                                                                    ------------

     TOTAL COSTS AND EXPENSES                                         1,086,262
                                                                    ------------

INCOME (LOSS) FROM OPERATIONS                                          (966,127)

OTHER INCOME
     GAIN (LOSS) ON SALE OF RENTAL PROPERTY                             391,777
     OTHER                                                               14,528
                                                                    ------------

     TOTAL OTHER INCOME                                                 406,305
                                                                    ------------

INCOME (LOSS) BEFORE INCOME TAXES                                      (559,822)

PROVISION FOR INCOME TAXES
                                                                    ------------

NET INCOME (LOSS)                                                      (559,822)
                                                                    ============

NET INCOME /(L0SS) PER SHARE                                              (0.03)
                                                                    ============

SHARES USED TO COMPUTE NET INCOME/(LOSS) PER SHARE                   19,058,377
                                                                    ============

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                       SECURITY ASSET CAPITAL CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED MARCH 31, 2001


                                                                     1st QUARTER
                                                                        2001
                                                                     -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
     NET LOSS                                                          (559,822)
     ADJUSTMENT TO RECONCILENET LOSS TO NET CASH
      PROVIDED BY (USED IN )OPERATING ACTIVITIES:
          DEPRECIATION                                                   50,000

     CHANGES IN OPERATING ASSETS AND LIABILITIES
          DECREASE (INCREASE) IN  DEFERRED FINANCING COST                57,403
          INCREASE (DECREASE) IN ACCOUNTS PAYABLE                        20,849
          INCREASE (DECREASE) IN NOTES PAYABLE                          299,282
          DECREASE (INCREASE)  IN LOAN PORTFOLIO                        (12,804)
          DECREASE (INCREASE)  IN ACCOUNTS RECEIVABLE                    20,718
          INCREASE (DECREASE) IN ACCRUED EXPENSES                        31,016
                                                                     -----------
     NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES          (93,358)

CASH FLOWS FROM INVESTING ACTIVITIES:
     SALE OF SECURITY ASSET PROPERTIES                                  397,111
     DECREASE (INCREASE) IN REAL ESTATE                                 718,333
     PROCEEDS FROM SALE OF RENTAL PROPERTIES
     (INCREASE) DECREASE IN DUE FROM RELATED PARTIES
                                                                     -----------

     NET CASH FLOWS FROM INVESTING ACTIVITIES                         1,115,444


CASH FLOWS FROM FINANCING ACTIVITIES:
     DECREASE IN DEFERRED FINANCING COST                                (57,403)
     INCREASE IN NOTES RECEIVABLE                                    (1,200,000)
     EQUITY FINANCING                                                   386,525
                                                                        (17,750)

     NET CASH FLOW FROM FINANCING ACTIVITIES                           (888,628)
                                                                     -----------


                NET INCREASE (DECREASE) IN CASH                         133,458


                CASH AT THE BEGINNING OF THE PERIOD                       3,443
                                                                     -----------


                CASH AT THE END OF THE PERIOD                           136,901
                                                                     ===========

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

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, or SCYA, is publicly traded on the Over the
Counter Electronic Bulletin Board (OTC:BB),. The Company and all of its
subsidiaries are well positioned to become a dominant force in both the booming
industries of asset liquidation and e-commerce technology. The Company is
completing the funding of a private placement and will apply for listing on the
NASDAQ upon its completion.

A leader in the booming asset liquidation industry, Security Asset Capital
Corporation recognized the need for technological advancement in the industry
and seized the opportunity to oversee its development. The Company plans to
become the debt buying industry's technological leader with its launch of The
Debt Registry, a financial sector registration system that will initially serve
the credit card, consumer loan, and medical debt marketplaces. The Debt Registry
is currently in discussions with Bank of America, G.E. Capital, Citibank, Chase,
and Bank One to participate in the new process as well as approval of the four
major rating agencies. The Debt Registry is projected to be operational with
cash flow within the next several months and has projections estimating a profit
within its first year of operations of approximately $19 million. The Debt
Registry is the defining element in the corporate mission,: to be the
technological leader in the financial services industry.

The company's management team has over 60 years of hands-on industry experience
and enjoys the reputation necessary to attract additional staff from a talent
pool of industry professionals nationwide. SCYA expects to become one of a
handful of companies with a fully developed infrastructure necessary to achieve
and maintain national reach in both technology and financial services.

<PAGE>

Founded on September 22, 1993, the Company stands by its original objective to
build through acquisition and development a team of vertically integrated
companies structured to achieve maximum economic advantage within the asset
liquidation industry. The industry is ranked among the fastest growing and most
lucrative arenas in American business today. Profits are earned in the industry
through the purchase of portfolios of non-performing loans or assets, at low
prices, and either collected at a high rate of return or sold at the wholesale
or retail level for immediate profits. Overall, current inventories available at
financial institutions are estimated at over $90 billion. Via acquisitions,
Security Asset Capital Corporation has grown over the past several years to
become a fully reporting entity.

The Company acquired the DebtTtrader.com, the premiere Internet portal for
buying and selling assets in the lucrative debt buying industry. Also acquired
was Broadband Technologies, Inc., a proprietary e-commerce technology with five
patents and patents pending that pertain to the offering of full screen,
video-on-demand and multimedia storage and delivery.

In October of 1999, the Company acquired Security Asset Properties, a property
company with $4.6 million of performing rental real estate, and sold this
division at a profit in January of 2001. The transaction included cash and a
carry back note, and was a private sale with no commissions. The sale of the
real estate division for profit continues the company's focus on its technology
divisions, The Debt Registry and Broadband Technologies, Inc. Security Asset
Capital Corporation intends to continue to divest itself of other subsidiaries
that do not fit within the company's technology-focused strategic plan. Proceeds
from these sales will also be used to further fund the technology divisions and
to payoff existing debt.

The Debt Registry(TM), is a patent pending online registration and tracking
System for the Financial services industry similar to CUSIP numbers for publicly
held stocks. The company is in the final stages of development on the system.
Once in service, the company plans to complete negotiations with most of the
major financial institutions to require registration of all portfolios sold. The
Debt Registry expects to begin to accept registrations during the third quarter
of 2001. This product has received excellent reception among leading industry
professionals as well as the approval of the country's four top rating agencies.

The Debt Registry(TM)

Throughout 1999 and the first half of 2000, Security Asset Capital Corporation,
a leader in the debt buying industry, expanded its focus to develop The Debt
Registry. The following is an overview of The Debt Registry process and system,
its products and revenue streams, and its benefits to the industry.

The Debt Registry is an asset ownership registration and tracking system for the
asset liquidation and purchasing industry. The closest counterpart to this
system is the process of UCC filings for assets held for collateral by lending
institutions. The asset liquidation and purchasing industry is the largest
industry in which assets are bought and sold without the benefits of asset
titles or filed ownership documents. As a result, a number of problems and
issues exist, or have the potential to exist, in the industry. These include
lack of verifiable ownership of assets within the industry; difficulty of
verifying age, experience, and other important details of a particular account;
potential fraud from key data changes and multiple sales; difficulty in
reporting correct information to the credit bureaus; difficulty in obtaining
documentation from originators on a timely basis; and inability or difficulty in
locating sold accounts by debtors.

The debt buying industry will continue to grow rapidly as more financial
institutions are faced with dramatic increases in consumer debt. The industry is
the largest industry in which assets are bought and sold without the benefits of
asset titles or filed ownership documents. As a result, a number of problems and
issues exist which create potential liabilities for all of the companies in the
industry, including the originators of debt, the companies buying and collecting
the debt, and the credit bureaus reporting the status of the account. The
implementation of The Debt Registry will provide the industry with much needed
structure that should allow the industry to continue to expand in the future
without inviting government regulation.

<PAGE>

ACCOUNT REGISTRATION
--------------------

As banks and other originators charge off non-performing debts, they are either
placed for collection with contingency collection firms, or sold in portfolios
to the secondary market. At present, no third party tracks accounts or maintains
ownership records. The results of no supervision are potential fraud, lack of
verifiable ownership following sales, and difficulties in verifying age,
experience, and details of an account.

Under The Debt Registry process, each time an account changes ownership, a
record of that sale is forwarded to the Registry. Included in the record are
identification data for the accounts, as well as experience information (agency
placement, etc.). The buyer of the accounts pays the registration fee, and
receives a registration document relating to the accounts. Each account is
assigned a registration number that is updated and tracked as ownership changes
through the life of the account. Once the debt is sold the second time (from the
second to the third owners), the accounts are re-registered to document both the
new ownership and the new collection experience. Addresses and payment
information are updated at this time. At each successive sale, the account is
re-registered with The Debt Registry.

At the sale of the accounts, the new buyer can verify the registration by
contacting The Debt Registry and checking a sampling of the accounts. If the new
buyer chooses, he can submit the full listing of accounts for verification. As
in all sales, the buyer pays for the registration and verification processes. It
is anticipated that the price of registration will not be a hindrance to any
transaction, since registration costs will be less than 1.0% of the purchase
price.

The ability to track the ownership of a particular account is also a benefit to
the debtor. Debtors often cannot locate the current owner of their old debt, due
to a lack of information from the originator regarding successive sales. Instead
of calling each "link" in the chain of title, a debtor will need only visit
www.FindMyDebts.com for up to the minute account status information.

ACCOUNT DOCUMENTATION
---------------------

Account statements and signed applications are the backbone of legal collection
efforts. Every collector understands the frustration of spending hours "working"
an account for which no documentation can ultimately be obtained. The Debt
Registry's proposed Documentation Clearinghouse will virtually eliminate these
types of problems.

The Registry's Clearinghouse will initially act as the hub for document requests
to various banks and credit grantors, which are overwhelmed by current industry
demands. All incoming requests for applications or statements will be send
directly to the clearinghouse and credit grantors would need only respond to one
entity for documentation requests.

In its second phase of development, the Clearinghouse would develop a means of
maintaining all documentation for all sold debt in an electronic format, which
will significantly speed up the forwarding process.

<PAGE>

SOURCES OF REVENUE
------------------

DOCUMENTATION REQUESTS
Charged-off credit card accounts are currently sold with little or no
documentation. Collectors who need account documents typically order them on an
account-by-account basis at roughly $5.00 to $7.00 per document. Banks and other
credit grantors price this service to recover their costs.

REGISTRY MEMBERSHIPS
All regular users of The Debt Registry would be offered membership at an annual
fee. Their membership will entitle them to a monthly newsletter, access to
verification services, and to account location services. For many of the
secondary and later owners, this service will generate significant additional
revenues, while allowing more debtors to settle accounts. The account owner will
pay a locating fee to The Debt Registry.

ACCOUNT REGISTRATION FEES
Account registration will generate significant revenue for The Debt Registry.
Although charged-off debt accounts are sold in large portfolios, each individual
account will be registered, and the fees would be based on per account pricing.
However, the cost of registration will not be a significant part of the purchase
price, and will therefore not be a deterrent to the sale transaction. In
secondary and successive sales, the cost of registration will likely be a
negotiating point in the sale, similar to closing cost in a home purchase.

WWW.FINDMYDEBTS.COM
Located online at www.FindMyDebts.com, this service will to allow consumers to
easily locate debts that have been sold by the original credit grantor to other
parties. This page facilitates the payment of debt and helps the debtor to
regain their good credit. Debtors enter their correct personal information and
the account numbers of the accounts that they want to resolve. The possibility
of fraud is virtually eliminated, as consumers can now ensure that they are
paying the correct party. The system is designed for consumers who intend to
both LOCATE and SETTLE old accounts, and debtors are forewarned that their
contact information will be shared with the account owners. The FindMyDebts
service is provided at no extra cost to consumers, as debt owners will pay all
fees. In the long run, this will constitute the greatest source of revenue for
The Debt Registry.

The mission of Security Asset Capital Corporation is to be the technological
leader in the financial services industry and in the electronic registration of
debt, loans and other assets. Through an alliance with Internet strategists
Center 7, Inc. the Company has developed an integrated hardware and software
system for The Debt Registry, a new financial sector registration system that
will provide the financial, lending and asset liquidation industries with much
needed structure and technological expansion. The Debt Registry is currently in
discussions with Bank of America, G.E. Capital, Citibank, Chase and Bank One to
require mandatory registration of all charged off loan portfolios.

<PAGE>

One of the Company's other wholly owned subsidiaries; Broadband Technologies,
Inc. remains dedicated to bringing full screen, on-demand video to the consumer
via the Internet. Just as companies rely on express mail services to rapidly
deliver packages, companies will rely on a service provider to store and deliver
video content. Some industries that will benefit from the ability to cast video
content directly to its consumers include pay TV, video rental, high-end product
sales, corporate advertising, infomercials, travel and real estate, auction
centers, and corporate training.

The challenge of bringing on-demand video to the consumer hinges mainly on the
storage of dense video content. Broadband Technology Inc.'s data warehousing
methods, combined with currently available technology, could allow us to
infinitely scale for the inventory demands of the future. Broadband
Technologies, Inc. has filed five patent applications, all of which have been
granted a patent pending status. These applications cover the key proprietary
features of the video delivery system. The following is a summary of these five
patent applications:

DISTRIBUTIVE NETWORK. The system utilizes a very complex and specific "Intranet"
network configuration. It allows for complete redundancy of the information
contained within the network and provides for fail-proof communications.

HARDWARE AND SOFTWARE CONFIGURATIONS. The configuration of hardware and software
that the system employs in its viewing centers is both specific and very unique.
The combination of software provided allows for the proper functionality of all
hardware components.

DUAL MPEG STREAMING. This patent pertains to the heart of the system. It
protects the actual process of delivering MPEG video streams. In addition, it
will guard the only method known to date for allowing a single processor CPU to
stream two different MPEG files simultaneously.

GRAPHICAL USER INTERFACE. Under this patent, the "look and feel" of the system
is protected. The graphical user interface ("GUI") is created by a unique
combination of display device drivers, file types and formats, that creates an
environment extremely intricate in delivery, yet very intuitive and user
friendly.

DESIGN. The design and engineering of the "viewing center" is protected under
this claim.

It is anticipated that the bulk of the video on demand revenue will come from
storage and delivery fees, as these will be our primary services. Companies
wishing to deliver "infomercials" or training videos, as well as those that
store product content in video format constitute our prospective industrial
market. We foresee industries such as real estate, education, travel and tourism
all depending upon technology and services, like those that Broadband
Technologies, Inc. intends to provide, for their success.

The Company's short-term objectives are to implement The Debt Registry into a
bottom line cash-producing vehicle, while at the same time improving the
existing proprietary technologies through investment in qualified technical
personnel. The Company's status as a stable, income-generating company gives it
the unique advantage of enjoying profit while researching and developing
opportunities in the video-on-demand niche markets.

<PAGE>

RESULTS OF OPERATIONS FOR EACH OF THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND
1999.

REVENUE

Revenue for the three months ended March 31, 2001 was $1,570,135 with $1,450,000
resulting from the sale of Security Asset Properties.

LOSS FROM OPERATION

Loss from Operations is calculated by subtracting operating expenses from net
revenue. Net Loss from Operation for the three months ended March 31, 2001
increased to $966,127 as compared to $162,509 for the three months ended March
31, 2001. This increased loss was primarily attributable to increased costs and
expense related to development of the Debt Registry and fund raising efforts.

NET LOSS

Net loss for the three months ended March 31, 2001 was $559,822
A decrease of $99,304 when compared to the  first three month of 2000. This
Decrease is attributable to the Sale of Security Asset Properties. The loss
after adjustment for the sale, would be $951,659, an increase of $292,533. The
Increase is attributed to the development of the Debt Registry, including
staffing cost and fund raising efforts.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of cash and cash flow from operations are its
short-term and long-term debt and increased gross revenues. At March 31, 2001,
the Company had cash and cash equivalents of $1,336,901.

The Company plans to continue funding operations through revenue earned from its
asset portfolio purchase and sale operations, development of the Debt Registry
and additional debt and equity capital raises.

<PAGE>

                                     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 on Form 8-K.

EXHIBIT NO.                    DESCRIPTION
-----------                    -----------

3.1      Articles of Incorporation of Securities Asset Capital Corporation are
         incorporated herein by reference to Exhibit 3.1 to the report on Form
         8-K filed April 5, 2000.

3.2      By-Laws of Security Asset Capital Corporation incorporated herein by
         reference to Exhibit 3.2 to the report on Form 8-K filed April 5, 2000.

4.       Form of Security Asset Capital Corporation's Common Stock Certificate
         incorporated herein by reference to Exhibit 4 to the report on Form
         10QSB filed May 18, 2000.


                                   SIGNATURES

        In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        SECURITY ASSET CAPITAL CORPORATION,
                                        a Nevada corporation


Date: May 16, 2001                      /S/  DAVID R. WALTON
                                        ----------------------------------------
                                        David R. Walton, Chief Executive Officer