<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, 2002.

                        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:

             31,846,710 of common stock shares as of March 31, 2002.
                                   ----------


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, 2002
                                                                ----------------
                                     ASSETS
CURRENT ASSETS

  LOAN PORTFOLIO ASSETS                                             $   397,160

  RELATED PARTY RECEIVABLES                                              21,789

  PREPAID EXPENSES                                                       67,200
                                                                    ------------

                        TOTAL CURRENT ASSETS                            486,149

NOTES RECEIVABLE                                                      1,200,000

LOAN PORTFOLIO ASSETS                                                   400,000

FIXED ASSETS, NET                                                        64,402

PATENTS AND PATENTS PENDING                                           1,552,500

DEBT REGISTRY DOMAIN NAMES                                            1,000,628
                                                                    ------------

                                                                    $ 4,703,679
                                                                    ============

                       LIABILITIES & SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

  CURRENT PORTION OF NOTES PAYABLE                                  $ 1,125,531
  ACCOUNTS PAYABLE                                                      599,651
  ACCRUED EXPENSES                                                      163,573
                                                                    ------------
  TOTAL CURRENT LIABILITIES                                           1,888,755

NOTES PAYABLE                                                         1,841,117
DEFERRED REVENUE                                                        382,190
                                                                    ------------
                        TOTAL LIABILITIES                             4,112,062
                                                                    ------------
SHAREHOLDERS' EQUITY
  COMMON STOCK, $.001 PAR VALUE, 100,000,000 SHARES AUTHORIZED,
         31,846,710 ISSUED                                               31,847
  PREFERRED STOCK, $.001 PAR VALUE, 20,000,000 AUTHORIZED,
            2,579,154 ISSUED                                              5,158
  ADDITIONAL PAID IN CAPITAL                                         16,373,966
  ACCUMULATED DEFICIT                                               (15,610,754)
                                                                    ------------
                                                                        800,217
  LESS:  TREASURY STOCK (175,000 shares)                               (208,600)
                                                                    ------------
                        TOTAL SHAREHOLDERS' EQUITY                      591,617
                                                                    ------------
                                                                    $ 4,703,679
                                                                    ============
 The accompanying notes are an integral part of the consolidated financial
 statements.

                                        2

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

                                            FOR THE THREE MONTHS ENDED MARCH 31,
                                                         2002         2001
                                                    -------------  -------------
REVENUES
  PORTFOLIO                                         $     11,146   $     51,213
  RENTAL                                                      --         68,922
                                                    -------------  -------------
                       TOTAL REVENUES                     11,146        120,135
                                                    -------------  -------------
EXPENSES
  PORTFOLIO                                                3,715         27,207
  RENTAL                                                      --         38,674
  GENERAL AND ADMINISTRATIVE                             508,776        646,171
                                                    -------------  -------------
                       TOTAL EXPENSES                    512,491        712,052
                                                    -------------  -------------

LOSS FROM OPERATIONS                                    (501,345)      (591,917)
                                                    -------------  -------------
OTHER
  INTEREST EXPENSE                                       (26,608)      (374,075)
  OTHER                                                       --         24,115
                                                    -------------  -------------

                       OTHER, NET                        (26,608)      (349,960)
                                                    -------------  -------------

NET LOSS                                            $   (527,953)  $   (941,877)
                                                    =============  =============

NET LOSS PER SHARE                                  $      (0.02)  $      (0.06)
                                                    =============  =============

WTD AVG SHARES USED TO COMPUTE NET LOSS PER SHARE     29,994,000     16,515,000
                                                    =============  =============

 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' EQUITY
                                              For the Three Months Ended March 31, 2002
                                                             (Unaudited)
<CAPTION>

                                       Common Stock          Preferred Stock        Treasury Stock
                                 ------------------------  ---------------------  -------------------  Additional
Accumulated                                                                                              Paid-In
                                    Stock        Amount      Stock     Amount      Stock     Amount      Capital        Deficit
                                 -------------  ---------  ---------  -------   ---------  ----------  -------------  -------------

<S>                                <C>          <C>        <C>        <C>       <C>        <C>         <C>            <C>
Balance, December 31, 2001         28,196,710   $ 28,197   2,579,154  $ 5,158    175,000   $(208,600)  $ 16,069,116   $(15,082,801)
                                 -------------  ---------  ---------  -------   ---------  ----------  -------------  -------------
Issuances of common stock:

   Consulting services:

   @$0.07 to $0.09 February 2002    3,300,000      3,300          --       --         --          --        276,200             --

   @$0.08 to $0.09 March 2002         350,000        350          --       --         --          --         28,650             --

Net loss for three months ended
   March 31, 2002                          --         --          --       --         --          --             --       (527,953)
                                 -------------  ---------  ---------  -------   ---------  ----------  -------------  -------------

Balance, March 31, 2002            31,846,710   $ 31,847   2,579,154  $ 5,158    175,000   $(208,600)  $ 16,373,966   $(15,610,754)
                                 =============  =========  =========  =======   =========  ==========  =============  =============

                        The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
                                                                  4

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

                                            FOR THE THREE MONTHS ENDED MARCH 31,
                                                         2002          2001
                                                    -------------  -------------
CASH FLOWS FROM OPERATING ACTIVITIES:

NET CASH FLOWS FROM OPERATING ACTIVITIES            $    (40,706)  $     43,932

NET CASH FLOWS FROM INVESTING ACTIVITIES                (100,000)       (42,074)

NET CASH FLOW FROM FINANCING ACTIVITIES                  140,706        131,600
                                                    -------------  -------------

              NET INCREASE IN CASH                            --        133,458

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

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

 The accompanying notes are an integral part of the consolidatedfinancial
 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 2001. 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 and its wholly owned subsidiaries, Security Asset
Management, Inc., Security Asset Properties, Inc. ("SAP") until its sale in
March, 2001, Broadband Technologies, Inc., Universal View Corporations, 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 Stats 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. Management believes that the proceeds from resale and collections exceed
the carrying value of the Assets. The cost of the Asset is written off by a
percentage of cash collections on a portfolio-by- portfolio basis. Management
presently estimates that Loan Portfolio Assets in collection will realize gross
collections equal to approximately three times the carrying value of the Assets.
The Company, therefore, writes off one dollar of cost of Portfolio Assets for
every three dollars in gross collection. Certain Loan Portfolio Assets are sold
in part or in whole by the Company. 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.

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

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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.

RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

REVENUES
Revenue for the three months ended March 31, 2001 was $11,146 as compared to
$120,135 for 2001. The decrease in revenues resulted from the sale of SAP, the
slowdown within the United State's economy, in particular collections following
the events of September 11, 2001, the decrease in Loan Portfolio sales due to
management's emphasis on development of the Debt Registry and fund raising
efforts.

NET LOSS
Net loss for the three months ended March 31, 2002 was $527,953 as compared to
941,877 for 2001, a decrease of $413,924 when compared to the first three month
of 2001. This decrease is primarily due to the decline in general and
administrative expenses resulting from the issuance of common stock for
services, and the decrease in interest expense.

LIQUIDITY AND CAPITAL RESOURCES
The Company plans to continue funding its operations and proceeds from
additional debt and equity capital offerings. There is no assurance that
management will be successful in these endeavors.

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 - None

                                        7

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                                   SIGNATURES

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

                                        Security Asset Capital Corporation

DATED:  May 20, 2002                    /s/ DAVID R. WALTON
                                        ----------------------------------------
                                        David R. Walton, Chief Executive Officer

                                        8