UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549-1004
                           ---------------------------

(Mark One)
                                    FORM 10-Q
[ X ]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly Period Ended June 30, 2003

                                       OR

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
   ( )               OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                      to
                               --------------------    --------------------
Commission File Number                  0-13084
                        ---------------------------------------------------

                             WARRANTECH CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                         13-3178732
--------------------------------------------------------------------------------
    (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                      Identification No.)

    2220 Highway 121, Suite 100, Bedford, TX                  76021
--------------------------------------------------------------------------------
    (Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code      (800) 544-9510
                                                   -----------------------------


--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last year)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
Yes   __X__     No ______

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act.) Yes [ ] No [ X ]

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

                  Class                          Outstanding at July 31, 2003
-----------------------------------------     ----------------------------------
 Common stock, par value $.007 per share               15,323,165 shares


<PAGE>


                     WARRANTECH CORPORATION AND SUBSIDIARIES

                                    I N D E X

                                                                        Page No.
                                                                        --------

                         PART I - FINANCIAL INFORMATION

Item 1:  Financial Statements

    Condensed Consolidated Statements of Operations -
           For the Three Months Ended June 30, 2003 and 2002 (Unaudited).......2

    Condensed Consolidated Balance Sheets at June 30, 2003
           (Unaudited) and March 31, 2003......................................3

    Condensed Consolidated Statements of Cash Flows
           For the Three Months Ended June 30, 2003
           and 2002 (Unaudited)................................................5

    Notes to Condensed Consolidated Financial Statements.......................6

Item 2:  Management's Discussion and Analysis of
           Financial Condition and Results of Operations .....................10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk ..........14

Item 4.  Controls and Procedures .............................................14



           PART II - OTHER INFORMATION

Item 1:  Legal Proceedings....................................................15

Item 2:  Changes in Securities................................................15

Item 3:  Defaults Upon Senior Securities......................................15

Item 4:  Submission of Matters to a Vote of Security Holders..................15

Item 5:  Other Information....................................................15

Item 6:  Exhibits and Reports on Form 8-K.....................................15

Signature ....................................................................16


                                       1
<PAGE>


PART I  -  FINANCIAL INFORMATION

 Item 1:  Financial Statements

                     WARRANTECH CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                              For the Three Months Ended
                                                                        June 30,
                                                           ----------------------------------
                                                                2003               2002
                                                           ---------------    ---------------
<S>                                                        <C>                  <C>
Earned administrative fee (net of amortization of
   deferred costs)                                         $    8,455,357       $  9,034,136
Costs and expenses
   Service, selling, and general and administrative             7,505,850          7,202,343
   Bad debt expense                                                95,000                  -
   Depreciation and amortization                                  928,080          1,023,119
                                                           ---------------    ---------------
Total costs and expenses                                        8,528,930          8,225,462
                                                           ---------------    ---------------

Income (loss) from operations                                     (73,573)           808,674
Other income (expense)                                            286,868            229,957
                                                           ---------------    ---------------

Income before provision for income taxes                          213,295          1,038,631
Provision (benefit) for income taxes                               (2,000)           326,272
                                                           ---------------    ---------------

Net income                                                 $      215,295       $    712,359
                                                           ===============    ===============

Earnings per share:
Basic                                                               $0.01              $0.05
                                                           ===============    ===============
Diluted                                                             $0.01              $0.05
                                                           ===============    ===============

Weighted average number of shares outstanding:
Basic                                                          15,284,134         15,307,642
                                                           ===============    ===============
Diluted                                                        15,672,197         15,386,538
                                                           ===============    ===============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       2
<PAGE>


                     WARRANTECH CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                   (Unaudited)
                                                     June 30,       March 31,
                                                      2003            2003
                                                  -------------- --------------
ASSETS
------
<S>                                               <C>            <C>
Current assets:
   Cash and cash equivalents                      $   4,689,531  $   5,478,095
   Investments in marketable securities                 542,413        843,980
   Accounts receivable, (net of allowances of
       $325,454 and $230,064, respectively)          22,511,199     22,008,608
   Loan receivable - Butler Financial
       Solutions, Inc.                                9,900,767      8,612,678
   Other receivables, net                             5,745,905      5,299,887
   Deferred income taxes                              2,098,171      2,098,171
   Employee receivables                                  63,393         73,833
   Prepaid expenses and other current assets          1,222,339      1,218,392
                                                  -------------- --------------
      Total current assets                           46,773,718     45,633,644
                                                  -------------- --------------

Property and equipment, net                           7,517,211      8,296,313
                                                  -------------- --------------

Other assets:
   Excess of cost over fair value of assets
     acquired (net of accumulated
     amortization of $5,825,405)                      1,637,290      1,637,290
   Deferred income taxes                                802,404        800,406
   Deferred direct costs                              8,419,169      9,972,309
   Investments in marketable securities               1,530,433      1,355,263
   Restricted cash                                      825,000        825,000
   Split dollar life insurance policies                 877,126        877,126
   Notes receivable                                   5,374,772      5,411,653
   Other assets                                          54,184         47,124
                                                  -------------- --------------
        Total other assets                           19,520,378     20,926,171

                                                  -------------- --------------
                    Total Assets                  $  73,811,307  $  74,856,128
                                                  ============== ==============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>


                     WARRANTECH CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                     (Unaudited)
                                                                      June 30,       March 31,
                                                                        2003           2003
                                                                    -------------  --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S>                                                                   <C>             <C>
Current liabilities:
     Current maturities of long-term debt and capital lease
        obligations                                                 $    737,789   $     802,070
     Insurance premiums payable                                       37,084,279      36,070,992
     Income taxes payable                                                 86,941          81,236
     Accounts and commissions payable                                  7,444,955       8,118,371
     Accrued expenses and other current liabilities                    3,999,538       3,534,106
                                                                    -------------  --------------
        Total current liabilities                                     49,353,502      48,606,775
                                                                    -------------  --------------

Deferred revenues                                                     13,072,167      15,065,547
Long-term debt and capital lease obligations                           1,239,376       1,218,670
Deferred rent payable                                                    391,077         417,720
                                                                    -------------  --------------
   Total liabilities                                                  64,056,122      65,308,712
                                                                    -------------  --------------

Commitments and contingencies

Stockholders' equity:
    Preferred stock - $.0007 par value authorized - 15,000,000
      Shares issued  - none at June 30, 2003 and March 31, 2003                -               -
    Common stock - $.007 par value authorized - 30,000,000 Shares
       issued  - 16,535,324 shares at June 30, 2003 and
       16,525,324 shares at March 31, 2003                               115,784         115,714
    Additional paid-in capital                                        23,754,335      23,760,809
    Loans to directors and officers                                  (10,533,048)    (10,462,094)
    Accumulated other comprehensive income (loss), net of taxes         (177,380)       (196,974)
    Retained earnings                                                    819,926         604,631
                                                                    -------------  --------------
                                                                      13,979,617      13,822,086

   Treasury stock - at cost, 1,212,190 shares at June 30, 2003
       and 1,249,690 shares at March 31, 2003                         (4,224,432)     (4,274,670)
                                                                    -------------  --------------
          Total Stockholders' Equity                                   9,755,185       9,547,416
                                                                    -------------  --------------

             Total Liabilities and Stockholders' Equity             $ 73,811,307   $  74,856,128
                                                                    =============  ==============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>


                     WARRANTECH CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          For the Three Months Ended
                                                                   June 30,
                                                      -----------------------------------
                                                           2003              2002
                                                      ---------------  ------------------
<S>                                                          <C>              <C>
Cash flows from operating activities:
  Net income                                          $      215,295   $         712,359
                                                      ---------------  ------------------
  Adjustments to reconcile net income to
     net cash provided by operating activities:              530,372            (322,841)
                                                      ---------------  ------------------
Net cash flows provided by (used in) by operating
     operating activities                                    745,667             389,518
                                                      ---------------  ------------------
Cash flows from investing activities:
  Property and equipment purchased                          (152,192)           (241,944)
  Purchase of marketable securities                         (175,000)           (445,000)
  Proceeds from sales of marketable securities               295,000             450,000
                                                      ---------------  ------------------
Net cash provided by (used in) by
  investing activities                                       (32,192)           (236,944)
                                                      ---------------  ------------------
Cash flows from financing activities:
    Issuance of common stock                                      70                   -
    Purchase treasury stock                                        -              (8,865)
    Increase in loans and notes receivable                (1,293,878)           (230,950)
    Repayments, notes and capital leases                    (208,231)           (228,372)
                                                      ---------------  ------------------
Net cash used in financing activities                     (1,502,039)           (468,187)
                                                      ---------------  ------------------
Net decrease in cash and cash equivalents                   (788,564)           (315,613)
Cash and cash equivalents at beginning of period           5,478,095           7,033,448
                                                      ---------------  ------------------
Cash and cash equivalents at end of period            $    4,689,531   $       6,717,835
                                                      ==============   =================
Supplemental Cash Flow Information:
Cash payments (receipts) for:
   Interest                                           $       43,582   $          49,903
   Income taxes                                                    -   $      (1,252,774)
                                                      ==============   =================
Non-Cash Investing and financing activities:
    Property and equipment financed through capital
      leases                                          $      168,838              54,833
    Capital leases refinanced                         $            -   $               -
    Increase in loans to officers and directors       $      (70,954)  $         (81,735)
    Issuance of treasury stock                        $       50,238   $               -
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>


                     WARRANTECH CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003
                                   (UNAUDITED)

1.     THE COMPANY

       Warrantech,   through  its  wholly   owned   subsidiaries,   markets  and
       administers service contracts, extended warranties and replacement plans.
       The   Company  is  a  third   party   administrator   for  a  variety  of
       dealer/clients  in  selected   industries  and  offers  call  center  and
       technical  computer  services.  The  Company  assists  dealer/clients  in
       obtaining  insurance  policies  from highly rated  independent  insurance
       companies for all contracts and programs  offered.  The insurance company
       is then  responsible  for the cost of  repairs  or  replacements  for the
       contracts administered by Warrantech.

       The Company's  service contract  programs benefit  consumers by providing
       them with  expanded  and/or  extended  product  coverage  for a specified
       period  of  time  (and/or   mileage  in  the  case  of  automobiles   and
       recreational  vehicles),  similar to that provided by manufacturers under
       the terms of their product  warranties.  Coverage  generally provides for
       the repair or replacement of the product,  or a component thereof, in the
       event of its failure. The Company's service contract programs benefit the
       dealer/clients by providing enhanced value to the goods and services they
       offer and by providing them with the  opportunity  for increased  revenue
       and  income  without  the  costs and  responsibilities  of  operating  an
       extended warranty program.

       The service  contracts,  extended  warranties and  replacement  contracts
       generally  have terms ranging from three (3) to one hundred  twenty (120)
       months.  Since the Company acts solely as a third party  administrator on
       behalf of the dealer/clients and insurance companies,  the actual repairs
       and/or  replacements  required  under the  agreements  are  performed  by
       independent third party authorized repair facilities or dealers. The cost
       of repairs is generally  paid for by the insurance  companies  which have
       the  ultimate  responsibility  for  the  claims  or by  Butler  Financial
       Solutions, LLC ("Butler"),  if Reliance Insurance Company ("Reliance") or
       the  Company  is  the  obligor.  The  insurance  policy  indemnifies  the
       dealer/clients  against losses resulting from service contract claims and
       protects consumers by ensuring their claims will be paid.

2.     BASIS OF PRESENTATION

       The accompanying  consolidated financial statements have been prepared by
       management and are unaudited.  These interim  financial  statements  have
       been prepared on the basis of accounting principles generally accepted in
       the United States of America ("GAAP") for interim  financial  information
       and with the  instructions to Form 10-Q and Article 10 of Regulation S-X.
       Accordingly,  they do not include all information and footnotes  required
       by  accounting  principles  generally  accepted  in the United  States of
       America for complete financial statements.  In the opinion of management,
       all  adjustments  (consisting of normal  recurring  accruals)  considered
       necessary for a fair presentation of the financial position and operating
       results  of the  Company  for the  interim  period  have  been  included.
       Operating  results  for the  three  months  ended  June 30,  2003 are not
       necessarily indicative of the results that may be expected for the fiscal
       year  ending  March  31,  2004.  For  further  information,  refer to the
       consolidated  financial  statements and footnotes thereto included in the
       Company's Annual Report on Form 10-K for the year ended March 31, 2003.

3.     RESTATEMENT

       The Company's  financial  statements  for the three months ended June 30,
       2002,  have been restated to reflect a change in accounting  treatment in
       calculating net earned administrative fees as more fully described in the
       Company's  Annual  Report on Form 10K for the year ended March 31,  2003.
       For certain  contracts,  the Company previously had deferred a portion of
       the revenue and would recognize such deferred revenue at the cancellation
       or end of the  contract's  term.  The  Company  is now  recognizing  this
       revenue over the life of the contract's term.


                                       6
<PAGE>


       The effect of this  restatement for the quarter ended June 30, 2002 is as
       follows:

                                                           JUNE 30, 2002
                                                    ---------------------------
                                                         AS
                                                     PREVIOUSLY
                                                      REPORTED     AS RESTATED
                                                    -------------  ------------
        Statement of operations:

        Earned administrative fee (net of             $9,030,286    $9,034,136
          amortization of deferred costs)
        Income from operations                           804,824       808,674
        Income before provision for income taxes       1,034,781     1,038,631
        Provision for income taxes                       324,900       326,272
        Net income                                      $709,881      $712,359

        Earnings per share:

        Basic                                              $0.05         $0.05
                                                           =====         =====
        Diluted                                            $0.05         $0.05
                                                           =====         =====


4.     NOTES RECEIVABLE

       Butler  serves  as the  ultimate  obligor  under  all  service  contracts
       administered  by the Company in exchange  for a fee.  Some of the service
       contracts  under which Butler is the obligor were insured by Reliance and
       the  liquidation  of Reliance has  eliminated  the insurance  coverage to
       Butler.

       In order to assist Butler in addressing its potential  obligations  under
       the service contracts  previously insured by Reliance for which Butler is
       or Warrantech was the obligor,  Warrantech  Automotive made an initial $1
       million  loan to  Butler  and  further  loans  through  June 30,  2003 of
       $14,392,397.

       Funding to Butler is provided by a special surcharge,  payable on certain
       vehicle service contracts administered by the Company sold after November
       19,   2001.   The   surcharge   is   payable  by  agents   through   whom
       Reliance-insured service contracts were sold. Butler will use these funds
       to pay the claims  previously  insured by Reliance and to repay its loans
       from Warrantech.

       Additionally,  in order to assist  Butler  in  addressing  its  potential
       obligations  under the service contracts  previously  insured by Reliance
       for which  Butler  is, or the  dealer or  Warrantech  was,  the  obligor,
       Warrantech Automotive has made loans to Butler, as necessary,  for claims
       obligations  in excess of Butler's fee revenues.  Subject to the terms of
       the  agreement  between the Company and Butler,  the Company has and will
       make further loans to Butler,  as necessary,  for claims  obligations  in
       excess of Butler's fee revenues. All of Warrantech's loans to Butler bear
       interest at the rate of prime plus 2% per annum and will begin to be paid
       down once Butler's fee revenues exceed the claims obligations.

       Through June 30, 2003,  Warrantech  has loaned Butler  $15,392,937.  RWC,
       which is not part of the Reliance liquidation, is obligated to pay Butler
       $9,990,767  of that  amount.  The Company  expects  Butler to collect the
       $9,990,767  from RWC  during  the  third  quarter  of  fiscal  2004  and,
       simultaneously,  the Company will  collect  this amount from Butler.  The
       portion of the Butler  receivables  for which RWC is legally  responsible
       for  payment  is  reflected  as "Loan  Receivables"  on the  Consolidated
       Balance  Sheet.  The  remaining  amount  representing  the loans due from
       Butler  of   $5,402,170  at  June  30,  2003,  is  classified  as  "Notes
       Receivable" on the Consolidated Balance Sheet.


                                       7
<PAGE>


       The  following  table sets forth the carrying  amounts and fair values of
       the Company's notes and other receivables at June 30, 2003.

<TABLE>
<CAPTION>
                               2004     2005      2006     2007     2008   THEREAFTER   TOTAL    FAIR VALUE
                               ----     ----      ----     ----     ----   ----------   -----    ----------
<S>                          <C>         <C>  <C>         <C>         <C>     <C>     <C>        <C>
Notes Receivable - Butler
      Equals 2% above prime         -     -   $2,563,129 $2,839,041     -       -      $5,402,170 $5,402,170
Loan Receivable - Butler;
      0% interest            $9,900,767   -            -          -     -       -      $9,900,767  9,900,767
Other Receivable -
      0%  interest           $5,745,905   -            -          -     -       -      $5,745,905 $5,745,905
</TABLE>

     5.   COMPREHENSIVE INCOME

         The components of comprehensive income are as follows:
<TABLE>
<CAPTION>

                                                              For the Three Months Ended
                                                        ----------------------------------------
                                                                       June 30,
                                                        ----------------------------------------
                                                              2003                  2002
                                                        ------------------    ------------------
<S>                                                              <C>                   <C>
Net income                                                       $215,295              $712,359
Other comprehensive income, net of tax
   Unrealized gain (loss) on investments                           (3,442)               18,420
   Foreign currency translation adjustments                        23,036                (7,106)
                                                        ------------------    ------------------
Comprehensive income                                             $234,889              $723,673
                                                        ==================    ==================

Comprehensive income per share:                                     $0.02                 $0.05
                                                        ==================    ==================

The components of accumulated comprehensive income are as follows:

                                                            June 30,              March 31,
                                                              2003                  2003
                                                        ------------------    ------------------
Unrealized gain/(loss) on investments                             $14,604               $18,046

Accumulated translation adjustments                              (191,984)             (215,020)
                                                        ------------------    ------------------
Accumulated other comprehensive income loss                     ($177,380)            ($196,974)
                                                        ==================    ==================
</TABLE>


<TABLE>
<CAPTION>
                                                   For the Three Months Ended
                                                            June 30,
                                               -----------------------------------
                                                    2003                2002
                                               ----------------    ---------------
<S>                                                   <C>                <C>
Numerator:
   Net income applicable to common stock              $215,295           $712,359
                                               ================    ===============
Denominator:

    Average outstanding shares used in the
          computation of per
          share earnings:
     Common Stock issued-Basic shares               15,284,134         15,307,642
                                               ----------------    ---------------
                           -Diluted shares          15,672,197         15,386,538
                                               ================    ===============
Earnings Per Common Share:
   Basic                                                 $0.01              $0.05
                                               ================    ===============
   Diluted                                               $0.01              $0.05
                                               ================    ===============
</TABLE>


6.     STOCK OPTION PLAN


6. STOCK OPTION PLAN

In December 2002, the FASB issued  Statement of Financial  Accounting  Standards
No. 148,  "Accounting for Stock-Based  Compensation - Transition and Disclosure,
an Amendment of FASB  Statement  No. 123" (SFAS No. 148).  SFAS No. 148 provides
alternative  methods of transition  for companies  making a voluntary  change to
fair value-based accounting for stock-based employee  compensation.  The Company
continues  to  account  for its stock  option  plan  under the  intrinsic  value
recognition  and measurement  principles of APB Opinion No. 25,  "Accounting for
Stock Issued to Employees," and related  Interpretations.  Effective for interim
periods beginning after December 15, 2002, SFAS No. 148 also requires disclosure
of pro-forma results on a quarterly basis as if the Company had applied the fair
value recognition provisions of SFAS No. 123.

As the  exercise  price of all  options  granted  under the plan was equal to or
above the market  price of the  underlying  common  stock on the grant date,  no
stock-based  employee  compensation  is recognized in net income.  The following
table illustrates the effect on net income and earnings per share if the company
had applied the fair value  recognition  provisions of SFAS No. 123, as amended,
to options  granted  under the stock  option  plans and rights to acquire  stock
granted  under the  company's  Stock  Participation  Plan,  collectively  called
"options." For purposes of this pro-forma  disclosure,  the value of the options
is estimated using a Black-Scholes option pricing model and amortized ratably to
expense  over the  options'  vesting  periods.  Because the  estimated  value is
determined as of the date of grant, the actual value ultimately  realized by the
employee may be significantly different.

                                          For the Three Months
                                             Ended June 30,
                                        --------------------------
                                           2003           2002
                                        ------------  -------------

Net income as reported                     $215,295       $712,359
Net income pro forma                       $195,611       $695,531
Shares - Basic                           15,284,134     15,307,642
Basic earnings per share as reported          $0.01          $0.05
Basic earnings per share pro forma            $0.01          $0.05


The fair value of Warrantech  stock options used to compute pro forma net income
and earnings per share  disclosures  is the estimated  value at grant date using
the  Black-Scholes  option-pricing  model with the  following  weighted  average
assumptions  for the three  months  ended June 30, 2003 and 2002,  respectively:
expected  dividend  yield of 0%;  expected  volatility of 30% - 50%; a risk free
interest rate of 4.0% - 5.0%; and expected option life of 3 to 10 years.

Presented  below is a summary of the status of the stock options in the plan and
the related transactions for the three months ended June 30, 2003 and 2002.
<TABLE>
<CAPTION>

                                               2003                  2002
                                       --------------------------------------------
                                                   Weighted              Weighted
                                                   Average               Average
                                                   Exercise              Exercise
                                         Shares     Price      Shares     Price
                                       --------------------------------------------
<S>                                    <C>    <C>      <C>    <C>            <C>
Options outstanding at beginning of    1,306, 380      $1.10  1,416,283      $1.54
the period
Granted                                   180,000       2.18    215,238       0.42
Canceled/Surrendered                            -          -    (5,000)     (0.42)
Exercised                                       -          -          -          -
Forfeited                                       -          -          -          -
                                       --------------------------------------------
Options outstanding at end of period    1,486,380      $1.16  1,581,521      $1.31
                                       ============================================

                                       --------------------------------------------
Options exercisable at end of period      708,660      $1.36    610,111      $1.21
                                       ============================================
</TABLE>


The weighted  average fair value of stock  options at date of grant,  calculated
using the Black-Scholes  option-pricing  model,  granted during the three months
ended June 30, 2003 and 2002 was $0.54 and $0.48, respectively.

The  Company  may issue  options  to  purchase  its  common  stock to  officers,
non-employees,  non-employee  directors  or  others  as part of  settlements  in
disputes  and/or  incentives  to perform  services for the Company.  The Company
accounts for stock options  issued to vendors and  non-employees  of the Company
under SFAS No. 123 "Accounting for Stock-based  Compensation." The fair value of
each option  grant is  estimated  on the date of grant  using the  Black-Scholes
option-pricing  model  is  charged  to  operations  utilizing  weighted  average
assumptions identical to those used for options granted to employees.

The following  table  summarizes  the status of all  Warrantech's  stock options
outstanding and exercisable at June 30, 2003.
<TABLE>
<CAPTION>

                                        Stock Options                 Stock Options
                                         Outstanding                   Exercisable
                             ---------------------------------    --------------------------
                                                    Weighted                      Weighted
                                                    Average                        Average
                                                    Exercise
                                                                                  Exercise
Range Of Exercise Prices        Shares               Price           Shares         Price
---------------------------  -------------        ------------    ------------   -----------
<S>      <C>                      <C>                   <C>           <C>             <C>
$0.67 to $0.87                    909,082               $0.74         366,666         $0.71
$1.3125 to $1.595                 616,008               $1.33         380,713         $1.33
$2.00                           4,650,000               $2.00       3,000,000         $2.00
$3.25 to $3.375                   101,290               $3.35         101,290         $3.27
                             -------------        ------------    ------------   -----------
Total at June 30, 2003          6,276,380               $1.97       3,848,669         $1.83
                             =============        ============    ============   ===========
</TABLE>




7.     SEGMENTS

       The  Company  operates  in three  major  business  segments:  Automotive,
       Consumer Products and  International.  The Automotive segment markets and
       administers   extended   warranties   on   automobiles,   light   trucks,
       motorcycles,  recreational vehicles and automotive components,  which are
       sold principally by franchised and independent  automobile and motorcycle
       dealers, leasing companies,  repair facilities,  retail stores, financial
       institutions and other specialty marketers. The Consumer Products segment
       develops,   markets  and  administers  extended


                                       8
<PAGE>

       warranties  and  product  replacement  plans  on  household   appliances,
       consumer  electronics,  televisions,  computers,  home office  equipment,
       jewelry,  musical  instruments  and homes and which are sold  principally
       through  retailers,  distributors,   manufacturers,   utility  companies,
       financial  institutions  and other specialty  marketers.  Warrantech also
       markets these  warranties and plans directly to the ultimate  consumer on
       behalf  of  the   retailer/dealer   and/or   the   manufacturer   through
       telemarketing  and  direct  mail  campaigns.  The  International  segment
       markets and administers  predominately  the same products and services as
       the other  business  segments.  The  International  segment is  currently
       operating in Central and South  America,  Puerto Rico and the  Caribbean.
       "Other"  includes  intersegment  eliminations of revenues and receivables
       and net unallocated Corporate expenses.

<TABLE>
<CAPTION>
                                                      Consumer                     Reportable
QUARTER ENDED                        Automotive       Products     International   Segments         Other          Total
                                     ----------       --------     -------------   --------         -----          -----
JUNE 30, 2003
-------------
<S>                                     <C>            <C>           <C>             <C>             <C>           <C>
Earned administrative fee               $3,311,467     $3,883,855    $1,080,427      $8,275,749      $179,608      $8,455,357
Income (loss) from operations            1,074,576        466,793       260,433       1,801,802    (1,875,375)        (73,573)
Pretax income (loss)                      (259,178)         6,375       263,832          11,029       202,266         213,295
Net interest income (expense)              (60,691)        (7,031)        1,906         (65,816)      183,002         117,186
Depreciation/amortization                   95,706        404,834        21,441         521,981       406,099         928,080
Total assets                            40,304,814     20,052,523     3,868,190      64,225,527     9,585,780      73,811,307

JUNE 30, 2002
-------------
Earned administrative fee               $5,009,132     $3,361,845      $716,273      $9,087,250      ($53,114)     $9,034,136
Income (loss) from                       3,079,140        (41,645)       46,705       3,084,200    (2,275,526)        808,674
operations
Pretax income (loss)                     1,431,739       (594,437)       47,283         884,585       154,046       1,038,631
Net interest income                         19,498         (4,452)        3,551          18,597       107,329         125,926
Depreciation/amortization                   99,508         436,567       21,237         557,312       465,807       1,023,119
Total assets                            40,183,577      26,637,731    3,591,600      70,412,908     4,306,156      74,719,064
</TABLE>

                                       9
<PAGE>




                     WARRANTECH CORPORATION AND SUBSIDIARIES

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

Except for the historical  information  contained herein,  the matters discussed
below or  elsewhere  in this  report  on Form 10-Q may  contain  forward-looking
statements that involve risks and uncertainties  that could cause actual results
to differ materially from those contemplated by the forward-looking  statements.
The Company makes such  forward-looking  statements  under the provisions of the
"safe harbor" section of the Private  Securities  Litigation Reform Act of 1995.
Forward-looking statements reflect the Company's views and assumptions, based on
information  currently  available to management.  Such views and assumptions are
based on, among other things, the Company's operating and financial  performance
over recent  years and its  expectations  about its business for the current and
future fiscal years.  When used in this Quarterly Report on Form 10-Q, the words
"believes,"  "estimates,"  "plans,"  "expects,"  and  "anticipates"  and similar
expressions  as they relate to the  Company or its  management  are  intended to
identify forward-looking statements.

Although  the  Company   believes  that  the   expectations   reflected  in  the
forward-looking  statements  are  reasonable,  it can give no assurance that its
expectations  will prove to be correct.  These statements are subject to certain
risks,  uncertainties  and  assumptions,  including,  but not  limited  to,  (a)
prevailing  economic  conditions which may  significantly  deteriorate,  thereby
reducing the demand for the Company's products and services, (b) availability of
technical  support  personnel  or  increases  in the  rate of  turnover  of such
personnel,  resulting from increased  demand for such qualified  personnel,  (c)
changes in the terms or  availability  of insurance  coverage for the  Company's
programs,  (d) regulatory or legal changes affecting the Company's business, (e)
loss of business from, or significant  change in  relationships  with, any major
customer,  (f) the ability to  successfully  identify  and contract new business
opportunities, both domestically and internationally,  (g) the ability to secure
necessary capital for general operating or expansion  purposes,  (h) the adverse
outcomes of litigation,(i)  the non-payment of notes due from an officer and two
directors of the Company due in 2007,  (j) the inability of any of the insurance
companies which insure the service  contracts  marketed and  administered by the
Company to pay the claims  under the service  contracts,  (k) the  inability  of
Butler to pay the claims previously insured by Reliance,  (l) the termination of
extended credit terms being provided by the Company's current insurance company,
(m) the  inability  of the  Company to collect  the "Other  Receivables"  in the
amount  of  $9,900,767  by the end of the  Company's  fiscal  year,  and (n) the
outcome of the review  currently  being conducted by the staff of the Securities
and  Exchange  Commission  ("SEC") of the  Company's  financial  statements  and
related  disclosures.  Should  one or  more  of  these  or any  other  risks  or
uncertainties  materialize  or develop in a manner  adverse to the  Company,  or
should the Company's underlying  assumptions prove incorrect,  actual results of
operations,  cash flows or the Company's financial condition may vary materially
from those  anticipated,  estimated  or expected and there could be a materially
adverse effect on the Company's business.

SEC REVIEW OF THE COMPANY'S FILINGS

The Staff of the Division of Corporation  Finance of the SEC selected certain of
the Company's  periodic reports for review,  including the Annual Report on Form
10-K for the fiscal year ended March 31, 2002 and the Quarterly  Reports on Form
10-Q for the periods  ended June 30, 2002,  September  30, 2002 and December 31,
2002. The staff informed the Company that the purpose of the review is to assist
the Company in its compliance with  applicable  disclosure  requirements  and to
enhance the overall disclosure in the Company's reports.

In the course of its review,  the staff requested  clarification  of some of the
Company's  disclosures  and items in its  financial  statements  and the Company
agreed to amend certain of them on a going-forward  basis. These disclosures are
included in the Annual  Report on Form 10-K for the period  ended March 31, 2003
and this Quarterly Report on Form 10-Q.

The most recent letter from the staff  contains four remaining  comments.  These
comments primarily pertain to the Company's accounting treatment of the loans to
Butler to pay  Reliance  claims.  The Company is  reviewing  the staff's  latest
comments  and will be  preparing  a  response.  The  Company  does not know what
changes, if any, may be required as a result of these comments.


                                       10
<PAGE>

RESULTS OF OPERATIONS

                              GROSS REVENUES

                       FOR THE YEARS ENDED JUNE 30,
                    ------------------------------------
                         2003               2002
                     --------------    ---------------

Gross revenues         $40,083,441        $33,650,184
                     ==============    ===============


Gross revenues for the period ended June 30, 2003 increased $6,433,257,  or 19%,
over the same period in 2002. The Automotive and International segments reported
increased gross revenues of 18% and 60%  respectively,  in the period ended June
30, 2003 over 2002. The Automotive segment increase in gross revenues was due to
new business from direct marketing and reinsurance  programs.  The International
segment also  experienced  higher sales volumes in both Puerto Rico and in South
America. The Consumer Products segment reported a 17% increase in gross revenues
during the period  ended June 30, 2003  compared to the same period in 2002,  as
sales  increased from its top five customers and the Consumer  Products  segment
added new business.

                         NET EARNED ADMINISTRATIVE FEES

                                         FOR THE YEARS ENDED JUNE 30,
                                       -----------------------------
                                           2003            2002
                                       -------------   -------------

Automotive segment                       $3,311,467      $5,009,132
Consumer Products segment                 3,883,855       3,361,845
International segment                     1,080,427         716,273
Other                                       179,608        (53,114)
                                       -------------   -------------
   Total net earned administrative fee   $8,455,357      $9,034,136
                                       =============   =============

Net earned  administrative  fees are gross  revenues  less  directs  costs,  the
combined sum of net premiums,  commissions  and sales  allowances  plus or minus
deferred revenue. Net earned  administrative fees for the quarter ended June 30,
2003  decreased  $578,779  over the  same  period  in 2002 as a result  of lower
margins and lower deferred  revenue of $383,362  recognized in the first quarter
of fiscal 2004 compared to deferred revenue of $616,314  recognized in the first
quarter of fiscal 2003. As the Company's older obligor contracts,  which make up
the  majority  of its  deferred  revenue,  continue  to  decline,  there is less
deferred revenue to record in the current period.

The Automotive segment net earned  administrative  fees decreased $828,748 or 4%
during the fiscal  period ended June 30, 2003 compared to 2002.  Although  gross
revenues  increased 18% during the first quarter ended June 30, 2003, its earned
administrative  fees  decreased  due to lower  margins  and lower  net  deferred
revenues  from  prior  periods  recognized  in the period  ended  June 30,  2003
compared to the same period in 2002.

The Consumer Products segment net earned  administrative fees increased $522,010
or 15% during the fiscal  period ended June 30, 2003 compared to the same period
in 2002.  The change was primarily  attributed to higher sales from new business
and increased volume from existing  clients.  Additionally,  higher net deferred
revenues  from  prior  periods  recognized  in the period  ended  June 30,  2003
compared  to the  same  period  in 2002  contributed  to the  Consumer  Products
segment's higher net earned administrative fees.

The International  segment net earned administrative fees increased $364,154, or
51%,  during period ended June 30, 2003 compared to the same period in 2002. The
increase  resulted from greater market  penetration  by its existing  dealers in
Puerto Rico and in South America.

                                      SG&A

                                            FOR THE YEARS ENDED JUNE 30,
                                            --------------------------------
                                                2003             2002
                                            -------------   ----------------

Service, selling and general                  $7,505,850         $7,202,343
administrative

Service,  selling and general and administrative  ("SG&A") for the quarter ended
June 30, 2003  increased  $303,507,  or 4%,  compared to the same quarter in the



                                       11
<PAGE>

prior year. Legal expenses decreased $220,465 for the period ended June 30, 2003
compared to the 2002 period,  primarily  because of the  decrease in  litigation
expenses  related to several  lawsuits  that were settled  during  fiscal period
2003.  Employee costs were higher at $4,654,879 during the period ended June 30,
2003, compared to $4,380,283 in the period ended June 30, 2002, primarily due to
an increase in salary costs.  Telephone  expenses were reduced 36%, or $157,397,
to $279,773 as compared to $437,170 in the period  ended June 30,  2002,  due to
lower negotiated  telephone usage rates and the elimination of data transmission
lines after the Company consolidated  operations into one building. Rent expense
increased  from  $427,012 for the period ended June 30, 2002 to $603,522 for the
period ended June 30, 2003,  reflecting  the Company's move to its new corporate
headquarters in Bedford, Texas.

                                      DEPRECIATION AND AMORTIZATION

                                       FOR THE YEARS ENDED JUNE 30,
                                   --------------------------------------
                                         2003                2002
                                   -----------------   ------------------

   Depreciation and amortization           $928,080           $1,023,119
                                   =================   ==================

Depreciation  and amortization  expenses were reduced by $95,039,  or 9%, during
period ended June 30, 2003  compared to the same period for 2002.  This decrease
is the result of the Company's  assets  maturing and the continued  reduction of
capital expenditures for the past few years.

                                        OTHER INCOME

                                  FOR THE YEARS ENDED JUNE 30,
                                ---------------------------------
                                    2003              2002
                                --------------   ----------------

Interest and dividend income         $249,383           $175,829
Interest expense                     (132,197)           (49,903)
Gain (loss) on sale of assets              23            (47,854)
Credit card usage rebate              129,177            146,894
Miscellaneous income                   40,482              4,991
                                --------------   ----------------
      Total other income             $286,868           $229,957
                                ==============   ================

Other income for quarter ended June 30, 2003 increased  slightly compared to the
quarter ended June 30, 2002 due to a loss on the sale of assets in 2002.  Higher
interest  income  during the  quarter  ended June 30,  2003 was offset by higher
interest expense.

                                         INCOME TAX EXPENSE

                                     FOR THE YEARS ENDED JUNE 30,
                                   ----------------------------------
                                        2003              2002
                                   ---------------   ----------------

Income taxes expense (benefit)           ($2,000)           $326,272
                                   ===============   ================

Income  taxes  expense  decreased  $328,272  for the period  ended June 30, 2003
compared  to the period  ended June 30,  2002.  Although  the  Company  reported
$213,295 of income before taxes, the use of Puerto Rico's net operating loss and
a lower  effective  tax rate on the  Company's  income  from  its  International
segment was offset by the Company's tax benefit from its U.S. operations.

LIQUIDITY AND FINANCIAL RESOURCES

During the three months  ended June 30, 2003,  the Company had a net decrease in
cash and cash  equivalents  of $788,564,  which was primarily  used in operating
activities to fund working capital.  Working capital was a negative $2.6 million
at June 30, 2003 compared to a negative $0.6 million at June 30, 2002, primarily
due to an increase in the loan to Butler.  The Company  believes that internally
generated  funds,  reimbursement  of claims paid for RWC  obligations and the $3
million line of credit from Great American Insurance Company, will be sufficient
to finance  its current  operations  for at least the next  twelve  months.  The
Company  is   aggressively   pursuing  new  business   both   domestically   and
internationally to fund future working capital. The Company plans to continue to
contain its SG&A costs and utilize technologies for operational  efficiencies to
further  enhance  both its  operating  income  and  cash  flows  from  operating
activities.

                                       12
<PAGE>

The Company has ongoing  relationships  with equipment  financing  companies and
intends  to  continue   financing   certain  future   equipment   needs  through
lease/purchase   transactions.   The  total  amount   financed   through   these
transactions  during the three months  ended June 30, 2003  amounted to $168,838
compared to $54,833 during the three months ended June 30, 2002.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
the  disclosure  of  contingent  assets  and  liabilities  at the  dates  of the
financial  statements and the reported  amounts of revenues and expenses  during
the reporting periods. Note 1 to the Company's Consolidated Financial Statements
set forth in the "Item 8. - Financial Statements and Supplementary Data," in the
Company's  Annual  Report  on Form  10-K  for the year  ended  March  31,  2003,
describes  the  significant   accounting   policies  and  methods  used  in  the
preparation of the Consolidated  Financial Statements.  The following lists some
of the Company's critical accounting policies affected by judgments, assumptions
and estimates.


REVENUE RECOGNITION

Under SAB 101, the Company recognizes revenue when the revenue is realizable and
earned.  The Company  considers  revenue realized and earned when a definitively
discrete  earnings  event has  occurred.  The Company has two discrete  earnings
events (1) for marketing  and  administration  of service  contracts and (2) for
servicing fees. The marketing and  administrative fee is paid by the retailer of
the service contract.  This revenue is recognized at the time of the sale to the
retailer as the Company will have  substantially  completed  the services it has
agreed to provide in  connection  with the sale of the  service  contract to the
consumer.

The second  discrete  earnings  event occurs over the life of the  contract.  As
such, Warrantech recognizes and realizes the revenue over the contract life.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company  assesses  potential  impairment  of its  long-lived  assets,  which
include its property and  equipment  and its  identifiable  intangibles  such as
software development costs,  goodwill and deferred charges under the guidance of
SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived  Assets." Once
annually or as events or  circumstances  indicate that an asset may be impaired,
the Company assesses potential  impairment of its long-lived assets. The Company
determines  impairment by measuring the undiscounted  future cash flow generated
by the assets,  comparing the result to the assets' carrying value and adjusting
the assets to the lower of its carrying value or fair value and charging current
operations for any measured  impairment.  At June 30, 2003 and 2002, the Company
found no  impairment  to its  property and  equipment or its other  identifiable
intangibles.

INCOME TAXES

Deferred tax assets and liabilities  are determined  using enacted tax rates for
the effects of net operating losses and temporary  differences  between the book
and tax  bases of assets  and  liabilities.  The  Company  records  a  valuation
allowance on deferred tax assets when appropriate to reflect the expected future
tax benefits to be realized. In determining the appropriate valuation allowance,
certain  judgments are made relating to  recoverability  of deferred tax assets,
use of tax loss  carryforwards,  level of  expected  future  taxable  income and
available tax planning  strategies.  These  judgments are routinely  reviewed by
management. At June 30, 2003, the Company had deferred tax assets of $2,900,575,
net of a valuation allowance of $256,434. For further discussion, see Note 12 to
the  Consolidated  Financial  Statements in the Company's  Annual Report on Form
10-K for the year ended March 31, 2003.


                                       13
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2003,  the Company did not have any  derivatives,  debt or hedges
outstanding.  Therefore,  the Company was not subject to interest  rate risk. In
addition,  the risk of foreign  currency  fluctuation was and is not material to
the Company's financial position or results of operations.

Short-term  marketable  securities  and long-term  investments  are comprised of
municipal  bonds which bear interest at fixed rates.  Interest income from these
securities  is generally  affected by changes in the U.S.  interest  rates.  The
following tables provide information about the Company's  financial  instruments
that are sensitive to changes in interest  rates.  The tables present  principal
cash flows and  weighted-average  interest rates by expected maturity dates. All
of  the  investments   are  considered   "available  for  sale."  The  resultant
differences  between  amortized  cost and fair  value,  net of taxes,  have been
reflected as a separate component of accumulated other comprehensive income.

Principal  amounts  by  expected  maturity  as of June  30,  2003 of  marketable
securities are as follows:

<TABLE>
<CAPTION>
                                    Expected Maturity Date as of June 30,
                          ----------------------------------------------------------
                             2004       2005     2006    2007    2008   Thereafter  Total Cost  Fair Value
                             ----       ----     ----    ----    ----   ----------  ----------  ----------
<S>                        <C>       <C>         <C>      <C>     <C>    <C>        <C>        <C>
   Available for sale
     securities            $542,413  $1,016,477  $476,620  -       -     $37,336    $2,072,846 $2,072,846
       Interest rate          4.36%       4.82%     4.87%  -       -       5.50%
</TABLE>


ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company's  Chief Executive  Officer (CEO) and Chief Financial  Officer (CFO)
are primarily  responsible for the accuracy of the financial information that is
presented in this  Quarterly  Report on Form 10-Q.  Each of them has,  within 90
days of the  filing  date of this  Quarterly  Report,  evaluated  the  Company's
disclosure controls and procedures, as defined in the rules of the SEC, and have
determined  that such controls and  procedures  were  effective in ensuring that
material information  relating to the Company and its consolidated  subsidiaries
was made known to them during the period covered by this Quarterly Report.

INTERNAL CONTROLS

To meet  their  responsibility  for  financial  reporting,  the CEO and CFO have
established  internal controls and procedures which they believe are adequate to
provide reasonable  assurance that the Company's assets are protected from loss.
These internal controls are reviewed by the Company's independent accountants to
support their audit work. In addition,  the Company's Audit Committee,  which is
composed entirely of outside directors,  meets regularly with management and the
independent  accountants to review  accounting,  auditing and financial matters.
This Committee and the independent  accountants  have free access to each other,
with or without management being present.

THERE WERE NO  SIGNIFICANT  CHANGES IN COMPANY'S  INTERNAL  CONTROLS OR IN OTHER
FACTORS THAT COULD SIGNIFICANTLY AFFECT INTERNAL CONTROLS SUBSEQUENT TO THE DATE
OF THE CEO'S AND CFO'S MOST RECENT EVALUATION.

                                       14
<PAGE>



                           PART II. OTHER INFORMATION

Item 1.       Legal Proceedings

              Not applicable.

Item 2.       Changes in Securities and Use of Proceeds

              Not applicable.

Item 3.       Defaults Upon Senior Securities

              Not applicable.

Item 4.       Submission of Matters to a Vote of Security Holders

              Not applicable.

Item 5.       Other Information

              Not applicable.

Item 6.       Exhibits and Reports on Form 8-K

              (a)     Exhibits

                      31.1  Certification of Chief Executive Officer pursuant
                            to Section 302 of Sarbanes-Oxley Act.

                      31.2  Certification of Chief Financial Officer pursuant
                            to Section 302 of Sarbanes-Oxley Act.

                      32.1  Certification of Chief Executive Officer pursuant
                            to 18 U.S.C. Section 1350, as  adopted pursuant to
                            Section 906 of Sarbanes-Oxley Act.

                      32.2  Certification  of Chief Financial  Officer  pursuant
                            to 18 U.S.C. Section 1350, as adopted pursuant to
                            Section 906 of Sarbanes-Oxley Act.

              (b)     Reports on Form 8-K

                      Current   Report  on  Form  8-K,   dated  June  26,  2003,
                      reporting,  under Item 9, the Company's  financial results
                      for the fiscal year ended March 31, 2003.


                                       15
<PAGE>




                                    SIGNATURE

         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 thereunto duly authorized.

                 WARRANTECH CORPORATION
                 ----------------------------------
                   (Registrant)

                  /s/ Richard F. Gavino
                 ----------------------------------
                      Richard F. Gavino - Executive Vice President, Chief
                      Financial Officer, Chief Accounting Officer and Treasurer
                      (Chief Financial Officer and Duly Authorized Officer)


Dated: August 14, 2003



                                       16