SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

(Mark One)
    X        Quarterly Report Pursuant to Section 13 or  15(d) of the Securities
    -        and Exchange Act of 1934

    For the Quarterly period ended MARCH 31, 2003

                                       or

    _        Transition report pursuant to Section 13 or 15(d) of the Securities
             and Exchange Act of 1934

    For the transition period from  ________________ to ___________________.

Commission File No. 1-9727
                    ------
                          FRANKLIN CAPITAL CORPORATION
                          ----------------------------
               (Exact name of registrant specified in its charter)

           DELAWARE                                      13-3419202
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
  incorporation or organization)

450 PARK AVENUE, 20TH FLOOR, NEW YORK, NEW YORK                       10022
-----------------------------------------------                   --------------
(Address of principal executive offices)                           (Zip Code)

Registrant's telephone number, including area code       (212) 486-2323
                                                     ---------------------------

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  Corporation  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes  X   No
                                       ---    ---
                                 NOT APPLICABLE

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

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes        No   X
                                       ------    ------
The  number  of  shares  of  common  stock  outstanding  as of May 13,  2003 was
1,040,100.
<PAGE>


                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
      Item 1.  Financial Statements (Unaudited)
               Balance Sheets
               Statements of Operations
               Statements of Cash Flows
               Statements of Changes in Net Assets
               Portfolio of Investments
               Notes to Financial Statements
      Item 2.  Management's Discussion and Analysis of Financial Condition and
                       Results of Operations
               Critical Accounting Policies
               Statement of Operations
               Financial Condition
               Investments
               Results of Operations
               Taxes
               Liquidity and Capital Resources
               Risk Factors
      Item 3.  Quantitative and Qualitative Disclosures about Market Risk
      Item 4.  Controls and Procedures

PART II. OTHER INFORMATION
      Item 1.  Legal Proceedings
      Item 2.  Changes in Securities and Use of Proceeds
      Item 3.  Defaults Upon Senior Securities
      Item 4.  Submission of Matters to a Vote of Security Holders
      Item 5.  Other Information
      Item 6.  Exhibits and Reports on Form 8-K

SIGNATURE

CERTIFICATIONS

EXHIBIT INDEX

                           FORWARD LOOKING STATEMENTS

WHEN  USED  IN THIS  QUARTERLY  REPORT  ON  FORM  10-Q,  THE  WORDS  "BELIEVES,"
"ANTICIPATES,"  "EXPECTS"  AND  SIMILAR  EXPRESSIONS  ARE  INTENDED  TO IDENTIFY
FORWARD-LOOKING  STATEMENTS.  STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS QUARTERLY REPORT ON FORM 10-Q. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS
AND  UNCERTAINTIES  WHICH  COULD  CAUSE  ACTUAL  RESULTS  TO DIFFER  MATERIALLY,
INCLUDING,  BUT NOT LIMITED TO, THOSE SET FORTH IN "MANAGEMENT'S  DISCUSSION AND
ANALYSIS  OF  FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS."  READERS  ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH
SPEAK ONLY AS OF THE DATE HEREOF.  THE  CORPORATION  UNDERTAKES NO OBLIGATION TO
PUBLICLY   REVISE  THESE   FORWARD-LOOKING   STATEMENTS  TO  REFLECT  EVENTS  OR
CIRCUMSTANCES  OCCURRING  AFTER THE DATE HEREOF OR TO REFLECT THE  OCCURRENCE OF
UNANTICIPATED EVENTS.


                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

         The  information  furnished in the  accompanying  financial  statements
reflects all adjustments that are, in the opinion of management, necessary for a
fair presentation of the results for the interim period presented.

















                                       3
<PAGE>


                          FRANKLIN CAPITAL CORPORATION
================================================================================


BALANCE SHEETS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                                (UNAUDITED)      (AUDITED)
                                                                                  MARCH 31,     DECEMBER 31,
                                                                                    2003            2002
-----------------------------------------------------------------------------------------------------------
<S>                                                                              <C>             <C>
ASSETS

Marketable investment securities, at market value (cost: March 31,
    2003 and December 31, 2002 - $34,675)  (Note 2)                                 $34,675         $34,675
Investments, at fair value (cost: March 31, 2003 - $2,564,248;
    December 31, 2002 - $2,476,804)  (Note 2)
         Excelsior Radio Networks, Inc.                                           3,092,863       2,957,875
         Other investments                                                        1,000,000       1,000,000
                                                                                 ----------      ----------
                                                                                  4,092,863       3,957,875
                                                                                 ----------      ----------

Cash and cash equivalents (Note 2)                                                   95,398         562,191
Other assets                                                                        106,385          77,597
                                                                                 ----------      ----------

TOTAL ASSETS                                                                     $4,329,321      $4,632,338
                                                                                 ==========      ==========


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

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Notes payable (Note 6)                                                             $948,111        $951,817
Accounts payable and accrued liabilities                                            369,022         412,981
                                                                                 ----------      ----------

TOTAL LIABILITIES                                                                 1,317,133       1,364,798
                                                                                 ----------      ----------

Commitments and contingencies  (Note 5)

STOCKHOLDERS' EQUITY

Convertible  preferred  stock, $1 par value,  cumulative 7% dividend:
    5,000,000 shares authorized;  10,950 issued and outstanding
    at March 31, 2003 and December 31, 2002, respectively
    (Liquidation preference $1,095,000) (Note 4)                                     10,950          10,950
Common stock, $1 par value: 5,000,000 shares authorized;
    1,505,888 shares issued: 1,042,900 and 1,049,600 shares outstanding
    at March 31, 2003 and December 31, 2002, respectively (Note 7)                1,505,888       1,505,888
Paid-in capital                                                                  10,439,610      10,439,610
Unrealized appreciation of investments,
    net of deferred income taxes  (Notes 2 and 3)                                 1,528,615       1,481,071
Accumulated deficit                                                              (7,871,699)     (7,578,808)
                                                                                 ----------      ----------

                                                                                  5,653,364       5,858,711
Deduct: 462,988 and 456,288 shares of common stock held in treasury,
    at cost, at March 31, 2003 and December 31, 2002, respectively  (Note 4)     (2,601,176)     (2,591,171)
                                                                                 ----------      ----------

Net assets (Note 9 for per share information)                                     3,012,188       3,267,540
                                                                                 ----------      ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $4,329,321      $4,632,338
                                                                                 ==========      ==========

-----------------------------------------------------------------------------------------------------------
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       4

<PAGE>


                          FRANKLIN CAPITAL CORPORATION
================================================================================

STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------

FOR THE THREE MONTHS ENDED MARCH 31,                                        2003        2002
-----------------------------------------------------------------------------------------------
<S>                                                                      <C>           <C>
INVESTMENT INCOME
    Interest income                                                           $678       $1,549
    Management fees                                                         45,000       90,000
                                                                         ---------    ---------

                                                                            45,678       91,549
                                                                         ---------    ---------

EXPENSES
    Salaries and employee benefits (Note 7)                                175,565      181,776
    Professional fees                                                       30,000       35,925
    Rent  (Note 5)                                                           9,172       35,154
    Insurance                                                               17,413       11,148
    Directors' fees                                                          2,001          500
    Taxes other than income taxes                                           15,969       18,896
    Newswire and promotion                                                      --        1,000
    Depreciation and amortization                                            4,244        4,243
    Interest expense                                                         8,850        8,850
    General and administrative                                              56,191       48,498
                                                                         ---------    ---------

                                                                           319,405      345,990
                                                                         ---------    ---------

Net investment loss from operations                                       (273,727)    (254,441)

Net realized loss on portfolio of investments:
     Investment securities:
          Affiliated                                                            --           --
          Unaffiliated                                                          --      (23,507)
                                                                         ---------    ---------
     Total investment securities                                                --      (23,507)

Net realized loss on portfolio of investments                                   --      (23,507)
                                                                         ---------    ---------

Provision for current income taxes                                              --           --
                                                                         ---------    ---------

Net realized loss                                                         (273,727)    (277,948)

Increase in unrealized appreciation of investments:
     Investment securities:
          Affiliated                                                        47,544           --
          Unaffiliated                                                          --       37,833
                                                                         ---------    ---------
     Total investment securities                                            47,544       37,833
                                                                         ---------    ---------

Increase in unrealized appreciation of investments                          47,544       37,833
                                                                         ---------    ---------

Net decrease in net assets from operations                                (226,183)    (240,115)
                                                                         ---------    ---------

Preferred dividends                                                         19,164       28,788
                                                                         ---------    ---------

Net decrease in net assets attributable to
   common stockholders                                                   ($245,347)   ($268,903)
                                                                         =========    =========

Basic and diluted net decrease in net assets per common share (Note 8)       $0.23       ($0.25)
                                                                         =========    =========
</TABLE>
--------------------------------------------------------------------------------

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

                                       5
<PAGE>

                          FRANKLIN CAPITAL CORPORATION
================================================================================

Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------

For the Three Months Ended March 31,                                         2003        2002
------------------------------------------------------------------------------------------------
<S>                                                                     <C>           <C>
Cash flows from operating activities:

  Net decrease in net assets from operations                              ($226,183)   ($240,115)
  Adjustments to reconcile net decrease in net assets to net
    cash used in operating activities:
      Depreciation and amortization                                           4,244        4,243
      Increase in unrealized appreciation of investments                    (47,544)     (37,833)
      Net realized loss on portfolio of investments,
           net of current income taxes                                           --       23,507

      Changes in operating assets and liabilities:
        Increase in other assets                                            (33,032)     (13,914)
        (Decrease) increase in accounts payable and accrued liabilities     (43,959)      57,801
                                                                          ---------    ---------

          Total adjustments                                                (120,291)      33,804
                                                                          ---------    ---------

          Net cash used in operating activities                            (346,474)    (206,311)
                                                                          ---------    ---------

Cash flows from investing activities:
  Proceeds from sale of other investments                                        --       20,093
  Loan payments from majority-owned affiliate                                    --       75,000
  Purchases of majority-owned affiliate                                     (87,444)          --
  Purchases of marketable investment securities                                  --      (22,985)
                                                                          ---------    ---------

          Net cash provided by investing activities                         (87,444)      72,108
                                                                          ---------    ---------

Cash flows from financing activities:
  Payment of preferred dividends                                            (19,164)     (28,788)
  Decrease in note payable                                                   (3,706)          --
  Purchases of treasury stock                                               (10,005)          --
                                                                          ---------    ---------

          Net cash used in by financing activities                          (32,875)     (28,788)
                                                                          ---------    ---------

Net decrease in cash and cash equivalents                                  (466,793)    (162,991)

Cash and cash equivalents at beginning of period                            562,191      279,728
                                                                          ---------    ---------

Cash and cash equivalents at end of period                                  $95,398     $116,737
                                                                          =========    =========
</TABLE>
--------------------------------------------------------------------------------

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



                                       6
<PAGE>


                          FRANKLIN CAPITAL CORPORATION
================================================================================


STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------


For the Three Months Ended March 31,                                    2003           2002
-----------------------------------------------------------------------------------------------
<S>                                                                  <C>           <C>
Decrease in net assets from operations:
   Net investment loss                                                ($273,727)     ($254,441)
   Net realized loss on portfolio of investments,
       net of current income taxes                                           --        (23,507)
   Increase (decrease) in unrealized appreciation of investments,        47,544         37,833
                                                                    -----------    -----------

       Net decrease in net assets from operations                      (226,183)      (240,115)

Capital stock transactions:
   Payment of dividends on preferred stock                              (19,164)       (28,788)
   Purchase of treasury stock                                           (10,005)            --
                                                                    -----------    -----------

       Total decrease in net assets                                    (255,352)      (268,903)

Net assets at beginning of period                                     3,267,540      2,921,745
                                                                    -----------    -----------

Net assets at end of period                                          $3,012,188     $2,652,842
                                                                    ===========    ===========

----------------------------------------------------------------------------------------------
</TABLE>
   The accompanying notes are an integral part of these financial statements.



                                       7
<PAGE>

                          FRANKLIN CAPITAL CORPORATION
================================================================================

PORTFOLIO OF INVESTMENTS

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

MARKETABLE INVESTMENT SECURITIES

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      NUMBER OF
                                                                      SHARES OR                         MARKET
                                                                      PRINCIPAL                          VALUE
MARCH 31, 2003 (2)                                                    AMOUNT ($)       COST(1)         (NOTE 2)
----------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>              <C>
Certificate of Deposit - 1.15%, due 04/04/2003                                          34,675          34,675
     Total Marketable Investment Securities (0.8% of total
        investments and 1.1% of net assets)                                            $34,675         $34,675
                                                                                       =======         =======
</TABLE>
--------------------------------------------------------------------------------
INVESTMENTS, AT FAIR VALUE
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                              NUMBER OF
                                                                                              SHARES OR               DIRECTORS'
                                                                                   EQUITY     PRINCIPAL               VALUATION
MARCH 31, 2003 (2)                                               INVESTMENT       INTEREST    AMOUNT ($)    COST(1)    (NOTE 2)
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                 <C>            <C>        <C>         <C>
MAJORITY OWNED AFFILIATE

Excelsior Radio Networks, Inc.                                  Common stock        60.42%     1,510,554  $1,531,648  $2,930,475
Excelsior Radio Networks, Inc.                                    Warrants             --        152,310      32,600     162,388
                                                                                                          ----------  ----------
Total Excelsior Radio Networks, Inc. (74.9% of total
     investments and 101.3% of net assets)                                          31.11%                 1,564,248   3,092,863
        (Radio production and advertising sales)                                (fully diluted)

OTHER INVESTMENTS

Alacra Corporation (24.2% of total investments               Convertible Preferred   1.68%       321,543   1,000,000   1,000,000
     and 32.8% of net assets) (Internet-based                        Stock
       information provider)

Total Other Investments                                                                                    1,000,000   1,000,000
                                                                                                          ----------   ---------

     Investments, at Fair Value                                                                            2,564,248   4,092,863
                                                                                                          ==========   =========
</TABLE>
--------------------------------------------------------------------------------

   (1) Book cost equals tax cost for all investments

   (2) Total  investments  refers  to  investments  and  marketable  investment
       securities.

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










                                       8
<PAGE>

FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003
1. DESCRIPTION OF BUSINESS

Franklin Capital  Corporation  ("Franklin",  or the "Corporation") is a Delaware
corporation  operating  as a  Business  Development  Company  ("BDC")  under the
Investment  Company  Act of 1940 (the  "Act").  A BDC is a  specialized  type of
investment  company  under  the Act.  A BDC  must be  primarily  engaged  in the
business of  furnishing  capital and making  available  managerial  expertise to
companies  that  do not  have  ready  access  to  capital  through  conventional
financial channels.  Such companies are termed "eligible  portfolio  companies".
The Corporation,  as a BDC,  generally may invest in other securities;  however,
such  investments may not exceed 30% of the  Corporation's  total asset value at
the time of any such investment.

The  accompanying  financial  statements  have been  prepared  assuming that the
Corporation  will continue as a going  concern.  The  Corporation  has a working
capital  deficiency  of  approximately  $1,100,000  at March 31, 2003.  (Working
capital is defined as total  liabilities  less liquid  assets.)  This  condition
raises substantial doubt about the Corporation's  ability to continue as a going
concern.  The  Corporation  is  currently  seeking  financing.  There  can be no
assurance that the Corporation  would be able to obtain  alternative  financing.
The financial  statements do not include any adjustments to reflect the possible
future  effects on the  recoverability  of assets or the amounts of  liabilities
that may result from the outcome of this uncertainty.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

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
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

STATEMENTS OF CASH FLOWS

For purposes of the  Statements of Cash Flows,  Franklin  considers  only highly
liquid  investments  such as  money  market  funds  and  commercial  paper  with
maturities  of 90  days or less at the  date  of  their  acquisition  to be cash
equivalents.

The  Corporation  paid no interest or income taxes during the three months ended
March 31, 2003 and 2002.

At March  31,  2003 and 2002,  the  Corporation  held cash and cash  equivalents
primarily in money market funds at one commercial banking institution.

VALUATION OF INVESTMENTS

Security  investments which are publicly traded on a national exchange or Nasdaq
Stock Market are stated at the last reported sales price on the day of valuation
or, if no sale was reported on that date,  then the securities are stated at the
last  quoted  bid price.  The Board of  Directors  of  Franklin  (the  "Board of
Directors") may determine, if appropriate,  to discount the value where there is
an impediment to the marketability of the securities held.

Investments for which there is no ready market are initially valued at cost and,
thereafter,  at fair value  based upon the  financial  condition  and  operating
results of the issuer and other pertinent factors as determined in good faith by
the Board of Directors.  The financial condition and operating results have been
derived  utilizing  both audited and  unaudited  data. In the absence of a ready
market for an  investment,  numerous  assumptions  are inherent in the valuation
process.  Some or all of these  assumptions may not  materialize.  Unanticipated
events and  circumstances  may occur subsequent to the date of the valuation and
values may change due to future events. Therefore, the actual amounts

                                       9
<PAGE>


FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


eventually  realized from each investment may vary from the valuations shown and
the  differences may be material.  Franklin  reports the unrealized gain or loss
resulting from such valuation in the Statements of Operations.

GAINS (LOSSES) ON PORTFOLIO OF INVESTMENTS

Amounts  reported as realized  gains  (losses)  are  measured by the  difference
between the  proceeds of sale or exchange  and the cost basis of the  investment
without regard to unrealized gains (losses) reported in the prior periods. Gains
(losses) are considered  realized when sales or  dissolution of investments  are
consummated.

INCOME TAXES

Franklin  does not  qualify  for  pass  through  tax  treatment  as a  Regulated
Investment  Company under  Subchapter M of the Internal  Revenue Code for income
tax purposes. Therefore, the Corporation is taxed under Regulation C.

Franklin accounts for income taxes in accordance with the provision of Statement
of Financial  Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109").  The  significant  components of deferred tax assets and  liabilities are
principally related to the Corporation's net operating loss carryforward and its
unrealized appreciation of investments.

STOCK-BASED COMPENSATION

The  Corporation  has elected to follow APB Opinion  25,  "Accounting  for Stock
Issued to Employees," to account for its  Non-Qualified  Stock Option Plan under
which no  compensation  cost is recognized  because the option exercise price is
equal to at least the market price of the underlying stock on the date of grant.
Had  compensation  cost for these plans been  determined  at the grant dates for
awards under the  alternative  accounting  method  provided for in SFAS No. 148,
"Accounting  for  Stock-Based  Compensation  -  Transition  and  Disclosure - an
Amendment of FASB  Statement  No. 123," net income and earnings per share,  on a
pro forma basis, would have been:
<TABLE>
<CAPTION>
                                                           MARCH 31, 2003      MARCH 31, 2002
                                                           --------------      --------------
<S>                                                           <C>                 <C>
Net decrease in net assets
   attributable to common stockholders:
As reported                                                   $(245,347)          $(268,903)

Deduct:
Total stock-based employee compensation
  expense determined under fair value based
  method for all awards, net of related tax effect                   --                1,184
                                                              ---------            ---------
Pro forma                                                     $(245,347)           $(270,087)
                                                              =========            =========

Basic and diluted net decrease in net assets
  attributable to common stockholders:
As reported                                                      ($0.23)              $(0.25)
Pro forma                                                        ($0.23)              $(0.25)
</TABLE>

DEPRECIATION AND AMORTIZATION

Property and equipment are stated at cost.  Depreciation  is recorded  using the
straight-line  method  at  rates  based  upon  estimated  useful  lives  for the
respective assets.  Leasehold  Improvements are included in other assets and are
amortized over their useful lives or the remaining life of the lease,  whichever
is shorter.

                                       10
<PAGE>


FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


NET INCREASE (DECREASE) IN NET ASSETS PER COMMON SHARE

Net increase  (decrease) in net assets  attributable to common  stockholders per
common share is  calculated in  accordance  with the  provisions of Statement of
Financial Accounting Standards No. 128, "Earnings per Share".

3.  INCOME TAXES

For the three months ended March 31, 2003, and 2002,  Franklin's tax (provision)
benefit was based on the following:



                                                    2003            2002
                                                  ---------      ---------
Net investment loss from operations               $(273,727)     $(254,441)
Net realized gain on portfolio of investments            --        (23,507)
Increase in unrealized appreciation                  47,544         37,833
                                                  ---------      ---------
     Pre-tax book loss                            $(226,183)     $(240,115)
                                                  =========      =========



                                                     2003           2002
                                                  ---------      ---------
Federal tax benefit at 34% on $(226,183) and
  $(240,115), respectively ....................    $ 77,000      $  82,000
Other .........................................       7,000         (3,000)
Change in valuation allowance .................     (84,000)       (79,000)
                                                  ---------      ---------
                                                  $      --      $      --
                                                  =========      =========

Deferred  income tax  benefit  reflects  the impact of  "temporary  differences"
between amounts of assets and liabilities for financial  reporting  purposes and
such amounts as measured by tax laws.

At March 31,  2003 and 2002,  significant  deferred  tax assets and  liabilities
consist of:
<TABLE>
<CAPTION>
                                                                    Asset (Liability)
                                                               --------------------------
                                                                 March 31,    December 31,
                                                                   2003           2002
                                                               -----------    -----------
<S>                                                            <C>            <C>
Deferred Federal and state benefit from net operating
  loss carryforward .........................................  $ 2,457,000    $ 2,356,000
Deferred Federal and state (provision) benefit on unrealized
  (appreciation) depreciation of investments ................     (550,000)      (533,000)
Valuation allowance .........................................   (1,907,000)    (1,823,000)
                                                               -----------    -----------
  Deferred taxes ............................................  $        --    $        --
                                                               ===========    ===========
</TABLE>
At December 31, 2002,  Franklin had net operating loss  carryforwards for income
tax purposes of approximately $6,544,000 that will begin to expire in 2011. At a
36%  effective  tax rate the  after-tax  net  benefit  from this  loss  would be
approximately $2,356,000.

4.  STOCKHOLDERS' EQUITY

The accumulated  deficit at March 31, 2003, consists of accumulated net realized
gains of $5,150,000 and accumulated investment losses of $13,022,000.

The Board of Directors has authorized  Franklin to repurchase up to an aggregate
of 525,000  shares of its common stock in open market  purchases on the American
Stock  Exchange when such purchases are deemed to be in the best interest of the
Corporation and its  stockholders.  As of December 31, 2002, the Corporation had
purchased  507,450  shares of its  common  stock of which  456,288  remained  in
treasury.  During  the three  months  ended  March  31,  2003,  the  Corporation
purchased 6,700 shares of its common stock at a total cost of $10,005.  To date,
Franklin has  repurchased  514,150  shares of its common stock of which  462,988
shares remain in treasury at March 31, 2003.

                                       11
<PAGE>


FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


PREFERRED STOCK -

The preferred  stock has a cumulative 7% quarterly  dividend and is  convertible
into the number of shares of common stock by dividing the purchase price for the
convertible  preferred  stock by conversion  price in effect (which is currently
$13.33). The convertible preferred stock has antidilution provisions,  which can
change the conversion price in certain  circumstances if the Corporation  issues
additional  shares of common  stock.  The holder  has the right to  convert  the
shares of convertible  preferred  stock at any time until February 22, 2010 into
common stock.  Upon  liquidation,  dissolution or winding up of the Corporation,
the stockholders of the convertible preferred stock are entitled to receive $100
per share plus any  accrued and unpaid  dividends  before  distributions  to any
holder of the Corporation's  common stock. On December 31, 2002, the Corporation
redeemed  from  certain  preferred  stockholders  5,500  shares  of  convertible
preferred stock for $25.00 per share.

5.  COMMITMENTS AND CONTINGENCIES

Franklin is  obligated  under an  operating  lease,  which  provides  for annual
minimum rental payments through December 31, 2004 of $149,600.

Rent  expense  for  the  three  months  ended  March  31,  2003  and  2002,  was
approximately $9,000 and $35,000, respectively. For the three months ended March
31,  2003,  and 2002,  the  Corporation  collected  rents of $9,000 and  $8,000,
respectively,  from subtenants under month-to-month leases, for a portion of its
existing  office space that is reflected as a reduction in rent expense for that
period.

On October 15, 2001, Jeffrey A. Leve and Jeffrey Leve Family  Partnership,  L.P.
filed a lawsuit against Franklin,  Sunshine Wireless,  LLC ("Sunshine") and four
other defendants  affiliated with Winstar  Communications,  Inc. in the Superior
Court of the State of  California  for the County of Los  Angeles.  The lawsuit,
which has subsequently  been removed to the United States District Court for the
Central District of California, alleges that the Winstar defendents conspired to
commit fraud and breached  their  fiduciary duty to the plaintiffs in connection
with the  acquisition  of the  plaintiffs'  radio  production  and  distribution
business.  The complaint  further  alleges that Franklin and Sunshine joined the
alleged  conspiracy.  The business was  initially  acquired by certain  entities
affiliated with Winstar  Communications  and,  subsequently,  the assets of such
business were sold to Franklin and Sunshine.  Concurrently  with such  purchase,
Franklin   transferred   such  assets  to   Excelsior   Radio   Networks,   Inc.
("Excelsior"). The plaintiffs seek recovery of damages in excess of $10,000,000,
costs and  attorneys'  fees.  On  January 7,  2002,  Franklin  filed a motion to
dismiss  the  lawsuit or, in the  alternative,  to transfer  venue to the United
States District Court of the Southern District of New York. The plaintiffs filed
a motion opposing Franklin's request on January 28, 2002.  Franklin's motion for
dismissal was granted on February 25, 2002,  due to improper  venue.  On June 7,
2002, the plaintiffs  filed their complaint to the United States District of the
Southern  District of New York.  On July 12,  2002,  Franklin  filed a motion to
dismiss the  complaint.  On February  25, 2003,  the case  against  Franklin and
Sunshine  was  dismissed;  however,  the  plaintiffs  may  file  an  appeal.  An
unfavorable  outcome  in this  lawsuit  may have a  material  adverse  effect on
Franklin's business, financial condition and results of operations.

6. TRANSACTIONS WITH AFFILIATES

Franklin  issued a $1,000,000  note as part of the purchase  price of Excelsior.
This note was due  February  28, 2002 with  interest at 3.54% but has a right of
set-off against certain representations and warranties made by WRN. (See Note 5)

On October 1, 2002,  Franklin  received  74,232  warrants  to acquire  shares of
Excelsior  common stock at an exercise  price of $1.20 per share for arranging a
refinancing of Excelsior debt. On October 3, 2002,  Franklin sold 773,196 shares
of  common  stock in  Excelsior  for $1.94  per  share  for  total  proceeds  of
$1,500,000 realizing a gain of $726,804.


                                       12
<PAGE>


FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


Franklin  entered into a services  agreement  with  Excelsior  whereby  Franklin
provides Excelsior with certain services.  Franklin receives a management fee of
not  less  than  $15,000  per  month  as   determined  by   Excelsior's   board.
Additionally,  Franklin's  chief  financial  officer serves in that capacity for
Excelsior  and his salary and  benefits  are  allocated  between  Excelsior  and
Franklin on an 80/20 basis.  During the three  months ended March 31, 2003,  and
2002, Franklin earned $45,000 and $90,000,  respectively, in management fees and
was reimbursed  $36,000 and $30,234,  respectively,  for salary and benefits for
Franklin's  chief  financial  officer,  which was  recorded  as a  reduction  of
expenses on Franklin.

On April 3, 2002,  Dial  Communications  Global Media,  Inc.  ("DCGM"),  a newly
formed  wholly-owned  subsidiary of  Excelsior,  a  majority-owned  affiliate of
Franklin,  completed the acquisition of substantially  all of the assets of Dial
Communications Group, Inc. ("DCGI"),  and Dial Communications Group, LLC ("DCGL"
and together with DCGI, the "Dial  Entities")  used in connection  with the Dial
Entities'  business of selling  advertising  relating to radio  programming (the
"Dial  Acquisition").  The Dial Acquisition was completed  pursuant to the Asset
Purchase Agreement (the "Purchase Agreement"), dated as of April 1, 2002, by and
among  the Dial  Entities,  Franklin  and  Excelsior.  Immediately  prior to the
closing of the transactions  contemplated by the Purchase  Agreement,  Excelsior
assigned all of its rights and obligations under the Purchase Agreement, as well
as certain other assets and  liabilities  relating to the portion of Excelsior's
business dedicated to the sale of advertising relating to radio programming,  to
DCGM.

The total  purchase  price for the Dial  Acquisition  will be an amount  between
$8,880,000 and $13,557,500.  The initial  consideration for the Dial Acquisition
consisted  of  $6,500,000  in cash  and a  three-year  promissory  note  bearing
interest  at 4.5%  issued  by DCGM in favor of DCGL in the  aggregate  principal
amount of $460,000. In addition, the Purchase Agreement provides for the minimum
payment of $1,920,000 of additional consideration,  which is subject to increase
to a maximum amount of $6,597,500  based upon the attainment of certain  revenue
and earnings  objectives in 2002 and 2003. The additional  consideration will be
comprised  of both cash and two  additional  promissory  notes issued by DCGM in
favor of DCGL,  each with an  initial  aggregate  principal  amount of  $460,000
bearing interest at 4.5% that is subject to increase upon the attainment of such
revenue  and  earnings  objectives.  Each  of the  promissory  notes  issued  in
consideration  of the Dial  Acquisition is convertible into shares of Franklin's
common  stock at a  premium  ranging  from 115% to 120% of the  average  closing
prices of  Franklin's  common  stock  during a  specified  pre and post  closing
measurement  period.  Excelsior has paid to Franklin an amount equal to $300,000
in  consideration  of Franklin's  obligations  in  connection  with any Franklin
common stock that may be issued pursuant to the terms of the Purchase  Agreement
or the promissory  notes issued in consideration  of the Dial  Acquisition.  For
each share of common  stock  Franklin is  required  to issue under the  Purchase
Agreement or the promissory  notes,  Franklin will receive 0.86 shares of common
stock in Excelsior.

7.   STOCK OPTION PLANS

On September 9, 1997, Franklin's stockholders approved two Stock Option Plans: a
Stock  Incentive  Plan ("SIP") to be offered to the  Corporation's  consultants,
officers and employees (including any officer or employee who is also a director
of the Corporation) and a Non-Statutory  Stock Option Plan ("SOP") to be offered
to the Corporation's  "outside"  directors,  (i.e.,  those directors who are not
also officers or employees of  Franklin).  112,500  shares of the  Corporation's
Common Stock have been reserved for issuance under these plans,  of which 67,500
shares have been  reserved for the SIP and 45,000  shares have been reserved for
the SOP.  Shares  subject to options that  terminate or expire prior to exercise
will be available  for future  grants  under the Plans.  Because the issuance of
options  to  "outside"  directors  is not  permitted  under the Act  without  an
exemptive  order by the  Securities  and  Exchange  Commission,  the issuance of
options under the SOP was conditioned upon the granting of such order. The order
was granted by the Commission on January 18, 2000.

The  following  is a summary of the status of the Stock  Option Plans during the
three months ended:

                                       13
<PAGE>

FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


<TABLE>
<CAPTION>
                                                  March 31, 2003           March 31, 2002
                                                  --------------           ---------------
                                                     Weighted                 Weighted
                                                      Average                  Average
                                                     Exercise                 Exercise
                                         Shares       Price        Shares       Price
                                         ------       -----        ------       ------
<S>                                      <C>          <C>          <C>         <C>
Outstanding at beginning of year         20,625       $11.39       39,375      $11.27
Granted                                     -            -           -            -
Exercised                                   -            -           -            -
Forfeited                                   -            -           -            -
Expired                                     -            -           -            -
                                         ----------               ----------
Outstanding at end of year               20,625       $11.39       39,375      $11.27
                                         ======                    ======
Exercisable at end of year               20,625       $11.39       36,875      $11.27
                                         ======                    ======
Weighted average fair value of
options granted                                    -                        -
</TABLE>
The options issued under the SIP have a remaining contractual life of 5.1 years.
The options issued under the SOP have a remaining contractual life of 7.1 years.

8.  NET INCREASE (DECREASE) IN NET ASSETS PER COMMON SHARE

The following  table sets forth the  computation  of basic and diluted change in
net assets per common share:
<TABLE>
<CAPTION>
                                                                  March 31,
                                                         --------------------------
                                                            2003           2002
                                                         -----------    -----------
<S>                                                      <C>            <C>
Numerator:
         Net decrease in net
            assets from operations                         ($226,183)     ($240,115)
         Preferred stock dividends                           (19,164)       (28,788)
                                                         -----------    -----------
         Numerator for basic and diluted
            earnings per share - net increase in net
            assets attributable to common stockholders     ($245,347)     ($268,903)
                                                         ===========    ===========

Denominator:
         Denominator for basic and diluted
            decrease in net assets from operations -
            weighted - average shares                      1,045,187      1,074,700
                                                         ===========    ===========

Basic and diluted net increase in net assets
         from operations per share                            $(0.23)        $(0.25)
                                                         ===========    ===========
</TABLE>
Common  shares  which  would be  issued  upon  conversion  of the  Corporation's
preferred  stock or exercise of options have been excluded from the dilutive per
share computation as they are antidilutive (see Notes 4 and 7):

                                                       PERIOD ENDED MARCH 31,
                                                       ----------------------
                                                         2003           2002
                                                       ----------------------
Preferred stock convertible into common stock            82,125       123,375
Stock options                                            20,625        39,375




                                       14
<PAGE>


FRANKLIN CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


9. NET ASSET VALUE PER SHARE

The  following  table sets forth the  computation  of net asset value per common
share attributable to common stockholders:
<TABLE>
<CAPTION>
                                                                           MARCH 31,    DECEMBER 31,
                                                                         --------------------------
                                                                            2003            2002
                                                                         --------------------------
<S>                                                                       <C>            <C>
Numerator:
         Numerator for net asset value per
           common share, as if converted basis                            $3,012,188     $3,267,540
         Liquidation value of convertible preferred stock                 (1,095,000)    (1,095,000)
                                                                         -----------     ----------
         Numerator for net asset value per share
           attributable to common stockholders                            $1,917,188     $2,172,540
                                                                          ==========     ==========


Denominator:
         Number of common shares outstanding,
           denominator for net asset value per share
           attributable to common stockholders                             1,042,900      1,049,600
         Number of shares of common stock to be
           issued upon conversion of preferred stock                          82,125         82,125
                                                                          ----------     ----------
         Denominator for net asset value per common
           share as if converted basis                                     1,125,025      1,131,725
                                                                          ==========     ==========

         Net asset value per share attributable to common stockholders         $1.84          $2.07
                                                                          ==========     ==========

         Net asset value per common share, as if converted basis               $2.68          $2.89
                                                                          ==========     ==========
</TABLE>

10.  PURCHASES AND SALES OF INVESTMENT SECURITIES

The  cost of  purchases  and  proceeds  from  sales  of  investment  securities,
excluding short-term investments,  aggregated $87,446 and $0, respectively,  for
the three months ended March 31, 2003;  $22,985 and $95,093,  respectively,  for
the three months ended March 31, 2002.








                                       15
<PAGE>

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

CRITICAL ACCOUNTING POLICIES

         Franklin's  discussion  and  analysis of its  financial  condition  and
results of operations  are based upon the  Corporation's  financial  statements,
which have been  prepared in accordance  with  accounting  principles  generally
accepted in the United States.  The  preparation of these  financial  statements
requires  the  Corporation  to make  estimates  and  judgments  that  affect the
reported  amounts of assets,  liabilities,  revenues  and  expenses  and related
disclosure  of  contingent  assets and  liabilities.  On an ongoing  basis,  the
Corporation  evaluates  its  estimates,  the most  critical  of which  are those
related to the fair value of the portfolio of investments.

STATEMENT OF OPERATIONS

         The Corporation accounts for its operations under accounting principles
generally accepted in the United States for investment companies. On this basis,
the principal  measure of its financial  performance  is captioned "Net increase
(decrease) in net assets from  operations",  which is composed of the following:
"Net  investment  loss from  operations,"  which is the  difference  between the
Corporation's  income  from  interest,  dividends  and  fees  and its  operating
expenses;  "Net  realized  gain  on  portfolio  of  investments,"  which  is the
difference   between  the  proceeds  received  from  dispositions  of  portfolio
securities  and  their  stated  cost;  any  applicable   income  tax  provisions
(benefits);   and  "Net  increase  (decrease)  in  unrealized   appreciation  of
investments,"  which is the net  change in the fair  value of the  Corporation's
investment  portfolio,  net of any increase  (decrease) in deferred income taxes
that would become payable if the unrealized  appreciation  were realized through
the sale or other disposition of the investment portfolio.

         "Net  realized  gain  (loss)  on  portfolio  of  investments"  and "Net
increase  (decrease) in unrealized  appreciation  of  investments"  are directly
related.  When a  security  is  sold to  realize  a  gain,  the  net  unrealized
appreciation  decreases and the net realized gain increases.  When a security is
sold to realize a loss,  the net unrealized  appreciation  increases and the net
realized gain decreases.

FINANCIAL CONDITION

         The  Corporation's  total  assets  and net assets  were,  respectively,
$4,329,321 and $3,012,188 at March 31, 2003, versus $4,632,338 and $3,267,540 at
December 31, 2002. Net asset value per share attributable to common shareholders
and on an as if converted  basis was $1.84 and $2.68,  respectively at March 31,
2003, versus $2.07 and $2.89 at December 31, 2002.

         The  Corporation's  financial  condition is dependent on the success of
its  investments.  A summary of the  Corporation's  investment  portfolio  is as
follows:

                                        MARCH 31, 2003       DECEMBER 31, 2002
                                        --------------       -----------------
Investments, at cost                        $2,564,248              $2,511,479
Unrealized appreciation                      1,528,615               1,481,071
                                            ----------              ----------
Investments, at fair value                  $4,092,863              $3,992,550
                                            ==========              ==========

         The accompanying  financial statements have been prepared assuming that
the Corporation will continue as a going concern.  The Corporation has a working
capital deficiency


                                       16
<PAGE>


of approximately $1,100,000 at March 31, 2003. This condition raises substantial
doubt about the Corporation's ability to continue as a going concern.  There can
be no assurance  that the  Corporation  would be able to find a suitable  merger
partner or be able to obtain alternative financing.  The financial statements do
not  include  any  adjustments  to reflect the  possible  future  effects on the
recoverability  of assets or the amounts of liabilities that may result from the
outcome of this uncertainty.

INVESTMENTS

         Franklin's  primary  investment  is  in  Excelsior.  A  description  of
Franklin's other investment follows the description of Excelsior.

         EXCELSIOR

         At March 31, 2003,  the  Corporation  has an  investment  in Excelsior,
formerly known as eCom Capital,  Inc.,  valued at $3,092,863,  which  represents
70.8% of the Corporation's total assets and 101.3% of its net assets.

         Excelsior   is  a   majority-owned   affiliate   of  Franklin  and  was
incorporated  in 1999 under the laws of the State of Delaware.  Excelsior had no
operations until August 2001 when a group led by Franklin  invested in Excelsior
for the purpose of acquiring  certain assets from Winstar Radio  Networks,  LLC,
Winstar Global Media, Inc. and Winstar Radio Productions, LLC.

         On April 3, 2002, Dial Communications  Global Media, Inc. ("Newco"),  a
newly formed wholly-owned subsidiary of Excelsior,  completed the acquisition of
substantially all of the assets of Dial Communications Group, Inc. ("DCGI"), and
Dial  Communications  Group,  LLC  ("DCGL"  and  together  with DCGI,  the "Dial
Entities")  used in  connection  with the Dial  Entities'  business  of  selling
advertising  relating to radio  programming (the "Dial  Acquisition").  The Dial
Acquisition  was  completed  pursuant  to  the  Asset  Purchase  Agreement  (the
"Purchase  Agreement"),  dated  as of  April  1,  2002,  by and  among  the Dial
Entities,  Franklin  and  Excelsior.  Immediately  prior to the  closing  of the
transactions  contemplated by the Purchase Agreement,  Excelsior assigned all of
its rights and  obligations  under the  Purchase  Agreement,  as well as certain
other assets and  liabilities  relating to the portion of  Excelsior's  business
dedicated to the sale of advertising relating to radio programming, to Newco.

         The total  purchase  price for the Dial  Acquisition  will be an amount
between  $8,880,000  and  $13,557,500.  The initial  consideration  for the Dial
Acquisition  consisted of  $6,500,000 in cash and a three year  promissory  note
bearing  interest  at 4.5%  issued  by Newco  in favor of DCGL in the  aggregate
principal amount of $460,000.  In addition,  the Purchase Agreement provides for
the minimum payment of $1,920,000 of additional consideration,  which is subject
to increase  to a maximum  amount of  $6,597,500  based upon the  attainment  of
certain  revenue  and  earnings  objectives  in 2002 and  2003.  The  additional
consideration will be comprised of both cash and two additional promissory notes
bearing  interest at 4.5% issued by Newco in favor of DCGL, each with an initial
aggregate  principal  amount of $460,000  that is subject to  increase  upon the
attainment of such revenue and earnings objectives. Each of the promissory notes
issued in  consideration  of the Dial  Acquisition is convertible into shares of
Franklin's  common  stock at a premium  of 115% to 120% of the  average  closing
prices of  Franklin's  common  stock  during a  specified  pre and post  closing
measurement  period.  The promissory  notes are not  convertible  for at least a
one-year  period.  Excelsior has paid to Franklin an amount equal to $300,000 in
consideration  of Franklin's  obligations in connection with any Franklin common

                                       17

<PAGE>


stock that may be issued pursuant to the terms of the Purchase  Agreement or the
promissory notes issued in consideration of the Dial Acquisition.

         The  assets  purchased  in the  Dial  Acquisition  were  combined  with
Excelsior's   Global   Media   division   to  create  a  national   radio  sales
representation  company  with 2002  advertising  sales  revenues  of almost  $50
million and a client roster of over 40 independent radio production companies.

         Excelsior creates, produces,  distributes and is a sales representative
for national radio programs and offers other miscellaneous services to the radio
industry.  Excelsior  offers  radio  programs to the  industry  in exchange  for
commercial  broadcast  time,  which  Excelsior  sells to  national  advertisers.
Excelsior  currently  offers  approximately  100  programs  to over 2,000  radio
stations  across the country.  The group of radio  stations  who  contract  with
Excelsior  to  broadcast  a  particular  program  constitutes  a radio  network.
Excelsior derives its revenue from selling the commercial  broadcast time on its
radio networks to advertisers desiring national coverage.

         Excelsior  currently  produces 23 network  programs  targeting the most
popular radio formats,  including adult contemporary,  rock, urban oldies, album
oriented rock, comedy and country.  Excelsior  produces both short form and long
form programs.  Short form features are two to three minute daily  vignettes and
include such programs as "African Americans Making History." Long form programs,
such as "Walt `Baby'  Love's The  Countdown"  and "Gospel  Traxx,"  "Keeping The
Seventies  Alive,"  "Behind the Hits" and "All Star Mix Party" are programs that
range from one to four hours in length. Excelsior offers these programs to radio
stations  free of  charge.  The radio  stations  airing  these  programs  become
networks for Excelsior to sell advertising time.  Excelsior sells the commercial
broadcast  time  inside  of these  networks  to  advertisers  desiring  national
coverage.

         On August 28,  2001,  the  Corporation  purchased  $2,500,000  worth of
Excelsior  Common  Stock  and  issued a  secured  note for  $150,000,  which has
subsequently  been repaid.  In connection  with this note,  Franklin was granted
warrants to acquire 12,879 shares of Excelsior common stock at an exercise price
of $1.125 per share. The note has been repaid to Franklin. Franklin sold 250,000
common  shares  for $1.00 per share on  December  4, 2001 for no gain or loss in
connection  with a proposed  merger with  Change  Technology  Partners,  Inc. On
October  1,  2002,  Franklin  received  74,232  warrants  to  acquire  shares of
Excelsior  common stock at an exercise  price of $1.20 per share for arranging a
financing of Excelsior.  On October 3, 2002, Franklin sold 773,196 common shares
for  $1.94  per  share for total  proceeds  of  $1,500,000  realizing  a gain of
$726,804.  On January 31, 2003,  Franklin  purchased  33,750  common  shares for
$1.625 per share and 65,199 warrants to acquire shares of Excelsior common stock
at an exercise price of $1.125 per share for $0.50 per warrant.

         ALACRA CORPORATION

         At  March  31,  2003,  the  Corporation  has an  investment  in  Alacra
Corporation  ("Alacra"),  valued at $1,000,000,  which  represents  25.7% of the
Corporation's total assets and 37.7% of its net assets. Alacra, headquartered in
New York and London, is a leading provider of Internet-based  online information
services.   Alacra  provides  a  service  called  .xls,   which  aggregates  and
cross-indexes  over  70  premier  business  databases,   delivering  information
directly to Microsoft Excel, HTML, Microsoft Word or PDF formats at the desktop.
Other products  include  privatesuiteTM,  a fast,  easy,  cost-effective  way to
identify and retrieve  profiles of privately  held  companies  around the world;
compbookTM, a tool for company peer analysis; and Portal BTM, a fully integrated
business information portal.


                                       18
<PAGE>


         On April 20, 2000, the Corporation purchased $1,000,000 worth of Alacra
Series F  Convertible  Preferred  Stock.  In  connection  with this  investment,
Franklin was granted observer rights for Alacra Board of Directors meetings.

RESULTS OF OPERATIONS

INVESTMENT INCOME AND EXPENSES:

         The   Corporation's   principal   objective   is  to  achieve   capital
appreciation  through  long-term  investments  in  businesses  believed  to have
favorable growth potential.  Therefore,  a significant portion of the investment
portfolio is structured to maximize the potential for capital  appreciation  and
provides  little or no current  yield in the form of dividends or interest.  The
Corporation earns interest income from loans, preferred stocks,  corporate bonds
and other fixed income  securities.  The amount of interest  income varies based
upon the average  balance of the  Corporation's  fixed income  portfolio and the
average yield on this portfolio.

         The  Corporation  had investment  income of $45,678 and $91,549 for the
three  months  ended  March 31,  2003 and 2002,  respectively.  The  decrease in
investment  income for the three  months  ended March 31, 2003 when  compared to
March 31, 2002,  was primarily the result of the reduction of the management fee
from Excelsior.

         Operating  expenses  were  $319,405  and  $345,990 for the three months
ended March 31,  2003 and 2002,  respectively.  A majority of the  Corporation's
operating  expenses consist of employee  compensation,  office and rent expense,
other expenses related to identifying and reviewing investment opportunities and
professional  fees.  Included  in  compensation  is a $40,000  bonus  paid to an
officer of the  Corporation  during 2003.  Professional  fees consist of general
legal  fees,  audit  and  tax  fees  and  investment  related  legal  fees.  The
Corporation  was  reimbursed  approximately  $36,000  and $30,000 for salary and
benefit  expense  for  its  chief  financial  officer  under  the  terms  of the
management  agreement  with  Excelsior for the three months ended March 31, 2003
and 2002,  respectively.  This reimbursement has been recorded as a reduction in
operating expenses.

         Net investment  losses from  operations  were $273,727 and $254,441 for
the three months ended March 31, 2003 and 2002, respectively.

         The Corporation has relied and continues to rely to a large extent upon
proceeds from sales of  investments  rather than  investment  income to defray a
significant  portion of its  operating  expenses.  Because  such sales cannot be
predicted with certainty,  the Corporation attempts to maintain adequate working
capital to provide for fiscal periods when there are no such sales.

NET REALIZED GAINS AND LOSSES ON PORTFOLIO OF INVESTMENTS:

         During the three months ended March 31, 2003 and 2002, the  Corporation
realized  net  losses  before  taxes of $0 and  $23,507  respectively,  from the
disposition of various investments.

UNREALIZED APPRECIATION OF INVESTMENTS:

         Unrealized appreciation of investments, increased by $47,544 during the
three months ended March 31, 2003, primarily from unrealized gains in Excelsior.

                                       19
<PAGE>


         Unrealized appreciation of investments, increased by $37,833 during the
three months ended March 31, 2002,  primarily from  unrealized  gains due to the
sale of Primal.

TAXES

         Franklin does not qualify for pass through tax treatment as a Regulated
Investment  Company under  Subchapter M of the Internal  Revenue Code for income
tax  purposes.  The  Corporation  is taxed under  Regulation  C of the Code and,
therefore,  it is subject to federal  income tax on the  portion of its  taxable
income and net capital as well as such distribution to its stockholders.

LIQUIDITY AND CAPITAL RESOURCES

         The accompanying  financial statements have been prepared assuming that
the Corporation will continue as a going concern.  The Corporation has a working
capital deficiency of approximately $1,100,000 at March 31, 2003. This condition
raises substantial doubt about the Corporation's  ability to continue as a going
concern.  The  Corporation  is seeking  alternative  financing.  There can be no
assurance that the Corporation  would be able to obtain  alternative  financing.
The financial  statements do not include any adjustments to reflect the possible
future  effects on the  recoverability  of assets or the amounts of  liabilities
that may result from the outcome of this uncertainty.

         Cash and cash  equivalents  decreased  by  $466,793  to $95,398 for the
three months  ended March 31,  2003,  compared to a decrease of $162,991 for the
three months ended March 31, 2002.

         Operating  activities  used $346,474 of cash for the three months ended
March 31, 2003,  compared to using $206,311 for the three months ended March 31,
2002.

         Operating  activities  for the  three  months  ended  March  31,  2003,
exclusive of changes in operating assets and liabilities, used $269,483 of cash,
as the  Corporation's  net  decrease in net assets from  operations  of $226,183
included  non-cash  charges  for  depreciation  and  amortization  of $4,244 and
unrealized  gains of  $47,544.  For the  three  months  ended  March  31,  2002,
operating activities,  exclusive of changes in operating assets and liabilities,
used  $250,198 of cash,  as the  Corporation's  net  decrease in net assets from
operations  of  $240,115   included   non-cash   charges  of  depreciation   and
amortization  of $4,243,  realized  losses of $23,507  and  unrealized  gains of
$37,833.

         Changes in operating assets and liabilities decreased cash $116,991 for
the three  months  ended March 31,  2003,  principally  due to a decrease in the
level of accounts  payable and accrued expenses and an increase in other assets.
For the three  months  ended March 31,  2002,  changes in  operating  assets and
liabilities produced $43,887 of cash.

           The factor in the $87,444 of cash used in  investing  activities  for
the three  months  ended March 31, 2003 was the  purchase of  additional  common
shares and warrants of Excelsior. For the three months ended March 31, 2002, the
principal  factor in the $72,108  cash  provided  by  investing  activities  was
payment  of a loan  from  Excelsior  offset  by the  net  purchase  and  sale of
marketable investment securities.

         Cash used in financing  activities for the three months ended March 31,
2003 of $32,875 resulted from payment of preferred  dividends of $19,164 and the
purchase of treasury stock of


                                       20
<PAGE>


$10,005. Financing activities used $28,788 in the prior year's comparable period
for the payment of preferred dividends.

RISK FACTORS

         There are  significant  risks  inherent  in the  Corporation's  venture
capital  business.  The  Corporation  has invested a substantial  portion of its
assets  in  small  private  companies  and  one  bulletin  board  listed  public
corporation.  Because of the speculative nature of these  investments,  there is
significantly greater risk of loss than is the case with traditional  investment
securities.  The Corporation  expects that from time to time its venture capital
investments may result in a complete loss of the Corporation's  invested capital
or  may  be  unprofitable.   Other  investments  may  appear  likely  to  become
successful,  but may never realize their  potential.  Neither the  Corporation's
investments  nor an  investment in the  Corporation  is intended to constitute a
balanced  investment  program.  The  Corporation  has in  the  past  relied  and
continues  to rely to a large  extent upon  proceeds  from sales of  investments
rather than investment  income to defray a significant  portion of its operating
expenses.

         INVESTING  IN PRIVATE  COMPANIES  INVOLVES A HIGH  DEGREE OF RISK.  The
Corporation's  portfolio consists primarily of investments in private companies.
Investments  in  private  businesses  involve  a high  degree  of  business  and
financial risk, which can result in substantial losses and accordingly should be
considered  speculative.  There is generally no publicly  available  information
about the companies in which Franklin invests, and Franklin relies significantly
on the diligence of its employees and agents to obtain information in connection
with  the  Corporation's   investment  decisions.   In  addition,  some  smaller
businesses have narrower product lines and market shares than their competitors,
and may be  more  vulnerable  to  customer  preferences,  market  conditions  or
economic  downturns,  which may adversely  affect the return on, or the recovery
of, the Corporation's investment in such businesses.

         THE PORTFOLIO OF INVESTMENTS IS ILLIQUID. Franklin acquires most of its
investments directly from private companies.  The majority of the investments in
its portfolio  will be subject to  restrictions  on resale or otherwise  have no
established  trading  market.  The  illiquidity  of  most of the  portfolio  may
adversely affect Franklin's  ability to dispose of loans and securities at times
when it may be advantageous to liquidate such investments.

         FRANKLIN'S  PORTFOLIO   INVESTMENTS  ARE  RECORDED  AT  FAIR  VALUE  AS
DETERMINED BY THE BOARD OF DIRECTORS IN ABSENCE OF READILY  ASCERTAINABLE PUBLIC
MARKET VALUES.  Pursuant to the requirements of the 1940 Act, the  Corporation's
board of  directors is required to value each asset  quarterly,  and Franklin is
required to carry the  portfolio  at a fair market  value as  determined  by the
board of directors.  Since there is typically no public market for the loans and
equity  securities of the companies in which  Franklin  makes  investments,  the
board of directors estimates the fair value of these loans and equity securities
pursuant  to written  valuation  policy  and a  consistently  applied  valuation
process.  Unlike banks,  Franklin is not permitted to provide a general  reserve
for anticipated  loan losses;  instead,  Franklin is required by the 1940 Act to
specifically value each individual  investment and record an unrealized loss for
an asset that it believes has become impaired.  Without a readily  ascertainable
market  value,  the  estimated  value  of the  portfolio  of  loans  and  equity
securities may differ  significantly from the values that would be placed on the
portfolio if there  existed a ready market for the loans and equity  securities.
Franklin  adjusts  quarterly the valuation of the portfolio to reflect the board
of directors' estimate of the current realizable value of each investment in the
Corporation's  portfolio.  Any changes in  estimated  value are  recorded in the
Corporation's statement of operations as "Net unrealized gains (losses)."

                                       21
<PAGE>

         FRANKLIN OPERATES IN A COMPETITIVE MARKET FOR INVESTMENT OPPORTUNITIES.
Franklin  competes for investments  with many other  companies and  individuals,
some of whom have greater  resources than does Franklin.  Increased  competition
would make it more difficult to purchase or originate  investments at attractive
prices.  As a result of this  competition,  sometimes  Franklin may be precluded
from making otherwise attractive investments.

         QUARTERLY  RESULTS MAY  FLUCTUATE  AND MAY NOT BE  INDICATIVE OF FUTURE
QUARTERLY  PERFORMANCE.  The  Corporation's  quarterly  operating  results could
fluctuate,  and  therefore,  you  should  not rely on  quarterly  results  to be
indicative  of Franklin's  performance  in future  quarters.  Factors that could
cause quarterly operating results to fluctuate include, among others, variations
in the  investment  origination  volume,  variation  in timing  of  prepayments,
variations in and the timing of the recognition of realized and unrealized gains
or losses,  the degree to which Franklin  encounters  competition in its markets
and general economic conditions.

         FRANKLIN IS DEPENDENT UPON KEY MANAGEMENT PERSONNEL FOR FUTURE SUCCESS.
Franklin is dependent for the selection,  structuring, closing and monitoring of
its investments on the diligence and skill of its senior management  members and
other  management  members.  The future success of the Corporation  depends to a
significant  extent on the  continued  service  and  coordination  of its senior
management  team,  particularly  the Chairman and Chief Executive  Officer.  The
departure of any of the  executive  officers or key employees  could  materially
adversely affect the Corporation's  ability to implement its business  strategy.
Franklin  does not  maintain  key man life  insurance  on any of its officers or
employees.

         THERE IS  SUBSTANTIAL  DOUBT AS TO FRANKLIN'S  ABILITY TO CONTINUE AS A
GOING CONCERN.  Franklin has determined that it may not have sufficient cash and
cash equivalents to meet its working capital  requirements  over the next fiscal
year.  Franklin's  independent  auditors  have  issued an  opinion  in which the
independent  auditors  have  indicated  that  there is  substantial  doubt as to
Franklin's  ability to continue as a going concern as noted in their explanatory
paragraph  within their opinion,  which is noted in Franklin's  annual financial
statements.  Franklin is currently seeking  alternative  sources of financing to
continue  operating  through the current  fiscal year. If funds were not raised,
Franklin may not be able to continue its operations.

         INVESTMENT IN SMALL, PRIVATE COMPANIES

         There are  significant  risks  inherent  in the  Corporation's  venture
capital  business.  The  Corporation  has invested a substantial  portion of its
assets  in  private  development  stage or  start-up  companies.  These  private
businesses tend to be thinly capitalized,  unproven,  small companies with risky
technologies  that lack management depth and have not attained  profitability or
have no history of operations. Because of the speculative nature and the lack of
a public market for these  investments,  there is significantly  greater risk of
loss than is the case with traditional  investment  securities.  The Corporation
expects that some of its venture capital  investments will be a complete loss or
will be unprofitable and that some will appear to be likely to become successful
but never realize their potential.  The Corporation has been risk seeking rather
than risk  averse in its  approach  to venture  capital  and other  investments.
Neither the  Corporation's  investments  nor an investment in the Corporation is
intended to constitute a balanced investment program. The Corporation has in the
past relied,  and continues to rely to a large extent,  upon proceeds from sales
of investments rather than investment income to defray a significant  portion of
its operating expenses.

                                       22
<PAGE>

         ILLIQUIDITY OF PORTFOLIO INVESTMENTS

         Most of the  investments  of the  Corporation  are or  will  be  equity
securities acquired directly from small companies.  The Corporation's  portfolio
of equity securities is and will usually be subject to restrictions on resale or
otherwise have no established  trading  market.  The  illiquidity of most of the
Corporation's portfolio of equity securities may adversely affect the ability of
the  Corporation  to  dispose  of  such  securities  at  times  when  it  may be
advantageous for the Corporation to liquidate such investments.

         THE INABILITY OF THE CORPORATION'S  PORTFOLIO COMPANIES TO SUCCESSFULLY
         MARKET THEIR  PRODUCTS  WOULD HAVE A NEGATIVE  IMPACT ON ITS INVESTMENT
         RETURNS

         Even if the  Corporation's  portfolio  companies  are  able to  develop
commercially viable products, the market for new products and services is highly
competitive and rapidly changing. Commercial success is difficult to predict and
the  marketing  efforts  of the  Corporation's  portfolio  companies  may not be
successful.

         VALUATION OF PORTFOLIO INVESTMENTS

         There is typically no public  market of equity  securities of the small
private companies in which the Corporation  invests.  As a result, the valuation
of the equity securities in the  Corporation's  portfolio is subject to the good
faith determination of the Corporation's Board of Directors. In the absence of a
readily  ascertainable  market value,  the estimated value of the  Corporation's
portfolio of equity  securities  may differ  significantly  from the values that
would be placed on the  portfolio  if a ready  market for the equity  securities
existed.  Any  changes  in  estimated  net  asset  value  are  recorded  in  the
Corporation's  statement of operations as "Change in unrealized  appreciation on
investments."

         FLUCTUATIONS OF QUARTERLY RESULTS

         The  Corporation's  quarterly  operating  results could  fluctuate as a
result of a number of factors.  These include,  among others,  variations in and
the timing of the  recognition of realized and unrealized  gains or losses,  the
degree  to which the  Corporation  encounters  competition  in its  markets  and
general economic conditions.  As a result of these factors,  results for any one
quarter  should not be relied upon as being  indicative of performance in future
quarters.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The  Corporation's  business  activities  contain elements of risk. The
Corporation  considers a principal  type of market  risk to be  valuation  risk.
Investments  are  stated at "fair  value" as  defined in the 1940 Act and in the
applicable regulations of the Securities and Exchange Commission. All assets are
valued at fair value as  determined in good faith by, or under the direction of,
the Board of Directors.

         Neither  the  Corporation's   investments  nor  an  investment  in  the
Corporation  is  intended  to  constitute  a balanced  investment  program.  The
Corporation has exposure to  public-market  price  fluctuations to the extent of
its publicly traded portfolio.

         The  Corporation  has invested a  substantial  portion of its assets in
private development stage or start-up  companies.  These private businesses tend
to be thinly capitalized,  unproven,  small companies that lack management depth
and have not attained profitability or have no


                                       23
<PAGE>


history of operations.  Because of the speculative nature and the lack of public
market for these investments,  there is significantly  greater risk of loss than
is the case with traditional investment securities. The Corporation expects that
some of its  venture  capital  investments  will be a  complete  loss or will be
unprofitable  and that some will  appear to be likely to become  successful  but
never realize their potential.

         Because there is typically no public market for the equity interests of
the small  companies  in which the  Corporation  invests,  the  valuation of the
equity  interests in the  Corporation's  portfolio is subject to the estimate of
the Corporation's Board of Directors. In making its determination, the Board may
consider  valuation  information  provided by an independent  third party or the
portfolio  company  itself.  In the  absence of a readily  ascertainable  market
value,  the estimated value of the  Corporation's  portfolio of equity interests
may differ  significantly  from the values that would be placed on the portfolio
if a ready market for the equity interests existed. Any changes in valuation are
recorded in the  Corporation's  consolidated  statements  of  operations as "Net
increase (decrease) in unrealized appreciation on investments."

ITEM 4.      CONTROLS AND PROCEDURES

         (a) The Company maintains  disclosure  controls and procedures that are
designed to ensure that  information  required to be disclosed in the  Company's
filings  under  the  Securities  Exchange  Act of 1934 is  recorded,  processed,
summarized and reported  within the periods  specified in the rules and forms of
the  Securities and Exchange  Commission.  Such  information is accumulated  and
communicated  to the Company's  management,  including  its principal  executive
officer  and  principal  financial  officer,  as  appropriate,  to allow  timely
decisions regarding required disclosure. The Company's management, including the
principal executive officer and the principal financial officer, recognizes that
any set of controls and  procedures,  no matter how well  designed and operated,
can  provide  only  reasonable   assurance  of  achieving  the  desired  control
objectives.

         Within 90 days prior to the  filing  date of this  quarterly  report on
Form 10-Q, the Company has carried out an evaluation,  under the supervision and
with the  participation  of the  Company's  management,  including the Company's
principal  executive officer and the Company's  principal  financial officer, of
the  effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and  procedures.  Based on such  evaluation,  the  Company's  principal
executive  officer and principal  financial officer concluded that the Company's
disclosure controls and procedures are effective.

         (b) There have been no  significant  changes in the Company's  internal
controls  or in other  factors  that could  significantly  affect  the  internal
controls  subsequent  to the date of their  evaluation  in  connection  with the
preparation of this quarterly report on Form 10-Q.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On  October  15,  2001,   Jeffrey  A.  Leve  and  Jeffrey  Leve  Family
Partnership,  L.P. filed a lawsuit  against  Franklin,  Sunshine  Wireless,  LLC
("Sunshine") and four other defendants  affiliated with Winstar  Communications,
Inc.  in the  Superior  Court of the State of  California  for the County of Los
Angeles.  The lawsuit,  which has subsequently been removed to the United States
District Court for the Central District of California,  alleges that the Winstar
defendants  conspired to commit fraud and breached  their  fiduciary duty to the
plaintiffs in connection with

                                       24
<PAGE>

the acquisition of the plaintiffs'  radio production and distribution  business.
The  complaint  further  alleges that  Franklin and Sunshine  joined the alleged
conspiracy.  The business was initially acquired by certain entities  affiliated
with Winstar Communications and, subsequently,  the assets of such business were
sold to  Franklin  and  Sunshine.  Concurrently  with  such  purchase,  Franklin
transferred such assets to Excelsior. The plaintiffs seek recovery of damages in
excess of $10,000,000,  costs and attorneys' fees. On January 7, 2002,  Franklin
filed a motion to dismiss the lawsuit or, in the alternative,  to transfer venue
to the United States  District  Court of the Southern  District of New York. The
plaintiffs  filed a motion  opposing  Franklin's  request on January  28,  2002.
Franklin's  motion for  dismissal  was  granted on  February  25,  2002,  due to
improper  venue.  On June 7, 2002, the plaintiffs  filed their  complaint to the
United States  District of the Southern  District of New York. On July 12, 2002,
Franklin filed a motion to dismiss the complaint. On February 25, 2003, the case
against Franklin and Sunshine was dismissed,  however the plaintiffs may file an
appeal.  An  unfavorable  outcome in this  lawsuit  may have a material  adverse
effect on Franklin's business, financial condition and results of operations.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

                  Not applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES HOLDERS

                  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

                      Exhibit 99.1   Certification Pursuant To 18 U.S.C. Section
                                     1350, As Adopted By Section 906 Of The
                                     Sarbanes-Oxley Act Of 2002
                      Exhibit 99.2   Certification Pursuant To 18 U.S.C. Section
                                     1350, As Adopted By Section 906 Of The
                                     Sarbanes-Oxley Act Of 2002

         (b)  REPORTS ON FORM 8-K.

                  None


                                       25
<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.

                                   FRANKLIN CAPITAL CORPORATION



Date: May 14, 2003                 By:    /s/ STEPHEN L. BROWN
                                          --------------------
                                          Stephen L. Brown
                                          CHAIRMAN AND CHIEF EXECUTIVE OFFICER



                                          /s/ HIRAM M. LAZAR
                                          --------------------------------
                                          Hiram M. Lazar
                                          CHIEF FINANCIAL OFFICER











                                       26
<PAGE>



                                 CERTIFICATIONS

     I, Stephen L. Brown, certify that:

     1.  I have reviewed this quarterly  report on Form 10-Q of Franklin Capital
         Corporation;

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

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

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

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

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

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

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

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

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

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

Dated: May 14, 2003

     By: /s/ STEPHEN L. BROWN
         --------------------
         Name: Stephen L. Brown
         Title: Chairman and Chief Executive Officer


                                       27
<PAGE>



                                 CERTIFICATIONS

         I, Hiram M. Lazar, certify that:

     1.  I have reviewed this quarterly  report on Form 10-Q of Franklin Capital
         Corporation;

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

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

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

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

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

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

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

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

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

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

Dated: May 14, 2003

By: /s/ HIRAM M. LAZAR
    ------------------
     Name: Hiram M. Lazar
     Title:   Chief Financial Officer


                                       28