THE FIRST CONNECTICUT CAPITAL CORPORATION

                              FINANCIAL STATEMENTS
                        AND INDEPENDENT AUDITORS' REPORT

                          AS OF AND FOR THE YEARS ENDED
                             MARCH 31, 2003 AND 2002

















<PAGE>







                    THE FIRST CONNECTICUT CAPITAL CORPORATION
              FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002



                                TABLE OF CONTENTS

                                                                            PAGE

INDEPENDENT AUDITORS' REPORT                                                  1

FINANCIAL STATEMENTS:

             Balance Sheets                                                   2

             Statements of Income                                             3

             Statements of Changes in Stockholders' Equity                    4

             Statements of Cash Flows                                         5

             Notes to Financial Statements                                    6








<PAGE>





                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
The First Connecticut Capital Corporation:

We have audited the balance sheets of The First Connecticut Capital Corporation
(the "Corporation"), a Connecticut corporation, as of March 31, 2003 and 2002,
and the related statements of income, changes in stockholders' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The First Connecticut Capital
Corporation as of March 31, 2003 and 2002, and the results of its operations and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.




/s/ SASLOW LUFKIN & BUGGY, LLP
------------------------------
Saslow Lufkin & Buggy, LLP

May 6, 2003





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<TABLE>
<CAPTION>



                    The First Connecticut Capital Corporation
                                 Balance Sheets
                             March 31, 2003 and 2002
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)






                                     ASSETS

                                                            2003         2002
                                                            ----         ----

<S>                                                        <C>          <C>
Cash and cash equivalents                                  $    30      $   437
Loans, net of allowance of
   $539 in 2003 and $594 in 2002                             1,509        2,172
Loans due from related parties                                --            225
Loans held for sale                                          1,571        1,355
Asset acquired in lieu of foreclosure                          515         --
Due from partnerships                                           83           92
Accrued interest receivable                                     37           50
Fixed assets                                                    12           16
Mortgage servicing rights                                       52           69
Deferred income taxes                                           72          250
Other assets                                                   121           75
                                                           -------      -------

      Total assets                                         $ 4,002      $ 4,741
                                                           =======      =======



                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Line of credit                                             $ 1,487      $ 2,441
Accounts payable related parties                               154          203
Accounts payable and accrued expenses                          100           94
                                                           -------      -------
      Total liabilities                                      1,741        2,738

STOCKHOLDERS' EQUITY

Common stock, no par value, stated value
   $.50 per share, authorized 3,000,000 shares,
   issued and outstanding 1,173,382 shares                     587          587
Paid-in capital                                              9,253        9,253
Accumulated deficit                                         (7,579)      (7,837)
                                                           -------      -------
      Total stockholders' equity                             2,261        2,003
                                                           -------      -------

      Total liabilities and stockholders' equity           $ 4,002      $ 4,741
                                                           =======      =======


   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>






                                      -2-
<PAGE>

<TABLE>
<CAPTION>

                    The First Connecticut Capital Corporation
                              Statements of Income
                   For the Years Ended March 31, 2003 and 2002
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                                2003           2002
                                                                ----           ----

INTEREST INCOME
<S>                                                           <C>           <C>
Interest and fees on loans                                    $       747   $       663
                                                              -----------   -----------

Interest expense on line of credit                                    136           229
Other interest expense                                                 13            13
                                                              -----------   -----------
        Total interest expense                                        149           242
                                                              -----------   -----------

        Net interest income                                           598           421

Provision (reduction) for loan losses                                  87            (6)
                                                              -----------   -----------

        Net interest income after provision for loan losses           511           427
                                                              -----------   -----------

OTHER OPERATING INCOME
Servicing fees                                                        172           156
Net gains on sales of loans held for sale                             514           335
Other fees                                                             51            66
                                                              -----------   -----------
        Total other operating income                                  737           557
                                                              -----------   -----------

        Total income                                                1,248           984

OTHER OPERATING EXPENSES
Officers' salaries                                                    207           178
Other salaries                                                         67            55
Directors' fees                                                      --               3
Professional services                                                 168           103
Miscellaneous taxes                                                    22            19
Employee and general insurance                                         50            48
Rent                                                                   33            31
Amortization of servicing rights                                       69            72
Corporate insurance expenses                                           51            22
Licenses, dues and subscriptions                                       17             9
Communications                                                          7             8
Advertising and promotions                                              7             7
Stock record and other financial expenses                              12            12
Depreciation                                                            5             5
Equipment and auto rental                                              18            14
Postage, office and other expenses                                     32            38
                                                              -----------   -----------
        Total other operating expenses                                765           624

Income before income taxes                                            483           360
Income tax provision                                                  225           315
                                                              -----------   -----------
        Net income                                            $       258   $        45
                                                              ===========   ===========
Income per common share (basic and diluted)                   $       .22   $       .04
                                                              ===========   ===========

Weighted average number of common shares
   outstanding: (basic)                                         1,173,382     1,173,382
                                                              ===========   ===========
                (diluted)                                       1,192,167     1,186,630
                                                              ===========   ===========

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>



                                      -3-
<PAGE>
<TABLE>
<CAPTION>


                    The First Connecticut Capital Corporation
                  Statements of Changes in Stockholders' Equity
                   For the Years Ended March 31, 2003 and 2002
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)



                                                                              Total
                               Common Stock         Paid-in   Accumulated  Stockholders'
                           SHARES        AMOUNT     CAPITAL     DEFICIT      EQUITY

<S>                       <C>         <C>         <C>         <C>          <C>
Balance, April 1, 2001    1,173,382   $     587   $   9,253   $  (7,882)   $   1,958

Net income                     --          --          --            45           45
                          ---------   ---------   ---------   ---------    ---------

Balance, March 31, 2002   1,173,382         587       9,253      (7,837)       2,003

Net income                     --          --          --           258          258
                          ---------   ---------   ---------   ---------    ---------

Balance, March 31, 2003   1,173,382   $     587   $   9,253   $  (7,579)   $   2,261
                          =========   =========   =========   =========    =========



   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

</TABLE>



                                      -4-
<PAGE>

<TABLE>
<CAPTION>

                    The First Connecticut Capital Corporation
                            Statements of Cash Flows
                   For the Years Ended March 31, 2003 and 2002
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                                  2003       2002
                                                                  ----       ----

OPERATING ACTIVITIES
<S>                                                            <C>         <C>
Net income                                                     $    258    $     45
Adjustments to reconcile net income to net
   cash (used in) provided by operating activities:
Depreciation                                                          5           5
Reduction in provision for loan losses                              (55)         (6)
Amortization of servicing rights                                     69          72
   Increase in mortgage servicing rights                            (52)        (69)
   Decrease in deferred taxes                                       178         304
Increase in asset acquired in lieu of foreclosure                  (515)       --
Origination of loans held for sale                              (17,036)    (13,821)
Proceeds from sales of loans held for sale                       16,820      13,389
Changes in assets and liabilities:
   Decrease in restricted cash                                     --            44
   Decrease (increase) in accrued interest receivable                13         (46)
   Increase in other assets                                         (46)        (27)
   Decrease in accounts payable to related parties                  (49)       --
   Increase in accounts payable and accrued expenses                  6         267
                                                               --------    --------
Net cash (used in) provided by operating activities                (404)        157
                                                               --------    --------

INVESTING ACTIVITIES
Originations of loans                                            (2,999)     (3,132)
Principal collected on loans                                      3,942       3,157
Purchases of fixed assets                                            (1)         (6)
                                                               --------    --------
Net cash provided by investing activities                           942          19
                                                               --------    --------

FINANCING ACTIVITIES
(Decrease) increase in line of credit borrowings                   (954)        121
 Decrease (increase) in amounts due from partnerships                 9         (92)
                                                               --------    --------
Net cash (used in) provided by financing activities                (945)         29
                                                               --------    --------

(Decrease) increase in cash                                        (407)        205

Cash and cash equivalents, beginning of year                        437         232
                                                               --------    --------

Cash and cash equivalents, end of year                         $     30    $    437
                                                               ========    ========

           Supplemental disclosure of cash flow information:
Cash paid for interest                                         $    138    $    234
                                                               ========    ========
Cash paid for taxes                                            $     24    $     11
                                                               ========    ========

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>





                                      -5-
<PAGE>


                    The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

COMPANY OPERATIONS - The First Connecticut Capital Corporation (the
"Corporation") is engaged in the mortgage banking business, which involves the
origination, purchase, sale and servicing of mortgage loans secured by
residential or commercial real estate. The Corporation's revenues consist of
loan servicing fees, loan origination fees, interest on mortgage loans held
prior to sale and gains from the sale of loans and mortgage servicing rights.
Mortgage loans that are originated or purchased by the Corporation may be
resold. The Corporation also engages in mortgage servicing of its own Portfolio
Loan Program, which includes the processing and administration of mortgage loan
payments and remitting principal and interest to purchasers.

LOANS - Loans are generally recorded at the principal amount outstanding less
the allowance for loan losses and any net deferred loan fees. Loan origination
and commitment fees, as well as certain direct origination costs, are recognized
as interest income over the term of the loans using a method that approximates
the interest method. Interest rates on loans are fixed at the time of issuance
and are based upon current market rates. Outstanding loans are payable in a
variety of methods over a term generally not exceeding one year, all loans are
collateralized by liens on real properties; a few of such properties are subject
to prior liens. Interest income on loans is recognized based on rates applied to
principal amounts outstanding. In connection with most loans, the borrower also
pays a nonrefundable fee to the Corporation.

Loans are generally placed on non-accrual status when they become 180 days past
due or earlier, if the loan is considered impaired. Any unpaid amounts
previously accrued on these loans are reversed from income. Subsequent cash
receipts are applied to the outstanding principal balance or to interest income
if, in the judgment of management, collection of the outstanding principal is
not in question. Loans are removed from non-accrual status when they become
current as to both principal and interest and when subsequent performance
reduces the concern as to the collectibility of principal and interest.

LOANS HELD FOR SALE - Mortgage loans originated and intended for sale in the
secondary market are carried at the lower of cost or fair value in the
aggregate. Net unrealized losses are recognized through a valuation allowance
charged to income. Net fees and costs associated with originating and acquiring
loans held for sale are deferred and are included in the basis for determining
the gain or loss on sales of loans held for sale. Gains on sales are recorded at
the settlement date and cost is determined on a specific identification basis.

ASSET ACQUIRED IN LIEU OF FORECLOSURE - Asset acquired in lieu of foreclosure is
recorded at fair value less costs to sell at the date of transfer. If the fair
value, less the estimated costs to sell, decline below the carrying amount of
the asset, the deficiency is recognized in the period in which it becomes known
and is included as a charge against other operating income.



                                      -6-
<PAGE>



                    The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ALLOWANCE FOR LOAN LOSSES - The allowance for loan losses is determined by
management on a loan-by-loan basis. The allowance is an amount that management
believes will be adequate to absorb losses on existing loans that may become
un-collectible based on evaluations of the collectibility of the loans. The
evaluations take into consideration such factors as geographic location,
assessment of collateral quality, appraisals of significant collateral and other
conditions that may affect the borrower's ability to repay. Loans are charged
off to the extent they are deemed uncollectible. The amount of the allowance for
loan losses is highly dependent upon management's estimates of variables
affecting valuation, appraisals of collateral, evaluations of performance and
status, and the amount and timing of future cash flows expected to be received
on impaired loans. Such estimates, appraisals, evaluations and cash flows may be
subject to frequent adjustments due to changing economic prospects of borrowers
or properties. These estimates are reviewed periodically and adjustments, if
necessary, are recorded in the provision for loan losses in the periods in which
they become known.

Certain impaired loans are measured based on the present value of expected
future cash flows discounted at the loan's effective interest rate or, as a
practical expedient, at the loan's observable market price or the estimated fair
value of the collateral if the loan is collateral dependent.

CONCENTRATION OF CREDIT RISKS - The nature of the Corporation's business is to
fund and service mortgages to qualified borrowers within the northeastern United
States, primarily in the State of Connecticut where management has the most
experience. The mortgage loans are predominately collateralized by residential
properties; however, there are a few smaller commercial properties as well as
some vacant land. The Corporation maintains a strict real estate appraisal
policy as well as underwriting guidelines.

CASH AND CASH EQUIVALENTS - The Corporation has defined cash as including cash
on hand and cash in interest bearing and non-interest bearing operating bank
accounts. Highly liquid investments such as time deposits with an original
maturity of three months or less are considered to be cash equivalents. At times
during the year the Corporation's cash balances exceed federal depository
insurance limits of $100,000.

INCOME TAXES - The Corporation follows the asset and liability method, whereby
deferred tax assets and liabilities are recognized for the future consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.


                                      -7-
<PAGE>




                    The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FIXED ASSETS - Fixed assets are carried at original cost. Depreciation is
provided for primarily by using accelerated depreciation methods over the
estimated service lives as follows:

                 Improvements                              31 years
                 Furniture and Fixtures                   3-5 years
                 Equipment                                3-5 years

Maintenance and repairs costs are expensed as incurred.

MORTGAGE SERVICING RIGHTS - The Corporation recorded an asset related to
servicing of loans. This asset is affected by the predominant risk
characteristics of the underlying financial assets and, accordingly, the
Corporation periodically assesses the asset for impairment. Since the underlying
financial assets primarily represent loans collateralized by first mortgages,
the servicing rights asset encompasses risks commonly associated with mortgage
loans. Mortgage servicing rights are amortized over the period of the estimated
net servicing income which is generally less than one year as the Corporation's
loan portfolio is short term in nature. The Corporation's loans are generally
under one year in nature. Estimation of a valuation allowance to reduce the
servicing rights asset to fair value involves evaluating the characteristics of
the underlying assets including interest rates, estimated remaining lives, dates
of origination, terms, and geographic location.

INCOME PER COMMON SHARE - Basic earnings per share ("EPS") is based on the
weighted average number of common shares outstanding for the period, excluding
the effects of any potentially dilutive securities. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted. Net income per share is calculated by
dividing net income by the weighted average number of common shares outstanding
during the period.

Basic and diluted income per share was calculated using the following number of
shares:

                                                      2003             2002
                                                      ----             ----
        Average shares outstanding                  1,173,382       1,173,382
                                                    ---------       ---------

        Basic shares                                1,173,382       1,173,382
        Net dilutive effect of options                 18,785          13,248
                                                   ----------       ---------
        Diluted shares                              1,192,167       1,186,630
                                                    =========       =========

RECLASSIFICATIONS - Certain reclassifications were made to the 2001 financial
statements to conform with the 2002 presentation. Such reclassifications did not
have a material effect on the financial statements.



                                      -8-
<PAGE>



                    The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

STOCK OPTIONS - As allowed by Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards ("SFAS") No. 123 "Accounting for
Stock-Based Compensation", the Corporation accounts for stock-based compensation
using the intrinsic value method under Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees."

The Corporation generally awards options for a fixed number of shares at an
option price equal to the fair value at the date of grant. The Corporation has
adopted the disclosure-only provisions of FASB's SFAS No. 123, see Note 10.

USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting periods. Actual results could differ
significantly from those estimates.

NEW ACCOUNTING PRONOUNCEMENTS - In June 2001, the FASB issued SFAS No. 142,
"Goodwill and Other Intangible Assets," which requires that goodwill and
intangible assets with indefinite lives no longer be amortized, but instead
tested for impairment at least annually. The Corporation adopted SFAS No. 142
effective April 1, 2002 and the adoption of the statement had no effect on the
financial statements.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations," which addresses the recognition and measurement of obligations
associated with the retirement of tangible long-lived assets. SFAS No. 143 is
effective April 1, 2003, with early adoption permitted. The Corporation plans on
adopting SFAS No. 143 effective April 1, 2003 and believes the adoption of the
statement will have no effect on the financial statements.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," which addresses the accounting and reporting for
the impairment or disposal of long-lived assets. The Corporation adopted SFAS
No. 144 effective April 1, 2002 and the adoption of the statement had no effect
on the financial statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements 4,
44, 64," which addresses reporting related to the extinguishment of debt,
accounting for intangible assets and the accounting for leases. The Corporation
adopted SFAS No. 145 effective May 15, 2002 and the adoption of the statement
had no effect on the financial statements.



                                      -9-
<PAGE>



                    The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which addresses financial accounting and
reporting for costs associated with exit or disposal activities. Under SFAS No.
146, such costs will be recognized when the liability is incurred, rather than
at the date of commitment to an exit plan. SFAS No. 146 is effective for exit or
disposal activities that are initiated after December 31, 2002, with early
application permitted. The Corporation adopted SFAS No. 146 effective January 1,
2003 and the adoption of the statement had no effect on the financial
statements.

In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
Financial Institutions, an amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9," which addresses accounting for purchases of certain
financial institutions. SFAS No. 147 is effective October 1, 2002, with early
application permitted. The Corporation adopted SFAS No. 147 effective October 1,
2002 and did not have any goodwill that was subject to Statement No. 72 and
therefore the provisions of Statement No. 147 have no effect on the financial
statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an amendment of FASB Statement No.
123," which provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
In addition, this Statement amends the disclosure requirements of SFAS No. 123
to require prominent disclosure in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Corporation has adopted the
requirements of SFAS No. 148 effective March 31, 2003 with no material effect on
its financial statements.

NOTE 2 - PARTNERSHIPS

On March 21, 1996, the Corporation formed a Limited Partnership (the "Limited
Partnership A") known as First Connecticut Capital Mortgage Fund A, Limited
Partnership of which the Corporation is the general partner.

The purpose of this entity is to sell units in the Limited Partnership A to
investors in a private placement, up to a maximum of $5,000 in $50 units, for
the purpose of funding a short-term Portfolio Loan Program for the Limited
Partnership A. The limited partners will be restricted to investors who qualify
as "Accredited Investors", as defined in Regulation D, promulgated under the
Securities Act of 1933.




                                      -10-
<PAGE>



                    The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)


NOTE 2 - PARTNERSHIPS (CONTINUED)

This program generates income to the Corporation in the form of loan origination
fees and servicing fees in excess of stipulated income returns to the limited
partners in connection with mortgage loans that are purchased by the Limited
Partnership A from the funds invested by the limited partners. The Corporation
does not guarantee a return of capital or interest to the limited partners.

On June 26, 2001 the Corporation established a second private placement offering
to be known as First Connecticut Capital Mortgage Fund B, Limited Partnership
(the "Limited Partnership B") of which the Corporation is the general partner.
The purpose of the Limited Partnership B is to sell units to investors in a
private placement, up to a maximum of $5,000 in $50 units, for the purpose of
supplying additional funding to a short-term Portfolio Loan Program. The
partners will also be limited to investors who qualify as "Accredited
Investors". The Corporation does not guarantee a return of capital or interest
to the limited partners.

As of March 31, 2003 and 2002, the Corporation had a one-percent interest in the
Limited Partnership A with a recorded investment balance of $46 and $43,
respectively, which is accounted for on the equity method of accounting and
included within other assets. The following represents un-audited summarized
financial information for the Limited Partnership A as of and for the years
ended December 31, 2002 and 2001, the Limited Partnership's fiscal year end:

                                                         2002              2001
                                                         ----           -------
      Total assets
          (principally consisting of
           mortgages receivable)                   $    5,096        $    4,837
      Total liabilities                            $       46        $       71
      Total partnership capital                    $    5,050        $    4,765
      Total revenues                               $      569        $      597
      Net (loss) income                            $      (15)       $       12

As of March 31, 2003 and 2002, the Corporation had a one-percent interest in the
Limited Partnership B with a recorded investment balance of $34 and $12,
respectively, which is accounted for on the equity method of accounting and
included within other assets. The following represents un-audited summarized
financial information for the Limited Partnership B as of and for the years
ended December 31, 2002 and 2001, the Limited Partnership's fiscal year end:

                                                  2002       2001
                                                  ----       ----
      Total assets (principally consisting
          of mortgages receivable)            $  2,692      $ 813
      Total liabilities                       $     32      $   6
      Total partnership capital               $  2,660      $ 807
      Total revenues                          $    208      $  31
      Net income (loss)                       $      3      $  (1)



                                      -11-
<PAGE>



                    The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)


NOTE 2 - PARTNERSHIPS (CONTINUED)

The Corporation has not consolidated their investments in the partnerships as
the limited partners can remove the Corporation as the general partner through a
simple majority vote without cause and therefore the Corporation does not
believe that it has an overall controlling interest within the partnerships.

NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans and allowance for loan losses at March 31, 2003 and 2002 are as follows:

                                                         2003          2002
                                                         ----          ----
      Mortgage loans                                  $    2,048    $    2,766
      Allowance for loan losses                             (539)         (594)
                                                      ----------    ----------
      Total                                           $    1,509    $   2,172
                                                      ==========    =========

      Mortgage loans due from related parties         $        -    $     225
                                                      ==========    =========

      Mortgage loans held for sale                    $    1,571    $   1,355
                                                      ==========    =========

Net unamortized fees associated with loans and loans held for sale are $33 and
$49 as of March 31, 2003 and $78 and $28 as of March 31, 2002, respectively.

Changes in the allowance for loan losses for the years ended March 31, 2003 and
2002 are as follows:

                                                        2003            2002
                                                        ----            ----
      Beginning balance                           $      594         $    600
      Provisions                                          87               (6)
      Charge-offs                                       (142)             --
      Recoveries                                           -              --
                                                  ----------        ----------
      Ending balance                              $      539        $     594
                                                  ==========        =========

No valuation allowance has been established for the loans held for sale or loans
due from related parties as of March 31, 2003 and 2002.

Loans and loans held for sale have interest rates ranging between 12% and 15%.
None of the Corporation's loans have a recourse provision.

At March 31, 2003, the Corporation has impaired loans of $594 and a related
allowance of $539, as compared to $628 of impaired loans and a related allowance
for investment losses of $569 at March 31, 2002.

                                      -12-
<PAGE>

                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)




NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES (CONTINUED)

The average impaired loans for the years ended March 31, 2003 and 2002 were $611
and $637, respectively, and the income recorded (under the cash basis method) on
these loans identified as impaired totaled $65 and $66, respectively. Loans on
which the accrual of interest has been discontinued for the years ended March
31, 2003 and 2002 amounted to $11 and $25, respectively. If those loans had been
current throughout their term, interest income would have increased $2 for both
the years ended March 31, 2003 and 2002.

Loans that are overdue by 90 days and accruing interest are $90 and $250 for the
years ended March 31, 2003 and 2002, respectively.

Loans serviced for the benefit of others totaled $15,476 and $11,442 for the
years ended March 31, 2003 and 2002, respectively.

NOTE 4 - FIXED ASSETS

The costs and related accumulated depreciation of the Corporation's fixed assets
at March 31, 2003 and 2002 were as follows:

                                            2003                 2002
                                            ----                 ----
      Improvements                       $        7           $        7
      Equipment                                  50                   49
                                         ----------           ----------
      Fixed assets at cost                       57                   56
      Accumulated depreciation                  (45)                 (40)
                                         ----------           ----------
      Fixed assets - net                 $       12           $       16
                                         ==========           ==========

NOTE 5 - MORTGAGE SERVICING RIGHTS

Mortgage servicing rights at March 31, 2003 and 2002 are summarized as follows:

                                             2003          2002
                                             ----          ----
      Balance at beginning of year, net  $       69      $    72
         Originations                            52           69
         Amortization                           (69)         (72)
                                         ----------      -------
      Balance at end of year, net        $       52      $    69
                                         ==========      =======

The estimated fair value of capitalized mortgage servicing rights is based on
estimated cash flows discounted using rates commensurate with risks involved.
Assumptions regarding prepayments, defaults and interest rates are determined
using available market information. No valuation allowance was recorded at March
31, 2003 and 2002, based on the characteristics of the underlying financial
assets.



                                      -13-
<PAGE>


                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)



NOTE 6 - INCOME TAXES

The income tax provision consists of the following for the years ended March 31,
2003 and 2002:

                                            2003                 2002
                                            ----                 ----
      Current:
         Federal                         $        -           $        -
         State                                   47                   11
                                         ----------           ----------
      Total current                              47                   11
                                         ----------           ----------

      Deferred:
         Federal                                178                  304
         State                                    -                    -
                                         ----------           ----------
      Total deferred                            178                  304
                                         ----------           ----------

      Total income tax provision         $      225           $      315
                                         ==========           ==========

A reconciliation of the income tax provision computed by applying the federal
and state statutory rates to income before taxes to the actual income tax
provision for the years ended March 31, 2003 and 2002 is as follows:

                                             2003                   2002
                                             ----                   ----
      Federal income tax provision
         at statutory rate               $      164           $    109
      State income tax, net of
         federal benefit                         47                 11
      Valuation allowance
         adjustment and other                    14                195
                                         ----------           --------
      Total                              $      225           $    315
                                         ==========           ========


The components of the net deferred tax asset at March 31, 2003 and 2002 are as
follows:

                                            2003                   2002
                                            ----                   ----
      Deferred tax asset:
         Net operating loss
          carryforwards                  $    2,385           $    2,558
         Loan loss reserves                     162                  178
         Valuation allowance                 (2,475)              (2,486)
                                         ----------           ----------
      Net deferred tax asset             $       72           $      250
                                         ==========           ==========

                                      -14-
<PAGE>


                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)




NOTE 6 - INCOME TAXES (CONTINUED)

The deferred tax asset results primarily from federal net operating loss
carryforwards (NOL'S). Management has evaluated the available evidence about
future taxable income. The valuation allowance reduces the deferred tax asset
related to the NOL'S to management's best estimate of the amount of such
deferred tax asset that more likely than not will be realized. The valuation
allowance was decreased by $11 and increased by $186 for years ended March 31,
2003 and 2002, respectively. These changes are due primarily to a change in the
expected utilization of NOL'S based on future Corporation's earnings and the
realizability of the deferred tax asset given the proposed asset purchase
transaction of the Corporation, see Note 14.

At March 31, 2003, the Corporation had available federal NOL'S of $7,950 for
income tax purposes, which expire from 2004 to 2016.

NOTE 7 - LINE OF CREDIT

The Corporation has a commercial line of credit with Hudson United Bank dated
June 11, 2002. This $3,500 line of credit is for a term of one year and interest
is computed at 2.5% over the Wall Street Prime Rate and will expire on June 30,
2003. The effective interest rate (Wall Street Prime Rate plus 2.5%) at March
31, 2003 and 2002 was 6.75% and 7.25%, respectively.

The line of credit is collateralized by an assignment of notes and mortgages
equal to the amount of the loan. At March 31, 2003 and 2002, there was $1,487
and $2,441 advanced on this line of credit, respectively. In addition, the bank
has a security interest in all assets of the Corporation as a result of the line
of credit.

The Corporation was in violation with a debt to net worth financial covenant on
the bank line of credit as of March 31, 2002. The bank covenants, which are
tested annually, are: a) current ratio to exceed 1.5 to 1 at March 31, 2003 and
1.25 to 1 at March 31, 2002, b) debt to worth ratio not to exceed 2 to 1 at
March 31, 2003, and 1 to 1 at March 31, 2002 and c) net worth requirement of
$2,000. Hudson United Bank has waived the violation of the debt to worth ratio
covenant for the year ended March 31, 2002. At March 31, 2003 there were no
violations with the bank line of credit financial covenants.

The Corporation's liquidity is highly dependent upon the banks credit line. If
the credit facility was not in place the Corporation would seek other similar or
alternative financing sources. The Corporation expects Hudson United Bank to
renew the current credit line for an additional one-year term.



                                      -15-
<PAGE>




                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)



NOTE 8 - TRANSACTIONS WITH AFFILIATES

Affiliates include directors and officers of the Corporation and members of
their immediate families and companies, which have a 5% or more ownership in the
Corporation.

Legal services, including representation of the Corporation on the closing of
all new loans, foreclosure proceedings on delinquent loans and general corporate
and security matters are provided by a firm in which a director of the
Corporation is a principal.

As of March 31, 2003, the Corporation does not have any loans due from an
affiliate. As of March 31, 2002, the Corporation has $225 in loans due from an
affiliate, Sonny Field, LLC. The President of Sonny Field, LLC, is a director of
the Corporation. The loan is collateralized by a first mortgage on property
owned by Sonny Field, LLC and is personally guaranteed by the director. The Loan
Committee and the Board of Directors approved the loan which was granted at
terms equivalent to other arm's length transactions entered into by the
Corporation. The loan was repaid in fiscal year 2003.

The Corporation utilizes the appraisal services of Larson Associates, LLC for
the majority of the Corporation's appraisal needs. Larson Associates, LLC is
owned by the Corporation's president and his spouse. The Corporation does not
pay for these appraisals as the fees are paid by the borrower. Larson
Associates, LLC performs appraisal services for a number of other clients in
addition to the Corporation, and management of the Corporation believes that all
appraisals performed by Larson Associates, LLC were performed in an unbiased
manner and represent proper market valuations.

The Corporation subleases office space to Larson Associates, LLC on a monthly
basis. Amounts received from Larson Associates, LLC for the years ended March
31, 2003 and 2002 were $5, respectively.

During 2003 and 2002, the Corporation has sold loans to Limited Partnership A
and Limited Partnership B. In addition, the Corporation services all loans sold
to these partnerships. As of March 31, 2003 and 2002, the Corporation is
servicing $4,795 and $4,768 of loans for Limited Partnership A and $3,263 and
$1,254 of loans for Limited Partnership B, respectively. For the years ended
March 31, 2003 and 2002, service fee income earned for servicing these loans
amounted to approximately $58 and $63 from Limited Partnership A and
approximately $34 and $3 from Limited Partnership B, respectively.

Certain members of the Corporation's management, board of directors, employees
and their immediate families are limited partners of Limited Partnership A and
Limited Partnership B. As of March 31, 2003 and 2002, these individuals
accounted for 15% and 19%, respectively, of the ownership in Limited Partnership
A. As of March 31, 2003 and 2002, these individuals accounted for 7% of the
ownership in Limited Partnership B.




                                      -16-
<PAGE>




                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)


NOTE 8 - TRANSACTIONS WITH AFFILIATES (CONTINUED)

During 2003 and 2002, the Corporation has sold portions of loans to certain
members of management, board of directors, employees and their immediate
families ("affiliates"). In addition, the Corporation services all of these
loans. As of March 31, 2003 and 2002 the Corporation is servicing $3,071 and
$2,721 of loans owned by certain members of management, board of directors,
employees and their immediate families, respectively. Service fee income earned
for servicing these loans amounted to approximately $57 and $41 for the years
ended March 31, 2003 and 2002, respectively. Within the above loan amounts the
Corporation is servicing $2,098 and $1,390 of loans, as of March 31, 2003 and
2002, respectively, which were sold to a board member, his limited liability
company or trust of which fees were earned of $23 and $17, respectively. If for
any reason the above loans, that are partially sold, were to default and become
an asset acquired, upon liquidation, the board member, his limited liability
company or trust is entitled to recovery of its investment and accrued interest
before the Corporation can recover its investment in any of the above loans. The
Corporation does not guarantee any investment or interest return in the above
transactions.

The Corporation grants a priority position on one or more loans, that are
partially sold, with the board member, his limited liability company or trust,
when the loan bears a higher nature of risk or has a higher loan to value ratio
than loans sold to Limited Partnership A, Limited Partnership B or others. Loans
are sold to this board member or his limited liability company or trust only if
such loans cannot be sold to Limited Partnership A or B, assigned to Hudson
United Bank or sold to a different person who does not require a loan priority.
It is the opinion of management that the Corporation benefits by selling such
loans under this arrangement to such board member, his limited liability company
or his trust rather than declining such loans.

The following table summarizes the amount of the loans serviced and the fee
income generated from loan sales to affiliates:
                                              2003                  2002
                                              ----                  ----
      Loan sales:
         Management                      $         305        $        367
         Board of Directors                      2,239               1,532
         Employees and families                    527                 822
                                         -------------        ------------
      Total                              $       3,071        $      2,721
                                         =============        ============

      Fee income:
         Management                      $           6        $          6
         Board of Directors                         42                  23
         Employees and families                      9                  12
                                         -------------        ------------
      Total                              $          57        $         41
                                         ===============      ============

None of the above transactions with affiliates have a recourse provision.



                                      -17-
<PAGE>



                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)


NOTE 8 - TRANSACTIONS WITH AFFILIATES (CONTINUED)

As of March 31, 2003, the Corporation had borrowed $154 from Partnership A to
fund a loan at an interest rate of 11%. The $203 of accounts payable due to
related parties at March 31, 2002 is due to a wire transfer of funds clearing
April 3, 2002 for a loan that closed on March 25, 2002. The funds are due to the
attorney who closed the loan. The attorney is a board member.

NOTE 9 - COMMITMENTS AND CONTINGENCIES AND FINANCIAL
         INSTRUMENTS WITH OFF-BALANCE SHEET RISK

On May 6, 2002, the Corporation entered into a $250 letter of credit issued to
the Town of North Branford, Connecticut for compliance of road construction on a
project to which the Corporation has a loan. Effective January 23, 2003, the
letter of credit was reduced to $100. No amounts have been drawn or are expected
to be drawn on this letter of credit which is expected to be released within the
next twelve months.

On November 11, 2001, the Corporation had entered into two letters of credit
with the town of Glastonbury, Connecticut. The first letter of credit was issued
in the original amount of $194 for the construction of a roadway and the second
letter is in the amount of $75 for soil and erosion control. Effective October
22, 2002, the roadway letter of credit has been reduced to $14. The $75 letter
of credit for soil and erosion control remains in place and is expected to be
reduced and/or released within the next twelve months. The same is expected for
the balance of the roadway letter of credit. No amounts have been drawn or
expected to be drawn on these letters of credit.

The Corporation entered into two letters of credit with the town of Fairfield,
Connecticut. The first letter of credit, dated November 22, 2002, is for
planning and zoning in the amount of $146. The second letter of credit, dated
October 8, 2002, is for sewer construction in the amount of $28. No amounts have
been drawn or are expected to be drawn on these letters of credit.

As of March 31, 2003 and 2002, the Corporation had outstanding loan commitments
of $2,367 and $3,068, respectively. These amounts represent the balances of
construction loans previously closed by the Corporation but not fully advanced.

The Corporation has not been required to perform on any financial guarantees
during the years ended March 31, 2003 and 2002. The Corporation has not incurred
any losses on its commitments for the years ended March 31, 2003 and 2002.

The Corporation's President has an employment agreement, whereby, upon
termination without cause, the President would receive one year in salary or
approximately $125,000.



                                      -18-
<PAGE>



                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)



NOTE 10 - STOCK OPTIONS

The Corporation has a compensatory stock option plan adopted in 1999 (the
"Plan") which enables the granting of options to officers and directors to
purchase shares of the Corporation's common stock at prices equal to fair value
at the date of grant. Options expire within ten years of grant and vest
immediately.

On May 3, 2001, 100,000 options were granted under the Plan at an exercise price
of $.64. No options were exercised during the year ended March 31, 2003 and
55,500 options were cancelled during 2003. No options were exercised or
cancelled during the year ended March 31, 2002. No compensation cost has been
recognized for stock options awarded under the Plan.

On October 1, 2002, the Corporation issued a total of 79,500 non Plan options
(other options), at an exercise price of $.82 per share to officers, directors
and employees of the Corporation. The options expire five years from the grant
date and vest immediately. No other options were exercised or cancelled during
the year ended March 31, 2003 and no compensation cost has been recognized.

The Corporation has adopted the disclosure only provision of SFAS No. 123. If
the Corporation had elected to recognize compensation costs based on the fair
value at the date of the grant for awards granted, consistent with the
provisions of SFAS No. 123, the Corporation's net income, after tax, would have
been adjusted to reflect additional compensation expense of $2 and $20 for the
years ended March 31, 2003 and 2002, respectively. Pro forma net income would
have been $256 and earnings per share would have been $.22 (basic and diluted)
for the year end March 31, 2003. Pro forma net income would have been $25 and
earnings per share would have been $.02 (basic and diluted) for the year ended
March 31, 2002. The estimated weighted average fair value of stock options at
the time of the grant using the Black-Scholes option pricing model was $.06 for
the fiscal year 2003 non Plan option shares issued and $.35 for the fiscal year
2002 Plan option shares issued. The assumptions which were used in computing the
weighted fair value of the options were as follows:

                                                   2003               2002
                                                   ----               ----

      Annualized dividend yield                       0%                 0%
      Expected Volatility                         115.0%             108.0%
      Risk free interest rate                       3.1%               5.2%
      Expected option term                            5                 10




                                      -19-
<PAGE>



                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)




NOTE 11 - LEASES

The Corporation leases office space and equipment for use in operations. The
leases generally provide that the Corporation pays taxes, insurance and
maintenance expenses. Some leases contain renewal options, and rent payments
change in accordance with changes in the Consumer Price Index. Rental expense
relating to cancelable and non-cancelable operating leases amounted to $31 for
both the years ended March 31, 2003 and 2002.

As of March 31, 2003, future minimum rental payments required under
non-cancelable operating leases were as follows:

                          2004         $       36
                          2005                 36
                          2006                 36
                          2007                 36
                          2008                 27
                                       ----------

                          Total        $      171
                                       ==========

NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The information provided below is required by SFAS No. 107, "Disclosures about
Fair Value of Financial Instruments". Methods and assumptions for estimating the
fair value of the Corporation's financial instruments are set forth below. Fair
values are calculated based on the value without regard to any premium or
discount that may result from concentrations of ownership of a financial
instrument, possible tax ramifications or estimated transaction costs.

LOANS - Substantially all of the Corporation's loans have a maturity of one year
or less. For loans considered to be impaired under SFAS No. 114, the estimated
fair value for loans is based on the present value of expected future cash flows
discounted at the loan's effective interest rate or on recent external
appraisals or other available market information if the loan is collateral
dependent. Assumptions regarding credit risk, cash flow, and discount rates are
judgmentally determined using available market information and specific borrower
information.

LOANS HELD FOR SALE - For loans held for sale the fair value is estimated by
discounting contractual cash flows adjusted for prepayment estimates using
discount rates based on secondary market sources adjusted to reflect differences
in servicing and credit costs.

MORTGAGE SERVICING RIGHTS - The Corporation estimates fair value for its
servicing rights by discounting expected net cash flows through maturity from
servicing activities at market discount rates that reflect the credit and
interest rate risk inherent in the servicing rights.



                                      -20-
<PAGE>



                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)



NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

OTHER ON-BALANCE SHEET FINANCIAL INSTRUMENTS - Other on-balance sheet financial
instruments include cash and cash equivalents, accrued interest receivable and a
line of credit. The carrying value of each of these financial instruments is a
reasonable estimation of fair value.

The following summarizes the Corporation's carrying value and fair value of the
financial instruments as of March 31, 2003 and 2002:
<TABLE>
<CAPTION>

                                            MARCH 31, 2003                      MARCH 31, 2002
                                            --------------                      --------------
                                       Carrying         Estimated          Carrying        Estimated
                                         VALUE          FAIR VALUE          VALUE          FAIR VALUE
ASSETS
<S>                                  <C>               <C>               <C>               <C>
   Cash and cash equivalents         $        30       $        30       $       437       $       437

   Loans, net                        $     1,509       $     1,509       $     2,172       $     2,172
   Loans due from related parties    $         -       $         -       $       225       $       225
   Loans held for sale               $     1,571       $     1,571       $     1,355       $     1,355
   Asset acquired                    $       515       $       515       $         -       $         -
   Mortgage servicing rights         $        52       $        52       $        69       $        69

LIABILITIES
   Line of credit                    $     1,487       $     1,487       $     2,441       $     2,441
   Accounts payable                  $       254       $       254       $       297       $       297
</TABLE>

The above table does not include any amounts for the value of any off-balance
sheet items as discussed in Note 9, as the carrying and fair values are not
significant.

LIMITATIONS - Fair value estimates are made at a specific point in time, based
on relevant market information and information about the financial instrument.
These estimates do not reflect any premium or discount that could result from
offering for sale at one time the Corporation's entire holdings of a particular
financial instrument. Because no market exists for a significant portion of the
Corporation's financial instruments, fair value estimates are based on judgments
regarding future expected loss experience, current economic conditions, risk
characteristics of various financial instruments and other factors. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the estimate.



                                      -21-
<PAGE>



                   The First Connecticut Capital Corporation
                          Notes to Financial Statements
                   For the Years Ended March 31, 2003 and 2002
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)





NOTE 13 - CONCENTRATIONS OF CREDIT RISK

The majority of the mortgage loans are made to residential home builders within
the State of Connecticut. The Corporation believes that all loans are well
secured, however, the Corporation is subject to the housing market risks within
Connecticut. The Corporation is also subject to individual credit risks as the
Corporation has six loans outstanding at March 31, 2003, that account for over
80% of the total loans and loans held for sale. The Corporation has eleven loans
outstanding at March 31, 2002, that account for over 70% of the total loans and
loans held for sale.

NOTE 14 - ASSET SALE

The Corporation has entered into a definitive agreement with respect to the sale
by the Corporation of substantially all of its assets to, and the assumption of
all of the Corporation's liabilities by, FCCC Holding Company, LLC, a limited
liability company consisting of members of management and the board of directors
of the Corporation, including Lawrence R. Yurdin, the Corporation's President
(the "Asset Purchase Transaction"). The Corporation has also entered into a
definitive agreement with certain private investors who are not presently
affiliates of the Corporation with respect to the sale by the Corporation of
shares of its common stock and warrants to purchase common stock, together with
a contractual undertaking to permit the investors to manage the business and
strategic operations of the Corporation subsequent to the sale of the business
assets (the "Stock Purchase Transaction").

On April 11, 2003, the Corporation filed a definitive Proxy Statement with the
Securities and Exchange Commission for its Annual Meeting of Stockholders that
set forth, among other things, information with respect to the Asset Purchase
and the Stock Purchase Transactions for stockholder consideration. The date of
the Annual Meeting of Stockholders is June 3, 2003, and the record date is April
10, 2003. The Notice of Annual Meeting of Stockholders and Proxy Statements,
including copies of the Corporation's Annual Reports on Form 10-KSB, as amended,
for the fiscal years ended March 31, 2002 and March 31, 2001, and the
Corporation's Quarterly Report on Form 10-QSB, as amended, for the quarterly
period ended December 31, 2002, were mailed to stockholders of record on the
record date on or about April 25, 2003. At the Annual Meeting, stockholders will
be asked to consider, vote upon and approve the Asset Purchase and the Stock
Purchase Transactions.

In the event that the stockholders approve the Asset Purchase and Stock Purchase
Transactions at the Annual Meeting, the simultaneous closing of those
transactions will take place on or about June 10, 2003. If the transactions were
to be approved, the Corporation would have sold its operating business. See the
Corporation's March 31, 2003 10-KSB for a pro forma balance sheet illustrating
the impact of the proposed transaction and for a more detailed discussion of the
transactions.





                                      -22-
<PAGE>