U.S. SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.


                                   FORM 10-QSB


                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2002

                          Commission File No. 000-30724


                          MONTGOMERY REALTY GROUP, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                                     Nevada
          ------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                   88-0377199
                         ------------------------------
                        (IRS Employer Identification No.)

                        400 Oyster Point Blvd., Suite 415
                          South San Francisco, CA 94080
                    ---------------------------------------
                    (Address of principal executive offices)

                                 (650) 266-8080
                           --------------------------
                           (Issuer's telephone number)

                                       n/a
               ---------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date: As of September 30, 2002, issuer had
16,500,000 shares of issued and outstanding common stock, par value $0.001.

Transitional Small Business Disclosure Format:  Yes [ ]  No [X]

<PAGE>

                          MONTGOMERY REALTY GROUP, INC.


                              INDEX TO FORM 10-QSB


                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

             Condensed Balance Sheets as of September 30, 2002,
               and December 31, 2001.......................................3
             Condensed Statements of Operations for the Nine Months
               Ended September 30, 2002, and 2001..........................4
             Condensed Statements of Operations for the Three Months
               Ended September 30, 2002, and September 30, 2001 ...........5
             Condensed Statements of Cash Flows for the Nine Months
               Ended September 30, 2002, and 2001..........................6
             Notes to Condensed Financial Statements.......................7

Item 2.  Management's Discussion and Analysis or Plan of Operations........8

Item 3.  Controls and Procedures..........................................13

                      PART II. OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders..............14

Item 6.  Exhibits and Reports on Form 8-K.................................14

         Signature........................................................14


                                       2
<PAGE>

                          PART I--FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
MONTGOMERY REALTY GROUP, INC.

CONDENSED BALANCE SHEETS
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001 (Unaudited)
----------------------------------------------------------------------------------------------------------------------------

                                                                                         September 30,        December 31,
                                                                                              2002                2001
ASSETS
<S>                                                                                      <C>                 <C>
PROPERTY:
  Land                                                                                   $    2,699,500      $    2,699,500
  Building                                                                                    5,040,000           5,040,000
  Improvements                                                                                3,115,688           3,108,384
                                                                                         --------------      --------------

           Total                                                                             10,855,188          10,847,884

  Less accumulated depreciation                                                              (2,904,213)         (2,749,794)
                                                                                         --------------      --------------

           Property, net                                                                      7,950,975           8,098,090

CASH                                                                                            407,587              81,328

TENANT RECEIVABLES                                                                               23,133              23,167

PREPAID EXPENSES AND OTHER ASSETS                                                               114,718             132,907

DEFERRED LEASE COMMISSIONS                                                                        7,987               9,625

DEFERRED LOAN COSTS-net                                                                         129,751             108,933

DEFERRED RENT RECEIVABLE                                                                         36,750              36,859

DEFERRED TAX ASSET                                                                            1,675,337           1,643,693
                                                                                         --------------      --------------

TOTAL ASSETS                                                                             $   10,346,238      $   10,134,602
                                                                                         ==============      ==============


LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES:
  Notes payable                                                                          $   12,736,070      $   12,428,036
  Accounts payable                                                                               25,584              26,901
  Accrued interest                                                                               73,084              74,472
  Security deposits and prepaid rent                                                             25,546              66,348
                                                                                         --------------      --------------

TOTAL LIABILITIES                                                                            12,860,284          12,595,757
                                                                                         --------------      --------------

STOCKHOLDERS' DEFICIT:
  Common stock, $0.001 par value; authorized 80,000,000 shares;
    issued and outstanding, 16,500,000 shares at September 30, 2002
    and, December 31, 2001                                                                       16,500              16,500
  Preferred stock, $0.001 par value; authorized 20,000,000 shares;
    no shares issued and outstanding at September 30, 2002 and
    December 31, 2001                                                                                 -                   -
  Additional capital                                                                          1,692,742           1,692,742
  Accumulated deficit                                                                        (4,223,287)         (4,170,397)
                                                                                         --------------      --------------

TOTAL STOCKHOLDERS' DEFICIT                                                                  (2,514,045)         (2,461,155)
                                                                                         --------------      --------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                              $   10,346,238      $   10,134,602
                                                                                         ==============      ==============

See notes to the financial statements.                                                                                    3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONTGOMERY REALTY GROUP, INC.

CONDENSED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Unaudited)
----------------------------------------------------------------------------------------------------------------------------

                                                                                              2002                2001
<S>                                                                                      <C>                 <C>
REVENUES:
  Rent                                                                                   $    1,146,868      $    1,173,784
  Other                                                                                           1,945              16,943
                                                                                         --------------      --------------

           Total revenues                                                                     1,148,813           1,190,727
                                                                                         --------------      --------------

EXPENSES:
  Real estate taxes                                                                             182,509             241,984
  Utilities                                                                                      17,648              15,539
  Repairs and maintenance                                                                         1,877               9,277
  General building                                                                               10,858              16,723
  Administration                                                                                 53,429              68,625
  Insurance                                                                                       7,992              22,572
  Management fee                                                                                 90,000              90,000
  Depreciation                                                                                  154,419             153,978
  Amortization                                                                                   48,078              20,086
                                                                                         --------------      --------------

           Total expenses                                                                       566,809             638,784
                                                                                         --------------      --------------

INCOME BEFORE INTEREST EXPENSE
  AND INCOME TAXES                                                                              582,004             551,943

INTEREST EXPENSE, NET                                                                          (666,539)           (680,080)
                                                                                         --------------      --------------

LOSS BEFORE INCOME TAXES                                                                        (84,534)           (128,137)

INCOME TAX BENEFIT                                                                               31,644              31,144
                                                                                         --------------      --------------

NET LOSS                                                                                 $      (52,890)     $      (96,993)
                                                                                         ==============      ==============

NET LOSS PER COMMON SHARE, BASIC AND DILUTED                                             $       (0.003)     $       (0.006)
                                                                                         ==============      ==============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES,
  BASIC AND DILUTED                                                                          16,500,000          16,500,000
                                                                                         ==============      ==============


See notes to the financial statements.                                                                                    4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONTGOMERY REALTY GROUP, INC.

CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Unaudited)
---------------------------------------------------------------------------------------------------------------------------

                                                                                               2002                2001
<S>                                                                                      <C>                 <C>
REVENUES:
  Rent                                                                                   $      381,686      $      413,620
  Other                                                                                             800                 321
                                                                                         --------------      --------------

           Total revenues                                                                       382,486             413,941
                                                                                         --------------      --------------

EXPENSES:
  Real estate taxes                                                                              61,107              60,700
  Utilities                                                                                       6,173               7,830
  Repairs and maintenance                                                                           677               4,481
  General building                                                                                3,573               5,506
  Administration                                                                                 22,724              23,726
  Insurance                                                                                       2,664               7,524
  Management fee                                                                                 30,000              30,000
  Depreciation                                                                                   51,534              51,326
  Amortization                                                                                   15,269              6,373
                                                                                         --------------      --------------

           Total expenses                                                                       193,721             197,466
                                                                                         --------------      --------------

INCOME BEFORE INTEREST EXPENSE
  AND INCOME TAXES                                                                              188,765             216,475

INTEREST EXPENSE, NET                                                                          (222,172)           (225,598)
                                                                                         --------------      --------------

LOSS BEFORE INCOME TAXES                                                                        (33,407)             (9,123)

INCOME TAX BENEFIT                                                                               10,548               3,102
                                                                                         --------------      --------------

NET LOSS                                                                                 $      (22,859)     $       (6,021)
                                                                                         ==============      ==============


NET LOSS PER COMMON SHARE, BASIC AND DILUTED                                             $       (0.001)     $      (0.003)
                                                                                         ==============      ==============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES,
  BASIC AND DILUTED                                                                          16,500,000          16,500,000
                                                                                         ==============      ==============


See notes to the financial statements.                                                                                    5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONTGOMERY REALTY GROUP, INC.

CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Unaudited)
-----------------------------------------------------------------------------------------------------------------------------

                                                                                                 2002               2001
<S>                                                                                        <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                                 $      (52,890)     $     (96,993)
  Depreciation and amortization                                                                   202,497            174,065
  Deferred rent receivable                                                                            109             (4,536)
  Deferred taxes                                                                                  (31,644)           (31,144)
  Adjustments to reconcile net loss to net cash
    provided by operating activities:
    Tenant receivables                                                                                 34            (38,963)
    Prepaid expenses and other assets                                                              18,189            (36,138)
    Accounts payable                                                                               (1,318)            12,686
    Accrued interest                                                                               (1,388)             7,031
    Security deposits and prepaid rent                                                            (40,802)             2,530
                                                                                           --------------      -------------

           Net cash provided by (used in) operating activities                                     92,787            (11,462)
                                                                                           --------------      -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property                                                                            (7,304)           (19,064)
                                                                                           --------------      -------------

           Net cash used in investing activities                                                   (7,304)           (19,064)
                                                                                           --------------      -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of notes payable                                                       2,500,000            250,000
  Payment of loan costs                                                                           (67,258)          (184,137)
  Payments on notes payable                                                                    (2,191,966)                 -
                                                                                           --------------      -------------

           Net cash provided by financing activities                                              240,776              65,863
                                                                                           --------------      -------------

INCREASE IN CASH                                                                                  326,259              35,337

CASH, BEGINNING OF PERIOD                                                                          81,328              54,823
                                                                                           --------------      -------------

CASH, END OF PERIOD                                                                        $      407,587      $       90,160
                                                                                           ==============      ==============


See notes to the financial statements.                                                                                      6
</TABLE>
<PAGE>

                          MONTGOMERY REALTY GROUP, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

         The accompanying  unaudited  condensed  financial  statements have been
         prepared from the Company's  accounting  records in accordance with the
         rules  and  regulations  of the  Securities  and  Exchange  Commission.
         Accordingly,  they do not include all of the  information and footnotes
         required by  generally  accepted  accounting  principles  for  complete
         financial   statements.   Such  statements   include  all  adjustments,
         consisting  only of normal  recurring  adjustments,  that  are,  in the
         opinion  of  management,  necessary  for a  fair  presentation  of  the
         Company's financial position, and results of operations for the interim
         period reported upon. The interim condensed financial statements should
         be read in conjunction  with the Company's annual report on Form 10-KSB
         for  the  year  ended  December  31,  2001,   including  the  financial
         statements and the notes thereto.

2.       TRANSACTIONS WITH AFFILIATE

         Property  management  fees of $90,000  were paid to an affiliate of the
         majority  stockholder  for the nine months ended September 30, 2002 and
         2001, respectively.

3.       BASIC AND DILUTED LOSS PER SHARE OF BENEFICIAL INTEREST

         Basic and diluted  loss per share is  computed by dividing  net loss by
         the weighted average number of shares outstanding of 16,500,000 for the
         nine  months  ended  September  30,  2002 and 2001.  Common  stock from
         options  granted were not included in the  calculation  of diluted loss
         per  share  because  they were  antidilutive  for the  three-month  and
         nine-month periods ended September 30, 2002 and 2001.

4.       NOTES PAYABLE

         Montgomery's  financing  activities  for the  nine-month  period  ended
         September  30,  2002,  reflect  proceeds  from the  issuance of a first
         mortgage  loan  in  the  principal  amount  of  $2,500,000  secured  by
         Montgomery's  Eccles  project.  The loan is an 18-month  loan,  bearing
         interest  at prime plus 1 1/2%  (6.25% at  September  30,  2002) with a
         15-year  amortization.  The maturity  date on the loan is September 15,
         2003. The loan is personally  guaranteed by the principal  stockholder,
         Dinesh  Maniar.  The proceeds from the loan were used to repay the line
         of credit  and a  promissory  note in the  amounts  of  $1,798,727  and
         $250,000, respectively.

                                       7
<PAGE>

        ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward-Looking Information May Prove Inaccurate

         This report contains statements about the future, sometimes referred to
as  "forward-looking"  statements.   Forward-looking  statements  are  typically
identified by the use of the words "believe," "may," "will," "should," "expect,"
"anticipate,"  "estimate,"  "project,"  "propose,"  "plan," "intend" and similar
words and expressions. Statements that describe future strategic plans, goals or
objectives  of the  Company  are also  forward-looking  statements.  The Company
intends  the  forward-looking  statements  to be  covered  by  the  safe  harbor
provisions  for  forward-looking  statements  contained  in  Section  27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

         Readers  of  this  report  are  cautioned   that  any   forward-looking
statements,  including those regarding the Company or its  management's  current
beliefs, expectations, anticipations, estimations, projections, proposals, plans
or intentions are not guarantees of future  performance or results of events and
involve risks and  uncertainties.  The  forward-looking  information is based on
present  circumstances and on the Company's  predictions  respecting events that
have  not  occurred,  that  may not  occur  or that  may  occur  with  different
consequences from those now assumed or anticipated. Actual events or results may
differ  materially from those discussed in the  forward-looking  statements as a
result of various  factors.  The  forward-looking  statements  included  in this
report are made only as of the date of this report. The Company is not obligated
to update  such  forward-looking  statements  to  reflect  subsequent  events or
circumstances.

         The  following  discussion  should  be read  in  conjunction  with  the
financial statements of the Company and the notes thereto.

Overview

         Montgomery is a real estate company that emphasizes  investment in both
development  real  estate  assets  and  income-producing   real  estate  assets.
Montgomery  is  engaged  in  the  ownership,  leasing,  management,   operation,
development,  redevelopment,  acquisition  and sale of real estate assets in the
greater San  Francisco  Bay area.  Montgomery  currently  owns  retail  shopping
centers and an office  building.  Montgomery also owns an undeveloped  parcel of
land referred to as the "Eccles Project" in South San Francisco, as discussed in
more detail in the  Company's  report on Form 10-KSB and below under the heading
"Eccles Project."

         Montgomery  conducts all of its real property  management and brokerage
activities through a written agreement with a related  corporation,  Diversified
Investment  &  Management  Corporation,  which  is 100%  owned  by  Montgomery's
majority stockholder,  Dinesh Maniar. Mr. Maniar currently owns in excess of 96%
of the stock of Montgomery.

         Montgomery's principal activity is the lease, finance,  development and
sale of  commercial  real estate in the San Francisco Bay area. In its June 1999
acquisition  from  Dinesh  Maniar,   Montgomery   obtained  the  following  four
properties in California:

                  (1) the Keker & Van Nest Office Building in San Francisco;

                  (2) the Orchard Supply Shopping Center in San Ramon;

                  (3) the San Ramon Retail Center in San Ramon; and

                  (4) the Eccles Project land located in South San Francisco.

                                       8
<PAGE>

These four properties are described in detail in Montgomery's Form 10-KSB.

         These  assets  had a value  of  approximately  $26,820,000  based  upon
independent  appraisals  performed  between September 1998 and February 2002, as
detailed in footnote 2 to the audited financial statements. With the acquisition
of these assets in 1999,  Montgomery became and remains an operating real estate
company with approximately  80,000 square feet of leasable  property.  The lease
space  is  currently  100%  occupied.  The  Eccles  Project,  which  is the only
undeveloped real estate in Montgomery's portfolio, has been in contract twice at
prices that substantiate a third-party  appraisal,  which values the property at
$12,370,000. (See discussion below on Eccles Project).

Basis of Presentation of Financial Information

         Montgomery  accounts for its real estate  assets  using the  historical
cost method.  While this method is consistent with generally accepted accounting
principles,  since  Montgomery  acquired all of its real estate  assets from its
principal stockholder, Dinesh Maniar, in a "reverse acquisition," the historical
cost as shown on the financial  statements  goes back to Mr.  Maniar's  original
purchase  cost,  which in some  instances may be quite dated.  For example,  the
historical  cost of the Eccles  Project is  $539,500  dating  back to 1980.  The
appraised value of the Eccles Project is  $12,370,000.  While the Eccles Project
is the most  extreme  example of such a disparity  between  historical  cost and
appraised value, the reader's  attention is drawn to the Form 10-KSB,  including
the audited financial statements and the footnotes therein.

Results of Operations

         Nine Months Ended September 30, 2002 and September 30, 2001

         Montgomery's net loss for the nine months ended September 30, 2002, was
$52,890,  a decrease  from the net loss of  $96,993  for the nine  months  ended
September  30,  2001,  or  45.5%.  The  decrease  in  net  loss  is  principally
attributable  to the  decrease in real estate tax expense for the 2002  calendar
year, a decrease that management  believes is stable,  since the real estate tax
expenses for 2001 included supplemental tax expenses related to reassessments of
the  property  values of  Montgomery's  assets  and a  cumulative  tax  increase
stemming from the 1999 transfer of the real estate assets to Montgomery.

         The real estate tax expense is tied to California's  fiscal year, which
runs from July 1 of each year to June 30. During the California fiscal year July
1, 2000,  to June 30,  2001,  total real estate tax  expense  was  approximately
$362,568.  This amount (which is  approximately  $100,000 higher than either the
prior or current  fiscal year)  primarily  reflected the increased tax burden on
the Keker & Van Nest Office Building and the Eccles Project.  Adjustments to the
tax roll on both the Orchard  Supply  Shopping  Center and the San Ramon  Retail
Center  have now been made,  and the real estate tax burden was  increased  less
than $10,000 with respect to these  properties.  For the California  fiscal year
July 1, 2001,  to June 30, 2002,  the total real estate tax expense is $242,804.
Allowing for the Proposition 13 limitations, management estimates that the total
real estate tax expense for the July 1, 2002, to June 30, 2003, fiscal year will
be approximately $245,000.

         Noncash  depreciation  and  amortization  expenses  for the nine months
ended September 30, 2002, aggregated $202,497,  such that Montgomery shows a net
cash flow of approximately $149,607, based upon the formula of net income (loss)
increased by noncash items such as depreciation and amortization.

         Montgomery's  total revenues  decreased from  $1,190,727 for the period
ended September 30, 2001, to $1,148,813 for the period ended September 30, 2002,
or 3.5%. This decrease is due primarily to two factors:

                                       9
<PAGE>

                  (1) in the first quarter of 2001, Montgomery had special lease
         termination income of $12,500, which it did not have in 2002; and

                  (2) despite higher base rents generally, the reduction in real
         estate tax expense  lowered the rent  reimbursable  from Orchard Supply
         Hardware,  such that 2002  rental  income is  slightly  lower  than the
         income  figure for the same period in 2001 (even  though net profit has
         increased).

         With  the  exception  of  the  Eccles  Project,   all  of  Montgomery's
properties are 100% leased under lease terms  extending  beyond the end of 2002,
so that no rent  reductions due to vacancies are expected for the balance of the
year nor are significant rent increases  likely,  absent early termination of an
existing  lease and a releasing.  Revenues  will vary slightly due to changes in
the amount of expenses  reimbursable under net leases and changes in base rents,
which are keyed to the Consumer Price Index.

         Total operating  expenses  decreased from $638,784 for the period ended
September 30, 2001, to $566,809 for the nine months ended September 30, 2002, or
11.3%. While most operating expenses showed expected  variations due to variable
costs,  such as  utilities,  real  property  tax expense  decreased as discussed
above.

         Management  fees remained  constant at $10,000 per month,  although the
Board of Directors is scheduled to discuss  whether or not to end the moratorium
on management fee increases. The management fees were set to increase to $15,000
per month  July 1, 2001;  however,  management  deferred  that  increase  due to
limited  working  capital,  a situation  that no longer  exists.  Management may
authorize an increase in  management  fees payable to  Diversified  Investment &
Management Corporation, but has not done so as of the date of this report.

         Net interest expense  decreased from $680,080 for the nine months ended
September 30, 2001, to $666,539 for the nine months ended September 30, 2002, or
2.0%. This decrease is due to a lower interest rate on the prime-based loan that
encumbers the Eccles Project compared to the previous financing on the property.

         Three Months Ended September 30, 2002 and September 30, 2001

         Montgomery's  net loss for the three months ended  September  30, 2002,
was  $22,859,  an increase  from the net loss of $6,021  reported  for the three
months ended September 30, 2001, an increase of 279.6%. The increase in net loss
is  primarily  attributable  to a decrease in common area  maintenance  revenue,
which was a one-time  expenditure  chargeable  to tenants  recorded in the prior
year.

         Montgomery's  total  revenues  decreased  from  $413,941  for the three
months  ended  September  30,  2001,  to  $382,486  for the three  months  ended
September  30, 2002,  or 7.6%.  This  decrease is due primarily to a decrease in
one-time  common area  maintenance  revenue from  tenants in the Orchard  Supply
Shopping Center.

         Montgomery's  administrative  expenses  decreased  from $23,726 for the
three months  ended  September  30, 2001,  to $22,724 for the three months ended
September 30, 2002, or 4.2%, due to greater  utilization of in-house  accounting
and legal services provided by Diversified Investment & Management Corporation.

                                       10
<PAGE>

         With  the  exception  of  the  Eccles  Project,   all  of  Montgomery's
properties are 100% leased under lease terms  extending  beyond the end of 2002,
so that no rent  reductions due to vacancies are expected for the balance of the
year nor are significant rent increases  likely,  absent early termination of an
existing  lease and a releasing.  Revenues  will vary slightly due to changes in
the amount of expenses  reimbursable under net leases and changes in base rents,
which are keyed to the Consumer Price Index.

         Total operating expenses for the three months ended September 30, 2002,
decreased  from  $197,466 at September  30, 2001,  to $193,721 at September  30,
2002, or 1.9%. While most operating  expenses showed expected  variations due to
variable costs, such as utilities,  real property tax expense and administrative
expenses decreased as discussed above.

         Management  fees remained  constant at $10,000 per month,  as discussed
above.

         Total interest expense, net decreased from $225,598 for the three-month
period ended  September 30, 2001, to $222,172 for the  three-month  period ended
September 30, 2002, or 1.5%. This decrease is due to lower interest rates on the
Eccles  Project loan,  which lower rates are offset by the larger loan amount as
discussed in Liquidity and Capital Resources below.

Liquidity and Capital Resources

         Montgomery has met its requirements for liquidity and capital resources
principally  from cash provided by operations and by refinancing and realization
of equity.  Montgomery's  cash  increased  from $81,328 at December 31, 2001, to
$407,587 at September 30, 2002, due to net proceeds  received from a refinancing
of the Eccles Project as discussed below.

Operating Activities

         Operating  activities  for the nine months  ended  September  30, 2002,
provided net cash of $92,787,  compared to net cash of $11,462 used by operating
activities for the nine months ended  September 30, 2001, an increase of 909.5%.
Security  deposits remained the same, but prepaid rent decreased due to a change
in timing of rental payments from a major tenant.

Investing Activities

         Montgomery's   investing   activities  used  cash  of  $7,304  for  the
nine-month  period ended September 30, 2002, as compared to $19,064 for the same
period in 2001. The 2002 investing activities consist of capital improvements at
710 Sansome  Street  Building  and the 2001  investing  activities  involved the
payment of lease commissions and loan costs.

Financing Activities

         Cash flow from financing activities for the nine months ended September
30, 2002, increased from the $65,863 provided for the period ended September 30,
2001, to $240,776 provided for the period ended September 30, 2002. Montgomery's
financing activities for the nine-month period ended September 30, 2002, reflect
proceeds from the issuance of a first  mortgage loan in the principal  amount of
$2,500,000 secured by Montgomery's Eccles Project. The loan is an 18-month loan,
bearing interest at prime plus 1 1/2% (6.25%), with a 15-year amortization.  The
maturity  date  on the  loan is  September  15,  2003.  The  loan is  personally
guaranteed by the principal stockholder, Dinesh Maniar.

         Other than the loan  discussed  above,  all other mortgage loans have a
maturity of more than two years from the date of this report.

                                       11
<PAGE>

Equity in Real Estate

         Montgomery  has net cash flow  from its  current  activities,  which it
believes will continue on a long-term basis,  providing sufficient cash to cover
activities  other than new  acquisitions or developments  while  sheltering cash
flow from  income tax by reason of the net  taxable  loss that is  generated  by
depreciation  and  amortization.  While  Montgomery is able to realize cash flow
from  refinancing  of existing  assets,  such as through the  refinancing of the
Eccles Project as discussed above,  Montgomery's principal methods for obtaining
acquisition  and  development  capital  come from  either  additional  financing
activities,  as discussed above, or the sale or exchange of existing real estate
assets so as to  realize a cash or trade  value  from the  equity  generated  by
appreciation  of real estate assets.  Absent  additional  capital from financing
activities  or the sale or exchange of real estate  assets,  Montgomery  may not
have sufficient cash flow to fund expansions or acquisitions.

         These assets had a market value of approximately $26,820,000 based upon
independent  appraisals  performed  between September 1998 and February 2002, as
detailed in footnote 2 to the audited financial statements. With the acquisition
of these assets in 1999,  Montgomery became and remains an operating real estate
company with approximately  80,000 square feet of leasable  property.  The lease
space  is  currently  100%  occupied.  The  Eccles  Project,  which  is the only
undeveloped real estate in Montgomery's  portfolio,  is currently being actively
marketed,  and a third-party appraisal shows the property valued at $12,370,000.
(See discussion below on Eccles Project).

Capital Requirements

         Montgomery  plans to expand its asset base in the future.  Expansion is
currently focused upon the development, sale or exchange of the Eccles Project.

         Montgomery  believes that  diversification is the key to long-term real
estate industry viability and success. Therefore,  Montgomery plans to diversify
its current portfolio with future acquisitions of  income-producing  real estate
and/or real estate with development potential.  Montgomery will seek the capital
for such  growth and  diversification  through a  combination  of asset sales or
exchanges,  refinancings through commercial loan sources, as well as through the
sale of debt or equity  securities.  With the  exceptions of the Eccles  Project
development,  there are no  current  plans to raise  additional  capital at this
time.

Eccles Project

         Management  is  currently  refocusing  its  resources  upon the  Eccles
Project. To date, the property has been in contract twice in the past two years.
In 2000,  it was in contract for over  $14,500,000  and  recently,  as discussed
above, it was in contract for $12,000,000.  Given these two contracts,  together
with the recent appraisal of the property at $12,370,000, management believes it
likely that the property can be sold at a price close to the appraised values.

         As  previously  disclosed,  Montgomery  has been  working to obtain the
entitlements  for the Eccles  Project.  Loading access  easements in favor of an
adjacent  landowner,  which would have  restricted the  development at the site,
have been  terminated.  Montgomery has completed a Phase I Environmental  Report
and no toxic  waste or  hazardous  materials  were  found.  Montgomery  has also
completed a Seismic  Refraction  Study that  indicates  general  bedrock  ground
contours suitable for the proposed expansion. Montgomery retained an engineering
firm  to  perform  the  geotechnical  analysis  of  the  site.  Phase  I of  the
geotechnical  analysis  has been  completed  and a draft  soils  report has been
issued  affirming that bedrock and similar  matters are suitable to Montgomery's
proposed  development.  Also,  such a soils  report  allows  the  architect  and
structural engineers to determine,  based on soil samples,  where to situate the
proposed  building,  where  pylons  should be  drilled,  and the depth and other
characteristics of the soils at the site.

                                       12
<PAGE>

         The project  architect has  completed  conceptual  designs.  Montgomery
needs to perform a traffic study and other  investigations  to allow it to apply
to the City of South San Francisco for development permits.  Although management
is confident that these studies can be completed in a timely and  cost-effective
manner, so as to yield development  approval,  no assurance of such a result can
be given,  and the final decision as to entitlements  will rest with the City of
South San Francisco, California.

         Montgomery has completed the preliminary entitlement work; however, due
to present market conditions,  Montgomery is waiting to complete the entitlement
work until a build-to-suit  opportunity with a creditworthy tenant or a contract
with a potential buyer is negotiated for the Eccles  Project.  Management is not
currently incurring any cost for entitlement work on the property.

Other Matters

         Montgomery  has  reviewed  and  adopted  SFAS 142  Goodwill  and  other
Intangible  Assets and SFAS 144  Accounting  for the  Impairment  or Disposal of
Long-Lived  Assets  effective  January 1, 2002. The adoption of these accounting
standards  did not have a  significant  effect  on the  financial  condition  or
results of  operations.  Based on a review of other recently  issued  accounting
standards, Montgomery believes that none of these other pronouncements will have
a significant effect on current or future earnings or operations.


                         ITEM 3. CONTROLS AND PROCEDURES

         Montgomery  maintains  a system of  internal  controls  and  procedures
designed to provide reasonable  assurance as to the reliability of its financial
statements and other disclosures included in this report.  Montgomery's board of
directors,  operating  through its audit  committee,  provides  oversight to its
financial reporting process.

         Within the 90-day  period prior to the date of this report,  Montgomery
evaluated  the  effectiveness  of the design  and  operation  of its  disclosure
controls and procedures  pursuant to Rule 13a-14 of the Securities  Exchange Act
of 1934. Based upon that evaluation,  Montgomery's  Chief Executive  Officer and
Chief Financial  Officer  concluded that its disclosure  controls and procedures
are  effective  in  alerting  him in a timely  manner  to  material  information
relating to Montgomery  required to be included in this quarterly report on Form
10-QSB.

         There  have  been  no  significant  changes  in  Montgomery's  internal
controls or in other factors that could  significantly  affect internal controls
subsequent  to the date that it  carried  out its  evaluation  and there were no
corrective actions regarding significant deficiencies or material weaknesses.

                                       13
<PAGE>

                           PART II--OTHER INFORMATION

           ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Montgomery's annual meeting of stockholders was held June 6, 2002. At
that meeting, the stockholders reelected Dinesh Maniar, Keith A. Cannon, O. Lee
Barnett, James M. Hanavan, and Arthur A. Torres as directors.


                    ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits. The following exhibits are included as part of this report at
the location indicated:

               SEC
  Exhibit   Reference
  Number      Number           Title of Document                       Location
---------- ----------- --------------------------------------------- -----------
Item 99                Certifications
---------- ----------- --------------------------------------------- -----------
99.01           99     Certification Pursuant to 18 U.S.C.           This filing
                       Section 1350, as Adopted Pursuant to
                       Section 906 of the Sarbanes-Oxley Act of 2002


(b)      Reports on Form 8-K. During the quarter ended September 30 2002, the
Company did not file any reports on Form 8-K.


                                    SIGNATURE

         In accordance with the  requirements of the Securities  Exchange Act of
1934,  the  registrant  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

                                    MONTGOMERY REALTY GROUP, INC.
                                    (Registrant)



Date: November 13, 2002             By: /s/ Dinesh Maniar
                                        ----------------------------------------
                                        Dinesh Maniar, President
                                        Principal Executive, Principal Financial
                                        and Principal Accounting Officer

                                       14
<PAGE>

                                  CERTIFICATION

         I, Dinesh Maniar, certify that:

         1. I have reviewed this  quarterly  report on Form 10-QSB of Montgomery
Realty Group, Inc;

         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 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 functions):

         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.

Date: November 13, 2002

/s/ Dinesh Maniar
----------------------------------
Dinesh Maniar
Principal Executive Officer and
Principal Financial Officer

                                       15