FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

              |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
                 For the quarterly period ended JANUARY 31, 2003

              |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
                        For the transition period from to

                                                     Commission File No. 2-96666

                   Canal Capital Corporation and Subsidiaries
             (Exact name of registrant as specified in its charter)

          Delaware                                               51-0102492
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

    717 Fifth Avenue, New York, NY                                  10022
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code (212) 826-6040

NONE Former name, former address and former fiscal year, if changed since last
report.

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

Indicate the number of shares outstanding for each of the issuer's classes of
common stock, as of the latest practical date:

    Title of each class                  Shares outstanding at February 28, 2003
Common stock, $0.01 par value                           4,326,929

(This document contains 30 pages)


<PAGE>
                  CANAL CAPITAL CORPORATION AND SUBSIDIARIES
                          FORM 10-Q JANUARY 31, 2003

                                     INDEX

The following documents are filed as part of this report:

Accountants' Review Report .....................................       3

Part I - Financial Information .................................       4

Item I.  Condensed Financial Statements:

      Consolidated Balance Sheets - January 31, 2003
       and October 31, 2002 ....................................       5

      Statements of Consolidated Operations and
       Comprehensive Income for the Three Month
       Periods ended January 31, 2003 and 2002 .................       7

      Statements of Consolidated Changes in
       Stockholders' Equity for the Three Month and
       One Year Periods ended January 31, 2003 and
       October 31, 2002 ........................................       9

      Statements of Consolidated Cash Flows for the
       Three Month Periods ended January 31, 2003 and
       2002 ....................................................      10

      Notes to Consolidated Financial Statements ...............      11

Item II.  Management's Discussion and Analysis of
          Financial Condition ..................................      19

      Capital Resources and Liquidity ..........................      20

      Other Factors ............................................      24

Item III.  Quantitative and Qualitative Disclosures
           About Market Risk ...................................      24

Item IV.   Controls and Procedures..............................      25

Part II - Other Information ....................................      26

      Items 1 through 6 ........................................      27

      Signatures ...............................................      28


                                        2
<PAGE>

                           ACCOUNTANTS' REVIEW REPORT

To the Stockholders of Canal Capital Corporation:

We have reviewed the consolidated balance sheet of Canal Capital Corporation and
subsidiaries  as of January 31, 2003,  the related  consolidated  statements  of
operations  and  comprehensive  income for the three month periods ended January
31, 2003 and the consolidated  statements of changes in stockholders' equity and
cash flows for the three month period ended January 31, 2003. These consolidated
financial statements are the responsibility of the company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion regarding the consolidated  financial  statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  consolidated  financial  statements for them to be in conformity
with generally accepted accounting principles.

The  financial  statements  have been  prepared  assuming  that the Company will
continue as a going concern. As discussed in Note 1 to the financial statements,
the Company has suffered  recurring  losses from operations in eight of the last
ten years and is obligated to continue making substantial  annual  contributions
to its defined  benefit  pension plan.  All of these  matters raise  substantial
doubt about the Company's  ability to continue as a going concern.  Management's
plans in regard to these matters are also described in Note 1. The  accompanying
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification of recorded asset amounts or the amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue as a going concern.


New York, N.Y.                               /S/ Todman & Co., CPA's,P.C.
March 11, 2003                               ----------------------------
                                             TODMAN & CO., CPA's,P.C.
                                             Certified Public Accountants (N.Y.)


                                        3

<PAGE>

                                     PART I

                              FINANCIAL INFORMATION


                                       4
<PAGE>

                    CANAL CAPITAL CORPORATION & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      JANUARY 31, 2003 AND OCTOBER 31, 2002

<TABLE>
<CAPTION>
                                                              JANUARY 31,  OCTOBER 31,
                                                                  2003        2002
                                                              (UNAUDITED)   (AUDITED)
                                                              ----------   ----------
<S>                                                             <C>          <C>
ASSETS:

CURRENT ASSETS:

       CASH AND CASH EQUIVALENTS                                $181,882     $139,057
       NOTES AND ACCOUNTS RECEIVABLE, NET                        169,716      125,227
       ART INVENTORY, NET OF A VALUATION ALLOWANCE OF
             $1,325,000 AND $1,325,000 AT JANUARY 31,
             2003 AND OCTOBER 31, 2002                           250,000      250,000
       STOCKYARDS INVENTORY                                        8,373       13,017
       INVESTMENTS                                                 7,405        7,405
       PREPAID EXPENSES                                          101,206      100,799
                                                              ----------   ----------
            TOTAL CURRENT ASSETS                                 718,582      635,505
                                                              ----------   ----------

NON-CURRENT ASSETS:

       PROPERTY ON OPERATING LEASES, NET OF
             ACCUMULATED DEPRECIATION OF $1,090,840
             AND $1,058,219 AT JANUARY 31, 2003 AND
             OCTOBER 31, 2002, RESPECTIVELY                    3,341,331    3,336,744
                                                              ----------   ----------

          PROPERTY USED IN STOCKYARD OPERATIONS, NET OF
             ACCUMULATED DEPRECIATION OF $293,361 AND
             $285,223 AT JANUARY 31, 2003 AND OCTOBER
             31, 2002, RESPECTIVELY                            1,173,178    1,176,027
                                                              ----------   ----------

       ART INVENTORY NON-CURRENT, NET OF A
             VALUATION ALLOWANCE OF $729,450
             AND $858,650 AT JANUARY 31, 2003
             AND OCTOBER 31, 2002, RESPECTIVELY                  558,888      622,388
                                                              ----------   ----------

OTHER ASSETS:

       PROPERTY HELD FOR DEVELOPMENT OR RESALE                   484,139      517,939
       DEFERRED LEASING AND FINANCING COSTS                       18,336       13,366
       DEPOSITS AND OTHER                                        210,902      210,902
                                                              ----------   ----------

                                                                 713,377      742,207
                                                              ----------   ----------

                                                              $6,505,356   $6,512,871
                                                              ==========   ==========
</TABLE>


                                        5

<PAGE>

                    CANAL CAPITAL CORPORATION & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      JANUARY 31, 2003 AND OCTOBER 31, 2002

                                               JANUARY 31,      OCTOBER 31,
                                                   2003           2002
                                               (UNAUDITED)      (AUDITED)
                                               ------------    ------------
LIABILITIES & STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:

       ACCOUNTS PAYABLE AND ACCRUED EXPENSES     $1,666,564      $1,856,671
       INCOME TAXES PAYABLE                           6,938           9,892
                                               ------------    ------------
         TOTAL CURRENT LIABILITIES                1,673,502       1,866,563
                                               ------------    ------------
LONG-TERM DEBT, RELATED PARTY                     2,667,000       2,667,000
                                               ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

  PREFERRED STOCK, $0.01 PAR VALUE:
      10,000,000 SHARES AUTHORIZED;
      5,647,993 AND 5,647,993 SHARES
      ISSUED AND OUTSTANDING AT JANUARY
      31, 2003 AND OCTOBER 31, 2002,
      RESPECTIVELY AND AGGREGATE
      LIQUIDATION PREFERENCE OF $10 PER
      SHARE FOR $ 56,479,930 AND
      $56,479,930 AT JANUARY 31, 2003
      AND OCTOBER 31, 2002, RESPECTIVELY             56,480          56,480

  COMMON STOCK, $0.01 PAR VALUE:
      10,000,000 SHARES AUTHORIZED;
      5,313,794 SHARES ISSUED AND
      4,326,929 SHARES OUTSTANDING AT
      JANUARY 31, 2003 AND OCTOBER 31,
      2002, RESPECTIVELY                             53,138          53,138

  ADDITIONAL PAID-IN CAPITAL                     28,000,499      27,958,498

  ACCUMULATED DEFICIT                           (12,566,319)    (12,709,864)

  986,865 SHARES OF COMMON STOCK
         HELD IN TREASURY, AT COST              (11,003,545)    (11,003,545)

  COMPREHENSIVE INCOME:
    PENSION VALUATION RESERVE                    (2,375,399)     (2,375,399)
                                               ------------    ------------
                                                  2,164,854       1,979,308
                                               ------------    ------------
                                                 $6,505,356      $6,512,871
                                               ============    ============


                                        6


<PAGE>

                    CANAL CAPITAL CORPORATION & SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
              FOR THE THREE MONTHS ENDED JANUARY 31, 2003 AND 2002

                                                       2003             2002
                                                    (UNAUDITED)      (UNAUDITED)
                                                     ----------       ----------
STOCKYARD OPERATIONS:
 STOCKYARD REVENUES:
    YARD HANDLING AND AUCTION                         1,001,911        1,079,203
    FEED AND BEDDING INCOME                              62,888           68,922
    RENTAL INCOME                                         1,024            2,827
    OTHER INCOME                                         35,908           34,431
                                                     ----------       ----------
                                                      1,101,731        1,185,383

STOCKYARD EXPENSES:
    LABOR AND RELATED COSTS                             365,217          407,543
    OTHER OPERATING AND MAINTENANCE                     192,810          255,500
    FEED AND BEDDING EXPENSE                             53,859           55,526
    DEPRECIATION AND AMORTIZATION                         5,266            6,233
    TAXES OTHER THAN INCOME TAXES                        46,888           64,069
    GENERAL AND ADMINISTRATIVE                          118,679          133,112
                                                     ----------       ----------
                                                        782,719          921,983

INCOME FROM STOCKYARD OPERATIONS                        319,012          263,400
                                                     ----------       ----------

REAL ESTATE OPERATIONS:
 REAL ESTATE REVENUES:
    SALE OF REAL ESTATE                                $117,000         $      0
    EXCHANGE BUILDING RENTAL INCOME                     116,006          125,757
    OUTSIDE REAL ESTATE RENT                            123,700          127,590
    OTHER INCOME                                              0              118
                                                     ----------       ----------
                                                        356,706          253,465

 REAL ESTATE EXPENSES:
    COST OF REAL ESTATE SOLD                             55,547                0
    LABOR, OPERATING AND MAINTENANCE                    105,210          108,593
    DEPRECIATION AND AMORTIZATION                        32,319           35,285
    TAXES OTHER THAN INCOME TAXES                        37,200           30,300
    GENERAL AND ADMINISTRATIVE                           12,283           11,739
                                                     ----------       ----------
                                                        242,559          185,917

INCOME FROM REAL ESTATE OPERATIONS                      114,147           67,548
                                                     ----------       ----------


                                                                               7

<PAGE>

                    CANAL CAPITAL CORPORATION & SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
              FOR THE THREE MONTHS ENDED JANUARY 31, 2003 AND 2002
                                  Continued ...


                                                      2003             2002
                                                   (UNAUDITED)      (UNAUDITED)
                                                   -----------      -----------

GENERAL AND ADMINISTRATIVE EXPENSE                    (213,734)        (227,665)
                                                   -----------      -----------

INCOME FROM OPERATIONS                                 219,425          103,283
                                                   -----------      -----------

OTHER INCOME (EXPENSE):
  INTEREST & OTHER INCOME                                   72          323,353
  INTEREST EXPENSE                                     (66,675)         (66,675)
  INCOME FROM ART SALES                                 32,723           16,577
  REALIZED GAIN (LOSS) ON INVESTMENTS                        0                0
  OTHER EXPENSE                                              0                0
                                                   -----------      -----------
                                                       (33,880)         273,255

INCOME BEFORE PROVISION FOR
  INCOME TAXES                                         185,545          376,538
PROVISION FOR INCOME TAXES                                   0                0
                                                   -----------      -----------
NET INCOME                                             185,545          376,538

OTHER COMPREHENSIVE INCOME (LOSS):

  UNREALIZED GAIN (LOSS) ON INVESTMENTS
  AVAILABLE FOR SALE                                         0                0
                                                   -----------      -----------
COMPREHENSIVE INCOME                                  $185,545         $376,538
                                                   ===========      ===========

INCOME PER COMMON SHARE - BASIC
  AND DILUTED                                            $0.03            $0.07
                                                   ===========      ===========

AVERAGE SHARES OUTSTANDING - BASIC
  AND DILUTED                                        4,327,000        4,327,000
                                                   ===========      ===========


                                        8

<PAGE>

                   CANAL CAPITAL CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                FOR THE YEAR ENDED OCTOBER 31, 2002 (AUDITED) AND
             FOR THE THREE MONTHS ENDED JANUARY 31, 2003 (UNAUDITED)

                                     COMMON STOCK         PREFERRED STOCK
                                   NUMBER                NUMBER
                                     OF                    OF
                                   SHARES     AMOUNT     SHARES       AMOUNT

BALANCE, OCTOBER 31, 2001        5,313,794   $53,138    4,998,446    $49,984
 NET INCOME                              0         0            0          0
 PREFERRED STOCK DIVIDEND                0         0      649,547      6,496
 MINIMUM PEN. LIAB. ADJ.                 0         0            0          0
                                --------------------   ---------------------

BALANCE, OCTOBER 31, 2002        5,313,794   $53,138    5,647,993    $56,480
 NET INCOME                              0         0            0          0
 PREFERRED STOCK DIVIDEND                0         0            0          0
 MINIMUM PEN. LIAB. ADJ.                 0         0            0          0
                                --------------------   ---------------------

BALANCE, JANUARY 31, 2003        5,313,794   $53,138    5,647,993    $56,480
                                ====================   =====================

<TABLE>
<CAPTION>
                              ADDITIONAL                                   TREASURY
                                PAID-IN      ACCUMULATED  COMPREHENSIVE      STOCK,
                                CAPITAL        DEFICIT    (LOSS) INCOME     AT COST
<S>                          <C>           <C>              <C>            <C>
BALANCE, OCTOBER 31, 2001    $27,848,561   ($13,019,374)    ($2,165,445)   ($11,003,545)
 NET INCOME                            0        425,990               0               0
 PREFERRED STOCK DIVIDEND        109,937       (116,480)              0               0
 MINIMUM PEN. LIAB. ADJ                0              0        (209,954)              0
                            ------------   ------------    ------------    ------------

BALANCE, OCTOBER 31, 2002    $27,958,498   ($12,709,864)    ($2,375,399)   ($11,003,545)
 NET INCOME                            0        185,545               0               0
 PREFERRED STOCK DIVIDEND         42,001        (42,000)              0               0
 MINIMUM PEN. LIAB. ADJ                0              0               0               0
                            ------------   ------------    ------------    ------------
BALANCE, JANUARY 31, 2003    $28,000,499   ($12,566,319)    ($2,375,399)   ($11,003,545)
                            ============   ============    ============    ============
</TABLE>


                                        9

<PAGE>

                    CANAL CAPITAL CORPORATION & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE THREE MONTHS ENDED JANUARY 31, 2003 AND 2002 (UNAUDITED)

                                                          2003           2002
                                                       ---------      ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
  NET INCOME                                            $185,545       $376,538
                                                       ---------      ---------
  ADJUSTMENTS TO RECONCILE NET INCOME
   TO NET CASH (USED) PROVIDED
   BY OPERATING ACTIVITIES:

   DEPRECIATION AND AMORTIZATION                          40,759         44,108
   GAIN  ON SALES OF REAL ESTATE                         (61,453)             0

CHANGES IN ASSETS AND LIABILITIES:

   NOTES AND ACCOUNTS RECEIVABLES, NET                   (44,489)        22,505
   ART INVENTORY, NET                                     63,500         66,602
   PREPAID EXPENSES AND OTHER, NET                       (22,480)        47,821
   PAYABLES AND ACCRUED EXPENSES, NET                   (193,061)      (130,622)
                                                       ---------      ---------

NET CASH (USED) PROVIDED BY OPERATING
   ACTIVITIES                                            (31,679)       426,952
                                                       ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

  PROCEEDS FROM SALES OF REAL ESTATE                     117,000              0
  CAPITAL EXPENDITURES                                   (42,496)       (41,380)
                                                       ---------      ---------

NET CASH PROVIDED (USED) BY INVESTING
  ACTIVITIES                                              74,504        (41,380)
                                                       ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:

  PROCEEDS FROM LONG-TERM DEBT-RELATED
    PARTIES                                                    0              0
  REPAYMENT OF SHORT-TERM BORROWINGS                           0              0
  REPAYMENT OF LONG-TERM DEBT OBLIGATIONS                      0              0
                                                       ---------      ---------
NET CASH (USED) BY FINANCING ACTIVITIES                        0              0
                                                       ---------      ---------

NET INCREASE IN CASH AND CASH
  EQUIVALENTS                                             42,825        385,572

CASH AND CASH EQUIVALENTS AT BEGN OF YEAR                139,057         13,680
                                                       ---------      ---------

CASH AND CASH EQUIVALENTS AT END OF YEAR                $181,882       $399,252
                                                       =========      =========

NOTE: CANAL MADE FEDERAL AND STATE INCOME TAX PAYMENTS OF $10,000 AND $1,000 AND
      INTEREST PAYMENTS OF $67,000 AND $67,000 IN THE THREE MONTH PERIODS ENDED
      JANUARY 31, 2003 AND 2002, RESPECTIVELY.


                                       10

<PAGE>
                   CANAL CAPITAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE MONTHS ENDED JANUARY 31, 2003
                                   (UNAUDITED)

1.    NATURE OF BUSINESS

      Canal Capital Corporation ("Canal"), incorporated in the state of Delaware
in 1964, commenced business operations through a predecessor in 1936. Canal is
engaged in two distinct businesses - the management and further development of
its real estate properties and stockyard operations.

      Canal's real estate properties located in five Midwest states are
primarily associated with its current and former agribusiness related
operations. As a result of an August 1, 1999 asset purchase agreement, Canal now
operates two central public stockyards located in St. Joseph, Missouri and Sioux
Falls, South Dakota (collectively the "Stockyards").

      While the Company is currently operating as a going concern, certain
significant factors raise substantial doubt about the Company's ability to
continue as a going concern. The Company has suffered recurring losses from
operations in eight of the last ten years and is obligated to continue making
substantial annual contributions to its defined benefit pension plan. The
financial statements do not include any adjustments that might result from the
resolution of these uncertainties. Additionally, the accompanying financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.

      Canal continues to closely monitor and reduce where possible its operating
expenses and plans to continue to reduce the level of its art inventories to
enhance current cash flows. Management believes that its income from operations
combined with its cost cutting program and planned reduction of its art
inventory will enable it to finance its current business activities. There can,
however, be no assurance that Canal will be able to effectuate its planned art
inventory reductions or that its income from operations combined with its cost
cutting program in itself will be sufficient to fund operating cash
requirements.


                                       11

<PAGE>

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      A) Principles of Consolidation -- The consolidated financial statements
include the accounts of Canal Capital Corporation ("Canal") and its wholly-
owned subsidiaries ("the Company"). All material intercompany balances and
transactions have been eliminated in consolidation.

      B) Revenue Recognition -- Lease and rental revenues are recognized ratably
over the period covered. All real estate leases are accounted for as operating
leases. Revenues from real estate sales are recognized generally when title to
the property passes. Revenues from stockyard operations which consist primarily
of yardage fees and sale of feed and bedding are recognized at the time the
service is rendered or the feed and bedding are delivered. Revenues from art
sales are recognized using the specific identification method, when the piece is
shipped to the purchaser. Art owned by Canal which is on consignment, joint
venture, or being examined in contemplation of sale is not removed from
inventory and not recorded as a sale until notice of sale or acceptance has been
received. Revenues from the sale of investments available for sale, if any, are
recognized, on a specific identification method, on a trade date basis.

      C) Investments Available for Sale -- Canal has an investment in a company
in which it, together with other affiliated entities, comprise a reporting group
for regulatory purposes. It is important to note that it is the group (as
defined) that can exercise influence over this company, not Canal. Accordingly,
this investment does not qualify for consolidation as a method of reporting.
Certain of Canal's officers and directors also serve as officers and/or
directors of this company. This investment (in which Canal's ownership interest
is approximately 1%) is carried at market value and the realized gains or
losses, if any, are recognized in operating results. Any unrealized gains or
losses are reflected in Stockholders Equity.

      Investments in Joint Ventures -- Investments in which ownership interest
range from 20% to 50% or less owned joint ventures are accounted for under the
equity method. These joint ventures are not, in the aggregate, material in
relation to the financial position or results of operations of Canal. The
carrying amount of such investments was $101,000 at both January 31, 2003 and
October 31, 2002, and is included in other assets. The operating results of
joint ventures accounted for on the equity method were not material to financial
statement presentation and were therefore included in other income from real
estate operations.

      D) Properties and Related Depreciation -- Properties are stated at cost
less accumulated depreciation. Depreciation is provided on the straight-line
method over the estimated useful lives of the properties. Such lives are
estimated from 35 to 40 years for buildings and from 5 to 20 years for
improvements and equipment.


                                       12

<PAGE>

      Property held for Development or Resale -- Property held for development
or resale consist of approximately 113 acres located in the midwest of
undeveloped land not currently utilized for corporate purposes nor included in
any of the present operating leases. The Company constantly evaluates proposals
received for the purchase, leasing or development of this asset. The land is
valued at cost which does not exceed the net realizable value.

      Long-Lived Assets - The Company reviews the impairment of long-lived
assets whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. The Company considers historical
performance and future estimated results in its evaluation of potential
impairment and then compares the carrying amount of the assets to the estimated
future cash flows expected to result from the use of the asset. The measurement
of the loss, if any, will be calculated as the amount by which the carrying
amount of the asset exceeds the fair value of the asset.

      E) Statements of Cash Flows -- The company considers all short-term
investments with a maturity of three months or less to be cash equivalents. Cash
equivalents primarily include bank, broker and time deposits with an original
maturity of less than three months. These investments are carried at cost, which
approximates market value.

      F) Accounting Estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

      G) Comprehensive Income -- The Company's only adjustments for each
classification of the comprehensive income was for minimum pension liability.

      H) Earnings (Loss) Per Share -- Basic earnings (loss) per share is
computed by dividing the net income (loss) applicable to common shares by the
weighted average of common shares outstanding during the period. Diluted
earnings (loss) per share adjusts basic earnings (loss) per share for the
effects of convertible securities, stock options and other potentially dilutive
financial instruments, only in the period in which such effect is dilutive.
There were no dilutive securities in any of the periods presented herein.

      I) Reclassification -- Certain prior year amounts have been reclassified
to conform to the current year's presentation.


                                       13

<PAGE>

3.    INTERIM FINANCIAL STATEMENTS

      The interim consolidated financial statements included herein have been
prepared by Canal without audit. In the opinion of Management, the accompanying
unaudited financial statements of Canal contain all adjustments necessary to
present fairly its financial position as of January 31, 2003 and the results of
its operations and its cash flows for the three month period ended January 31,
2003. All of the above referenced adjustments were of a normal recurring nature.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These financial statements should be read in
conjunction with the consolidated financial statements for the three years ended
October 31, 2002 and the notes thereto which are contained in Canal's 2002
Annual Report on Form 10-K. The results of operations for the period presented
is not necessarily indicative of the results to be expected for the remainder of
fiscal 2003.

4.    REAL ESTATE OPERATIONS

      Canal's real estate properties located in five Midwest states are
primarily associated with its current and former agribusiness related
operations. Each property is adjacent to a stockyards operation (two of which
are operated by the Company) and consist, for the most part, of an Exchange
Building (commercial office space), land and structures leased to third parties
(meat packing facilities, railcar repair shops, lumber yards and various other
commercial and retail businesses) as well as vacant land available for
development or resale. Its principal real estate operating revenues are derived
from rental income from its Exchange Buildings, lease income from land and
structures leased to various commercial and retail enterprises and proceeds from
the sale of real estate properties.

      Real estate operations resulted in operating income of $114,000 and
$68,000 for the three month periods ended January 31, 2003 and 2002,
respectively. Additionally, real estate operations contributed $357,000 and
$253,000 to Canal's revenues for the three month periods ended January 31, 2003
and 2002, respectively.

      As of January 31, 2003, there are approximately 101 acres of undeveloped
land owned by Canal adjacent to its stockyard properties. Canal is continuing
the program, which it started several years ago, to develop or sell this
property.


                                       14

<PAGE>

5.    STOCKYARD OPERATIONS

      As a result of an August 1, 1999 asset purchase agreement, Canal currently
operates two public stockyards (formerly subject to the Master Lease between the
Company and United Market Services) located in St. Joseph, Missouri, and Sioux
Falls, South Dakota.

      Public stockyards act much like a securities exchange, providing markets
for all categories of livestock and fulfilling the economic functions of
assembly, grading and price discovery. The livestock handled by the stockyards
include cattle, hogs and sheep. Cattle and hogs may come through the stockyard
facilities at two different stages, either as feeder livestock or slaughter
livestock. The Company's stockyards provide all services and facilities required
to operate an independent market for the sale of livestock, including veterinary
facilities, auction arenas, auctioneers, weigh masters and scales, feed and
bedding, and security personnel. In addition, the stockyards provide other
services including pure bred and other specialty sales for producer
organizations. The Company promotes its stockyard business through public
relations efforts, advertising, and personal solicitation of producers.

      In March 2002, Canal permanently closed its stockyard operations in Sioux
City, Iowa. The Sioux City stockyard operations generated operating losses of
$75,000, $118,000, and $124,000 for the three years ended October 31, 2002, 2001
and 2000, respectively. The stockyard facility was dismantled with the
equipment, fixtures and materials going either to Canal's remaining two
stockyards or sold at a public sale held at the Sioux City location in April
2002. On February 27, 2003, the Company entered into a Contract of Sale for the
sale of approximately 30 acres of land located in Sioux City, Iowa (formerly
used by the Company for stockyards operations) at a purchase price of One
Million Three Hundred Thousand ($1,300,000.00) Dollars. The sale is subject to a
number of contingencies which must be satisfied before closing. The Company
anticipates it will take approximately six months to close this transaction.

      Stockyard operations resulted in operating income of $319,000 and $263,000
for the three month periods ended January 31, 2003 and 2002, respectively.
Additionally, stockyard operations contributed $1,102,000 and $1,185,000 to
Canal's revenues for the three month periods ended January 31, 2003 and 2002,
respectively.

6.    PROPERTY AND EQUIPMENT

      Included in property and equipment were the cost of buildings of
approximately $2.5 million at January 31, 2003 and October 31, 2002.


                                       15

<PAGE>

7.    ART INVENTORY HELD FOR SALE

      Canal has not purchased inventory in several years nor does it currently
have any intention of purchasing additional art inventory in the foreseeable
future. It is the Company's intention to liquidate, in an orderly manner, its
art inventory. Management estimates it may take approximately five years to
dispose of its current art inventory. The Company's ability to dispose of its
art inventory is dependent primarily on general economic conditions and the
competitiveness of the art market itself. Accordingly, there can be no assurance
that Canal will be successful in disposing of its art inventory within the time
frame discussed above.

      Antiquities and contemporary art represented 29% ($230,639) and 71%
($641,749) and 26% ($230,639) and 74% ($578,249) of total art inventory at
January 31, 2003 and 2002, respectively. All of the contemporary art inventory
held for resale is comprised of the work of Jules Olitski.

      The amount recorded as the current portion of art inventory represents
management's estimate of the inventory expected to be sold during the next
twelve months. The Company recorded a valuation allowance against the current
portion of its inventory to reduce it to its estimated net realizable value
based on the history of losses sustained on inventory items sold in the current
and previous years. In fiscal 2003 Canal applied against sales $179,000 of the
valuation allowance against its art inventory, thereby, decreasing the total
valuation allowance to $2,054,450 as of January 31, 2003 as compared to
$2,183,650 at October 31, 2002.

      The nature of art makes it difficult to determine a replacement value. The
most compelling evidence of a value in most cases is an independent appraisal.
Canal has its art inventory appraised by independent appraisers annually. The
2002 appraisal covered approximately 22% of the inventory value. The appraised
values estimate the current market value of each piece giving consideration to
Canal's practices of engaging in consignment, private and public auction sales.
The net realizable value of the remaining 78% of the inventory was estimated by
management based in part on the Company's history of losses sustained on art
sales in the current and previous years and in part on the results of the
independent appraisals done.

      Canal's art sales generated income of $33,000 (net of a decrease in the
valuation allowance of $179,000) as compared to income of $17,000 (net of a
decrease in the valuation allowance of $108,000) for the three month periods
ended January 31, 2003 and 2002, respectively.

      The Company had approximately $175,000 of art inventory (at original cost)
on consignment with third party dealers at both January 31, 2003 and October 31,
2002.


                                       16
<PAGE>

8.    PENSION VALUATION RESERVE

      The Pension Valuation Reserve represents the excess of additional minimum
pension liability required under the provisions of SFAS No. 87 over the
unrecognized prior service costs of former stockyard employees. Such excess
arose due to the decline in the market value of pension assets available for
pension benefits of former employees, which benefits were frozen at the time the
stockyard operations were sold in 1989. The additional minimum pension liability
will be expensed as actuarial computations of annual pension cost (made in
accordance with SFAS No. 87) recognize the deficiency that exists.

9.    INVESTMENTS AVAILABLE FOR SALE

      At January 31, the investments available for sale consisted of the
following: ($ 000's Omitted)

                                                    January 31,  October 31,
                                                       2003         2002
                                                       ----         ----

         Aggregate market value.....................   $  7         $  7
                                                       ----         ----
         Aggregate carrying value...................   $  7         $  7
                                                       ----         ----

      Canal has an investment in a company in which it, together with other
affiliated entities, comprise a reporting group for regulatory purposes. It is
important to note that it is the group (as defined) that can exercise influence
over this company, not Canal. Accordingly, this investment does not qualify for
consolidation as a method of reporting. Certain of Canal's officers and
directors also serve as officers and/or directors of this company. This
investment (in which Canal's ownership interest is approximately 1%) is carried
at market value and any unrealized gains or losses are reflected in Stockholders
Equity. The realized gains or losses, if any, are recognized in operating
results.

      On May 3, 2000 this company filed for reorganization under Chapter 11 of
the Bankruptcy Code and subsequently emerged in December 2000. This action, in
combination with other factors, has resulted in Canal's determination that the
decline in market value of its investment in this company is permanent, and
accordingly, recognized a realized loss on investments in marketable securities
of approximately $14,000 in fiscal 2002. Management will continue to monitor
this situation closely and take appropriate action if it determines that future
fluctuations in the market value of this investment are other than temporary.


                                       17

<PAGE>

10.   BORROWINGS

      At January 31, 2003, substantially all of Canal's real properties, the
stock of certain subsidiaries, the investments and a substantial portion of its
art inventories are pledged as collateral for the following obligations:

                                                   January 31,   October 31,
($ 000's Omitted)                                     2003          2002
-----------------                                     ----          ----
Variable rate mortgage notes due
  May 15, 2006 - related party ..................   $ 2,667       $ 2,667
                                                    -------       -------

      On January 8, 1998, the Company issued $3,700,000 of variable rate
mortgage notes due May 15, 2001. The purchasers of these notes included certain
entities controlled by the Company's Chairman, the Company's Chief Executive
Officer and members of their families. These notes carried interest at the
highest of four variable rates, determined on a quarterly basis. These notes,
among other things, prohibits Canal from becoming an investment company as
defined by the Investment Company Act of 1940; requires Canal to maintain
minimum net worth; restricts Canal's ability to pay cash dividends or repurchase
stock; requires principal prepayments to be made only out of the proceeds from
the sale of certain assets, and required the accrual of additional interest (to
be paid at maturity) of approximately three percent per annum.

      On July 29, 1999 the above Notes were amended to extend the maturity date
to May 15, 2003; to fix the interest rate at 10% per annum; to agree that the
additional interest due to the holders of the notes shall become current and be
treated as principal due under the notes; and to have certain of the holders
loan the Company $525,000 in additional financing, the proceeds of which was
used to repay in full certain of the other holders of the notes. As a result,
the notes are now held in total by the Company's Chief Executive Officer and
members of his family.

      On January 10, 2000, the above Notes were further amended to have holders
loan the Company $1,725,000 in additional financing, the proceeds of which was
used to repay in full all of the Company's outstanding non related party
long-term debt. On October 8, 2002, the above notes were amended to extend the
maturity date to May 15, 2006. As of January 31, 2003 the balance due under
these notes was $2,667,000 all of which is classified as long-term debt-related
party.

      The scheduled maturities and sinking fund requirements of long-term debt
during the next five years are $2,667,000 due May 15, 2006.


                                       18

<PAGE>

ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND
         FINANCIAL CONDITION FOR THE THREE MONTHS ENDED JANUARY 31, 2003

      The following discussion should be read in conjunction with our financial
statements and notes thereto included elsewhere in this report.

                    FORWARD-LOOKING AND CAUTIONARY STATEMENTS

      We may from time to time make written or oral forward-looking statements,
including those contained in the following section. These forward-looking
statements involve risks and uncertainties and actual results could differ
materially from those discussed in the forward-looking statements. For this
purpose, any statements contained in this section that are not statements of
historical fact may be deemed to be forward-looking statements. Factors which
may effect our results include, but are not limited to, our ability to expand
our customer base, our ability to develop additional and leverage our existing
distribution channels for our products and solutions, dependance on strategic
and channel partners including their ability to distribute our products and meet
or renew their financial commitments, our ability to address international
markets, the effectiveness of our sales and marketing activities, the acceptance
of our products in the market place, the timing and scope of deployments of our
products by customers, fluctuations in customer sales cycles, customers' ability
to obtain additional funding, the emergence of new competitors in the
marketplace, our ability to compete successfully against established competitors
with greater resources, the uncertainty of future governmental regulation, our
ability to manage growth, and obtain additional funds, general economic
conditions and other risks discussed in this report and in our other filings
with the Securities and Exchange Commission. All forward- looking statements and
risk factors included in this document are made as of the date hereof, based on
information available to us as of the date thereof, and we assume no obligation
to update any forward-looking statement or risk factors.

Results of Operations - General

      While the Company is currently operating as a going concern, certain
significant factors raise substantial doubt about the Company's ability to
continue as a going concern. The Company has suffered recurring losses from
operations in eight of the last ten years and is obligated to continue making
substantial annual contributions to its defined benefit pension plan. The
financial statements do not include any adjustments that might result from the
resolution of these uncertainties. Additionally, the accompanying financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.


                                       19

<PAGE>

      Canal recognized net income of $186,000 for the three month period ended
January 31, 2003 as compared to net income of $377,000 for the same period in
fiscal 2002. There were no adjustments necessary to arrive at comprehensive
income for the periods presented. After recognition of preferred stock dividend
payments of $42,000 and $78,000 for the three month periods ended January 31,
2003 and 2002, respectively, the Company recognized net income applicable to
common stockholders of $144,000 ($0.03 per common share) and net income
applicable to common stockholders of $299,000 ($0.07 per common share) for the
three month periods ended January 31, 2003 and 2002, respectively. Included in
the 2003 results is a sale of a 12 acre parcel of land located in St. Joseph,
Missouri which generated operating income of approximately $61,000 and the sale
of a piece of contemporary art which generated other income of approximately
$33,000. Included in the 2002 results is other income of approximately $323,000
received by Canal as a demutualization compensation payment from an insurance
company, from which, Canal had purchased annuity contracts in the early 1980's
for certain of its retired stockyards employees.

      Canal's revenues from continuing operations consist of revenues from its
real estate and stockyards operations. Total revenues increased slightly by
$20,000 or 1.4% to $1,458,000 for the three month period ended January 31, 2003,
as compared to revenues of $1,438,000 for the same period in fiscal 2002. The
fiscal 2003 increase in revenues is due primarily to a $103,000 increase in
revenue from the sales of real estate which was offset to a certain extent by
softer than anticipated stockyard revenues.

Capital Resources and Liquidity

      While the Company is currently operating as a going concern, certain
significant factors raise substantial doubt about the Company's ability to
continue as a going concern. The Company has suffered recurring losses from
operations in eight of the last ten years and is obligated to continue making
substantial annual contributions to its defined benefit pension plan. The
financial statements do not include any adjustments that might result from the
resolution of these uncertainties. Additionally, the accompanying financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.

      On January 8, 1998, the Company issued $3,700,000 of variable rate
mortgage notes due May 15, 2001. The purchasers of these notes included certain
entities controlled by the Company's Chairman, the Company's Chief Executive
Officer and members of their families. The notes carried interest at the highest
of four variable rates, determined on a quarterly basis. These notes, among
other things, prohibit Canal from becoming an investment company as defined by
the Investment Company Act of 1940; require Canal to maintain minimum net worth;
restrict Canal's ability to pay cash dividends or


                                       20

<PAGE>

repurchase stock; require principal prepayments to be made only out of the
proceeds from the sale of certain assets, and required the accrual of additional
interest (to be paid at maturity) of approximately three percent per annum.

      On July 29, 1999 the above notes were amended to extend the maturity date
to May 15, 2003; to fix the interest rate at 10% per annum; to agree that the
additional interest due to the holders of the notes shall become current and be
treated as principal due under the notes; and to have certain of the holders
loan the Company $525,000 in additional financing, the proceeds of which was
used to repay in full certain of the holders of the notes. As a result, the
notes are now held in total by the Company's Chief Executive Officer and members
of his family.

      On January 10, 2000, the above notes were further amended to have the
noteholders loan the Company $1,725,000 in additional financing, the proceeds of
which was used to repay in full all of the Company's outstanding non related
party long-term debt. On October 8, 2002, the above notes were amended to extend
the maturity date to May 15, 2006. As of January 31, 2003 the balance due under
these notes was $2,667,000 all of which is classified as long-term debt-related
party.

      The scheduled maturities and sinking fund requirements of long-term debt
during the next five years are $2,667,000 due May 15, 2006.

      Cash and cash equivalents of $182,000 at January 31, 2003 increased
$43,000 from $139,000 at October 31, 2002. Net cash used by operations in fiscal
2003 was $32,000. At January 31, 2003 and October 31, 2002, the Company's
current liabilities exceeded current assets by $1.0 million and $1.2 million,
respectively. Substantially all of the funds received by Canal from the sale of
real estate and art were used to pay down its accounts payable and accrued
expenses. The only required principal repayments under Canal's debt agreements
for fiscal 2003 will be from the proceeds, if any, of the sale of certain
assets.

      Canal's cash flow position has been under significant strain for the past
several years. Canal continues to closely monitor and reduce where possible its
operating expenses and plans to continue to reduce the level of its art
inventories to enhance current cash flows. Management believes that its income
from operations combined with its cost cutting program and planned reduction of
its art inventory will enable it to finance its current business activities.
There can, however, be no assurance that Canal will be able to effectuate its
planned art inventory reductions or that its income from operations combined
with its cost cutting program in itself will be sufficient to fund operating
cash requirements.


                                       21

<PAGE>

2003 COMPARED TO 2002

Stockyard Revenues

      Stockyard revenues for the three months ended January 31, 2003 of
$1,102,000 accounted for 75.5% of the fiscal 2003 revenues as compared to
stockyard revenues of $1,185,000 or 82.4% for the same period in fiscal 2002.
Stockyard revenues are comprised of yard handling and auction (90.9% and 91.0%),
feed and bedding income (5.7% and 5.8%), rental income (0.1% and 0.2%) and other
income (3.3% and 3.0%) for the three month periods ended January 31, 2003 and
2002, respectively. There were not significant percentage variations in the year
to year comparisons.

Stockyard Expenses

      Stockyard expenses for the three months ended January 31, 2003 of $783,000
decreased by $139,000 (15.1%) from stockyard expenses of $922,000 for the same
period in fiscal 2002. Stockyard expenses are comprised of labor and related
costs (46.6% and 44.2%), other operating and maintenance (24.6% and 27.7%), feed
and bedding expense (6.9% and 6.0%), depreciation and amortization (0.7% and
0.7%), taxes other than income taxes (6.0% and 6.9%) and general and
administrative expense (15.2% and 14.5%) for the three month periods ended
January 31, 2003 and 2002, respectively. There were no significant percentage
variations in the year to year comparisons.

      In March 2002, Canal permanently closed its stockyard operations in Sioux
City, Iowa. The Sioux City stockyard operations generated operating losses of
$75,000, $118,000, and $124,000 for the three years ended October 31, 2002, 2001
and 2000, respectively. The stockyard facility was dismantled with the
equipment, fixtures and materials going either to Canal's remaining two
stockyards or sold at a public sale held at the Sioux City location in April
2002. On February 27, 2003, the Company entered into a Contract of Sale for the
sale of approximately 30 acres of land located in Sioux City, Iowa (formerly
used by the Company for stockyards operations) at a purchase price of One
Million Three Hundred Thousand ($1,300,000.00) Dollars. The sale is subject to a
number of contingencies which must be satisfied before closing. The Company
anticipates it will take approximately six months to close this transaction.

Real Estate Revenues

      Real estate revenues for the three months ended January 31, 2003 of
$357,000 accounted for 24.5% of the fiscal 2003 revenues as compared to real
estate revenues of $253,000 or 17.6% for the same period in fiscal 2002. Real
estate revenues are comprised of sale of real estate (32.8% and 0.0%), rental
income from commercial office space in its Exchange Buildings (32.5% and 49.6%),
rentals and other lease income from the rental of vacant land and certain
structures (34.7% and 50.3%) and other income (0.0% and 0.1%) for the three
months ended January 31, 2003 and 2002, respectively. The percentage


                                       22

<PAGE>

variations in the year to year comparisons are due primarily to increased sales
of real estate for fiscal 2003.

Real Estate Expenses

      Real estate expenses for the three months ended January 31, 2003 of
$243,000 increased by $57,000 (33.5%) from real estate expenses of $186,000 for
the same period in fiscal 2002. Real estate expenses are comprised of the cost
of real estate sold (22.9% and 0.0%), labor, operating and maintenance (43.4%
and 58.4%), depreciation and amortization (13.3% and 19.0%), taxes other than
income taxes (15.3% and 16.3%) and general and administrative and other expenses
(5.1% and 6.3%) for the three months ended January 31, 2003 and 2002,
respectively. The percentage variations in the year to year comparisons are due
primarily to the increased cost of real estate sold for fiscal 2003.

General and Administrative

      General and administrative expenses for the three months ended January 31,
2003 of $214,000 decreased by $14,000 (6.1%) from expenses of $228,000 for the
same period in fiscal 2002. The major components of general and administrative
expenses are officers salaries (54.4% and 50.4%), rent (1.9% and 9.9%), legal
and professional fees (1.0% and 0.8%), insurance (11.0% and 15.0%) and office
salaries (8.9% and 8.2%) for the three month periods ended January 31, 2003 and
2002, respectively. The percentage variations in the year to year comparisons
are due primarily to the sharp decreases in rent expense (resulting from Canal's
subletting substantially all of its New York office space)and insurance premiums
for fiscal 2003.

Interest Expense

      Interest expense for the three months ended January 31, 2003 of $67,000
was unchanged from the same period in fiscal 2002. The principal balances
outstanding as well as the interest rates on Canal's variable rate mortgage
notes have remained unchanged for the past 12 months. At January 31, 2003 the
outstanding balance of these notes was $2,667,000.

Interest and Other Income

      Interest and other income for the three months ended January 31, 2003 of
$0 decreased $323,000 (100.0%) from interest and other income of $323,000 for
the same period in fiscal 2002. Included in the 2002 results is other income of
approximately $323,000 received by Canal as a demutalization compensation
payment from an insurance company that Canal had purchased annuity contracts
from in the early 1980's for certain of its retired stockyard employees.


                                       23

<PAGE>

Income (Loss) from Art Sales

      Other income from art sales for the three months ended January 31, 2003 of
$33,000 increased by $16,000 from other income of $17,000 for the same period in
fiscal 2002. Art revenues are comprised of the proceeds from the sale of
antiquities and contemporary art. Canal recognized gross sales of $103,000 and
$90,000 for the three month periods ended January 31, 2003 and 2002,
respectively. Art expenses are comprised of the cost of inventory sold and
selling, general and administrative expenses. Canal incurred cost of inventory
sold of $64,000 and $67,000 (net of a valuation allowance of $179,000 and
$108,000) as well as selling, general and administrative expenses of $3,000 and
$7,000 for the three month periods ended January 31, 2003 and 2002,
respectively. It is the Company's policy to use the adjusted carrying value for
sales, thereby reducing the valuation reserve proportionately as the inventory
is sold.

Other Factors

      Some of the statements in this Form 10-Q, as well as statements by the
Company in periodic press releases, oral statements made by the Company's
officials to analysts and stockholders in the course of presentations about the
Company and conference calls following earning releases, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involved known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by the
forward-looking statements.

ITEM III. Quantitative and Qualitative Disclosures About Market Risk

      The Securities and Exchange Commission's rule related to market risk
disclosure requires that we describe and quantify our potential losses from
market risk sensitive instruments attributable to reasonably possible market
changes. Market risk sensitive instruments include all financial or commodity
instruments and other financial instruments (such as investments and debt) that
are sensitive to future changes in interest rates, currency exchange rates,
commodity prices or other market factors. We are not exposed to market risks
from changes in foreign currency, exchange rates or commodity prices. As of
January 31, 2003, we do not hold derivative financial instruments nor do we hold
securities for trading or speculative purposes. Under our current policies, we
do not use interest rate derivative instruments to manage our exposure to
interest rate changes.


                                       24

<PAGE>

Item IV. Controls and Procedures

      Our management, which includes our Chief Executive Officer and Chief
Financial Officer, has conducted an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Rule 13(a)-14(c) promulgated
under the Securities Exchange Act of 1934) as of January 31, 2003 ("the
Evaluation Date") within 45 days prior to the filing date of this report. Based
upon that evaluation our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective for timely
gathering, analyzing and disclosing the information we are required to disclose
in our reports filed under the Securities Exchange Act of 1934, as amended.
There have been no significant changes made in our internal controls or other
factors that could significantly effect our internal controls subsequent to the
Evaluation Date.


                                       25

<PAGE>


                                     PART II

                                OTHER INFORMATION


                                       26


<PAGE>

Item 1:        Legal Proceedings:

               See Item 3 of Canal's October 31, 2002 Form 10-K.

Item 2 and 3:

               Not applicable.

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

               None.

Item 5:        Other Information:

               None.

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

               (A)   Not applicable.

               (b)   The Company filed a Form 8-K on March 3, 2003 in which the
                     Company disclosed that on February 27, 2003, the Company
                     entered into a Contract of Sale for the sale of
                     approximately 30 acres of land located in Sioux City, Iowa
                     (formerly used by the Company for stockyards operations) at
                     a purchase price of One Million Three Hundred Thousand
                     ($1,300,000.00) Dollars. The sale is subject to a number of
                     contingencies which must be satisfied before closing.
                     The Company anticipates it will take approximately six
                     months to close this transaction.


                                       27

<PAGE>

                                  SIGNATURES

      Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                    Canal Capital Corporation
                                                    -------------------------
                                                          Registrant


                                                    /s/ Michael E. Schultz
                                                    -------------------------
                                                    Michael E. Schultz
                                                    Chief Executive Officer &
                                                    President


                                                    /s/ Reginald Schauder
                                                    -------------------------
                                                    Reginald Schauder
                                                    Vice President-Finance &
                                                    Chief Financial Officer


Date: March 13, 2003


                                       28

<PAGE>

                                 CERTIFICATIONS

I, Michael E. Schultz, certify that:

      1)    I reviewed this quarterly report on From 10-Q of Canal Capital
            Corporation ("Registrant");

      2)    Based on my knowledge, this quarterly report does not contain any
            untrue statements 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.

                                                    /s/ Michael E. Schultz
                                                    -------------------------
                                                    Michael E. Schultz
                                                    Chief Executive Officer &
                                                    President


Date: March 13, 2003


                                       29

<PAGE>

                                 CERTIFICATIONS

I, Reginald Schauder, certify that:

      1)    I reviewed this quarterly report on From 10-Q of Canal Capital
            Corporation ("Registrant");

      2)    Based on my knowledge, this quarterly report does not contain any
            untrue statements 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.

                                                    /s/ Reginald Schauder
                                                    -------------------------
                                                    Reginald Schauder
                                                    Vice President-Finance &
                                                    Chief Financial Officer


Date: March 13, 2003

                                       30