U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

    For the quarterly period ended June 30, 2003


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

    For the transition period from         to

    Commission File No.  0-32331

                              SURETY HOLDINGS CORP.
             -------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

            Delaware                                              52-2229054
   ------------------------------                          ---------------------
   State of other jurisdiction of                          (IRS Employer
   incorporation or organization                           Identification No.)

                               4400 Route 9 South
                           Freehold, New Jersey 07728
                ------------------------------------------------
                    (Address of Principal Executive Offices)

   Registrant's telephone number including area code          732-886-0706
                                                              ------------

   Check  whether  the  issuer  (1) filed all  reports  required  to be filed by
   Section  13 or 15 (d) of the  Exchange  Act during the past 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.

   (1)   YES  X   NO                            (2)   YES  X   NO
             ---    ---                                   ---    ---

   State the number of shares outstanding of each of the Registrant's classes of
   common equity, as of the latest applicable date:

                          6,753,000 - - August 14, 2003


<PAGE>

                                      INDEX

                                                                           PAGE
                                                                           ----
Part I - Financial Information

       Item 1 - Condensed Consolidated Financial Statements

            Balance Sheet as of June 30, 2003                                1

            Statements of Income for the six and three months
               ended June 30, 2003 and 2002                                  2

            Statements of Cash Flows for six months ended June 30, 2003
            and 2002                                                        3-4

            Notes to the Financial Statements                               5-10

       Item 2 - Management's Discussion and Analysis or Plan of Operation  11-20

       Item 3 - Evaluation of Disclosure Controls and Procedures            21

Part II - Other Information

       Item 1 - Legal Proceedings                                           21

       Item 2 - Change in Securities                                        21

       Item 3 - Defaults Upon Senior Securities                             21

       Item 4 - Submission of Matters to a Vote of Security Holders         21

       Item 5 - Other Information                                           21

       Item 6 - Exhibits and Reports on Form 8-K                            21

       SIGNATURE                                                            22




<PAGE>

                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  June 30, 2003
                                   (unaudited)

                                     ASSETS


CURRENT ASSETS
  Cash                                                             $ 11,385,000
  Real estate held for sale, current                                  2,305,000
  Other current assets                                                  281,000
  Notes receivable, officer, current                                     13,000
                                                                   ------------
     Total current assets                                            13,984,000

NOTES RECEIVABLE, less current maturities                             2,876,000

NOTE RECEIVABLE, officer, less current maturity                         547,000

REAL ESTATE HELD FOR SALE                                            29,717,000

NOTES RECEIVABLE AND ACCRUED INTEREST,
  MARINE FOREST RESORT, INC., net of an approximate
  $11 million allowance for loan losses                                      --

REAL ESTATE DEVELOPMENT COSTS                                        42,723,000

PROPERTY AND EQUIPMENT, net of accumulated depreciation
  and amortization of approximately $2 million                        2,525,000

DEFERRED TAX ASSET                                                    4,519,000

OTHER ASSETS                                                          1,937,000
                                                                   ------------
                                                                   $ 98,828,000
                                                                   ============

                          LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Notes payable, current maturity                                  $     31,000
  Accounts payable                                                      309,000
  Accrued expenses and other current liabilities                        348,000
                                                                   ------------
     Total current liabilities                                          688,000
                                                                   ------------

LONG-TERM LIABILITIES
  Notes payable, less current maturity                                  387,000
  Obligations pursuant to notes receivable
    financing, less current maturity                                    451,000
                                                                   ------------
     Total long-term liabilities                                        838,000
                                                                   ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Common stock, $.001 par value,
    200,000,000 shares authorized,
    6,753,000 shares issued and
    outstanding                                                           7,000
  Capital in excess of par value                                    101,709,000
  Accumulated deficit                                                (4,414,000)
                                                                   ------------
     Total stockholders' equity                                      97,302,000
                                                                   ------------

                                                                   $ 98,828,000
                                                                   ============


SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       1
<PAGE>


                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                SIX AND THREE MONTHS ENDED JUNE 30, 2003 AND 2002
                                   (unaudited)
<TABLE>
<CAPTION>
                                   SIX MONTHS ENDED JUNE 30,   THREE MONTHS ENDED JUNE 30,
                                     2003           2002           2003           2002
                                  -----------    -----------    -----------    -----------
<S>                               <C>            <C>            <C>            <C>
REVENUES                          $ 6,970,000    $ 1,793,000    $ 3,892,000    $   848,000

COST OF REVENUES                    2,387,000        649,000      1,220,000        309,000
                                  -----------    -----------    -----------    -----------

GROSS PROFIT                        4,583,000      1,144,000      2,672,000        539,000

GENERAL AND ADMINISTRATIVE
 EXPENSES                           1,138,000        775,000        521,000        382,000
                                  -----------    -----------    -----------    -----------

INCOME FROM OPERATIONS              3,445,000        369,000      2,151,000        157,000
                                  -----------    -----------    -----------    -----------

OTHER INCOME (EXPENSE)
Interest income                       109,000        137,000         48,000         63,000
Interest expense                      (13,000)       (98,000)        (6,000)       (10,000)
                                  -----------    -----------    -----------    -----------
                                       96,000         39,000         42,000         53,000
                                  -----------    -----------    -----------    -----------

INCOME BEFORE INCOME TAXES          3,541,000        408,000      2,193,000        210,000

INCOME TAXES                       (1,318,000)      (165,000)      (805,000)      (116,000)
                                  -----------    -----------    -----------    -----------
NET INCOME                        $ 2,223,000    $   243,000    $ 1,388,000    $    94,000
                                  ===========    ===========    ===========    ===========

NET INCOME PER COMMON
 SHARE, basic and diluted         $      0.33    $      0.04    $      0.21    $      0.01
                                  ===========    ===========    ===========    ===========

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING, basic and diluted     6,749,000      6,738,000      6,753,000      6,738,000
                                  ===========    ===========    ===========    ===========
</TABLE>






SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       2
<PAGE>


                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                                   (unaudited)
<TABLE>
<CAPTION>
                                                             2003            2002
                                                         ------------    ------------
<S>                                                      <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                             $  2,223,000    $    243,000
  Adjustments to reconcile net income
   to net cash used in operating activities:
     Depreciation and amortization                             71,000          73,000
     Deferred income taxes                                     46,000           8,000
     Gain on sales of property                             (5,173,000)     (1,110,000)
     Loss on sale of notes receivable                                          75,000
     Stock compensation charge                                 31,000
     Increase (decrease) in cash
      attributable to changes in operating
      assets and liabilities:
        Other current assets                                  180,000           5,000
        Other assets                                         (188,000)       (201,000)
        Accounts payable                                     (389,000)       (271,000)
        Accrued expenses and other
         current liabilities                                  230,000         174,000
                                                         ------------    ------------
NET CASH USED IN OPERATING ACTIVITIES                      (2,969,000)     (1,004,000)
                                                         ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                         (14,000)        (93,000)
  Proceeds from sales of property                           4,903,000       1,318,000
  Real estate development expenditures                       (429,000)       (756,000)
  Proceeds from repayments of notes receivable                158,000         769,000
  Proceeds from repayments of note receivable, officer          7,000           2,000
                                                         ------------    ------------
NET CASH PROVIDED BY INVESTING ACTIVITIES                   4,625,000       1,240,000
                                                         ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Principal payments on notes payable                         (17,000)        (14,000)
  Repayments of notes payable, president                                     (260,000)
                                                         ------------    ------------
NET CASH USED IN FINANCING ACTIVITIES                         (17,000)       (274,000)
                                                         ------------    ------------
NET INCREASE (DECREASE) IN CASH                             1,639,000         (38,000)

CASH
  Beginning of period                                       9,746,000       9,908,000
                                                         ------------    ------------
  End of period                                          $ 11,385,000    $  9,870,000
                                                         ============    ============
</TABLE>









SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       3
<PAGE>



                     SURETY HOLDINGS CORP. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                   2003         2002
                                                                                ----------   ----------
<S>                                                                             <C>          <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATION, cash paid during the period for:
  Interest                                                                      $   13,000   $   17,000
                                                                                ==========   ==========


  Income taxes                                                                  $  823,000   $       --
                                                                                ==========   ==========

SUPPLEMENTAL DISCLOSURES OF NONCASH
 INVESTING AND FINANCING ACTIVITIES:

Issuance of note receivable to officer upon sale of property and improvements   $       --   $  575,000
                                                                                ==========   ==========

Issuance of notes receivable upon sale of property                              $1,658,000   $       --
                                                                                ==========   ==========
</TABLE>






SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       4

<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  NATURE OF OPERATIONS

Surety   Holdings   Corp.   ("Surety")   and   its   wholly-owned   subsidiaries
(collectively,  the  "Company")  are primarily  engaged in the  development of a
property on 642 acres of land in the North Kohala  district of Hawaii  Island in
the state of  Hawaii.  This  development,  referred  to as the  Kohala  Preserve
development project was initially slated to be a hotel,  18-hole golf course and
resort homes. However, the Company is exploring other avenues of development for
the 642 acres most notably, an all-inclusive fractional interest club community.

The  current  operations  of the  Company  include  the  sale of its  non-Kohala
Preserve development project real estate and other ancillary activities,  all of
which are not deemed to be the future of the Company's business.

In January 2003,  the Company  acquired the assets of  Millennium  International
Sports &  Entertainment,  LLC  ("Millennium"),  which  consisted  of sports  and
entertainment  memorabilia (see Item 7, CONSOLIDATED FINANCIAL STATEMENTS - NOTE
13, in the Company's  Annual  Report on Form 10-KSB for the year ended  December
31, 2002 for further  detail).  However,  since revenues related to the sales of
the memorabilia  were below certain  thresholds  specified in the Asset Purchase
Agreement,  the Company notified Millennium of its election to rescind the Asset
Purchase Agreement, pursuant to the terms of agreement.

2.  UNAUDITED   STATEMENTS,   INCOME   PER  COMMON  SHARE  AND  NEW   ACCOUNTING
    PRONOUNCEMENTS

UNAUDITED STATEMENTS

The accompanying  condensed consolidated financial statements of Surety Holdings
Corp.  and  Subsidiaries  as of June 30,  2003  and for the six and  three-month
periods ended June 30, 2003 and 2002 are  unaudited and reflect all  adjustments
of a normal and recurring  nature to present fairly the  consolidated  financial
position,  results of operations and cash flows for the interim  periods.  These
unaudited condensed  consolidated financial statements have been prepared by the
Company pursuant to instructions to Form 10-QSB.  Pursuant to such instructions,
certain financial information and footnote disclosures normally included in such
financial statements have been omitted.

These unaudited condensed  consolidated  financial  statements should be read in
conjunction  with  the  consolidated  audited  financial  statements  and  notes
thereto,   together  with  management's  discussion  and  analysis  or  plan  of
operations,  contained in the Company's Annual Report on the Form 10-KSB for the
year  ended  December  31,  2002.  The  results  of  operations  for the six and
three-month  periods ended June 30, 2003 are not  necessarily  indicative of the
results that may occur for the year ending December 31, 2003.

INCOME PER COMMON SHARE

The Company complies with Statement of Financial  Accounting  Standards ("SFAS")
No. 128,  "Earnings  Per Share" which  requires dual  presentation  of basic and
diluted  earnings per share.  Basic earnings per share excludes  dilution and is
computed  by  dividing   income   available  to  common   stockholders   by  the
weighted-average  common shares  outstanding for the year.  Diluted earnings per
share  reflects the  potential  dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity.  Since the Company has no securities or other  contracts to issue common
stock, basic and diluted net income per common share for the six and three-month
periods ended June 30, 2003 and 2002 were the same.




                                       5
<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


2.  UNAUDITED   STATEMENTS,   INCOME  PER  COMMON  SHARE  AND   NEW   ACCOUNTING
    PRONOUNCEMENTS (CONTINUED)

NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the Financial  Accounting  Standards Board ("FASB") issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 requires  certain  variable  interest  entities to be consolidated by the
primary  beneficiary of the entity if the equity  investors in the equity do not
have the  characteristics  of a  controlling  financial  interest or do not have
sufficient  equity at risk for the  entity to  finance  its  activities  without
additional  subordinated  financial  support  from  other  parties.  FIN  46  is
effective immediately for all new variable interest entities created or acquired
after January 15, 2003. The Company has no arrangements that would be subject to
this interpretation.

In April 2003,  the FASB issued SFAS  No.149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  the  accounting  for  derivative   instruments,   including   certain
derivative  instruments embedded in other contracts,  and for hedging activities
under  SFAS  No.  133,  "Accounting  for  Derivative   Instruments  and  Hedging
Activities."  SFAS No. 149 is generally  effective for contracts entered into or
modified after June 30, 2003 and for hedging relationships designated after June
30,  2003.  The adoption of SFAS No. 149 on July 1, 2003,  as  required,  had no
impact on the Company's condensed consolidated financial statements.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics of Both Liabilities and Equity".  SFAS No. 150
establishes  standards for  classifying  and measuring as  liabilities,  certain
financial   instruments   that  embody   obligations  of  the  issuer  and  have
characteristics  of both  liabilities  and equity.  The adoption of SFAS No. 150
will  not  have a  material  effect  on  the  Company's  condensed  consolidated
financial statements.

3.  REAL ESTATE DEVELOPMENT COSTS

At June 30, 2003,  real estate  development  costs,  attributed to the Company's
Kohala Preserve development project, consist of the following:


Land and land acquisition costs                $  28,975,000
Planning and studies                               2,521,000
Engineering and architectural                        565,000
Infrastructure                                     6,604,000
Professional and consulting fees                   2,458,000
Other                                              1,600,000
                                               -------------
                                               $  42,723,000
                                               =============


4.  STOCKHOLDERS' EQUITY

In January 2003,  the Company issued 15,000 shares of its common stock valued at
$31,000 pursuant to employment contracts.



                                       6
<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


5.  COMMITMENTS AND CONTINGENCIES

The prior  approvals  obtained for the Kohala Preserve  development  project are
conditional;  that is,  each  approval  is  subject  to  various  conditions  of
approval.  Certain  of these  conditions  of  approval  contain  time  limits or
financial  compliance  requirements,  which if not met, may ultimately result in
legislative and/or administrative actions to void or revoke the prior approvals.
The effect of such adverse  actions would be to return the land  entitlements to
the former  zoning,  or more  appropriate  zoning as determined by the County of
Hawaii.  The  Company  believes  that it has  continued  to  maintain  the prior
approvals  through  compliance  with all applicable  conditions.  In the future,
however,  the Company may not be able to maintain compliance with all applicable
conditions.

The  Company has entered  into  various  consulting  agreements  for  investment
banking, project development and other services. Generally, these agreements are
on a project by project basis requiring payments as services are performed.

The Company is involved in certain legal actions that arose in the normal course
of business. In the opinion of the Company's management, the resolution of these
matters will not have a material  adverse effect on the  consolidated  financial
position, results of operations or cash flows of the Company

6.  RELATED PARTY TRANSACTIONS

MARINE FOREST RESORT, INC. ("MARINE FOREST")

Pursuant to  uncollateralized  promissory  notes,  the Company  advanced  Marine
Forest, a related Japanese corporation that controls  approximately 400 acres of
land in Okinawa, Japan, $9.75 million. The notes bear interest at the U.S. prime
rate, at date of issuance,  plus one percent.  Under their original  terms,  the
notes  were due six  months  after  date of  issuance.  However,  the notes were
extended an  additional  six months and  subsequently  extended to December  31,
2002, as a concession to Marine Forest to advance  Marine  Forest's  development
projects.  Marine Forest's current  development  plans are based upon a recently
completed  study  prepared by a consultant for the Kohala  Preserve  development
plan. The Company believes that Marine Forest may sell its development  projects
based on the aforementioned study and repay the notes and interest thereafter.

As of June 30, 2003, the notes remain  outstanding.  Further,  since issuance of
the notes,  no interest  has been paid to the Company.  Accordingly,  during the
years ended  December 31, 2002 and 2001, in light of the  speculative  nature of
Marine Forest's  development projects among other reasons and in accordance with
its compliance with the  requirements  of SFAS No. 114, the Company  recorded an
impairment charge of approximately $3.8 million and $7.2 million,  respectively,
including  approximately $1.3 million of aggregate accrued interest  receivable.
During the year ended  December  31,  2002,  the Company  discontinued  accruing
interest income on the notes in light of its impairment charge.

NOTE RECEIVABLE, OFFICER

In April 2002,  an officer of the Company  purchased  property and  improvements
thereon for $575,000.  The officer entered into a 30-year note agreement,  which
requires  monthly  payments of principal  and interest  through  2032.  The note
receivable bears interest at the rate of 2.66%. At June 30, 2003, the balance on
this note receivable was approximately $560,000.





                                       7
<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7.  SEGMENT REPORTING

As  discussed  in Note 1, the  Company's  primary  business  focus is the Kohala
Preserve  development project.  Nonetheless,  the Company complies with SFAS No.
131 "Disclosures about Segments of an Enterprise and Related Information", which
provides information about the Company's current business activities. Management
has divided the Company into the following segments:  real estate sales, rental,
cattle sales and other. Transactions between segments are not common and are not
material to the segment  information.  Some business  activities  that cannot be
classified in the aforementioned segments are shown under "corporate".

Operating results, by segment,  for the six and three months ended June 30, 2003
and 2002 are as follows (in thousands):


                                      SIX MONTHS ENDED JUNE 30, 2003
<TABLE>
<CAPTION>
                                      Real Estate      Rental         Cattle
                                         Sales        Activity         Sales        Other        Corporate      Total
                                      ----------------------------------------------------------------------------------
<S>                                   <C>             <C>            <C>           <C>           <C>            <C>
Revenues                              $    6,561      $     141      $     147     $     121     $      --      $  6,970
Cost of revenues                           2,102             61            113           111                       2,387
                                      ----------------------------------------------------------------------------------
Segment profit                             4,459             80             34            10                       4,583
General and administrative expenses                                                                 (1,138)       (1,138)
Interest income, net                                                                                    96            96
Income taxes                                                                                        (1,318)       (1,318)
                                      ----------------------------------------------------------------------------------

Net income (loss)                     $    4,459      $      80      $      34     $      10     $  (2,360)     $  2,223
                                      ==================================================================================

Total assets                          $   37,425      $      61      $      94     $     550     $  60,698      $ 98,828
                                      ==================================================================================

Capital expenditures                  $       --      $      --      $       6     $       1     $     436      $    443
                                      ==================================================================================

Depreciation and amortization         $       --      $       2      $       9     $      28     $      32      $     71
                                      ==================================================================================
</TABLE>








                                       8
<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


7.  SEGMENT REPORTING (CONTINUED)


                                      SIX MONTHS ENDED JUNE 30, 2002
<TABLE>
<CAPTION>
                                      Real Estate      Rental      Cattle
                                         Sales        Activity      Sales          Other        Corporate       Total
                                      ----------------------------------------------------------------------------------
<S>                                   <C>             <C>         <C>            <C>            <C>           <C>
Revenues                              $    1,318      $    139    $      211     $      125     $       --    $    1,793
Cost of revenues                             384            57            88            120            649
                                      ----------------------------------------------------------------------------------
Segment profit                               934            82           123              5                        1,144
General and administrative expenses                                                                   (775)         (775)
Interest income, net                                                                                    39            39
Income taxes                                                                                          (165)         (165)
                                      ----------------------------------------------------------------------------------

Net income (loss)                     $      934      $     82    $      123     $        5     $     (901)   $      243
                                      ==================================================================================

Total assets                          $   40,614      $     40    $      105     $      599     $   56,518    $   97,876
                                      ==================================================================================

Capital expenditures                  $       --      $     --    $        4     $       51     $      794    $      849
                                      ==================================================================================

Depreciation and amortization         $       --      $      2    $        8     $       31     $       32    $       73
                                      ==================================================================================
</TABLE>

                                      THREE MONTHS ENDED JUNE 30, 2003
<TABLE>
<CAPTION>
                                      Real Estate      Rental      Cattle
                                         Sales        Activity      Sales          Other        Corporate       Total
                                      ----------------------------------------------------------------------------------
<S>                                   <C>             <C>         <C>            <C>            <C>           <C>
Revenues                              $    3,693      $    58     $       75     $       66     $       --    $    3,892
Cost of revenues                           1,082           30             53             55                        1,220
                                      ----------------------------------------------------------------------------------

Segment profit                             2,611           28             22             11                        2,672
General and administrative expenses                                                                   (521)         (521)
Interest income, net                                                                                    42            42
Income taxes                                                                                          (805)         (805)
                                      ----------------------------------------------------------------------------------

Net income (loss)                     $    2,611      $    28     $       22     $       11     $   (1,284)   $    1,388
                                      ==================================================================================

Capital expenditures                  $       --      $    --     $       --     $        1     $      138    $      139
                                      ==================================================================================

Depreciation and amortization         $       --      $     1     $        4     $       14     $       16    $       35
                                      ==================================================================================
</TABLE>

                                       9
<PAGE>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


7.  SEGMENT REPORTING (CONTINUED)


                                      THREE MONTHS ENDED JUNE 30, 2002
<TABLE>
<CAPTION>
                                      Real Estate      Rental      Cattle
                                         Sales        Activity      Sales          Other        Corporate       Total
                                      ----------------------------------------------------------------------------------
<S>                                   <C>             <C>         <C>            <C>            <C>           <C>
Revenues                              $      608      $     40    $      130     $       70     $       --    $      848
Cost of revenues                             189            29            40             51                          309
                                      ----------------------------------------------------------------------------------

Segment profit                               419            11            90             19                          539
General and administrative expenses                                                                   (382)         (382)
Interest income, net                                                                                    53            53
Income taxes                                                                                          (116)         (116)
                                      ----------------------------------------------------------------------------------

Net income (loss)                     $      419      $     11    $       90     $       19     $     (445)   $       94
                                      ==================================================================================

Capital expenditures                  $       --      $     --    $        4     $       24     $      608    $      636
                                      ==================================================================================

Depreciation and amortization         $       --      $      1    $        4     $       13     $       17    $       35
                                      ==================================================================================
</TABLE>







                                       10
<PAGE>


Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

NOTE ON FORWARD LOOKING INFORMATION

This Form 10-QSB  contains  forward-looking  statements.  For this purpose,  any
statements  contained in this Form 10-QSB that are not  statements of historical
fact may be  deemed  to be  forward-looking  statements.  Without  limiting  the
foregoing,  words  such as "may",  "will",  "expect",  "believe",  "anticipate",
"estimates", or "continue" or comparable terminology or the negative thereof are
intended to identify  certain  forward-looking  statements.  These statements by
their  nature  involve  substantial  risks  and  uncertainties,  both  known and
unknown,  and actual  results  may  differ  materially  from any future  results
expressed or implied by such forward-looking  statements. The Company undertakes
no  obligation  to  publicly  update or revise  any  forward-looking  statements
whether as a result of new information, future events or otherwise.

OVERVIEW

Surety  Holdings Corp. (the  "Company"),  through its  wholly-owned  subsidiary,
Surety Kohala Corporation ("Surety Kohala"),  is engaged in the development of a
property on 642 acres of land in the North Kohala  district of Hawaii  Island in
the state of  Hawaii.  This  development,  referred  to as the  Kohala  Preserve
development project (formerly known as the Mahukona  development  project),  was
initially slated to be a hotel,  18-hole golf course and resort homes.  However,
the Company is exploring  other  avenues of  development  for the 642 acres most
notably,  an  all-inclusive  fractional  interest  club  community  (see  KOHALA
PRESERVE DEVELOPMENT in Liquidity and Capital Resources).

The Company  maintains an  investment  in Marine Forest  Resort,  Inc.  ("Marine
Forest"), a related Japanese  corporation that controls  approximately 400 acres
of land in Okinawa,  Japan (see MARINE FOREST in Liquidity and Capital Resources
for discussion of Impairment Charge).

The current operations of the Company (discussed in Results of Operations on the
following pages) include the sale of its non-Kohala Preserve development project
real estate and other ancillary  activities,  many of which are not deemed to be
the future of the Company's business.

In January 2003,  the Company  acquired the assets of  Millennium  International
Sports &  Entertainment,  LLC,  which  consisted  of  sports  and  entertainment
memorabilia.  Subsequently,  the Company has notified Millennium of its election
to rescind on the Asset Purchase  Agreement as a result of revenues  relating to
the memorabilia being below certain specified thresholds in the agreement.  (See
MILLENNIUM in Liquidity and Capital Resources).


                                       11
<PAGE>


CRITICAL ACCOUNTING POLICIES

The Company has  identified  the following  critical  accounting  policies which
effect the Company's  consolidated  financial statements as of June 30, 2003 and
for the six months ended June 30, 2003 and 2002:

REAL ESTATE HELD FOR SALE AND DEVELOPMENT COSTS (INCLUDING IMPAIRMENT)

Real estate  held for sale is stated at the lower of cost or market.  All direct
and indirect costs relating to the Company's development project are capitalized
in accordance with Statement of Financial  Accounting  Standards ("SFAS") No. 67
"Accounting  for Costs and Initial Rental  Operations of Real Estate  Projects".
Such standard  requires costs associated with the  acquisition,  development and
construction of real estate and real  estate-related  projects to be capitalized
as part of that  project.  The  realization  of these costs is predicated on the
ability  of the  Company  to  successfully  open  and  operate  the  development
property.

The Company reviews its real estate held for sale, real estate development costs
and long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully recoverable. To
determine  the  recoverability  of these  assets,  the Company  employs  various
methods  to assess  fair  value  including,  but not  limited  to,  analysis  of
undiscounted  cash flows,  third party  appraisals or valuations and contractual
sales  value of  similar  properties.  Impairment  is the  amount  by which  the
carrying value of the asset exceeds its fair value.

The Company has obtained an "Opinion of Market  Value",  dated February 3, 2003,
for  a  majority  of  its  property  from  Economics  Research  Associates,   an
experienced and reputable advisor for developers and others.

 MARINE FOREST - "ACCOUNTING BY CREDITORS FOR IMPAIRMENT OF A LOAN"

The Company  accounts  for the notes  receivable  from Marine  Forest  under the
provisions of SFAS No. 114,  "Accounting by Creditors for Impairment of a Loan".
Under SFAS No. 114, a loan is impaired when,  based on current  information  and
events, it is probable that a creditor will be unable to collect all amounts due
according to the contractual terms of the loan agreement.  SFAS No. 114 requires
lenders to measure  impaired  loans based on: (i) the present  value of expected
future cash flows  discounted at the loans'  effective  interest rate;  (ii) the
loans'  observable market price or (iii) the fair value of the collateral if the
loan is collateral-dependent.  An allowance for loan losses is maintained if the
measure of an impaired loan is less than its recorded investment. Adjustments to
the allowance are made through corresponding charges or credits to the provision
for loan losses.



                                       12
<PAGE>


RESULTS OF OPERATIONS

The following  table sets forth the  statements of income of the Company for the
the six months ended June 30, 2003 and 2002:

                                                  2003              2002

     Real estate sales                       $   6,561,000     $   1,318,000
     Rentals                                       141,000           139,000
     Cattle sales                                  147,000           211,000
     Other                                         121,000           125,000
                                             -------------     -------------
     Total revenues                              6,970,000         1,793,000
                                             -------------     -------------

     Cost of real estate sales                   2,102,000           384,000
     Cost of rentals                                61,000            57,000
     Cost of cattle sales                          113,000            88,000
     Cost of other                                 111,000           120,000
                                             -------------     -------------
     Total cost of revenues                      2,387,000           649,000
                                             -------------     -------------

     Gross profit                                4,583,000         1,144,000

     General and administrative expenses         1,138,000           775,000
                                             -------------     -------------

     Income from operations                      3,445,000           369,000
                                             -------------     -------------

     Interest income                               109,000           137,000
     Interest expense                              (13,000)          (98,000)
     Income taxes                               (1,318,000)         (165,000)
                                             -------------     -------------
                                                (1,222,000)         (126,000)
                                             -------------     -------------
     Net income                              $   2,223,000     $     243,000
                                             =============     =============

REAL ESTATE SALES -

For the six  months  ended  June 30,  2003,  the  Company  sold 27 parcels to 13
different  buyers of  properties  for proceeds of  approximately  $6,561,000  as
compared  to the six  months  ended  June 30,  2002  where  the  Company  sold 6
properties for proceeds of approximately  $1,318,000,  an approximate $5,243,000
increase.  In 2002, the Company had been  experiencing  closing delays caused by
the Company's  survey  company,  the largest survey company on the Big Island of
Hawaii and probably the only survey company large enough to handle the Company's
PCRS  (Parcel  Consolidation  Re-Subdivision)  parcels and  subdivisions,  being
backlogged with work. To address the backlog,  the Company switched surveyors on
several  projects.  Land court and county approval  processes  (generally  three
months or more),  which occur  subsequent to the  surveying,  could  contribute,
however, to a slowing in the closing process.


                                       13
<PAGE>


The Company  anticipates closing between 9 to 13 transactions in the second half
of 2003 for  approximately  $5,000,000.  As a result of the survey work becoming
quicker, the Company anticipates closing  approximately  $11,000,000 million for
2003.  There  can be no  assurances  that  the  Company  will be able to close a
majority of these contracts in 2003.

Real estate sales expense  increased in 2003 as a result of the  amortization of
the survey costs being much greater in 2003 than previously for the parcels sold
in 2002.

The  Company  believes  that the  tourism  and  second  home  markets  have made
recoveries from the events of September 11, 2001  ("September  11th"),  however,
the war in the Middle East may have negative repercussions.

RENTAL REVENUES -

Rental  revenues for the six months ended June 30, 2003 are consistent  with the
rental  revenues  realized for the six months  ended June 30, 2002.  The Company
believes  total  rental  revenues  in 2003 could  decrease  as compared to total
rental revenues realized in 2002 as long as land continues to be sold.

CATTLE SALES -

The  approximate 30% decrease in cattle sales is attributable to the decrease in
the  average  price per head of cattle  and the  decrease  in the  cattle  sold.
Specifically, for the six months ended June 30, 2003, the Company sold 551 heads
at an average  price of  approximately  $267 per head  versus the same period in
2002, where the Company sold 741 heads at an average price of approximately $290
per head. The  deteriorated  cattle sales margins are  attributable to increased
costs  resulting  from the increase in rent expense caused by the sale and lease
back of former  pasturelands.  Cattle  sales will  continue  to  decrease as the
Company continues to sell pasturelands.

OTHER REVENUES -

Other revenues experienced no significant fluctuations.  The Company anticipates
other revenues to increase through the remainder of 2003.

GENERAL AND ADMINISTRATIVE EXPENSES -
On an overall basis, general and administrative expenses increased approximately
47% for the six months  ended June 30,  2003 as  compared  to the same period in
2002. The components of general and  administrative  expenses for the six months
ended  June 30,  2003  include  salaries  and  related  costs  of  approximately
$205,000;  professional  fees (legal,  auditing and consulting) of approximately
$497,000;  franchise and other taxes of approximately  $67,000;  depreciation of
approximately  $32,000;  insurance of approximately  $74,000; and other expenses
aggregating approximately $263,000. The components of general and administrative
expenses  for the six months  ended June 30, 2002  include  salaries and related
costs  of  approximately  $260,000;   professional  fees  (legal,  auditing  and
consulting)   of   approximately   $135,000;   franchise   and  other  taxes  of
approximately  $101,000;  depreciation of  approximately  $31,000;  insurance of
approximately $60,000; and other expenses aggregating approximately $188,000.


                                       14
<PAGE>


Professional  fees more than  tripled  in 2003 as a result of (i)  higher  legal
costs in  connection  with hiring  legal  counsel to  negotiate  and address the
development  cost activities and (ii) an increase in consulting fees paid to the
Company's  President and Chief  Executive  Officer.  Depreciation  and insurance
expense remained flat in 2003. Other expenses increased by approximately $75,000
primarily as a result of (i) increased travel and entertainment by executives to
progress  development  plans  (ii)  increased  rent  attributable  to  temporary
accommodations  in San  Francisco  for the  Company's  President and (iii) stock
compensation charge incurred pursuant to employment contracts.

INTEREST EXPENSES -

Interest  expense  for the six months  ended June 30, 2002  included  $75,000 of
interest charges incurred from the loss on sale of a mortgage.

The following  table sets forth the  statements of income of the Company for the
three months ended June 30, 2003 and 2002:

                                                  2003                2002

     Real estate sales                       $   3,693,000       $     608,000
     Rentals                                        58,000              40,000
     Cattle sales                                   75,000             130,000
     Other                                          66,000              70,000
                                             -------------       -------------
     Total revenues                              3,892,000             848,000
                                             -------------       -------------

     Cost of real estate sales                   1,082,000             189,000
     Cost of rentals                                30,000              29,000
     Cost of cattle sales                           53,000              40,000
     Cost of other                                  55,000              51,000
                                             -------------       -------------
     Total cost of revenues                      1,220,000             309,000
                                             -------------       -------------

     Gross profit                                2,672,000             539,000

     General and administrative expenses           521,000             382,000
                                             -------------       -------------

     Income from operations                      2,151,000             157,000
                                             -------------       -------------
     Interest income                                48,000              63,000
     Interest expense                               (6,000)            (10,000)
     Income taxes                                 (805,000)           (116,000)
                                             -------------       -------------

                                                  (763,000)            (63,000)
                                             -------------       -------------

     Net income                              $   1,388,000       $      94,000
                                             =============       =============


REAL ESTATE SALES -

During  the three  months  ended June 30,  2003,  the  Company  sold 13 lots for
proceeds of approximately $3,700,000, as compared to the three months ended June
30, 2002 where the Company sold four  properties  for proceeds of  approximately
$608,000, an approximate  $3,100,000 increase.  See management's  discussion and
analysis  for the six months  ended  June 30,  2003 and 2002 for  discussion  of
delays and future expectations.


                                       15
<PAGE>


RENTAL REVENUES -

Rental revenues  increased by  approximately  $18,000 for the three months ended
June 30, 2003 as compared to the three months ended June 30, 2002.

CATTLE SALES -

Cattle sales declined approximately 42% for the three months ended June 30, 2003
as 270 heads of cattle were sold compared to 460 heads of cattle during the same
period of the prior year.  The Company  believes that cattle sales will continue
to  decrease  for  the  foreseeable   future  due  to  the  continuing  sale  of
pasturelands.

OTHER REVENUES -

Other revenues experienced no significant fluctuations.  The Company anticipates
other revenues to increase through the remainder of 2003.

GENERAL AND ADMINISTRATIVE EXPENSES -

On an overall basis, general and administrative expenses increased approximately
36% for the three  months  ended June 30, 2003 as compared to the same period in
2002. The components of general and administrative expenses for the three months
ended  June 30,  2003  include  salaries  and  related  costs  of  approximately
$103,000;  professional  fees (legal,  auditing and consulting) of approximately
$207,000;  franchise and other taxes of approximately  $38,000;  depreciation of
approximately  $16,000;  insurance of approximately  $37,000; and other expenses
aggregating approximately $120,000. The components of general and administrative
expenses for the three  months ended June 30, 2002 include  salaries and related
costs  of  approximately  $124,000;   professional  fees  (legal,  auditing  and
consulting) of approximately $76,000; franchise and other taxes of approximately
$54,000;  depreciation  of  approximately  $16,000;  insurance of  approximately
$24,000; and other expenses aggregating approximately $88,000.







                                       16
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

For the six months ended June 30, 2003 and 2002,  the Company's net cash used in
operating activities of approximately  $2,969,000 and $1,004,000,  respectively,
is comprised of the following:

Net income                                      $   2,223,000    $     243,000

Depreciation and amortization                          71,000           73,000

Deferred income taxes                                  46,000            8,000

Stock compensation charge                              31,000

Net gain on sales and disposition of property
  and assets                                       (5,173,000)      (1,035,000)

Changes in operating assets
 and liabilities                                     (167,000)        (293,000)
                                                -------------    -------------

                                                $  (2,969,000)   $  (1,004,000)
                                                =============    =============


For the six months ended June 30, 2003 and 2002, the Company's net cash provided
by  investing   activities   of   approximately   $4,625,000   and   $1,240,000,
respectively, is comprised of the following:


                                                 2003                2002

Capital expenditures including
  real estate development                   $   (443,000)       $   (849,000)

Proceeds from sales of property                4,903,000           1,318,000

Proceeds from notes receivable                   165,000             771,000
                                            ------------        ------------

                                            $  4,625,000        $  1,240,000
                                            ============        ============






                                       17
<PAGE>


Approximately  $429,000  of the  $443,000  of the June  2003  quarter's  capital
expenditures and  approximately  $756,000 of the $1,050,000 of the June 30, 2002
quarter's  capital  expenditures  was  made to  progress  the  Company's  Kohala
Preserve  development   endeavors.   These  expenditures  include  approximately
$313,000  and  $236,000,  in the six  months  ended  June  30,  2003  and  2002,
respectively, for land clearing, leveling and grading, approximately $41,000 and
$290,000 of professional fees including  consulting,  approximately  $75,000 and
$230,000  in the six months  ended  June 30,  2003 and 2002,  respectively,  for
design, planning, engineering and surveying and other costs.

For the six months ended June 30, 2003 and 2002, the Company's net cash used for
financing  activities of approximately  $17,000 and $274,000,  respectively,  is
comprised of the following:

                                                    2003            2002

Repayment of debt (to President)               $                 $   (260,000)

Debt repayments, net                                (17,000)          (14,000)

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

                                               $    (17,000)     $   (274,000)
                                               ============      ============


As of June 30,  2003,  the Company  has total  current  assets of  approximately
$13,984,000 and total current liabilities of approximately $688,000 or a working
capital of  approximately  $13,296,000.  As  previously  discussed,  the Company
anticipates  2003  revenue  levels to be higher than levels  experienced  during
2002. However, given the Company's anticipated cash requirements to complete the
revised Kohala Preserve  development  project (discussed below),  future capital
raising or debt financing activities may be required.

KOHALA PRESERVE (FORMERLY MAHUKONA) DEVELOPMENT

The Company  continues to strategize its  development  plans relative to its 642
acres of land in the North  Kohala  district  of  Hawaii  Island in the state of
Hawaii (known as the Kohala Preserve development project). The original plan for
this valuable parcel of land was the development of a hotel, 18-hole golf course
and resort homes.  However,  during 2001, the Company hired several consultants,
with extensive  experience in high-end  resort  development  and  marketing,  to
reassess its development strategy with respect to Kohala Preserve property,  the
goal of which is to provide the Company  guidance in  determining  an  effective
development  strategy that will optimize the property's economic potential.  The
present  assessment of the consultants  for the Kohala Preserve  property is the
development of an all-inclusive fractional interest club community structured as
an undivided  interest  ("UDI").  A UDI would allow the prospective buyer to use
the Kohala  Preserve  facility  plus the  eco-ranch  lands and would  provide an
ownership interest in both. A UDI would not allow the prospective buyer to own a
specific  parcel of land,  but only a fraction of each square foot of  property.
The revised Kohala  Preserve


                                       18
<PAGE>


development  project is subject to further  Company  and  consultant  review and
analysis that is expected to be completed during the second half of 2003.

Based  on  the  present  assessment  of its  consultants,  the  Kohala  Preserve
development  project cost  (excluding  ongoing costs and  maintenance)  would be
approximately  $213.7 million and completed  substantially  (approximately  80%)
over a three-year period. Based on information provided by its consultants,  the
Company  anticipates  the  timing and  details  of the  $213.7  million to be as
follows (in thousands):

<TABLE>
<CAPTION>
                                    YEAR 1         YEAR 2        YEAR 3         BEYOND
<S>                              <C>            <C>            <C>            <C>
Infrastructure and amenities     $    21,062    $    31,762    $    13,280    $    15,586
3-Bedroom fractionals                                               15,080         15,998
2-Bedroom fractionals                                                8,918          3,546
Hales                                                                4,262          4,389
3-Bedroom condos                                                    11,310
2-Bedroom condos                                                     5,016
Lots                                                    822                         2,471
Hotel                                 16,243         43,949

                                 -----------    -----------    -----------    -----------
                                 $    37,305    $    76,533    $    57,866    $    41,990
                                 ===========    ===========    ===========    ===========
</TABLE>

The Company  recognizes  that its current  operations  will not be sufficient to
fund the cost of Kohala  Preserve's  development and it may not be successful in
future capital raising or debt financing activities. Accordingly, the Company is
exploring other financing strategies including,  but not limited to, a 50% joint
venture  with  development  partners,  including,  but not limited  to,  another
property  development  company,  a  fractional  facility  management  company or
private investors.

MARINE FOREST

Pursuant to  uncollateralized  promissory  notes,  the Company  advanced  Marine
Forest, a related Japanese corporation that controls  approximately 400 acres of
land in Okinawa, Japan, $9.75 million. The notes bear interest at the U.S. prime
rate, at the date of issuance, plus one percent. Under their original terms, the
notes were due nine  months  after  date of  issuance.  However,  the notes were
extended and additional  nine months and  subsequently  extended to December 31,
2002, as a concession to Marine Forest to advance  Marine  Forest's  development
projects.  Marine Forest's current  development  plans are based upon a recently
completed  study  prepared by a consultant for the Kohala  Preserve  development
plan. The Company believes that Marine Forest may sell its development  projects
based on the aforementioned  study and repay the notes and interest  thereafter.
However,  this  action  has not been  initiated  at this point and when (and if)
initiated,  it would take at least a year, if not longer,  to consummate  such a
transaction.

As of June 30, 2003 and through the date hereof,  the notes remain  outstanding.
Further,  since  issuance of the notes and through the date hereof,  no interest
has been paid to the Company.  Accordingly,  during the years ended December 31,
2002 and 2001, in light of


                                       19
<PAGE>


the  speculative  nature of Marine  Forest's  development  projects  among other
reasons and in accordance with its compliance with the  requirements of SFAS No.
114 (see  previous  discussion  of Critical  Accounting  Policies),  the Company
recorded an impairment  charge of  approximately  $3.8 million and $7.2 million,
respectively, including approximately $1.3 million of aggregate accrued interest
receivable.  During the year ended December 31, 2002,  the Company  discontinued
accruing interest income on the notes in light of its impairment charge.

MILLENNIUM

In January 2003, pursuant to an Asset Purchase  Agreement,  the Company acquired
the   assets  of   Millennium   International   Sports  &   Entertainment,   LLC
("Millennium"),  which  consisted of sports and  entertainment  memorabilia.  In
consideration  for the assets  received,  the Company  will issue  shares of its
common stock if certain  revenue levels related to the sales of the  memorabilia
are  attained  by  certain  dates.  If  revenues  related  to the  sales  of the
memorabilia  equal or exceed $8 million by December  31,  2003,  an aggregate of
350,000  shares of the  Company's  common  stock  would be issued to the  former
members  of  Millenium,  all of whom  executed  employment  agreements  with the
Company in  connection  with the January 2003  transaction.  Since the Company's
acquisition of Millennium and through May 15, 2003,  there has been little to no
revenues related to the sales of the  memorabilia.  Pursuant to the terms of the
Asset Purchase Agreement,  the Company notified Millennium in May of 2003 of its
election to rescind.

CONTRACTUAL COMMITMENTS

The Company is obligated  under various  contractual  commitments  over the next
several years. Following is a summary of those commitments as of June 30, 2003:

                                                                  GREATER
                                     1 YEAR       1 -3 YEARS    THAN 3 YEARS

Notes payable (a)                  $    31,000    $    57,000   $    302,000

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

                                   $    31,000    $    57,000   $    302,000
                                   ===========    ===========   ============

(a)   Excludes obligation pursuant to notes receivable  financing whereby a cash
      outlay is only required if the financial  institution requires the Company
      to repurchase a defaulted note.






                                       20
<PAGE>


Item 3.    Evaluation of Disclosure Controls and Procedures

(a) Evaluation of disclosure  controls and  procedures.  Our president and chief
financial   officer,   after  evaluating  the  effectiveness  of  the  Company's
"disclosure  controls and procedures" (as defined in the Securities Exchange Act
of 1934 Rules  13a-14(c) and  15-d-14(c)) as of a date (the  "Evaluation  Date")
within 90 days before the filing date of this quarterly  report,  have concluded
that as of the  Evaluation  Date, our  disclosure  controls and procedures  were
adequate and designed to ensure that material information relating to us and our
consolidated  subsidiaries  would be made known to them by others  within  those
entities.

(b)  Changes in  internal  controls.  There were no  significant  changes in our
internal controls or to our knowledge, in other factors that could significantly
affect our disclosure controls and procedures subsequent to the Evaluation Date.

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings:

There have been no  material  changes in legal  proceedings  as  required  to be
reported on Form 10-QSB from as previously  reported in the Company's 10-KSB for
the fiscal year ended December 31, 2002.

Item 2.    Change in Securities

           In January 2003, the Company issued 15,000 shares of its common stock
           valued at $31,000 pursuant to employment contracts.

Item 3.    Defaults Upon Senior Securities:

           None

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:

           Form 8-K filed on January 16, 2003 - other events.

           SIGNATURES

           CERTIFICATIONS



                                       21
<PAGE>


                                   SIGNATURES

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

                                            SURETY HOLDINGS CORP.
                                                (Registrant)



                                            By: /s/ Howard R. Knapp
                                            -----------------------
                                            Howard R. Knapp
                                            Chief Financial Officer

Dated:  August 14, 2003










                                       22