UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-QSB

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

(Mark one)
[X] Quarterly Report Under Section 13 or 15(d) of The Securities Exchange
    Act of 1934

    For the quarterly period ended March 31, 2003

[ ] Transition Report Under Section 13 or 15(d) of The Securities Exchange
    Act of 1934

    For the transition period from ______________ to _____________

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

                         Commission File Number: 0-31297


                          SHALLBETTER INDUSTRIES, INC.
        (Exact name of small business issuer as specified in its charter)


      Minnesota                                                41-1961936
(State of incorporation)                                (IRS Employer ID Number)


                  30 Sembrado, Rancho Santa Margarita, CA 92688
                    (Address of principal executive offices)


                                 (949) 459-1220
                           (Issuer's telephone number)

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

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. YES [X]  NO [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: May 14, 2003: 3,623,655

Transitional Small Business Disclosure Format (check one): YES [ ]  NO [X]
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.

                Form 10-QSB for the Quarter ended March 31, 2003

                                Table of Contents

                                                                         Page
                                                                         ----
PART I - FINANCIAL INFORMATION

  Item 1  Financial Statements                                             3

  Item 2  Management's Discussion and Analysis or Plan of Operation       12

  Item 3  Controls and Procedures                                         13

PART II - OTHER INFORMATION

  Item 1  Legal Proceedings                                               13

  Item 2  Changes in Securities                                           13

  Item 3  Defaults Upon Senior Securities                                 14

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

  Item 5  Other Information                                               14

  Item 6  Exhibits and Reports on Form 8-K                                14

SIGNATURES                                                                14

CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002      15

                                       2
<PAGE>
                                     PART I
ITEM 1 - FINANCIAL STATEMENTS

                          SHALLBETTER INDUSTRIES, INC.
                                 BALANCE SHEETS
                             March 31, 2003 and 2002

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   March 31,        March 31,
                                                                     2003             2002
                                                                   --------         --------
<S>                                                                <C>              <C>
                                     ASSETS
CURRENT ASSETS
  Cash in bank                                                     $     --         $     74
                                                                   --------         --------

TOTAL ASSETS                                                       $     --         $     74
                                                                   ========         ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable - trade                                         $     --         $  2,358
  Advances from controlling shareholder                              20,603            6,600
                                                                   --------         --------

      TOTAL LIABILITIES                                              20,603            8,958
                                                                   --------         --------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
  Preferred stock - $0.01 par value
   5,000,000 shares authorized; none issued and outstanding              --               --
  Common stock - $0.01 par value
   45,000,000 shares authorized. 3,623,655 shares issued
    and outstanding                                                  36,237           36,237
  Additional paid-in capital                                          3,953           (6,508)
  Accumulated deficit                                               (60,793)         (38,613)
                                                                   --------         --------

      TOTAL SHAREHOLDERS' EQUITY                                    (20,603)          (8,884)
                                                                   --------         --------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                         $     --         $     74
                                                                   ========         ========
</TABLE>

The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.
                 STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                   Three months ended March 31, 2003 and 2002

                                   (UNAUDITED)

                                             Three months           Three months
                                                ended                  ended
                                               March 31,              March 31,
                                                 2003                   2002
                                              -----------           -----------

REVENUES                                      $        --           $        --
                                              -----------           -----------
EXPENSES
  General and administrative                        3,277                 2,364
                                              -----------           -----------

      TOTAL EXPENSES                                3,277                 2,364
                                              -----------           -----------

LOSS FROM OPERATIONS                               (3,277)               (2,364)

OTHER INCOME
  Interest income                                      --                    --
                                              -----------           -----------

LOSS BEFORE INCOME TAXES                           (3,277)               (2,364)

PROVISION FOR INCOME TAXES                             --                    --
                                              -----------           -----------

NET LOSS                                           (3,277)               (2,364)

OTHER COMPREHENSIVE INCOME                             --                    --
                                              -----------           -----------

COMPREHENSIVE LOSS                            $    (3,277)          $    (2,364)
                                              ===========           ===========
Loss per weighted-average share of
 common stock outstanding, computed on
 Net Loss - basic and fully diluted                   nil                   nil
                                              ===========           ===========
Weighted-average number of shares
 of common stock outstanding                    3,623,655             3,623,655
                                              ===========           ===========

The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.
                            STATEMENTS OF CASH FLOWS
                   Three months ended March 31, 2003 and 2002

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                Three months    Three months
                                                                   ended           ended
                                                                  March 31,      March 31,
                                                                    2003           2002
                                                                  -------         -------
<S>                                                               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss                                                        $(3,277)        $(2,364)
  Adjustments to reconcile net income to net cash
   provided by operating activities
    Depreciation                                                       --              --
    Increase in Accounts payable - trade                               --           2,358
                                                                  -------         -------

      NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES          (3,277)             (6)
                                                                  -------         -------

CASH FLOWS FROM INVESTING ACTIVITIES                                   --              --
                                                                  -------         -------

CASH FLOWS FROM FINANCING ACTIVITIES
  Advances from shareholder                                         3,277              --
                                                                  -------         -------

      NET CASH PROVIDED BY FINANCING ACTIVITIES                     3,277              --
                                                                  -------         -------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                       --              (6)

Cash and cash equivalents at beginning of period                       --              80
                                                                  -------         -------

Cash and cash equivalents at end of period                        $    --         $    74
                                                                  =======         =======

SUPPLEMENTAL DISCLOSURES OF INTEREST AND INCOME TAXES PAID
  Interest paid during the period                                 $    --         $    --
                                                                  =======         =======
  Income taxes paid (refunded)                                    $    --         $    --
                                                                  =======         =======
</TABLE>

The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.

                          NOTES TO FINANCIAL STATEMENTS


NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

Shallbetter  Industries,  Inc. (Company) was initially incorporated on September
8, 1968 under the laws of the State of Minnesota.  The Company has not conducted
any business operations or maintained any assets since 1982.

The current  business purpose of the Company is to seek out and obtain a merger,
acquisition or outright sale transaction whereby the Company's shareholders will
benefit.  The Company  continues to seek an  appropriate  merger or  acquisition
candidate.

NOTE B - PREPARATION OF FINANCIAL STATEMENTS

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
adopted a year-end of December 31.

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

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented

During interim periods, the Company follows the accounting policies set forth in
its annual  audited  financial  statements  filed with the U. S.  Securities and
Exchange  Commission  on its  Annual  Report on Form  10-KSB  for the year ended
December 31, 2002.  The  information  presented  within these interim  financial
statements  may not include all  disclosures  required by accounting  principles
generally  accepted in the United  States of America and the users of  financial
information  provided for interim  periods should refer to the annual  financial
information and footnotes when reviewing the interim financial results presented
herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in  accordance  with the U. S.  Securities  and  Exchange  Commission's
instructions   for  Form  10-QSB,   are   unaudited  and  contain  all  material
adjustments,  consisting  only of  normal  recurring  adjustments  necessary  to
present fairly the financial condition,  results of operations and cash flows of
the Company for the respective  interim  periods  presented.  The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending December 31, 2003.

NOTE C - GOING CONCERN UNCERTAINTY

The Company has not conducted any business  operations or maintained  any assets
since  1982.  The  current  business  purpose of the  Company is to seek out and
obtain a merger,  acquisition or outright sale transaction whereby the Company's
shareholders  will  benefit.  The  Company  is  not  currently  engaged  in  any
negotiations  and  continues  to  seek  an  appropriate  merger  or  acquisition
candidate.

                                       6
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE C - GOING CONCERN UNCERTAINTY - CONTINUED

The  Company's  need for  capital  may change  dramatically  if it  acquires  an
interest  in a business  opportunity  during the next 12 months.  The  Company's
current  operating  plan  is to (i)  handle  the  administrative  and  reporting
requirements  of a public  company;  and (ii) search for  potential  businesses,
products,  technologies and companies for acquisition.  At present,  the Company
has no understandings, commitments or agreements with respect to the acquisition
of any  business,  product,  technology or company and there can be no assurance
that the Company will identify any such business, product, technology or company
suitable for acquisition in the future.  Further, there can be no assurance that
the Company would be successful in  consummating  any  acquisition  on favorable
terms  or that it will be able  to  profitably  manage  the  business,  product,
technology or company it acquires or, if  successful,  that any  acquisition  or
merger will result in the  appreciation of our  stockholders'  investment in our
common stock.

The  Company's  continued  existence is  dependent  upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.

The Company  remains  dependent upon additional  external  sources of financing;
including being dependent upon its management and/or significant stockholders to
provide  sufficient  working capital.  The Company  anticipates  offering future
sales of equity securities. However, there is no assurance that the Company will
be able to obtain  additional  funding  through the sales of  additional  equity
securities  or,  that such  funding,  if  available,  will be  obtained on terms
favorable to or affordable by the Company.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.  However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.

In such a restricted cash flow scenario, the Company would be unable to complete
our  business  plan  steps,  and  would,  instead,   delay  all  cash  intensive
activities.  Without  necessary cash flow, the Company may become dormant during
the next twelve months, or until such time as necessary funds could be raised in
the equity securities market.

The Company has not conducted any business  operations or maintained  any assets
since 1982, has minimal cash on hand, no profit, is not currently engaged in any
merger or acquisition  negotiations and continues to seek an appropriate  merger
or acquisition candidate.  Because of these factors, our auditors have issued an
audit opinion for the Company which  includes a statement  describing  our going
concern status.  This means, in our auditor's  opinion,  substantial doubt about
our ability to continue as a going  concern  exists at the date of their  latest
audit opinion.

While the Company is of the opinion that good faith  estimates of the  Company's
ability to secure additional  capital in the future to reach our goals have been
made, there is no guarantee that the Company will receive  sufficient funding to
sustain operations or implement any future business plan steps.


                (Remainder of this page left blank intentionally)

                                       7
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.   CASH AND CASH EQUIVALENTS

     The Company considers all cash on hand and in banks,  including accounts in
     book overdraft  positions,  certificates of deposit and other highly-liquid
     investments with maturities of three months or less, when purchased,  to be
     cash and cash equivalents.

2.   INCOME TAXES

     The Company  utilizes  the asset and  liability  method of  accounting  for
     income  taxes.  At March 31,  2003 and  2002,  the  deferred  tax asset and
     deferred tax liability  accounts,  as recorded when material,  are entirely
     the  result  of  temporary  differences.  Temporary  differences  represent
     differences  in the  recognition  of  assets  and  liabilities  for tax and
     financial  reporting  purposes,   primarily  accumulated  depreciation  and
     amortization. As of March 31, 2003 and 2002, the deferred tax asset related
     to the Company's net operating loss  carryforward was fully reserved due to
     the unpredictability of ultimate realization.

3.   EARNINGS (LOSS) PER SHARE

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance,  whichever is later.  As of March 31, 2003 and 2002,  the Company
     has no warrants and/or options issued and outstanding.

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.

NOTE F - SEASONALITY OF OPERATIONS

The  Company   experiences   fluctuations  in  quarterly   operating   expenses,
principally  professional  services for compliance with the Securities  Exchange
Act of 1934, which are charged to operations in the period in which the services
are incurred.

                                       8
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE G - ADVANCES FROM CONTROLLING SHAREHOLDER

To support  operations,  the Company's former controlling  shareholder and chief
executive officer made non-interest  bearing working capital advances to support
operations. On July 24, 2002, this former officer forgave the $10,460 in working
capital  advances  to  the  Company  and  these  amounts  were  reclassified  to
additional paid-in capital on that date.

During the period  between July 2002 and March 31, 2003,  the Company's  current
controlling  shareholder  has  advanced  the  Company  approximately  $20,600 to
support  operations,  settle  outstanding  trade  accounts  payable  and provide
working  capital.  The  advance is  repayable  upon  demand and is  non-interest
bearing and is unsecured.

NOTE H - COMMON STOCK TRANSACTIONS

During  the  first  quarter  of  2001,   the  Company   performed  an  extensive
reconciliation  of its shareholder list in conjunction with the appointment of a
new stock  transfer  agent.  As a result  of this  reconciliation  process,  the
Company noted various clerical errors in its issued and outstanding  shares. The
net effect of this reconciliation process was to add 10,600 shares to the issued
and  outstanding  shares of the Company as of the first day of the first  period
presented.

On August 6, 2002, the Company's Board of Directors authorized a 3 for 1 forward
stock split to  shareholders of record as of the close of business on August 19,
2002. The result of this action,  including  fractional  share rounding,  was to
increase the issued and  outstanding  shares from  1,207,885 to  3,623,665.  The
effects  of  these  actions  are  cumulatively  reflected  in  the  accompanying
financial statements as of the first day of the first period presented.

NOTE I - INCOME TAXES

The components of income tax (benefit) expense for the year ended March 31, 2003
and 2002, respectively, are as follows:

                                            Three months         Three months
                                               ended                ended
                                              March 31,            March 31,
                                                2003                 2002
                                               -------              -------
     Federal:
       Current                                 $    --              $    --
       Deferred                                     --                   --
                                               -------              -------
                                                    --                   --
                                               -------              -------
     State:
       Current                                      --                   --
       Deferred                                     --                   --
                                               -------              -------
                                                    --                   --
                                               -------              -------

     Total                                     $    --              $    --
                                               =======              =======

                                       9
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE I - INCOME TAXES - CONTINUED

As of March 31,  2003,  the Company has a net  operating  loss  carryforward  of
approximately  $41,000  to offset  future  taxable  income.  Subject  to current
regulations,  this  carryforward  will  begin to expire in 2020.  The amount and
availability  of  the  net  operating  loss  carryforwards  may  be  subject  to
limitations set forth by the Internal  Revenue Code.  Factors such as the number
of shares ultimately issued within a three year look-back period;  whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate;  continuity of historical  business;  and subsequent income of
the  Company  all  enter  into  the  annual   computation  of  allowable  annual
utilization of the carryforwards.

The  Company's  income tax expense for the three months ended March 31, 2003 and
2002, respectively, are as follows:

                                                     Three months   Three months
                                                        ended          ended
                                                       March 31,      March 31,
                                                         2003           2002
                                                        -------        -------


Statutory rate applied to income before income taxes     $(804)        $(805)
Increase (decrease) in income taxes resulting from:
  State income taxes                                        --            --
  Other, including reserve for deferred tax asset and
   application of net operating loss carryforward          804           805
                                                         -----         -----

       Income tax expense                                $  --         $  --
                                                         =====         =====

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs and statutory  differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of March 31, 2003 and 2002, respectively:

                                                    March 31,          March 31,
                                                      2003               2002
                                                    --------           --------
Deferred tax assets
  Net operating loss carryforwards                  $ 14,000           $  6,400
  Less valuation allowance                           (14,000)            (6,400)
                                                    --------           --------

Net Deferred Tax Asset                              $     --           $     --
                                                    ========           ========

During the three months ended March 31, 2003 and 2002, respectively, the reserve
for the deferred current tax asset increased by  approximately  $1,120 and $800,
respectively.

                                       10
<PAGE>
                          SHALLBETTER INDUSTRIES, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE J - COMMON STOCK TRANSACTIONS

On August 6, 2002, the Company's Board of Directors authorized a 3 for 1 forward
stock split to  shareholders of record as of the close of business on August 19,
2002. The result of this action,  including  fractional  share rounding,  was to
increase the issued and  outstanding  shares from  1,207,885 to  3,623,665.  The
effects  of  these  actions  are  cumulatively  reflected  in  the  accompanying
financial statements as of the first day of the first period presented.




                (Remainder of this page left blank intentionally)


                                       11
<PAGE>
PART I - ITEM 2

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

(1) CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain  statements  contained  in  this  annual  filing,   including,   without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-QSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

(2) GENERAL

Shallbetter  Industries,  Inc. (Company) was initially incorporated on September
8, 1968 under the laws of the State of Minnesota.  The Company has not conducted
any  business  operations  or  maintained  any assets  since  1982.  The current
business purpose of the Company is to seek out and obtain a merger,  acquisition
or outright sale transaction  whereby the Company's  shareholders  will benefit.
The Company is not currently  engaged in any  negotiations and continues to seek
an appropriate merger or acquisition candidate.

(3) RESULTS OF OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES AND PLAN OF OPERATION

The Company had no revenue for the three  months  ended March 31, 2003 and 2002,
respectively.

General and  administrative  expenses  for the three months ended March 31, 2003
and 2002 were  approximately  $3,300 and $2,400,  respectively.  These  expenses
consisted primarily of legal and accounting expenses associated with maintaining
the corporate  status of the Company and compliance with the periodic  reporting
requirements of the Securities Exchange Act of 1934.

The Company realized a net loss of  approximately  $(3,300) and $(2,400) for the
three months ended March 31, 2003 and 2002, respectively.

The  Company  does not  expect  to  generate  any  meaningful  revenue  or incur
operating  expenses  unless and until it acquires  an  interest in an  operating
company.

At March 31,  2003,  the Company  had no  available  cash,  a deficit in working
capital  of  approximately   $(20,600)  and  negative  shareholders'  equity  of
approximately $(20,600).

Through July 16, 2002,  working  capital was  provided by the  Company's  former
chief executive officer,  Craig Laughlin. In July 2002, Mr. Laughlin advanced an
additional  $2,561 to the Company to bring his total  advances to  approximately

                                       12
<PAGE>
$10,461.  On July 24, 2002, Mr. Laughlin  forgave the $10,461 in working capital
advances  to the Company  and these  amounts  were  reclassified  to  additional
paid-in capital on that date.

Subsequent  to July 16, 2002,  the  Company's  working  capital  needs have been
provided by Don Saunders, the current controlling shareholder.

The Company is currently  fully dependent upon either future sales of securities
and/or advances or loans from significant  stockholders or corporate officers to
provide  sufficient  working  capital to preserve the integrity of the corporate
entity.

There is no assurance that the Company will be able to obtain additional funding
through the sales of additional  securities or, that such funding, if available,
will be obtained on terms favorable to or affordable by the Company.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the  corporate  entity.  However,  there  is  no  legal  obligation  for  either
management or significant stockholders to provide additional future funding.

The  Company's  need for  capital  may change  dramatically  if it  acquires  an
interest  in a business  opportunity  during the next 12 months.  The  Company's
current  operating  plan  is to (i)  handle  the  administrative  and  reporting
requirements  of a public  company;  and (ii) search for  potential  businesses,
products,  technologies and companies for acquisition.  At present,  the Company
has no understandings, commitments or agreements with respect to the acquisition
of any  business,  product,  technology or company and there can be no assurance
that the Company will identify any such business, product, technology or company
suitable for acquisition in the future.  Further, there can be no assurance that
the Company would be successful in  consummating  any  acquisition  on favorable
terms  or that it will be able  to  profitably  manage  the  business,  product,
technology or company it acquires.

ITEM 3 - CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange  Act,  within the 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the  participation  of  the  Company's   management,   including  the  Company's
President,  Chief  Executive  and  Chief  Financial  Officer.  Based  upon  that
evaluation, the Company's President, Chief Executive and Chief Financial Officer
concluded that the Company's  disclosure  controls and procedures are effective.
There have been no significant  changes in the Company's internal controls or in
other factors,  which could  significantly  affect internal controls  subsequent
to the date the Company carried out its evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive  Officer and Chief Financial  Officer as appropriate,  to allow timely
decisions regarding required disclosure.

                                       13
<PAGE>
                                     PART II
                                OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None

ITEM 2 - CHANGES IN SECURITIES

None

ITEM 3 - DEFAULTS ON SENIOR SECURITIES

None

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

The  Company  has held no  regularly  scheduled,  called or special  meetings of
shareholders during the reporting period.

ITEM 5 - OTHER INFORMATION

None

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
  99.1   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Reports on Form 8-K

None

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

                                   SIGNATURES

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

                                            SHALLBETTER INDUSTRIES, INC.


Dated: May 14, 2003                         /s/ Thomas K. Russell
       ------------                         ------------------------------------
                                                               Thomas K. Russell
                                             President, Chief Executive Officer,
                                            Chief Financial Officer and Director

                                       14
<PAGE>
       CERTIFICATION PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002


In  connection  with  the  Quarterly  Report  of  Shallbetter  Industries,  Inc.
(Registrant)  on Form 10-QSB for the quarter ended March 31, 2003, as filed with
the  Securities  and  Exchange  Commission,  on the date  hereof,  I,  Thomas K.
Russell, Chief Executive and Chief Financial Officer of the Company,  certify to
the best of my knowledge,  pursuant to ss.302 of the Sarbanes-Oxley Act of 2002,
that:

1.   I have  reviewed  this  Quarterly  Report  on Form  10-QSB  of  Shallbetter
     Industries, Inc. for the quarter ended March 31, 2003.

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

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

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

     (a) designed  such  disclosure  controls  and  procedures  to  ensure  that
         material  information   relating  to  the  Registrant,   including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this Quarterly Report
         is being prepared;

     (b) evaluated the effectiveness of the Registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         Quarterly Report (the "Evaluation Date"); and

     (c) presented  in  this  Quarterly   Report  our   conclusions   about  the
         effectiveness  of the disclosure  controls and procedures  based on our
         evaluation as of the Evaluation Date;

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

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

     (b) any fraud,  whether or not material,  that involves management or other
         employees  who have a  significant  role in the  Registrant's  internal
         controls; and

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

/s/ Thomas K. Russell                                        Dated: May 14, 2003
---------------------                                               ------------
Thomas K. Russell
Chief Executive Officer and
Chief Financial Officer

                                       15