UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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 September 30, 2002

                                       OR

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     For the transition period from _________ to _________.


                        Commission file number: 333-45464


                        MEDICAL CAPITAL MANAGEMENT, INC.
        (Exact name of small business issuer as specified in its charter)


            Delaware                                       88-0473359
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


               3770 Howard Hughes Parkway, Las Vegas, Nevada 89109
                    (Address of principal executive offices)


                    Issuer's telephone number: (800) 824-3700


     As of October 31, 2002,  there were 2,000 shares of the  registrant's  sole
class of common stock issued and outstanding.


     Transitional Small Business Disclosure Format Yes [ ] No [X]
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                        MEDICAL CAPITAL MANAGEMENT, INC.
                                  BALANCE SHEET
                                   (UNAUDITED)

                                                                   September 30,
                                                                       2002
                                                                   ------------
ASSETS
Current assets:
  Cash and cash equivalents ...................................    $  1,020,062
  Medical receivables, net of discount reserves of $295,000 ...      38,491,400
  Prepaid trustee fee .........................................          18,097
  Receivable from Parent and affiliates .......................          27,193
  Income tax receivable .......................................          25,468
  Notes receivable ............................................       4,045,000
  Other accounts receivable ...................................          15,605
                                                                   ------------
        Total current assets ..................................      43,642,825
                                                                   ------------
        Total assets ..........................................    $ 43,642,825
                                                                   ============

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
  Accrued expenses - trade ....................................    $     57,688
  Interest payable, net .......................................         338,765
  Notes payable - current .....................................      17,774,000
                                                                   ------------
        Total current liabilities .............................      18,170,453

 Notes payable - long term, net of deferred offering
  costs of $90,844 and commissions of $2,269,353 ..............      23,639,803
                                                                   ------------
        Total liabilities .....................................      41,810,256
                                                                   ------------

STOCKHOLDER'S EQUITY:
  Preferred stock - par value $0.01 (10,000 shares
    authorized, no shares issued and outstanding) .............              --
  Common stock - par value $0.01 (10,000 shares
    authorized, 2,000 shares issued and outstanding) ..........              20
  Additional paid-in capital ..................................       3,000,000
  Accumulated deficit .........................................      (1,167,451)
                                                                   ------------
        Total stockholder's equity ............................       1,832,569
                                                                   ------------
        Total liabilities and stockholder's equity ............    $ 43,642,825
                                                                   ============

See accompanying notes.

                                        2
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                     Nine months ended              Three months ended
                                                        September 30,                  September 30,
                                                ----------------------------   ----------------------------
                                                    2002            2001           2002            2001
                                                ------------    ------------   ------------    ------------
<S>                                             <C>             <C>            <C>             <C>
REVENUES:
  Discount fees, net of change in
  discount reserve of $99,164, including
  related party fees of $1,197,060 (2002) ...   $  3,632,940    $  1,022,241   $  1,669,930    $  1,022,241
  Administrative fees .......................          9,120              --          9,120              --
                                                ------------    ------------   ------------    ------------
Total Revenues ..............................      3,642,060       1,022,241      1,679,050       1,022,241
COST OF REVENUES:
  Administration fees, related party ........        780,453         326,378        302,245         326,378
                                                ------------    ------------   ------------    ------------
GROSS PROFIT ................................      2,861,607         695,863      1,376,805         695,863
                                                ------------    ------------   ------------    ------------

OPERATING EXPENSES:
  Interest expense, net .....................      2,566,252         279,298      1,107,895         266,781
  Salaries and benefits .....................        142,591              --         76,057              --
  Advertising ...............................        284,539         115,391         96,020         102,892
  Professional services .....................        241,671          38,512         56,787          28,282
  Service fees, related party ...............        207,713           9,458         72,425           9,458
  Legal expenses ............................        135,833          38,816         31,304          38,816
  Underwriting expenses, related party ......        126,000              --             --              --
  Travel and entertainment ..................        124,320          16,634         53,851          13,377
  Sales commissions .........................        102,108              --         22,344              --
  Trustee fees ..............................         36,195          42,563         13,573          14,188
  Directors' fees ...........................         33,000          33,000         11,000          11,000
  Other .....................................        101,600           3,241         55,957           2,818
                                                ------------    ------------   ------------    ------------
      Total operating expenses ..............      4,101,822         576,913      1,597,213         487,612
                                                ------------    ------------   ------------    ------------

GAIN (LOSS) BEFORE TAXES ....................     (1,240,215)        118,950       (220,408)        208,251
                                                ------------    ------------   ------------    ------------
Provision (benefit) for income tax ..........        (25,468)         41,633              0          72,888
                                                ------------    ------------   ------------    ------------
NET INCOME (LOSS) ...........................   $ (1,214,747)   $     77,317   $   (220,408)   $    135,363
                                                ============    ============   ============    ============

Weighted average number of common
shares outstanding - basic and diluted ......          2,000           1,667          2,000           2,000
                                                ============    ============   ============    ============

Net loss per common share - basic and
  diluted ...................................   $    (607.37)   $      46.38   $    (110.20)   $      67.68
                                                ============    ============   ============    ============
</TABLE>

See accompanying notes.

                                        3
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                             Nine months     Nine months
                                                                ended           ended
                                                             September 30,   September 30,
                                                                 2002            2001
                                                             ------------    ------------
<S>                                                          <C>             <C>
Cash flows used for operating activities:
  Net gain (loss) ........................................   $ (1,214,747)   $     77,317
  Adjustments to reconcile net gain (loss) to net cash
    provided by (used for) operating activities:
    Amortization of deferred offering costs and
      commissions ........................................        865,947         125,709
    Amortization of prepaid trustee fee ..................         36,195          42,562
  Changes in assets and liabilities:
    Increase in medical receivables ......................    (23,048,234)    (10,545,182)
    Decrease in interest receivable ......................         42,660         (29,457)
    Increase in accounts receivable ......................        (15,605)             --
    Increase in prepaid trustee fee ......................        (54,292)        (56,750)
    Increase in due to (from) Parent .....................        (76,200)          7,778
    Increase in accrued expenses - trade .................           (441)         16,627
    Increase in interest payable .........................        192,894         125,998
    Decrease in income taxes payable .....................        (50,936)         41,633
                                                             ------------    ------------
Net cash used for operations .............................    (23,322,759)    (10,193,765)
                                                             ------------    ------------

Cash flows provided by (used for) financing activities:
  Proceeds from issuance of debt, net ....................     25,557,000      10,604,000
  Increase in notes receivable ...........................             --      (1,045,000)
  Payments on offering costs and commissions .............     (2,058,076)       (832,081)
  Payment of dividend, related party .....................     (1,250,000)             --
  Proceeds from sale of common stock .....................             --       4,249,910
  Proceeds from paid-in capital ..........................             --              10
                                                             ------------    ------------
Net cash provided by financing activities ................     22,248,924      12,976,839
                                                             ------------    ------------
Net increase (decrease) in cash and cash equivalents .....     (1,073,835)      2,783,074
Cash at beginning of year ................................      2,093,897             100
                                                             ------------    ------------
Cash and cash equivalents at end of period ...............   $  1,020,062    $  2,783,174
                                                             ============    ============

Supplemental disclosure of cash flow items:
  Income taxes paid ......................................   $         --    $         --
  Interest paid ..........................................   $  2,237,658    $    219,095
</TABLE>

See accompanying notes.

                                        4
<PAGE>
                        MEDICAL CAPITAL MANAGEMENT, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. OPERATIONS OF THE COMPANY

ORGANIZATION:

Medical Capital  Management,  Inc. (the "Company") was incorporated in the state
of Delaware on August 4, 2000.  It maintains  its  corporate  office in Anaheim,
California.  The Company is wholly owned by Medical Capital Holdings,  Inc. (the
"Parent").

BUSINESS ACTIVITY:

The Company was organized to purchase the insured portion of medical receivables
from medical providers including physicians,  clinics, hospitals,  nursing homes
and other  providers of healthcare  services  throughout the United States.  The
medical receivables are purchased at a discount to the full amount of the claim.
The  Company  also seeks  other  investments  that will  enhance  its  financial
position.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES:

The preparation of financial  statements  requires  management to make estimates
and assumptions  that affect certain  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 amounts could differ from those estimates.

The accompanying  financial  statements  include all adjustments  (consisting of
only  normal  recurring  accruals)  which are,  in the  opinion  of  management,
necessary for a fair  presentation  of the results of operations for the periods
presented.  Interim results are not necessarily  indicative of the results to be
expected for the full year ending December 31, 2002. These financial  statements
should be read in  conjunction  with the  financial  statements  included in the
annual  report of the  Company on Form  10-KSB for the year ended  December  31,
2001.

CASH AND CASH EQUIVALENTS:

For the  purposes  of the  statement  of cash flows,  cash and cash  equivalents
include all highly liquid debt  instruments  with  original  maturities of three
months or less that are not securing any corporate obligations.

The Company  maintains its cash in bank deposit  accounts,  which at times,  may
exceed the federally insured limits.  The Company has not experienced any losses
in its accounts.

DISCOUNTS EARNED ON MEDICAL RECEIVABLES:

Medical  receivables  are recorded at cost when purchased by the Company.  Gross
receivables are adjusted to cost for the purchase discount and reserves based on
the  estimated  ultimate  collectible  amount due to the  Company.  Discounts on
medical  receivables  are  recognized as earned over a period ranging from 1-270
days using a method that approximates the interest method.

                                        5
<PAGE>
The Company has  established  a "discount  reserve" on a per client  basis based
upon its preliminary  underwriting  criteria,  collection  history,  and ongoing
credit and  underwriting  policies.  These  reserves are deducted  from discount
revenue.  The Company  anticipates the receivables upon which these reserves are
based to be collected  and earned  within the provider  contract  period.  As of
September 30, 2002, this reserve was $295,000.

PROVIDER CONCENTRATION:

As of September  30,  2002,  medical  receivables  purchased by the Company from
three providers amounted to approximately 75% of the outstanding  balance of the
total receivables due to the Company.

RESERVE FOR LOSSES:

The reserve for losses on medical receivables is increased by provisions charged
against  operations  and reduced by  receivables  charged off, as  determined by
management.  The reserve is maintained at a level considered adequate to provide
for potential losses on medical  receivables  based on management's  evaluation.
Under the terms by which the medical receivables are purchased,  the Company has
significant  collateral,  including  substitution  of receivables  exceeding the
contractual  period ranging from 1-270 days.  Accordingly,  charge-offs  are not
expected  to be  material  to the  Company's  financial  position  or results of
operations.  During  the nine  months  ended  September  30,  2002 and 2001,  no
reserves for losses were needed.

COMMISSIONS:

Commissions  paid  to  outside  and  related  parties  in  connection  with  the
origination  of  medical  receivables  are  expensed  as  incurred.  Commissions
incurred on the  acquisition of investor funds (notes  payable) are  capitalized
and amortized over the period the debt is outstanding using the interest method.
For the nine months ended  September 30, 2002 and 2001, the Company  capitalized
commissions of $2,042,633 and $646,751, respectively, and amortized $769,224 and
$58,043, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

Unless  otherwise  indicated,  the fair value of all reported assets (except for
cash and cash equivalents,  which approximate fair value) and liabilities, which
represent  financial  instruments,  none of which are held for trading purposes,
approximate carrying values of such accounts.

INCOME TAXES

The Company uses the liability method of accounting for income taxes pursuant to
SFAS No.  109,  "Accounting  for Income  Taxes."  Deferred  income tax assets or
liabilities  result from  temporary  differences  when certain income or expense
amounts  are  recognized  or  deducted  for  financial  statement  purposes in a
different  reporting period than when they are recognized or deducted for income
tax  purposes.  For  federal  and state  income  tax  purposes,  the  Company is
consolidated  with  its  Parent.  The  Company  is  allocated  its  share of the
consolidated tax liability  approximating the separate return method,  estimated
at 40% of net income before taxes.  For the period ending September 30, 2002 and
2001,  the  Company's  provision  (benefit)  for income taxes was  $(25,468) and
$41,633 respectively.

                                        6
<PAGE>
3. NOTES RECEIVABLE

The Company  entered into agreements  with three medical  providers  whereby the
Company  provided cash loans,  which are secured by real  property.  These notes
receivables are as follows:

                                                              SEPTEMBER 30, 2002
                                                              ------------------
Physician-Client, 18%, interest only paid monthly,
  due July 15, 2002(1)                                           $    300,000
Skilled Nursing Facility, 16%, interest only paid monthly,
  due September 18, 20021                                             745,000
Medical Group, 16%, interest only paid monthly,
  due November 12, 2002                                             3,000,000
                                                                 ------------
                                                                 $  4,045,000
                                                                 ------------

----------
(1)  Expecting to extend an additional six months.

4. DEFERRED OFFERING COSTS

Deferred offering costs consist of costs incurred for the Company's registration
of debt  securities  on Form SB-2,  as filed with the  Securities  and  Exchange
Commission  on February 6, 2001 and January 18, 2002.  These costs are amortized
over the weighted term of the securities using the interest method. For the nine
months  ended  September  30, 2002 and 2001,  the Company  paid and  capitalized
deferred  offering  costs of $15,250 and $185,330,  respectively,  and amortized
$96,530 and  $67,666,  respectively.  The  amortization  was included in the net
interest expense during the applicable period.

5. NOTES PAYABLE

The  Company  issues  notes that are  secured by medical  receivables,  for cash
through several broker-dealers,  as filed on its registration statement with the
Securities and Exchange Commission. These notes consist of the following:

              RATE           MATURITY DATE                    SEPTEMBER 30, 2002
              ----           -------------                    ------------------
Class A       9.00%          1 year from issuance date           $  4,732,000
Class A       8.00%          1 year from issuance date             10,465,000
Class B       9.75%          2 years from issuance date             3,208,000
Class B       8.75%          2 years from issuance date             6,015,000
Class C       10.25%         3 years from issuance date             2,650,000
Class C       9.25%          3 years from issuance date             3,389,000
Class D       10.75%         4 years from issuance date             3,257,000
Class D       9.75%          4 years from issuance date            10,058,000
                                                                 ------------
Total face value of notes payable.............................     43,774,000
Less unamortized offering costs and commissions...............     (2,360,197)
                                                                 ------------
                                                                   41,413,803
Less current maturities.......................................     17,774,000
                                                                 ------------
                                                                 $ 23,639,803
                                                                 ============

                                        7
<PAGE>
The maturities of notes payable as of September 30, 2002 are as follows:

                   SEPTEMBER 30                     AMOUNT
                   ------------                  ------------
                       2003                      $ 17,774,000
                       2004                         8,802,000
                       2005                         6,237,000
                       2006                        10,961,000
                                                 ------------
                                                 $ 43,774,000
                                                 ============

6. INTEREST TO SECURED NOTEHOLDERS

Interest  on all  secured  notes is paid  monthly in arrears on the tenth of the
following  month to the  noteholder  of  record  as of the last day of the month
preceding the month in which the interest payment date occurs.  Interest is paid
without any compounding.  Each class of notes has a different  maturity date and
accrues interest at different rates. The current rates on the Company's  secured
notes are presented in Note 5. The effective interest rates are approximately 4%
higher than the stated rates due to the amortization of deferred  offering costs
and commissions, which are accounted for as interest expense.

7. STOCKHOLDER'S EQUITY

On April 23,  2002,  the  Company's  Board of  Directors  approved a dividend of
$1,250,000 to our stockholder and Parent, Medical Capital Holdings, Inc.

8. RELATED PARTY TRANSACTIONS

Several  affiliates that are wholly owned by the Parent provide  services to the
Company. These related parties and services are as follows:

     The Company has entered  into an  Administrative  Services  Agreement  with
     Medical Capital Corporation ("MCC"), who is the administrator in purchasing
     and monitoring the healthcare  receivables  the Company  purchases.  MCC is
     compensated  for the  underwriting  and  administration  of the  healthcare
     receivables  purchased,  as well as for accounting and financial  services.
     For the nine months ended September 30, 2002 and 2001, the Company incurred
     administrative fees provided by MCC of $780,453 and $326,378  respectively.
     For the nine months ended September 30, 2002 and 2001, the Company incurred
     underwriting fees provided by MCC of $126,000 and $0, respectively.

     The Company has entered  into a Master  Servicing  Agreement  with  Medical
     Tracking  Services,  Inc.  ("MTS").  MTS is  compensated  for servicing the
     receivables that are purchased. Servicing fees incurred for the nine months
     ended September 30, 2002 and 2001 were $207,713 and $9,458, respectively.

     For the nine months ended September 30, 2002, the Company purchased medical
     receivables of various providers from its Parent and affiliates with a book
     value of $10,289,012,  for which it paid a  consideration  of $9,091,952 in
     cash with the balance  included  in the  calculation  of  discount  revenue
     earned and reserved (deferred).

                                        8
<PAGE>
9. TRUSTEE FEES

The Company  pledges  collateral to an  independent  bank  trustee.  The pledged
collateral  secures all of the Company's Series I notes,  regardless of when the
collateral  was acquired or when the notes were issued.  The fees to the trustee
are prepaid on an annual basis and amortized monthly.  For the nine months ended
September  30, 2002 and 2001,  the Company  prepaid  trustee fees of $54,292 and
$56,750,   respectively,   of  which,   $36,195  and  $42,562  were   amortized,
respectively.

10. EARNINGS PER SHARE

The Company  computes  net  earnings  (loss) per share  following  SFAS No. 128,
"Earnings  Per Share." Under the  provisions  of SFAS No. 128,  basic net income
(loss) per share is computed  by dividing  the net income  (loss)  available  to
common  shareholders  for the period by the  weighted  average  number of common
shares  outstanding  during the period.  Diluted net income  (loss) per share is
computed  by  dividing  the net income  (loss)  for the  period by the  weighted
average number of common equivalent shares  outstanding during the period. As of
September 30, 2002 and 2001, there were no common stock equivalents.

11. SIGNIFICANT AGREEMENTS

The Company has entered into several broker-dealer agreements for the purpose of
offering,  selling,  and distributing  certain secured notes of the Company on a
best efforts basis. The effective term of each of the  broker-dealer  agreements
is generally for one year.

12. RECLASSIFICATION

As of September 30, 2002, certain prior period amounts have been reclassified to
conform with the current period presentation.

                                        9
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS. (UNAUDITED)

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

REVENUES.  For the nine months ended  September 30, 2002, the Company  purchased
medical  receivables  carrying an  estimated  net  realizable  value  ("ENR") of
$38,961,969 and earned discount fees on these purchases of $3,632,940, including
related party discount fees of $1,197,060 from its Parent and affiliates. During
the same period, the Company also earned $9,120 in adminstration fees.

For the nine months ended  September  30, 2001,  the Company  purchased  medical
receivables  carrying an estimated net  realizable  value ("ENR") of $11,349,475
and earned  discount fees on these  purchases of $1,022,241,  including  related
party discount fees of $839,448 from its Parent and affiliates.  During the same
period, the Company also earned $9,120 in adminstration fees.

As of the nine  months  ended  September  30, 2002 and 2001,  the  Company  held
$295,000 and $0, respectively,  in discount reserves which reduced the Company's
discount  revenue.  Management  anticipates  the  receivables  upon which  these
reserves  are based to be fully  collectible  and the  discount fee to be earned
within the provider contract period.

GROSS PROFIT.  The gross profit during the nine months ended  September 30, 2002
was $2,861,607,  which arose from gross discount revenues of $3,741,224 less the
change in discount reserves of $99,164,  plus $9,120 in adminstration fees, less
the administration fees incurred of $780,453.  The administration  fees, related
party, were 2.0% of the total ENR.

The gross profit  during the nine months ended  September 30, 2001 was $695,863,
which  arose from gross  discount  revenues  of  $1,022,241,  less the change in
discount reserves of $0, and administration fees incurred of $326,378.

OPERATING  EXPENSES.  The Company's total operating expenses for the nine months
ended  September  30, 2002 were  $4,101,822.  Expenses  consisted  primarily  of
$2,566,252 in interest expense, which consists of interest expense of $2,207,059
plus amortized  commissions of $769,417 and amortized  deferred offering cost of
$96,530 less interest earned of $506,754.  Interest earned included  $481,952 on
the Company's notes  receivables of $4,045,000  from various medical  providers,
and $24,802 on cash and cash equivalents.  The Company also incurred $284,539 in
advertising  expense,  which is expensed as incurred,  professional  services of
$241,671, service fees of $207,713 (related party), and legal fees of $135,833.

For the nine months ended  September  30, 2001,  the Company's  total  operating
expenses were  $576,913.  Expenses  consisted  primarily of $279,278 in interest
expense,   which  consists  of  interest  expense  of  $199,988  plus  amortized
commissions  of $58,043 and  amortized  deferred  offering  cost of $67,666 less
interest earned of $46,399.  Interest  earned included  $28,994 on the Company's
notes receivables of $1,045,000 from various medical  providers,  and $17,405 on
cash and cash  equivalents.  The Company also incurred  $115,391 in  advertising
expense,  which is expensed as incurred,  professional  services of $38,512, and
legal expenses of $38,816.

INCOME TAX EXPENSE.  For the nine months ending September 30, 2002 and 2001, the
provision (benefit) for income taxes was $(25,468) and $43,633 respectively. For
Federal and state income taxes, the Company is consolidated with its Parent. The
Company is  allocated  its share of the  consolidated  tax  liability  using the
separate return method.

                                       10
<PAGE>
NET  INCOME  OR LOSS.  The  Company  had a net loss of  $1,240,747  or basic and
diluted net loss per common share of $607.37 for the nine months ended September
30, 2002.  The net loss of the Company  resulted  primarily from gross profit of
$2,861,607 on the purchase of medical receivables being less than administration
and operating  expenses.  The Company had anticipated greater year to date sales
of its notes from its public  offering,  which the Company offered at attractive
interest rates, thereby being able to purchase more medical receivables and earn
greater  revenues.  The Company  still  anticipates  greater  sales of its notes
during the  remainder  of 2002 and expects  revenues  and profit  margin to rise
during the rest of the fiscal year ending December 31, 2002.

For the nine months ended  September  30, 2001,  the Company had a net income of
$77,317 or basic and diluted net gain per common share of $46.38.

Due to numerous economic,  competitive and regulatory risks, any or all of which
may have a material adverse impact upon the Company's  operations,  there can be
no  assurance  that  it  will  be  able  to  successfully   purchase  healthcare
receivables  and/or acquire a business which generates  significant  revenues or
achieves a level of profits  which will permit the  Company to pay the  interest
and principal  payments on notes when due.  However,  the Company  believes cash
available from the net offering  proceeds will be sufficient to fund all general
and administrative expenses of the Company.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

The Company was formed on August 4, 2000 and  operations  did not commence until
after the first quarter of 2001.

REVENUES.  For the three months ended September 30, 2002, the Company  purchased
medical  receivables  carrying an  estimated  net  realizable  value  ("ENR") of
$16,587,663 and earned discount fees on these purchases of $1,669,930, including
related  party  discount fees of $515,083  from its Parent and  affiliates,  and
increased the discount reserve by $0.

For the three months ended  September 30, 2001,  the Company  purchased  medical
receivables  carrying an estimated net  realizable  value ("ENR") of $11,349,475
and earned  discount fees on these  purchases of $1,022,241,  including  related
party  discount fees of $839,448 from its Parent and  affiliates,  and increased
the discount reserve by $0.

GROSS PROFIT.  The gross profit during the three months ended September 30, 2002
was $1,376,805,  which arose from gross discount revenues of $1,679,050 less the
change in discount reserves of $0, and administration fees incurred of $302,245.

The gross profit during the three months ended  September 30, 2001 was $695,863,
which  arose from  gross  discount  revenues  of  $1,022,241  less the change in
discount reserves of $0, and administration fees incurred of $326,378.

OPERATING EXPENSES.  The Company's total operating expenses for the three months
ended  September  30, 2002 were  $1,597,213.  Expenses  consisted  primarily  of
$1,107,895 in interest  expense,  which consists of interest expense of $924,118
plus amortized  commissions of $326,593 and amortized  deferred offering cost of
$31,483 less interest earned of $174,300.  Interest earned included  $169,785 on
the Company's notes  receivables of $4,045,000  from various medical  providers,
and $4,515 on cash and cash  equivalents.  The Company also incurred  $96,020 in
advertising  expense,  which is expensed as  incurred,  $56,787 in  professional
services, and $72,425 in service fees (related party).

                                       11
<PAGE>
For the three months ended  September 30, 2001,  the Company's  total  operating
expenses were  $487,612.  Expenses  consisted  primarily of $266,781 in interest
expense,   which  consists  of  interest  expense  of  $188,433  plus  amortized
commissions  of $57,081 and  amortized  deferred  offering  cost of $67,666 less
interest earned of $46,399.  Interest  earned included  $28,994 on the Company's
notes receivables of $1,045,000 from various medical  providers,  and $15,190 on
cash and cash  equivalents.  The Company also incurred  $102,892 in  advertising
expense,  which is  expensed  as  incurred,  $28,282 in  professional  services,
$38,816 in legal fees, and $9,458 in service fees (related party).

INCOME TAX EXPENSE. For the three months ending September 30, 2002 and 2001, the
provision  (benefit)  for income  taxes was $0 and  $72,888,  respectively.  For
Federal and state income taxes, the Company is consolidated with its Parent. The
Company is  allocated  its share of the  consolidated  tax  liability  using the
separate return method.

NET INCOME OR LOSS.  The Company had a net loss of $220,406 or basic and diluted
net loss per common share of $110.20 for the three months  ended  September  30,
2002.  The net loss of the  Company  resulted  primarily  from  gross  profit of
$1,376,805  on the  purchase of medical  receivables  for the three months ended
September 30, 2002 being less than  administration  and operating  expenses over
the same period.  The Company had anticipated  greater year to date sales of its
notes from its public offering, which the Company offered at attractive interest
rates,  thereby being able to purchase more medical receivables and earn greater
revenues.

For the three months ended  September 30, 2001,  the Company had a net income of
$135,363 or basic and diluted net loss per common share of $67.68.

Due to numerous economic,  competitive and regulatory risks, any or all of which
may have a material adverse impact upon the Company's  operations,  there can be
no  assurance  that  it  will  be  able  to  successfully   purchase  healthcare
receivables  and/or acquire a business which generates  significant  revenues or
achieves a level of profits  which will permit the  Company to pay the  interest
and principal  payments on notes when due.  However,  the Company  believes cash
available from the net offering  proceeds will be sufficient to fund all general
and administrative expenses of the Company.

LIQUIDITY AND CAPITAL RESOURCES

During  the  nine  months  ended  September  30,  2002,  the  Company   received
$26,618,000  in cash from the  issuance  of secured  notes by the Company on its
public offering, and received collections on medical receivables of $12,125,760.
During the same period,  the Company used $33,310,677 of these funds to purchase
medical receivables,  and had $1,061,000 in notes mature and not reinvest. As of
September  30,  2002,  the  Company  maintained  $1,020,062  in  cash  and  cash
equivalents,  which  it  seeks  to  utilize  in  purchasing  additional  medical
receivables and in the acquisition of other possible investments.

From the  Company's  inception  on August 4, 2000 to  September  30,  2002,  the
Company  has  received  $44,835,000  from the sale of its  notes,  and  received
$15,944,927  in collections on medical  receivables.  Over the same period,  the
Company used $51,761,911 to purchase medical receivables, and made cash loans of
$4,045,000  to  providers.  The  Company has had  $1,061,000  in notes that have
matured and not reinvested since inception.

Management  believes  current  conditions  of the stock  exchanges and financial
markets  are  expected  to have some  impact on the  issuance  of the  Company's
secured notes,  yet due to the favorable and fixed interest rates offered on its
notes,  the Company  believes this impact will not be  significant.  The Company
does not believe that inflation has had a significant impact on its operations.

                                       12
<PAGE>
The Company's  management  consists of officers and  employees  employed by MCC.
Their  salaries and benefits are paid by MCC. The Company's  operating  expenses
will be reimbursed  from the net offering  proceeds or from cash flow  generated
from its operations.

RELATED PARTY TRANSACTIONS

The Medical  Capital  Holdings Group has  substantial  experience and success in
identifying  and  evaluating   healthcare   providers  desiring  to  sell  their
healthcare receivables. The Company intends to use the services and expertise of
Medical  Capital  Holdings  and its  subsidiaries  to  purchase a  portfolio  of
healthcare  receivables.  It has  entered  into  contracts  with  MCC  and  MTS,
affiliated  companies,  to provide the  appropriate  system for  purchasing  and
tracking  its   healthcare   receivables.   Reimbursement   for  these  services
approximates  the costs to these affiliated  entities which management  believes
equals the prevailing market rates for comparable services of this nature.

For the nine months ended  September 30, 2002 and 2001, MCC was  compensated for
administration  of the  healthcare  receivables  which the Company  purchased of
$780,453 and  $326,378,  respectively.  For the nine months ended  September 30,
2002 and  2001,  the  Company  incurred  underwriting  fees  provided  by MCC of
$126,000 and $0, respectively.  For the nine months ended September 30, 2002 and
2001, MTS was  compensated  for servicing the Company's  receivables of $207,713
and $9,458, respectively.

For the nine months ended  September  30, 2002,  the Company  purchased  medical
receivables  of various  providers  from its Parent and  affiliates  with a book
value of $10,289,012,  for which it paid a  consideration  of $9,091,952 in cash
with the balance  included in the  calculation  of discount  revenue  earned and
reserved (deferred).

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
141 "Business Combinations." SFAS No. 141 supersedes Accounting Principles Board
("APB") No. 16 and requires that any business combinations  initiated after June
30,  2001  be  accounted  for  as  a  purchase;   therefore,   eliminating   the
pooling-of-interest method defined in APB 16. The statement is effective for any
business  combination  initiated  after  June 30,  2001 and  shall  apply to all
business combinations accounted for by the purchase method for which the date of
acquisition is July 1, 2001 or later. The adoption of the statement did not have
a material impact on the Company's  financial  position or results of operations
since the Company has not  participated  in any  activities  covered  under this
pronouncement.

In July 2001,  the FASB issued SFAS No. 142,  "Goodwill and Other  Intangibles."
SFAS No. 142 addresses the initial recognition,  measurement and amortization of
intangible assets acquired individually or with a group of other assets (but not
those  acquired  in a  business  combination)  and  addresses  the  amortization
provisions for excess cost over fair value of net assets acquired or intangibles
acquired in a business combination.  The statement is effective for fiscal years
beginning  after  December  15,  2001,  and is  effective  July 1,  2001 for any
intangibles  acquired in a business  combination  initiated after June 30, 2001.
The Company  does not expect the  adoption  to have any impact on the  Company's
financial position or results of operations.

In October 2001, the FASB issued SFAS No. 143,  "Accounting for Asset Retirement
Obligations,"  which requires  companies to record the fair value of a liability
for asset retirement  obligations in the period in which they are incurred.  The
statement  applies  to  a  company's  legal  obligations   associated  with  the
retirement  of a tangible  long-lived  asset that results from the  acquisition,
construction,  and  development or through the normal  operation of a long-lived
asset. When a liability is initially recorded,  the company would capitalize the

                                       13
<PAGE>
cost,  thereby  increasing  the  carrying  amount  of  the  related  asset.  The
capitalized asset retirement cost is depreciated over the life of the respective
asset while the liability is accreted to its present value.  Upon  settlement of
the liability,  the obligation is settled at its recorded  amount or the company
incurs a gain or loss.  The  statement is effective  for fiscal years  beginning
after June 30, 2002. The Company does not expect the adoption to have any impact
to the Company's financial position or results of operations.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of  Long-Lived  Assets".  SFAS No. 144  addresses  the  accounting  and
reporting for the  impairment or disposal of  long-lived  assets.  The statement
provides a single  accounting  model for disposition of long-lived  assets.  New
criteria  must be met to  classify  the  asset as an asset  held-for-sale.  This
statement  also focuses on reporting the effects of a disposal of a segment of a
business.  This statement is effective for fiscal years beginning after December
15,  2001.  The Company  does not expect the  adoption to have any impact on the
Company's financial position or results of operations.

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and
Losses from  Extinguishment  of Debt", and an amendment of that Statement,  FASB
Statement  No.  64,  "Extinguishments  of  Debt  Made  to  Satisfy  Sinking-Fund
Requirements"  and FASB Statement No. 44,  "Accounting for Intangible  Assets of
Motor Carriers".  This Statement  amends FASB Statement No. 13,  "Accounting for
Leases",  to eliminate an  inconsistency  between the  required  accounting  for
sale-leaseback  transactions  and the  required  accounting  for  certain  lease
modifications  that have  economic  effects  that are similar to  sale-leaseback
transactions. The Company does not expect the adoption to have any impact to the
Company's financial position or results of operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal Activities".  SFAS No. 146 requires companies to recognize
costs associated with exit or disposal  activities when they are incurred rather
than at the date of a  commitment  to an exit or disposal  plan,  as  previously
required under Emerging  Issues Task Force Issue 94-3. A fundamental  conclusion
reached by the FASB in this statement is that an entity's  commitment to a plan,
by  itself,  does not  create a  present  obligation  to others  that  meets the
definition of a liability.  SFAS No. 146 also establishes that fair value is the
objective  for initial  measurement  of the  liability.  The  provisions of this
statement are effective for exit or disposal activities that are initiated after
December  31,  2002.  The  Company  believes  that  this  SFAS  will  not have a
significant impact on its results of operations or financial position.

                                       14
<PAGE>
CRITICAL ACCOUNTING POLICY AND ESTIMATES

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial  statements and the reported
amounts of revenues and expenses  during the  reporting  period.  On an on-going
basis, management evaluates its estimates and judgments, including those related
to revenue recognition,  financing operations, and contingencies and litigation.
Management  bases its estimates and  judgments on historical  experience  and on
various   other   factors  that  are  believed  to  be   reasonable   under  the
circumstances,  the results of which form the basis for making  judgments  about
the carrying value of assets and liabilities  that are not readily apparent from
other sources.  Actual results may differ from these  estimates  under different
assumptions or conditions. The most significant accounting estimates inherent in
the preparation of the Company's  financial  statements  include estimates as to
the appropriate  carrying value of certain assets and liabilities  which are not
readily  apparent from other sources,  primarily  allowance for doubtful medical
receivables,  accruals for other costs, and the  classification of net operating
loss and tax credit  carryforwards  between current and long-term assets.  These
accounting  policies are described at relevant  sections in this  discussion and
analysis and in the notes to the consolidated  financial  statements included in
our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2001.

FORWARD LOOKING STATEMENTS

This  report  contains  forward  looking  statements  within the  meaning of the
Private Securities Litigation Reform Act of 1995. Forward looking statements can
be  identified  by the  use  of  words  like  "believes,"  "could,"  "possibly,"
"anticipates,"  "estimates,"  "projects,"  "expects,"  "may," "will,"  "should,"
"intend,"  "plan,"  "consider"  or the  negative of these  expressions  or other
variations,   or  by   discussions   of   strategies   that  involve  risks  and
uncertainties. The Company based these forward looking statements on its current
expectations  and  projections  about future  events and  information  currently
available to it.  Although the Company  believes that the  assumptions for these
forward looking statements are reasonable, any of the assumptions could prove to
be inaccurate.  The Company's actual results could differ  materially from those
anticipated in the forward  looking  statements due to risks,  uncertainties  or
actual events differing from the assumptions underlying these statements.

                                       15
<PAGE>
ITEM 3. CONTROLS AND PROCEDURES.

Our principal  executive officer,  principal  financial  officer,  and principal
operating officer have evaluated the  effectiveness of our "disclosure  controls
and  procedures,"  as that term is defined in Rule  15d-14(c) of the  Securities
Exchange Act of 1934 (the "Exchange Act"),  within 90 days of the filing date of
this Quarterly Report on Form 10-QSB.  Based on their evaluation,  the principal
executive officer,  principal financial officer, and principal operating officer
concluded  that our  disclosure  controls and procedures are effective to ensure
that  information  we are  required to disclose in the reports we file or submit
under the Exchange Act is recorded,  processed,  summarized and reported  within
the time periods  specified in the SEC's rules and forms,  and include  controls
and procedures  designed to ensure that information  required to be disclosed by
us in those reports is accumulated and communicated to our management, including
our principal  executive officer,  principal  financial  officer,  and principal
operating  officer as appropriate to allow timely decisions  regarding  required
disclosure.

There were no significant  changes in our internal  controls or in other factors
that could  significantly  affect these  controls  subsequent to the date of the
evaluation.

                           PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES.

On February  6, 2001,  the  Securities  and  Exchange  Commission  declared  the
Registrant's Registration Statement on Form SB-2, File No. 333-45464, effective.
Shortly  thereafter,  the  Registrant  commenced  the  public  offering  of  its
Redeemable Secured Notes, Series I ("Notes").  The proceeds of the offering were
used primarily to acquire healthcare receivables.  As of September 30, 2002, the
Registrant had received net proceeds from the offering of Notes in the amount of
$21,307,244, net of deferred offering costs of $272,138 and sales commissions of
$2,177,618.

On January  18,  2002,  the  Company  filed a  registration  statement  with the
Securities  and  Exchange   Commission,   registering  the  public  offering  of
$100,000,000 in Redeemable  Secured Notes.  The proceeds of the offering will be
used primarily to acquire  healthcare  receivables.  These Notes are offered for
sale by means  of a final  prospectus.  The  Registrant's  offering  of Notes is
currently  ongoing.  As of September 30, 2002,  the  Registrant has received net
proceeds from the offering of Notes in the amount of $18,987,757 net of deferred
offering costs of $15,250 and sales commissions of $1,013,993.

                                       16
<PAGE>
                                   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.

                                       MEDICAL CAPITAL MANAGEMENT, INC.


Date: November 13, 2002                By /s/ Sidney M. Field
                                          --------------------------------------
                                          Sidney M. Field, President, Chief
                                          Executive Officer and Director


Date: November 13, 2002                By /s/ Alan Meister
                                          --------------------------------------
                                          Alan Meister, Chief Accounting Officer
                                          (Chief Financial Officer)

                                       17
<PAGE>
                                 CERTIFICATIONS

I, Sidney M. Field, Chief Executive Officer of Medical Capital Management, Inc.,
certify that:

1.   I have reviewed  this  quarterly  report on Form 10-QSB of Medical  Capital
Management, Inc.;

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

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

4.   The  registrant's  other  certifying  officer  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 we have:

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

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

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

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

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

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

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

Date: November 13, 2002

/s/ Sidney M. Field
-------------------------------------
Sidney M. Field
Chief Executive Officer

                                       18
<PAGE>
                                 CERTIFICATIONS

I, Alan Meister,  (Principal  Financial Officer) of Medical Capital  Management,
Inc., certify that:

1.   I have reviewed  this  quarterly  report on Form 10-QSB of Medical  Capital
Management, Inc.;

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

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

4.   The  registrant's  other  certifying  officer  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 we have:

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

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

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

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

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

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

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

Date: November 13, 2002

/s/ Alan Meister
-------------------------------------
Alan Meister
(Principal Financial Officer)

                                       19
<PAGE>
                                 CERTIFICATIONS

I, Joseph Lampariello,  Chief Operating Officer and Treasurer of Medical Capital
Management, Inc., certify that:

1.   I have reviewed  this  quarterly  report on Form 10-QSB of Medical  Capital
Management, Inc.;

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

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

4.   The  registrant's  other  certifying  officer  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 we have:

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

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

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

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

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

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

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

Date: November 13, 2002

/s/ Joseph Lampariello
-------------------------------------
Joseph Lampariello
Chief Operating Officer and Treasurer

                                       20