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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549


FORM 10-QSB

|           |  |                                                                                         
|---------- |  | ----------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                         
|x          |  | QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|           |  |                                                                                         
|           |  | For the quarterly period ended March 31, 2003                                           
|           |  |                                                                                         
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from      to

Commission File Number
000-25313

AGEMARK CORPORATION

(Exact name of small business issuer as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|NEVADA                                                         |  | 94-32701689                         
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|2614 Telegraph Avenue, Berkeley, California                    |  | 94704                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          

Issuers telephone number, including area code: (510) 548-6600

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes x No o.

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court. Yes x No o

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date: The number of shares of
Common Stock, $.001 par value per share, outstanding on March 31, 2003, was
1,109,481.

Transitional Small Business Disclosure Format (check one): Yes o No x





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TABLE OF CONTENTS



|                               |                                                                                               |  |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements.                                                                
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Controls and Procedures                                                              
|PART II                       
|                               | Item 6. Exhibits and Reports on Form 8-K.                                                    
|SIGNATURES                    
|EXHIBIT INDEX                 
|Exhibit 11                    
|Exhibit 99.1                  
|Exhibit 99.2                  



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TABLE OF CONTENTS

|                                                                                             |  |     
|-------------------------------------------------------------------------------------------- |  | ----
|                                                                                             |  | Page
|PART I. FINANCIAL INFORMATION                                                                |  |     
|ITEM 1.Financial Statements                                                                  |  | 2   
|ITEM 2.Managements Discussion and Analysis of Financial Condition and Results
of Operations |  | 10  
|ITEM 3.Controls and Procedures                                                               |  | 11  
|PART II. OTHER INFORMATION                                                                   |  |     
|ITEM 6.Exhibits and Reports on Form 8-K                                                      |  | 13  
|SIGNATURES                                                                                   |  | 14  
|EXHIBIT INDEX                                                                                |  | 17  

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PART I  FINANCIAL INFORMATION




Item 1. Financial Statements.

AGEMARK CORPORATION

BALANCE SHEET

March 31, 2003

(In thousands except share data)

(Unaudited)

|                            |                                                                                                         |                                            |                                      |             |        |  |  | 
|--------------------------- | ------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ----------- | ------ |  |  | 
|                            |                                                                                                         |                                            |                                      | A S S E T S |        |  |  | 
|Cash and cash equivalents   |                                                                                                         | $                                          | 213                                  |            
|Note receivable             |                                                                                                         |                                            | 170                                  |            
|Property and equipment, net |                                                                                                         |                                            | 15,103                               |            
|Other assets                |                                                                                                         |                                            | 601                                  |            
|                            |                                                                                                         |                                            |                                      |            
|                            |                                                                                                         | Total assets                               |                                      | $           | 16,087 | 
|                            |                                                                                                         |                                            |                                      |            
|                            |                                                                                                         |                                            | LIABILITIES AND STOCKHOLDERS EQUITY |             |        |  | 
|LIABILITIES                 |                                                                                                         |                                            |                                      |            
|                            | Accounts payable and accrued liabilities                                                                |                                            | $                                    | 2,059       |       
|                            | Vehicle loans                                                                                           |                                            |                                      | 29          |       
|                            | Capitalized lease obligations                                                                           |                                            |                                      | 64          |       
|                            | Notes payable                                                                                           |                                            |                                      | 12,043      |       
|                            |                                                                                                         |                                            |                                      |            
|                            |                                                                                                         | Total liabilities                          |                                      | $           | 14,195 | 
|                            |                                                                                                         |                                            |                                      |            
|STOCKHOLDERS EQUITY        |                                                                                                         |                                            |                                      |            
|                            | Common stock, stated value $.001, 20,000,000 shares
authorized, 1,109,481 shares issued and outstanding |                                            | $                                    | 1           |       
|                            | Additional paid in capital                                                                              |                                            |                                      | 7,163       |       
|                            | Unearned compensation                                                                                   |                                            |                                      | 85          |       
|                            | Stock notes receivable                                                                                  |                                            |                                      | (204        | )     
|                            | Accumulated deficit                                                                                     |                                            |                                      | (4,983      | )     
|                            |                                                                                                         |                                            |                                      |            
|                            |                                                                                                         | Total stockholders equity                 |                                      | $           | 1,892  | 
|                            |                                                                                                         |                                            |                                      |            
|                            |                                                                                                         | Total liabilities and stockholders equity |                                      | $           | 16,087 | 
|                            |                                                                                                         |                                            |                                      |            

See accompanying notes to financial statements.

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AGEMARK CORPORATION

STATEMENTS OF OPERATIONS

Three and Six Months Ended March 31, 2003 and 2002

(In thousands except share data)

(Unaudited)

|                                             |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |       |       |  
|-------------------------------------------- | ------------------------------------ | ----------------------- | ---- | ------------------ | ----- | ---------------- | --- | ----- | ----- | ---- | ---- | ----- | ----- | - | ---- | ----- | ----- | -
|                                             |                                      |                         |      | Three Months Ended |       | Six Months Ended
|                                             |                                      |                         |      | March 31,          |       | March 31,       
|                                             |                                      |                         |      |                    |       |                 
|                                             |                                      |                         |      | 2003               |       | 2002             |     | 2003  |       | 2002
|                                             |                                      |                         |      |                    |       |                  |     |       |       |     
|Revenue                                      |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |      
|                                             | Property gross revenue               |                         | $    | 2,289              |       |                  | $   | 2,661 |       |      | $    | 4,553 |       |   | $    | 5,318 |      
|                                             | Other income                         |                         |      | 1                  |       |                  |     | 1     |       |      |      | 3     |       |   |      | 3     |      
|                                             |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |      
|                                             |                                      | Total revenue           |      | $                  | 2,290 |                  |     | $     | 2,662 |      |      | $     | 4,556 |   |      | $     | 5,321 |  
|Expenses                                     |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |      
|                                             | Property operating expenses          |                         | $    | 1,965              |       |                  | $   | 2,112 |       |      | $    | 3,980 |       |   | $    | 4,269 |      
|                                             | Administrative and overhead expenses |                         |      | 176                |       |                  |     | 176   |       |      |      | 378   |       |   |      | 340   |      
|                                             | Stock option compensation            |                         |      | 43                 |       |                  |     | 54    |       |      |      | 97    |       |   |      | 107   |      
|                                             | Interest expense                     |                         |      | 198                |       |                  |     | 255   |       |      |      | 391   |       |   |      | 510   |      
|                                             | Depreciation                         |                         |      | 127                |       |                  |     | 152   |       |      |      | 253   |       |   |      | 304   |      
|                                             |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |      
|                                             |                                      | Total expenses          |      | $                  | 2,509 |                  |     | $     | 2,749 |      |      | $     | 5,099 |   |      | $     | 5,530 |  
|                                             |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |      
|                                             |                                      | $                       | (219 | )                  |       | $                | (87 | )     |       | $    | (543 | )     |       | $ | (209 | )    
|Gain on disposition of property              |                                      |                         |      |                    |       |                  |    |       |       |      | 6    |       |       |   |     |      
|Equity in net income (loss) of joint venture |                                      |                         |      |                    |       |                  | 13  |       |       |      |      |       |       |   | 3    |      
|                                             |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |      
|                                             |                                      | Net (loss)              |      | $                  | (219  | )                |     | $     | (74   | )    |      | $     | (537  | ) |      | $     | (206  | )
|                                             |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |      
|                                             |                                      | (Loss) per common share |      | $                  | (0.20 | )                |     | $     | (0.08 | )    |      | $     | (0.48 | ) |      | $     | (0.22 | )
|                                             |                                      |                         |      |                    |       |                  |     |       |       |      |      |       |       |   |      |      

See accompanying notes to financial statements.

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AGEMARK CORPORATION

STATEMENT OF STOCKHOLDERS EQUITY

Six Months Ended March 31, 2003

(In thousands)

|                            |  |              |   |         |  |                    |       |            |  |             |      |             |  |   |      |   |  |   |        |   |  |   |       |  
|--------------------------- |  | ------------ | - | ------- |  | ------------------ | ----- | ---------- |  | ----------- | ---- | ----------- |  | - | ---- | - |  | - | ------ | - |  | - | ----- | -
|                            |  |              |   |         |  | Additional Paid-In |       | Unearned   |  | Stock Notes |      | Accumulated |  |   |      |  
|                            |  | Common Stock |   | Capital |  | Compensation       |       | Receivable |  | (Deficit)   |      | Total      
|                            |  |              |   |         |  |                    |       |            |  |             |      |            
|Balance, September
30, 2002 |  | $            | 1 |         |  | $                  | 7,152 |            |  | $           | (171 | )           |  | $ | (204 | ) |  | $ | (4,446 | ) |  | $ | 2,332 |  
|Stock option
compensation   |  |              |   |         |  |                    | 11    |            |  |             | 86   |             |  |   |      |   |  |   |        |   |  |   | 97    |  
|Net (loss)                  |  |              |   |         |  |                    |       |            |  |             |      |             |  |   |      |   |  |   | (537   | ) |  |   | (537  | )
|                            |  |              |   |         |  |                    |       |            |  |             |      |             |  |   |      |   |  |   |        |   |  |   |       |  
|Balance, March 31,
2003     |  | $            | 1 |         |  | $                  | 7,163 |            |  | $           | (85  | )           |  | $ | (204 | ) |  | $ | (4,983 | ) |  | $ | 1,892 |  
|                            |  |              |   |         |  |                    |       |            |  |             |      |             |  |   |      |   |  |   |        |   |  |   |       |  

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AGEMARK CORPORATION

STATEMENTS OF CASH FLOWS

Six Months Ended March 31, 2003 and 2002

(In thousands)

(Unaudited)

|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |      |     |    |     |  
|---------------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------- | ---------------------------------------------------- | ----------------------------------------- | --- | ---- | ---- | ---- | --- | -- | --- | -
|                                               |                                                                                   |                                           |                                                      |                                           |     | 2003 |      | 2002
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|CASH FLOWS FROM OPERATING ACTIVITIES           |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               | Net (loss)                                                                        |                                           | $                                                    | (537                                      | )   |      | $    | (206 | )  
|                                               | Adjustments to reconcile net (loss) to net cash
provided by operating activities: |                                           |                                                      |                                           |     |      |      |      |    
|                                               |                                                                                   | Depreciation and amortization             |                                                      |                                           | 253 |      |      |      | 304 |   
|                                               |                                                                                   | Stock option compensation                 |                                                      |                                           | 97  |      |      |      | 107 |   
|                                               |                                                                                   | Gain on sale of property                  |                                                      |                                           | (6  | )    |      |     
|                                               |                                                                                   | Undistributed (income) from joint venture |                                                      |                                           |     |      |      |      | (3  | ) 
|                                               |                                                                                   | Change in assets and liabilities:         |                                                      |                                           |     |      |      |      |     |   
|                                               |                                                                                   |                                           | (Increase) in other assets                           |                                           |     | (119 | )    |      |     | (5 | )  
|                                               |                                                                                   |                                           | Increase in accounts payable and accrued liabilities |                                           |     | 139  |      |      |     | 21 |    
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               |                                                                                   |                                           |                                                      | Net cash provided by operating activities |     | $    | (173 | )    |     | $  | 218 |  
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|CASH FLOWS FROM INVESTING ACTIVITIES           |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               | Additions to property and equipment                                               |                                           | $                                                    | (197                                      | )   |      | $    | (126 | )  
|                                               | Proceeds from sale of property                                                    |                                           |                                                      | 93                                        |     |      |      |      |    
|                                               | Distributions from joint venture                                                  |                                           |                                                      |                                           |     |      |      | 54   |    
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               |                                                                                   |                                           |                                                      | Net cash (used in) investing activities   |     | $    | (104 | )    |     | $  | (72 | )
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|CASH FLOWS FROM FINANCING ACTIVITIES           |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               | Principal payments on notes payable                                               |                                           | $                                                    | (29                                       | )   |      | $    | (26) | )  
|                                               | New loan costs paid                                                               |                                           |                                                      |                                          |     |      |      |     |    
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               |                                                                                   |                                           |                                                      | Net cash (used in) financing activities   |     | $    | (29  | )    |     | $  | (26 | )
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               |                                                                                   |                                           |                                                      | Net increase in cash and cash equivalents |     | $    | (306 | )    |     | $  | 120 |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |                                                                                   |                                           | 519                                                  |                                           |     |      | 188  |     
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               |                                                                                   |                                           |                                                      | Cash and cash equivalents, end of period  |     | $    | 213  |      |     | $  | 308 |  
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|SUPPLEMENTAL DISCLOSURES                       |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               | Non cash items from Investing and Financing Activities                            |                                           |                                                      |                                           |     |      |      |      |    
|                                               |                                                                                   |                                           | Note received from sale of property                  |                                           | $   | 170  |      |      |     |    |    
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               | Cash payments for:                                                                |                                           |                                                      |                                           |     |      |      |      |    
|                                               |                                                                                   | Interest                                  |                                                      | $                                         | 325 |      |      | $    | 410 |   
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     
|                                               |                                                                                   | Taxes                                     |                                                      | $                                         | 1   |      |      | $    | 0   |   
|                                               |                                                                                   |                                           |                                                      |                                           |     |      |      |     

See accompanying notes to financial statements.

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AGEMARK CORPORATION

NOTES TO FINANCIAL STATEMENTS

Note 1. Basis of Presentation



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The interim financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the
information presented not misleading.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | These statements reflect all adjustments, consisting of normal recurring
adjustments which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that
these interim financial statements be read in conjunction with the
financial statements and notes thereto included in the Companys annual
report on Form 10-KSB for the year ended September 30, 2002. The
Company follows the same accounting policies in preparation of interim
reports.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As disclosed below in Note 5, on January 27, 2003, Agemark filed a
preliminary proxy statement on Schedule 14A with the Securities and
Exchange Commission relating to the proposed sale of the Companys
assets and the liquidation and dissolution of the Company. The Company
has not adopted a liquidation basis of accounting in these financial
statements because the stockholders have not approved the liquidation of
the Company. After the definitive proxy statement is filed with the
Securities and Exchange Commission, the Company intends to solicit
stockholder approval of the sale of the Companys assets and the
liquidation and dissolution of the Company. If approval is received
from stockholders holding a majority of interests, the Company intends
to adopt the liquidation basis of accounting to restate its assets and
liabilities to estimated values.

Note 2. Transactions With Affiliates



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has contracted with Opus X, Inc.(Opus) for the
management of its properties. Opus is co-owned by Richard J. Westin
and Jesse A. Pittore, directors and officers of the Company.
Compensation for these management services is 3.75% of gross income
paid monthly. For the three and six months ended March 31, 2003,
management fees of $84,880 and $170,731, respectively, and for the
three and six months ended March 31, 2002, management fees of $99,784
and $199,428, respectively, are included in the property operating
expenses on the statement of operations for services provided by
Opus. At March 31, 2003, accounts payable includes $28,000 owed by
the Company to Opus.



| |                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For the three and six months ended March 31, 2003 and 2002, the
Company paid rent for the Companys headquarters in Berkeley, CA in
the amount of $6,000 and $12,000,

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| |                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | respectively, pursuant to a lease
between the Company and the Waterford Company, which is owned by
members of Richard J. Westins family. The lease is for a one-year

AGEMARK CORPORATION

NOTES TO FINANCIAL STATEMENTS

Note 2. Transactions With Affiliates (continued)



| |                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | term starting October 1, 1998 at a rent of $2,000 per month. The
lease renews automatically unless terminated by either party. The
lessee is responsible for limited maintenance and repair expenses and
all utilities. The Waterford Company is responsible for major
repairs, real estate taxes and debt service.

Note 3. Gain on Disposition of Property and Note receivable



| |                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In November, 2002, the Company sold its property located in
Chanute, KS. The net sales price of $261,000 was paid partially in
the form of a note in the amount of $170,000 which bears interest
at 8% per annum and was due on April 23, 2003. The buyer of the
property is presently in default and the Company is in the process
of listing the property for sale again.

Note 4. Employee Stock Incentive Plan



| |                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In December, 1998 the stockholders approved the adoption of the 1997
Employee Stock Incentive Plan, a stock option plan for certain
employees and directors. The total number of shares that may be issued
upon the exercise of options under this plan is 250,000. Also under
this plan, no participant may be granted more than 100,000 shares and
no awards may be granted after November 21, 2007.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Options to purchase up to a total of 237,164 shares of common stock
have been granted at exercise prices ranging from $1.00 to $1.10 per
share to the officers, directors and employees of the Company. On June
1, 2002 the officers and directors exercised their vested options and
acquired 187,749 shares of the Companys common stock by executing
promissory notes and pledge agreements totaling $204,415. The notes
have a term of four years and bear interest at 5%. Details of the
options are:

7



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|                    |                   |         |        |           |   |                   |         |                |  |  |                  |  |  |  |  | 
|------------------- | ----------------- | ------- | ------ | --------- | - | ----------------- | ------- | -------------- |  |  | ---------------- |  |  |  |  | 
|                    |                   |         |        |           |   | Shares            |         | Exercise Price |  |  |                  | 
|Date of Grant       |                   | Granted |        | Per Share |   | Date Fully Vested
|                    |                   |         |        |           |   |                  
|                    | January 1, 1999   |         |        | 166,666   |   |                   | $       | 1.10           |  |  | July 1, 1999    
|                    | January 1, 1999   |         |        | 1,000     |   |                   |         | 1.00           |  |  | January 1, 2000 
|                    | January 1, 1999   |         |        | 42,750    |   |                   |         | 1.00           |  |  | January 1, 2003 
|                    | April 1, 1999     |         |        | 18,748    |   |                   |         | 1.00           |  |  | April 1, 2001   
|                    | November 10, 1999 |         |        | 5,000     |   |                   |         | 1.00           |  |  | November 1, 2001
|                    | December 22,1999  |         |        | 3,000     |   |                   |         | 1.00           |  |  | December 1, 2000
|                    |                   |         |        |           |   |                   |         |                |  |  |                  |  | 
|                    |                   |         |        | Total     |   |                   | 237,164 |                |  |  |                  |  |  |  |  | 
|                    | Options ceded     |         |        | (12,882   | ) |                   |         | 1.00           |  |  |                  |  | 
|                    | Options exercised |         |        | (166,666  | ) |                   |         | 1.10           |  |  |                  |  | 
|                    | Options exercised |         |        | (21,083   | ) |                   |         | 1.00           |  |  |                  |  | 
|                    |                   |         |        |           |   |                   |         |                |  |  |                  | 
|Options outstanding |                   |         | 36,533 |           |   |                   | 1.00    |                |  |  |                  | 
|                    |                   |         |        |           |   |                   |         |                |  |  |                  | 

AGEMARK CORPORATION

NOTES TO FINANCIAL STATEMENTS

Note 4. Employee Stock Incentive Plan (continued)



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The stock of the Company has not been listed for sale on any public
exchange. For purposes of accounting for compensation expense arising
from the granting of stock options under APB Opinion No. 25, the book
value of $5.97 per share on September 30, 1998 has been used in the
absence of any other reliable market information. In the case of the
166,666 options which fully vest July 1, 1999, the compensation
represented by the difference between the $1.10 exercise price and the
$5.97 net book value is being recognized over the 57 months remaining of the terms of the employment contracts of the
officers to whom the options were granted. The compensation
attributable to the remaining 70,498 options is being recognized over
their respective vesting periods. Total compensation for the three and
six months ended March 31, 2003 was $43,000 and $97,000, respectively.
Total compensation for the three and six months ended March 31, 2002
under APB Opinion No. 25 was approximately $54,000 and $107,000,
respectively.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If the Company had used the fair value based method of accounting for
its employee stock incentive plan, as prescribed by SFAS No. 123, stock
option compensation cost in the statement of operations for the three
and six months ended March 31, 2003 would have decreased by $43,000 and
$86,000, respectively, resulting in net losses of $173,000 and
$451,000 and the basic loss per common share would have been $0.16 and
$0.41. For the three and six months ended March 31, 2002 compensation
would have decreased by $43,000 and $86,000, respectively, resulting in
net losses of $31,000 and $120,000, respectively and losses per common
share would have been $0.03 and $0.13, respectively.



| | 
| | 

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Note 5. Liquidation and Dissolution



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On January 27, 2003, Agemark filed a preliminary proxy statement on
Schedule 14A with the Securities and Exchange Commission relating to
the proposed sale of the Companys assets and the liquidation and
dissolution of the Company. The Board of Directors has determined that
such a sale of assets and liquidation and dissolution of the Company is
in the best interests of the Companys stockholders. After the
definitive proxy statement is

AGEMARK CORPORATION

NOTES TO FINANCIAL STATEMENTS

Note 5. Liquidation and Dissolution (continued)



| |                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | filed with the Securities and Exchange Commission, the Company intends
to solicit stockholder approval of the sale of the Companys assets and
the liquidation and dissolution of the Company.

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Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations

Statements in this Quarterly Report on Form 10-QSB concerning the
Companys outlook or future economic performance; anticipated profitability,
gross rentals, expenses or other financial items; and statements concerning
assumptions made or exceptions to any future events, conditions, performance or
other matter are forward looking statements as that term is defined under the
Federal Securities Laws. Forward-looking statements are subject to risks,
uncertainties, and other factors that would cause actual results to differ
materially from those stated in such statements, including those set forth
under the caption Factors That May Affect Results in the description of the
Companys business in the Companys Annual Report on Form 10-KSB.

Results of Operations

Three Months Ended March 31, 2003 Compared to the Three Months Ended
March 31, 2002

Property gross revenue decreased from $2,661,000 in the three months
ended March 31, 2002 to $2,289,000 in the three months ended March 31, 2003
reflecting generally higher rental rates offsetting revenues of $425,000 in the
2002 period attributable to sold facilities. Property operating expenses
decreased in the 2003 period to $1,965,000 from $2,112,000 in the 2002 period.
This decrease was attributable primarily to costs associated with sold
facilities of $307,000 offsetting generally higher operating costs at the
facilities retained. Administrative expenses were $176,000 in both
periods. Stock option compensation decreased from $54,000 in 2002 to $43,000 in
2003. Interest expense was $198,000 for the three months ended March 31, 2003
compared to $255,000 for the three months ended March 31, 2002 , reflecting the
retirement of debt in September, 2002. Depreciation expense was $127,000 in
2003 compared to $152,000 in 2002, reflecting the sale of the Cumberland, MD
property.

Six Months Ended March 31, 2003 Compared to the Six Months Ended
March 31, 2002

Property gross revenue decreased from $5,318,000 in the six months ended
March 31, 2002 to $4,553,000 in the six months ended March 31, 2002 reflecting
generally higher rental rates offsetting revenues of $829,000 in the 2002
period attributable to sold facilities. Property operating expenses decreased
in the 2003 period to $3,980,000 from $4,269,000 in the 2002 period. This
decrease was attributable primarily to costs associated with sold facilities of
$614,000 offsetting generally higher operating costs at the facilities
retained. Administrative expenses increased from $340,000 in 2002 to $378,000
in 2003 due to higher personnel costs. Stock option compensation decreased from
$107,000 in 2002 to $97,000 in 2003. Interest expense was $391,000 for the six
months ended March 31, 2003 compared to $510,000 for the six months ended March
31, 2002 reflecting the retirement of debt in September, 2002. Depreciation
expense was $304,000 in 2002 compared to $313,000 in 2001.

The gain on disposition of property reflects the sale of the Companys
Chanute, KS property. This property was classified as held for sale. As of the
date of this filing the buyer of

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the property has defaulted on his obligations and the Company is in the
process of listing the property for sale again.

The equity in net loss of joint venture reflects the Companys 25% share
of operations after depreciation at the joint venture Alzheimers facility in
Cumberland, MD. This joint venture interest was sold July 1, 2002.

Liquidity and Capital Resources

Net cash used by operations during the six months ended March 31, 2003 was
$173,000. The largest use of funds was those used to increase other assets.

The Companys investing activities for the six months ended March 31, 2003
used $104,000. The sale of the Chanute, KS property provided $93,000 and
$197,000 was invested in improvements to the Companys properties.

The Companys financing activities used $29,000 to pay down tax notes.

Cash and cash equivalents at March 31, 2003 totaled $213,000, down
$306,000 from September 30, 2002. Management believes that funds provided from
operations and cash reserves will be adequate to support its short-term cash
requirements for capital expenditures, payment of interest and maintenance of
working capital.

Secured indebtedness of $11,982,000 will become due and payable on
September 30, 2003. Originally due September 30, 2002, the debts were extended
for one year by substantial reductions on or before September 30, 2002.
They may be extended an additional year to September 30, 2004 by
the payment of a substantial amount of principal. Management believes that, after years of pursuing refinance sources without
success due to the taint of the Bankruptcy filings which resulted in the
formation of the Company, the best source of funds to repay and extend its
secured indebtedness is the sale of assets. On January 27, 2003, Agemark filed
a preliminary proxy statement on Schedule 14A with the Securities and Exchange
Commission relating to the proposed sale of the Companys assets and the
liquidation and dissolution of the Company. The Board of Directors has
determined that such a sale of assets and liquidation and dissolution of the
Company is in the best interests of the Companys stockholders. After the
definitive proxy statement is filed with the Securities and Exchange
Commission, the Company intends to solicit stockholder approval of the sale of
the Companys assets and the liquidation and dissolution of the Company.

Impact of Inflation

Management believes that the Companys operations have not been materially
adversely affected by inflation. The Company expects that it will be able to
offset the effects of inflation on salaries and other operating expenses by
increases in rental rates, subject to applicable restrictions in North Dakota,
where the Company receives subsidies




Item 3. Controls and Procedures

a) Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
conducted an evaluation of

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our disclosure controls and procedures, as such term
is defined under Rule 13a-14(c) promulgated
under the Securities Exchange Act of 1934, as amended within the 90 day
period prior to the filing date of this report. Based on this evaluation, our
principal executive officer and principal financial officer concluded that our
disclosure controls and procedures were effective. as of that date.

(b)  There have been no significant changes (including corrective actions
with regard to significant deficiencies or material weaknesses) in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation referenced in paragraph (a) above.

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PART II




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



|(a) |  | Exhibits.
|--- |  | ---------

|            |  |                                                      
|----------- |  | -----------------------------------------------------
|Exhibit No. |  | Description                                          
|            |  |                                                      
|11          |  | Statement regarding Computation of Per Share Earnings
|99.1        |  | Certification of Chief Executive Officer             
|99.2        |  | Certification of Chief Financial Officer             



|(b) |  | Reports on Form 8-K. The Registrant filed no reports on Form 8-K during
the quarter ended March 31, 2003.
|--- |  | ---------------------------------------------------------------------------------------------------------

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SIGNATURES

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

|             |  |                                                                      
|------------ |  | ---------------------------------------------------------------------
|             |  | AGEMARK CORPORATION                                                  
|             |  | /s/ Richard J. Westin                                                
|May 13, 2003 |  | Richard J. Westin,
Chief Executive Officer                           
|             | 
|             |  | /s/ James P. Tolley                                                  
|May 13, 2003 |  | James P. Tolley,
Chief Financial Officer and
Chief Accounting Officer

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##### Table of Contents



CERTIFICATIONS

Certification of Chief Executive Officer

I, Richard J. Westin, certify that:

1.     I have reviewed this quarterly report on Form 10-QSB of Agemark Corporation;

2.     Based on my knowledge, this annual 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 annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the period presented in this annual 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 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 annual 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
annual report (the Evaluation Date); and

(c)  presented in this annual 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 officer 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 aversely 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 officer and I have indicated in this
annual report whether there are 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.

|                    |  |                                          
|------------------- |  | -----------------------------------------
|Dated: May 13, 2003 |  | /s/Richard J. Westin                     
|                    |  |                                          
|                    |  | Richard J. Westin
Chief Executive Officer

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Certification of Chief Financial Officer

I, James P.Tolley, certify that:

1.     I have reviewed this quarterly report on Form 10-QSB of Agemark Corporation;

2.     Based on my knowledge, this annual 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 annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the period presented in this annual 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 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 annual 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
annual report (the Evaluation Date); and

(c)  presented in this annual 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 officer 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 aversely 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 officer and I have indicated in this
annual report whether there are 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.

|                    |  |                                        
|------------------- |  | ---------------------------------------
|Dated: May 13, 2003 |  | /s/James P. Tolley                     
|                    |  |                                        
|                    |  | James P. Tolley
Chief Financial Officer

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EXHIBIT INDEX

TO QUARTERLY REPORT ON FORM 10-QSB

FOR AGEMARK CORPORATION

|            |  |                                                      
|----------- |  | -----------------------------------------------------
|Exhibit No. |  | Description                                          
|            |  |                                                      
|11          |  | Statement regarding Computation of Per Share Earnings
|99.1        |  | Certification of Chief Executive Officer             
|99.2        |  | Certification of Chief Financial Officer             

17