##### Table of Contents



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 June 30, 2003                                            
|           |  |                                                                                         
|[    ]     |  | 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 |  | (I.R.S. Employer   
|incorporation or organization)  |  | 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 [   ].

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 [   ]

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 June 30, 2003, was
1,109,481.

Transitional Small Business Disclosure Format (check one): Yes [   ]   No [X]





---

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. OTHER INFORMATION    
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                    
|EXHIBIT INDEX                 
|Exhibit 11                    
|Exhibit 31.1                  
|Exhibit 31.2                  
|Exhibit 32.1                  
|Exhibit 32.2                  



---



##### Table of Contents



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                                                               |  |      | 12 | 
|PART II. OTHER INFORMATION                                                                    |  |      |    | 
|ITEM 6. Exhibits and Reports on Form 8-K                                                      |  |      | 13 | 
|SIGNATURES                                                                                    |  |      | 14 | 
|EXHIBIT INDEX                                                                                 |  |      |    | 

1



---



##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements.

AGEMARK CORPORATION

BALANCE SHEET

June 30, 2003

(In thousands except share data)

(Unaudited)

|                                     |                                                                                                         |   |        |                                            |   |   |        | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------- | - | ------ | ------------------------------------------ | - | - | ------ | 
|A S S E T S                         
|Cash and cash equivalents            |                                                                                                         | $ | 169    |                                           
|Property and equipment, net          |                                                                                                         |   | 15,058 |                                           
|Property held for sale               |                                                                                                         |   | 188    |                                           
|Other assets                         |                                                                                                         |   | 572    |                                           
|                                     |                                                                                                         |   |        |                                           
|                                     |                                                                                                         |   |        | Total assets                               |   | $ | 15,987 | 
|                                     |                                                                                                         |   |        |                                           
|LIABILITIES AND STOCKHOLDERS EQUITY
|LIABILITIES                          |                                                                                                         |   |        |                                           
|                                     | Accounts payable and accrued liabilities                                                                |   | $      | 2,132                                      |  
|                                     | Vehicle loans                                                                                           |   |        | 29                                         |  
|                                     | Capitalized lease obligations                                                                           |   |        | 64                                         |  
|                                     | Notes payable                                                                                           |   |        | 12,042                                     |  
|                                     |                                                                                                         |   |        |                                           
|                                     |                                                                                                         |   |        | Total liabilities                          |   | $ | 14,267 | 
|                                     |                                                                                                         |   |        |                                           
|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                                                                                   |   |        | (42                                        | )
|                                     | Stock notes receivable                                                                                  |   |        | (204                                       | )
|                                     | Accumulated deficit                                                                                     |   |        | (5,198                                     | )
|                                     |                                                                                                         |   |        |                                           
|                                     |                                                                                                         |   |        | Total stockholders equity                 |   | $ | 1,720  | 
|                                     |                                                                                                         |   |        |                                           
|                                     |                                                                                                         |   |        | Total liabilities and stockholders equity |   | $ | 15,987 | 
|                                     |                                                                                                         |   |        |                                           

See accompanying notes to financial statements.

2



---



##### Table of Contents



AGEMARK CORPORATION

STATEMENTS OF OPERATIONS

Three and Nine Months Ended June 30, 2003 and 2002

(In thousands except share data)

(Unaudited)

|                                             |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |       |       |  
|-------------------------------------------- | ------------------------------------ | ----------------------- | ---- | ------------------ | ----- | ----------------- | --- | ----- | ----- | ---- | ---- | ----- | ----- | - | ---- | ----- | ----- | -
|                                             |                                      |                         |      | Three Months Ended |       | Nine Months Ended
|                                             |                                      |                         |      | June 30,           |       | June 30,         
|                                             |                                      |                         |      |                    |       |                  
|                                             |                                      |                         |      | 2003               |       | 2002              |     | 2003  |       | 2002
|                                             |                                      |                         |      |                    |       |                   |     |       |       |     
|Revenue                                      |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |      
|                                             | Property gross revenue               |                         | $    | 2,257              |       |                   | $   | 2,688 |       |      | $    | 6,809 |       |   | $    | 8,006 |      
|                                             | Other income                         |                         |      |                    |       |                   |     | 4     |       |      |      | 3     |       |   |      | 7     |      
|                                             |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |       |      
|                                             |                                      | Total revenue           |      | $                  | 2,257 |                   |     | $     | 2,692 |      |      | $     | 6,812 |   |      | $     | 8,013 |  
|                                             |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |       |      
|Expenses                                     |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |      
|                                             | Property operating expenses          |                         | $    | 1,905              |       |                   | $   | 2,155 |       |      | $    | 5,885 |       |   | $    | 6,423 |      
|                                             | Administrative and overhead expenses |                         |      | 204                |       |                   |     | 173   |       |      |      | 581   |       |   |      | 502   |      
|                                             | Stock option compensation            |                         |      | 43                 |       |                   |     | 53    |       |      |      | 140   |       |   |      | 160   |      
|                                             | Interest expense                     |                         |      | 196                |       |                   |     | 255   |       |      |      | 587   |       |   |      | 767   |      
|                                             | Depreciation                         |                         |      | 124                |       |                   |     | 152   |       |      |      | 377   |       |   |      | 457   |      
|                                             |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |       |      
|                                             |                                      | Total expenses          |      | $                  | 2,472 |                   |     | $     | 2,788 |      |      | $     | 7,570 |   |      | $     | 8,318 |  
|                                             |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |       |      
|                                             |                                      | $                       | (215 | )                  |       | $                 | (96 | )     |       | $    | (758 | )     |       | $ | (305 | )    
|Gain on disposition of property              |                                      |                         |      |                    |       |                   |     |       |       |      | 6    |       |       |   |      |      
|Equity in net income (loss) of joint venture |                                      |                         |      |                    |       |                   | 15  |       |       |      |      |       |       |   | 17   |      
|                                             |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |       |      
|                                             |                                      | Net (loss)              |      | $                  | (215  | )                 |     | $     | (81   | )    |      | $     | (752  | ) |      | $     | (288  | )
|                                             |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |       |      
|                                             |                                      | (Loss) per common share |      | $                  | (0.19 | )                 |     | $     | (0.08 | )    |      | $     | (0.68 | ) |      | $     | (0.30 | )
|                                             |                                      |                         |      |                    |       |                   |     |       |       |      |      |       |       |   |      |       |      

See accompanying notes to financial statements.

3



---



##### Table of Contents



AGEMARK CORPORATION

STATEMENT OF STOCKHOLDERS EQUITY

Nine Months Ended June 30, 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    |            |  |             | 129  |             |  |   |      |   |  |   |        |   |  |   | 140   |  
|Net (loss)                  |  |              |   |         |  |              |       |            |  |             |      |             |  |   |      |   |  |   | (752   | ) |  |   | (752  | )
|                            |  |              |   |         |  |              |       |            |  |             |      |             |  |   |      |   |  |   |        |   |  |   |       |  
|Balance, June 30,
2003      |  | $            | 1 |         |  | $            | 7,163 |            |  | $           | (42  | )           |  | $ | (204 | ) |  | $ | (5,198 | ) |  | $ | 1,720 |  
|                            |  |              |   |         |  |              |       |            |  |             |      |             |  |   |      |   |  |   |        |   |  |   |       |  

4



---



##### Table of Contents



AGEMARK CORPORATION

STATEMENTS OF CASH FLOWSNine Months Ended June 30, 2003 and 2002

(In thousands)

(Unaudited)

|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |     |     |      |  
|------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ---------------------------------------------------- | ---------------------------------------------------- | --- | ---- | ---- | ---- | --- | --- | ---- | -
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     | 2003 |      | 2002
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |     
|CASH FLOWS FROM OPERATING ACTIVITIES              |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |     
|                                                  | Net (loss)                                                                        |                                                                    | $                                                    | (752                                                 | )   |      | $    | (288 | )  
|                                                  | Adjustments to reconcile net (loss) to net cash
provided by operating activities: |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   | Depreciation                                                       |                                                      |                                                      | 377 |      |      |      | 457 |    
|                                                  |                                                                                   | Stock option compensation                                          |                                                      |                                                      | 140 |      |      |      | 160 |    
|                                                  |                                                                                   | Gain on disposition of property                                    |                                                      |                                                      | (6  | )    |      |      |     |    
|                                                  |                                                                                   | Undistributed loss (income)from joint venture                      |                                                      |                                                      |     |      |      |      | (17 | )  
|                                                  |                                                                                   | Change in assets and liabilities:                                  |                                                      |                                                      |     |      |      |      |     |    
|                                                  |                                                                                   |                                                                    | (Increase) decrease in other assets                  |                                                      |     | 86   |      |      |     | (31 | )   
|                                                  |                                                                                   |                                                                    | Increase in accounts payable and accrued liabilities |                                                      |     | 110  |      |      |     | 140 |     
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   |                                                                    |                                                      | Net cash (used in) provided by operating activities  |     | $    | (45  | )    |     | $   | 421  |  
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|CASH FLOWS FROM INVESTING ACTIVITIES              |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |     
|                                                  | Additions to property and equipment                                               |                                                                    | $                                                    | (276                                                 | )   |      | $    | (276 | )  
|                                                  | Investment in joint venture                                                       |                                                                    |                                                      |                                                      |     |      |      | 91   |    
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   |                                                                    |                                                      | Net cash (used in) investing activities              |     | $    | (276 | )    |     | $   | (185 | )
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|CASH FLOWS FROM FINANCING ACTIVITIES              |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |     
|                                                  | Principal payments on notes payable                                               |                                                                    | $                                                    | (29                                                  | )   |      | $    | (26  | )  
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   |                                                                    |                                                      | Net cash (used in) financing activities              |     | $    | (29  | )    |     | $   | (26  | )
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   |                                                                    |                                                      | Net increase (decrease) in cash and cash equivalents |     | $    | (350 | )    |     | $   | 210  |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD    |                                                                                   |                                                                    | 519                                                  |                                                      |     |      | 188  |     
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   |                                                                    |                                                      | Cash and cash equivalents, end of period             |     | $    | 169  |      |     | $   | 398  |  
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |     
|                                                  | Cash payments for:                                                                |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   | Interest                                                           |                                                      | $                                                    | 430 |      |      | $    | 609 |    
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   | Taxes                                                              |                                                      | $                                                    | 2   |      |      | $    | 0   |    
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  | Non cash investing and financing activities:                                      |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   | Note received from sale of property                                |                                                      |                                                      | 170 |      |      |      |     |    
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    
|                                                  |                                                                                   | Common stock issued to officers and directors for notes receivable |                                                      | $                                                    |     |      |      | $    | 204 |    
|                                                  |                                                                                   |                                                                    |                                                      |                                                      |     |      |      |      |    

See accompanying notes to financial statements.

5



---



##### Table of Contents



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.                                                                                                                                                                                                   
|       
|Note 2. |  | Transactions With Affiliates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        |  | The Company contracted with Opus X, Inc. (Opus) for the management
of its owned and operated properties. Opus is co-owned by Richard J.
Westin and Jesse A. Pittore, directors and officers of the Company.
Compensation for these management services was 3.75% of gross income
paid monthly. For the three and nine months ended June 30, 2003,
management fees of $84,623 and $255,354, respectively, and for the
three and nine months ended June 30, 2002, management fees of $100,801
and $300,230, respectively, are included in the property operating
expenses on the statement of operations for services provided by
Opus. At June 30, 2003 accounts payable includes $28,000 owed by the
Company to Opus.
|       
|        |  | For the three and nine months ended June 30, 2003 and 2002, the
Company paid rent for the Companys headquarters in Berkeley, CA in
the amount of $6,000 and $18,000, 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
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.                                                        
|       
|        |  | On May 1, 2002 the Company received an offer to purchase the facility
in Cumberland, MD for $3,300,000 and the Companys 25% interest in
the joint venture also located in Cumberland, MD for $200,000. These
offers were made by entities controlled by directors and officers
Richard J. Westin and Jesse A. Pittore. Prior to accepting the offers                                                                                                                                                                                                                                                                                                                                                                  

6



---



##### Table of Contents



AGEMARK CORPORATION

NOTES TO FINANCIAL STATEMENTS



|Note 2. |  | Transactions With Affiliates (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | received, the Company held an auction of the properties on June 5,
2002 after advertising the auction for the month of May in the
national edition of the Wall Street Journal and the Baltimore Sun.
The Company received 30 responses seeking additional information,
which was provided, but no bids were received. The sale of the joint
venture interest closed on July 1, 2002. The sale of the Cumberland,
MD facility was completed in August 2002.                                                                                                                                                                                                                                                                     
|       
|        |  | On January 23, 2003 the Company executed a contract to sell its
Hastings, Nebraska property for $2,150,000 to Martin Hug, an employee
of the Company, and entities affiliated with Messrs. Westin and
Pittore. Mr. Hug currently serves as the Companys operations
officer. The sale of the Hastings Property to Mr. Hug and the
entities affiliated with Messrs. Westin and Pittore is conditioned
upon stockholder approval of the sale and upon the purchasers bid
being the highest bid at auction.
In August, 2003 the Company entered into a contract to sell its
Dickinson, ND property to an entity formed by Messrs. Westin and
Pittore for $2,350,000. This sale is subject to the same terms as the
Hastings sale.
|       
|Note 3. |  | Gain on Disposition of Property and Property Held for Sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        |  | 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 has defaulted and Company has listed the property for
sale again.                                                                                                                                                                                                                                                                                                                                                                                    
|       
|Note 4. |  | 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. The proxy statement is currently under review by the SEC. 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.                
|       
|Note 5. |  | 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.                                                                                                                                                                                                                                                                                                                         

7



---



##### Table of Contents



AGEMARK CORPORATION

NOTES TO FINANCIAL STATEMENTS



|Note 5. |  | Employee Stock Incentive Plan (continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | 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:

|                    |  |         |          |                |  |                   |      |  |  |                  |  | 
|------------------- |  | ------- | -------- | -------------- |  | ----------------- | ---- |  |  | ---------------- |  | 
|                    |  | 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 |  |  |                  |  | 
|                    |  |         |          |                |  |                   |      |  |  |                  |  | 



| |  | 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 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 vested 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 nine months
ended June 30, 2003 under APB Opinion 25 was $43,000 and $140,000,
respectively. Total compensation for the three and nine months ended
June 30, 2002 under APB Opinion 25 was $53,000 and $160,000,
respectively.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8



---



##### Table of Contents



AGEMARK CORPORATION

NOTES TO FINANCIAL STATEMENTS



|Note 5. |  | Employee Stock Incentive Plan (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | If the Company had used the fair value based method of accounting for
its employee stock incentive plan, as prescribed by Statement of
Financial Accounting Standards No. 123, stock option compensation cost
in the statements of operations for the three and nine months ended June
30, 2003 would have decreased by $43,000 and $129,000, respectively,
resulting in net losses of $172,000 and $623,000, respectively and basic
losses per common share would have been $0.16 and $.56, respectively.
For the three and nine months ended June 30, 2002, stock option
compensation cost would have decreased by $43,000 and $128,000,
respectively, resulting in net losses of $38,000 and $160,000,
respectively and basic losses per common share would have been $0.04 and
$0.17, respectively.

9



---



##### Table of Contents






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 June 30,
2003 Compared to the Three Months Ended June 30, 2002

The Company sold its Cumberland, MD property in August, 2002. Total
property gross revenue decreased from $2,688,000 in the three months ended June
30, 2002 to $2,257,000 in the three months ended June 30, 2003 reflecting the
absence of the property sold. Property operating expenses decreased in the
2003 period to $1,905,000 from $2,155,000 in the 2002 period. This decrease
was attributable to lower expenses attributable the Cumberland property
offsetting increased maintenance, marketing and personnel costs.
Administrative expenses increased from $173,000 in 2002 to $202,000 in 2003
reflecting higher legal expenses associated with the SECs review of our proxy statement. Stock option compensation decreased from
$53,000 in 2002 to $43,000 in 2003 reflecting the expiration of the vesting
term for most options granted. Interest expense was $196,000 for the three
months ended June 30, 2003 compared to $255,000 for the three months ended June
30, 2002 reflecting the payoff of a substantial amount notes payable.
Depreciation expense was $124,000 in 2003 versus $152,000 in 2002 reflecting
the sale of the Cumberland property.
No income was received in 2003 from the investment in the joint venture as this
interest was sold on July 1, 2002.

Nine Months Ended June 30,
2003 Compared to the Nine Months Ended June 30, 2002

Total property gross revenue decreased from $8,006,000 in the nine
 months ended June 30, 2002 to $6,809,000 in the nine months ended June 30, 2003 reflecting the absence of the property sold.
Property operating expenses decreased in the 2003 period to $5,885,000
from $6,423,000 in the 2002 period. This decrease was attributable primarily
to increased maintenance, marketing and personnel costs offsetting the drop in
Cumberlands expenses. Administrative expenses increased from $502,000 in 2002
to $581,000 in 2003 reflecting higher legal costs associated with the SECs review of our proxy statement. Stock option compensation
decreased from $160,000 in 2002 to $140,000 in 2003 reflecting the expiration
of the vesting term for most options granted. Interest expense was $587,000
for the nine months ended June 30, 2003 compared to $767,000 for the nine
months ended June 30, 2002 reflecting the payoff of a substantial amount notes
payable. Depreciation expense was $377,000 in 2003 compared to $457,000 in
2002. No income was received in 2003 from the investment in the joint venture
as this interest was sold on July 1, 2002.

10



---



##### Table of Contents



Liquidity and Capital Resources

Net cash used in operations during the nine months ended June 30, 2003 was
$45,000. The largest items offsetting the net loss of $752,000 were
depreciation expense of $377,000 and stock option compensation of $140,000.
The increase of $110,000 in accounts payable and accrued liabilities consists
largely of the difference between the interest accruing on the Companys major
notes payable and the amount required to be paid on those notes. This amount is
deferred by agreement to the maturity date of the notes.

The Companys investing activities for the nine months ended June 30, 2003
used $276,000 consisting entirely of improvements to the Companys properties.

The Companys financing activities used $29,000 during nine months ended
June 30, 2003 consisting of regularly scheduled principal payments on tax
notes.

Cash and cash equivalents at June 30, 2003 totaled $169,000, down
$350,000 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, repayment of debt and maintenance
of working capital. Secured indebtedness of $11,982,000 will become due and
payable on September 30, 2003. Originally due September 30, 2001, the debts
were extended twice through substantial principal payments. An additional
extension from September 30, 2003 to September 30, 2004 is obtainable upon the
payment of $322,000 on or before September 30, 2003. Management believes that,
after years of pursuing refinance sources without success due to the taint of
the bankruptcy filings that resulted in the formation of the Company, the best
source of funds to repay and extend its secured indebtedness is the sale of the Companys assets, for which the Company intends to
solicit stockholder approval.

On May 1, 2002 the Company received an offer to purchase the facility in
Cumberland, MD for $3,300,000 and the Companys 25% interest in the joint
venture also located in Cumberland, MD for $200,000. These offers were made by
entities controlled by directors and officers Richard J. Westin and Jesse A.
Pittore. Prior to accepting the offers received, the Company held an auction of
the properties on June 5, 2002 after advertising the auction for the month of
May in the national edition of the Wall Street Journal and the Baltimore Sun.
The Company received 30 responses seeking additional information, which was
provided, but no bids were received. The sale of the joint venture interest
closed on July 1, 2002. The sale of the Cumberland, MD facility closed at the
end of August, 2002. The Company used the majority of the proceeds of these
two transactions to repay and thereby extend the due date of the secured
indebtedness from September 30, 2002 to September 30, 2003. Further sales of
the Companys assets are contemplated and are more fully explained in the preliminary proxy
statement filed with the SEC and currently under SEC review.

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.

11



---



##### Table of Contents






Item 3. Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive
officer and principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures, as such term is
defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended.  Based on this evaluation, our
principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as
of the end of the period covered by this quarterly report.

12



---



##### Table of Contents






PART II




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



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

|            |  |                                                      
|----------- |  | -----------------------------------------------------
|Exhibit No. |  | Description                                          
|            |  |                                                      
|11          |  | Statement regarding Computation of Per Share Earnings
|            |  |                                                      
|31.1        |  | Section 302 Certification of Chief Executive Officer 
|            |  |                                                      
|31.2        |  | Section 302 Certification of Chief Financial Officer 
|            |  |                                                      
|32.1        |  | Section 906 Certification of Chief Executive Officer 
|            |  |                                                      
|32.2        |  | Section 906 Certification of Chief Financial Officer 



| | (b) |  | Reports on Form 8-K. The Registrant filed no reports on Form 8-K during
the quarter ended June 30, 2003.
| | --- |  | --------------------------------------------------------------------------------------------------------

13



---



##### Table of Contents






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         
|                |  |                             
|August 14, 2003 |  | /s/ Richard J. Westin       
|                |  |                             
|                |  | Richard J. Westin,          
|                |  | Chief Executive Officer     
|                |  |                             
|August 14, 2003 |  | /s/ James P.
Tolley         
|                |  |                             
|                |  | James P. Tolley,            
|                |  | Chief Financial Officer and 
|                |  | Principal Accounting Officer

14



---



##### Table of Contents






EXHIBIT INDEX

TO QUARTERLY REPORT ON FORM 10-QSB

FOR AGEMARK CORPORATION

|            |  |                                                      
|----------- |  | -----------------------------------------------------
|Exhibit No. |  | Description                                          
|            |  |                                                      
|11          |  | Statement regarding Computation of Per Share Earnings
|            |  |                                                      
|31.1        |  | Section 302 Certification of Chief Executive Officer 
|            |  |                                                      
|31.2        |  | Section 302 Certification of Chief Financial Officer 
|            |  |                                                      
|32.1        |  | Section 906 Certification of Chief Executive Officer 
|            |  |                                                      
|32.2        |  | Section 906 Certification of Chief Financial Officer