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SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549

FORM 10- QSB

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

|FOR
QUARTER ENDED: | DECEMBER 31, 2002 |  | COMMISSION
FILE NO: | 0-2172
|------------------ | ----------------- |  | ------------------- | ------
|                   |                   |  |                     |       



|THE FLAMEMASTER CORPORATION                           
|------------------------------------------------------
|                                                      
|(Exact name of
Registrant as specified in its Charter)



|NEVADA                                                         | 95-2018730                          
|-------------------------------------------------------------- | ------------------------------------
|                                                               |                                     
|(State or other
jurisdiction of incorporation or organization) | (IRS Employer
identification Number)



|11120 SHERMAN WAY, SUN VALLEY, CALIFORNIA 91352
|-----------------------------------------------
|                                               
|(Address
of Principal Executive Office)        



Registrant's telephone number including area
code:
  (818) 982-1650Registrant's facsimile number including area
code:
  (818) 765-5603


Indicate by
check mark whether registrant (1) has 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.

|YESý | NOo
|---- | ---

Indicate the
number of shares outstanding of each of the issuer's classes of common stock,
as of the latest practicable date:

|December 31, 2002 | 1,401,802
|----------------- | ---------

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Item 1 Financial Information
Item 1 Financial Statement

THE FLAMEMASTER CORPORATION 
CONDENSED BALANCE SHEET

|                                                    | December 31, | 
|--------------------------------------------------- | ------------ | 
|
|
|                                                    |              | 
|A S S E T S :                                       |              | 
|Current Assets:                                     |              | 
|Cash and cash equivalents                           |              | 
|Marketable securities                               |              | 
|Accounts receivable, less allowance                 |              | 
|of $5,000                                           |              | 
|Notes Receivable                                    |              | 
|Inventories                                         |              | 
|Prepaid expenses                                    |              | 
|Income Tax Receivable                               |              | 
|Deferred income taxes                               |              | 
|Other investments                                   |              | 
|                                                    |              | 
|Total current assets:                               |              | 
|Machinery & improvements, net of                    |              | 
|accumulated depreciation                            |              | 
|License agreement, net of accumulated               |              | 
|amortization                                        |              | 
|                                                    |              | 
|TOTAL ASSETS                                        |              | 
|                                                    |              | 
|LIABILITIES AND STOCKHOLDERS EQUITY:               |              | 
|Current Liabilities:                                |              | 
|Accounts payable                                    |              | 
|Accrued liabilities                                 |              | 
|Deferred tax liability                              |              | 
|                                                    |              | 
|Total current liabilities:                          |              | 
|Long-term liabilities:                              |              | 
|Notes payable                                       |              | 
|                                                    |              | 
|Total Liabilities:                                  |              | 
|SHAREHOLDERS EQUITY:                               |              | 
|Common Stock, par value, $.01 per share,            |              | 
|authorized 6,000,000 shares; issued and outstanding |              | 
|1,401,802 shares at 12/31/02                        |              | 
|Additional paid-in Capital                          |              | 
|Retained earning                                    |              | 
|Allowance for marketable securities                 |              | 
|                                                    |              | 
|TOTAL STOCKHOLDERS EQUITY                          |              | 
|                                                    |              | 
|TOTAL LIABILITY AND EQUITY                          |              | 
|                                                    |              | 

See notes to condensed financial
statements.

2

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
CONDENSED  STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31,

|                                     | 2002 |  | 2001 |          
|------------------------------------ | ---- |  | ---- | ---------
|                                     |      |  |      |          
|Net Sales                            |      |  | $    | 1,111,883
|Royalties                            |      |  |      | 78       
|Interest and Other Income            |      |  |      | 64,495   
|                                     |      |  |      |          
|Total Revenues                       |      |  |      | 1,176,456
|                                     |      |  |      |          
|Costs and expenses:                  |      | 
|Cost of Sales                        |      |  |      | 596,627  
|Selling                              |      |  |      | 89,451   
|General and administrative           |      |  |      | 166,353  
|Laboratory                           |      |  |      | 95,796   
|Other (income)/ Expenses, Net        |      |  |      | 8,426    
|Interest on Convertible Notes        |      |  |      | 19,859   
|                                     |      |  |      |          
|Total Costs and Expenses             |      |  |      | 976,512  
|                                     |      |  |      |          
|Income before income taxes           |      |  |      | 199,944  
|Income taxes                         |      |  |      | 70,135   
|                                     |      |  |      |          
|Net income                           |      |  |      | 129,809  
|                                     |      | 
|Other comprehensive income           |      | 
|Net of income taxes                  |      | 
|Unrealized holding gains (losses)    |      |  |      | 540,457  
|                                     |      |  |      |          
|Comprehensive Income                 |      |  | $    | 670,266  
|                                     |      |  |      |          
|Net income per share, basic          |      |  | $    | .09      
|                                     |      |  |      |          
|Net income per share, diluted        |      |  |      | ***      
|                                     |      |  |      |          
|Weighted average shares outstanding: |      | 
|Basic                                |      |  |      | 1,404,254
|                                     |      |  |      |          
|Diluted                              |      |  |      | 1,659,103
|                                     |      |  |      |          

---

****   Diluted
earnings per share are not presented, as effect of the assumed conversion of
Notes Payable is anti-dilutive.

See notes to condensed financial
statements.

3

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31,

|                                                  | 2002 | 
|------------------------------------------------- | ---- | 
|                                                  |      | 
|Net cash provided (used) by operating activities: |      | 
|                                                  |      | 
|                                                  |     
|CASH FLOWS FROM INVESTING ACTIVITIES:             |      | 
|Purchase of equipment & improvements              |      | 
|Net purchases and sales of investment securities  |      | 
|                                                  |      | 
|NET CASH USED IN INVESTING ACTIVITIES:            |      | 
|                                                  |      | 
|CASH FLOWS FROM FINANCING ACTIVITIES:             |      | 
|Increase in notes payable                         |      | 
|Purchase of Companys Common Stock                |      | 
|Dividends paid                                    |      | 
|                                                  |      | 
|NET CASH USED IN FINANCING ACTIVITIES             |      | 
|                                                  |      | 
|                                                  |     
|NET INCREASE, (DECREASE), IN CASH                 |      | 
|                                                  |     
|Cash, beginning of period                         |      | 
|                                                  |      | 
|Cash, end of period                               |      | 
|                                                  |      | 
|                                                  |     
|                                                  |     
|Cash paid during period for income taxes          |      | 
|Cash paid during period for interest expense      |      | 

See notes to
condensed financial statements

4

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
DECEMBER 31, 2002

|Note 1: |  | Forward-Looking
and Cautionary Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |  | The
Company and its representatives may from time to time make written or oral forward-looking
statements, including statements contained in the Companys filings with Securities
and Exchange Commission and its reports to stockholders. In connection with the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995, the
Company is hereby identifying information that is forward-looking, including, without
limitations, statements regarding the Companys future financial performance, the
effect of government regulations, national and local economic conditions, the competitive
environment in which the Company operates, results or success of discussions with other
entities on mergers, acquisitions, or alliance possibilities and expansion of product
offerings. Actual results may differ materially from those described in the
forward-looking statement. The Company cautions that the foregoing list of important
factors is not exclusive. The Company does not undertake to update any forward-looking statements that may be made
from time to time by or on behalf of the Company.



|Note 2: |  | Basis of
Presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        |  | The
accompanying unaudited condensed financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information and with
the instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals), considered necessary for a fair
presentation have been included. Operating results for the three months ended December 31,
2002 are not indicative of the results that may be expected for the year ending September
30, 2003. For further information, refer to the consolidated financial statements and
footnotes thereto included in the Companys annual report on Form 10-KSB for the year
ended September 30, 2002.

5

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
DECEMBER 31, 2002

|Note 3: |  | Summary of
Significant Accounting Policies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Investment in Debt and Equity
Securities: The
Company adopted Statement of Financial Accounting Standards No: 115 (SFAS No:
115), Accounting for Certain Investments in Debt and Equity Securities, effective
January 1, 1995. Management determines the appropriate classification of its Investments in
debt and equity securities at the time of purchase and reevaluates such determination at
each balance sheet date. Debt securities for which the Company does not have the intent or
ability to hold to maturity are classified as available for sale, along with the
Companys investment in equity securities. Securities available for sale are carried
at fair value, with the unrealized gains and losses reported in a separate component of
shareholders equity net of income taxes, until realized. At December 31, 2002 the
Company had no investments that qualified as trading or held to maturity. The amortized
cost of zero-coupon debt securities classified as available for sale is adjusted for
accretion of discounts to maturity. Such amortization and interest are included in
interest income. Realized gains and losses are included in other income or expense. The
cost of securities sold is based on specific identification method.

6

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
DECEMBER 31, 2002

|Note 4: |  | Inventories are summarized as follows:
|------- |  | --------------------------------------

|                   | December 31, | 
|------------------ | ------------ | 
|
|                   |              | 
|Raw materials      |              | 
|Shipping materials |              | 
|Finished goods     |              | 
|                   |              | 
|                   |              | 
|                   |              | 
|                   |             



|Note 5: |  | During the three months ended December 31, 2002, the Company
purchased 5,908 shares of its outstanding common stock at a cost of $37,433.
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------



|Note 6: |  | MARKETABLE SECURITIES:
Marketable securities classified as current assets at December 31, 2002 include the following:
|------- |  | ---------------------------------------------------------------------------------------------------------------------



|                                   | Fair Value |  | Cost |          
|---------------------------------- | ---------- |  | ---- | ---------
|                                   |            |  |      |          
|U.S. Treasury obligations          |            |  | $    | 283,787  
|Other Government Bonds             |            |  |      | 38,501   
|Corporate debt securities          |            |  |      | 199,623  
|Mortgage backed securities         |            |  |      | 302,823  
|Marketable equity securities       |            |  |      | 1,916,001
|                                   |            |  |      |          
|                                   |            |  | $    | 2,740,735
|                                   |            |  |      |          
|The contractual maturities of debt |            | 
|securities available for sale at   |            | 
|December 31, 2002 is as follows:   |            | 
|
|                                   |            |  |      |          
|Due within one year                |            |  | $    | 69,835   
|Due after one year thru 5 years    |            |  |      | 85,773   
|Due after 5 years thru 10 years    |            |  |      | 81,103   
|Due after 10 years                 |            |  |      | 577,613  
|Not due at single maturity date    |            |  |      | 10,410   
|                                   |            |  |      |          
|                                   |            |  | $    | 824,734  
|                                   |            |  |      |          

Gross unrealized holding gains and
losses at December 31, 2002 were $212,936 and $1,148,563, respectively. Realized gains and
losses from the sale of securities for the three months ended December 31, 2002 were
$19,894 and $ 7,813 respectively.

7

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THE FLAMEMASTER CORPORATION 
Item 2: 
Managements Discussion and Analysis of Financial Condition and Results of
Operations:

December 31, 2002 compared to September 30, 2002 and December 31,
2002 compared to December 31, 2001.

FINANCIAL CONDITION AND LIQUIDITY:

The companys financial
condition is strong with current assets of $6,784,334 compared to current liabilities of
$166,843 at December 31, 2002 for a current ratio of more than 40.65 to 1. Working capital
increased to $6,617,491 on December 31, 2002 compared to $6,584,369 at September 30, 2002.
Cash and cash equivalents and marketable securities declined to $4,698,312 on December 31,
2002 from $4,717,915 at fiscal year end September 30, 2002. Accounts receivable decreased
moderately to $543,484 from $623,638 in the prior years quarter ended December 31,
2001. Inventories lowered significantly to $1,046,252 on December 31. 2002 from $1,270,159
in the year earlier period due to faster turn around time.

Revenues for the December 31, 2002
quarter declined moderately to $1,176,456 from $1,259,833 in the year earlier quarter.
Sales of aircraft sealants gained due to the requirement of the U.S. Military and defense
contractors. Sales of our flame retardant coatings decreased due to a sluggish economy and
a decline in corporate spending and expansion projects. Also affecting revenues was a
decline in investment and interest income.

Management believes that future
working capital requirements will be provided primarily from operations and that the
Companys liquidity and working capital requirements are adequate for the next 12
months of operation. Management believes that the Companys creditworthiness is
substantial relative to its size.

Flamemaster paid a $.032 dividend on
the Companys common stock during the quarter.

RESULTS OF OPERATIONS:

For the three months ended December
31, 2002 net income gained slightly to $129,809 from $125,439 or $.09 per share vs. $.09
per share in the year earlier period. The increase in earnings was due to sales of higher
margin products. Investment gains were moderately lower.

Laboratory costs, including research
and development for the quarter increased to $95,796 from $86,778 in the year earlier
quarter due to the hiring of additional personnel and a greater effort on developing more
high end products. General and Administrative expenses increased moderately to $166,353
from $159,718 in the prior year, while selling expense also rose modestly to $89,451 from
$88,602 due to increased salaries.

8

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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 hereunto duly
authorized.

|                  | THE FLAMEMASTER CORPORATION            
|----------------- | ---------------------------------------
|                  |                                        
|                  | (Registrant)                           
|                  |                                        
|DATE:             | JOSEPH MAZIN                           
|February 06, 2003 |                                        
|                  | (Signature)                            
|                  | Joseph Mazin, President and Chairman   
|                  | And Chief Executive Officer            
|                  |                                        
|DATE:             | MARY KAY EASON                         
|February 06, 2003 |                                        
|                  | (Signature)                            
|                  | Mary Kay Eason, Treasurer and Secretary
|                  |                                        
|                  |                                        
|DATE:             | DONNA MAZIN                            
|February 06, 2003 |                                        
|                  | (Signature)                            
|                  | Donna Mazin, Director                  



9

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CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TO 
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the accompanying
10-QSB of The Flamemastr Corporation (the Company) for the fiscal year ending
September 30, 2003, as filed with the Securities and Exchange Commission on the date
hereof (the Report), I, Joseph Mazin, CEO and CFO of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

|1. | I have reviewed the Report;
|-- | ---------------------------

|2. | Based on my knowledge, the Report does not contain any untrue statement of
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 10-QSB;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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,
for the periods presented in the Report;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | I am 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 is made known to me by others within the Company,
particularly during the period in which this 10-QSB is being prepared;
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b. |  | evaluated
the effectiveness of the Companys disclosure controls and procedures as
of a date within 90 days prior to the filing date of the Report (the Evaluation
Date); and
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | c. |  | presented
in the Report my conclusions about the effectiveness of the disclosure controls
and procedures based on my evaluation as of the Evaluation date;
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | I have disclosed, based on my most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or
persons performing the equivalent functions):
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a. |  | all
significant deficiencies in the design or operation of internal controls which could
adversely affect the Company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;
| |  | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------

|6. | I have indicated in the Report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of my most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weakness.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

/s/ Joseph Mazin
Joseph Mazin,      CEO and CFO 
      February 06, 2003