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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

     /x/        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

     / /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                 FOR THE TRANSITION PERIOD FROM _____ TO ______

                          COMMISSION FILE NO. 2-86551C

                       PEOPLES EDUCATIONAL HOLDINGS, INC.
           (NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)


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                           DELAWARE                                          41-1368898
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)  (I.R.S. EMPLOYER IDENTIFICATION NO.)
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            299 MARKET STREET, SADDLE BROOK, NJ              07663
            (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)       (ZIP CODE)

                                 (201) 712-0090
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

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 past twelve 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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. NOT APPLICABLE

State Issuer's revenues for its most recent fiscal year: $18,825,224

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates: $697,907. (See Item 5).

The number of shares outstanding of the Issuer's common stock on March 24, 2003
was 3,531,421

Documents incorporated by reference: NONE.
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                                TABLE OF CONTENTS

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                                                                        PAGE NO.
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PART I
        Item 1.    DESCRIPTION OF BUSINESS                                  1
        Item 2.    DESCRIPTION OF PROPERTY                                  6
        Item 3.    LEGAL PROCEEDINGS                                        6
        Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      6

PART II
        Item 5.    MARKET FOR COMMON EQUITY AND
                   RELATED STOCKHOLDER MATTERS                              6
        Item 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR
                   PLAN OF OPERATION                                        6
        Item 7.    FINANCIAL STATEMENTS                                    12
        Item 8.    CHANGES IN AND DISAGREEMENTS WITH
                   ACCOUNTANTS ON ACCOUNTING AND
                   FINANCIAL DISCLOSURE                                    12

PART III
        Item 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
                   AND CONTROL PERSONS; COMPLIANCE WITH
                   SECTION 16(a) OF THE EXCHANGE ACT                       13
        Item 10.   EXECUTIVE COMPENSATION                                  16
        Item 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                   OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
                   MATTERS                                                 18
        Item 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS          19
        Item 13.   EXHIBITS AND REPORTS ON FORM 8-K                        19
        Item 14.   CONTROLS AND PROCEDURES                                 20

SIGNATURES                                                                 21
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PART I

ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW AND COMPANY HISTORY

The Peoples Publishing Group, Inc. ("PPG") publishes, distributes, and markets
supplementary educational texts and related materials for the K - 12 market.
Supplementary educational materials are predominantly softcover books that can
be sold efficiently through catalogs, direct mail, telemarketing, and sales
representatives to the schools. The market for supplementary educational
materials consists of a large and growing number of distinct niches. PPG's
strategy is to develop and acquire products for individual niches.

PPG was founded in 1989 by James J. Peoples, the current Chairperson, and by
Diane M. Miller, the current Executive Vice President. It began operations in
1990 with the acquisition of a small supplementary product line aimed at the
high school remedial population. Effective November 1, 1998, PPG merged into a
subsidiary of Peoples Educational Holdings, Inc., a Minnesota corporation (the
"Company," formerly Concourse Corporation), a public company with minimal
operations. As a result of the merger, PPG became a wholly-owned subsidiary of
the Company. All of the Company's operations are currently conducted through
PPG. In November 2001, the Company reincorporated in Delaware.

PPG develops and sells its own proprietary products and also distributes other
publishers' products. PPG's current product line consists of supplementary
educational materials in three market niches:

       -      Test Preparation. PPG publishes materials for use by schools to
              help prepare students for required state proficiency tests, grades
              2 - 12.

       -      Instruction. Proprietary and distributed texts and related
              materials which focus on remedial and multicultural instruction
              for markets, grades K - 12.

       -      Advanced Placement. PPG is the exclusive distributor for the high
              school market of college texts published by two major college
              publishers. These texts are used in senior high schools for the
              Advanced Placement honors, college preparation and second year
              courses.

The Company, and PPG are located at 299 Market Street, Saddle Brook, NJ 07663.
The telephone number is (201) 712-0090; the website is
www.peoplespublishing.com. The contents of the Company's website are not part
of, or incorporated into, this report.

INDUSTRY BACKGROUND

The School Market

Enrollments

The National Center for Education Statistics (NCES) has projected the 2002 K -
12 public school enrollment to be 47.6 million and projects an all-time-high
enrollment of 47.9 million in 2005. The K - 8 grade portion of the enrollment in
2002 is projected at 33.7 million students, while the 9 - 12 projection is 13.9
million. K - 8th grade enrollment represents 71% of the total, and the 9 - 12
enrollment represents the remaining 29%. Increase in birthrates along with
immigration contribute to the enrollment growth. As enrollment grows, schools
require additional funds to hire teachers, build schools, and purchase
instructional materials.

Private K - 12 school enrollment projections are not as solid as the public
school projections, but NCES 2002 K - 12 enrollment projections were at 5.9
million students. The same growth factors that are fueling the public school
enrollment increases are expected to impact private school enrollments. In
addition, enrollments may increase as a result of states like Michigan,
Wisconsin, and Florida providing vouchers for students moving from under
performing public schools to private schools. (Source: National Center for
Education Statistics to 2012, May 2002)



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Educational Funding

School funding has traditionally been provided by the states (49.5%) and local
government funds (43.2%). The federal government financial contribution to
schools has declined over the past several years and currently accounts for
approximately 7.3% of the total. For the 2002 - 2003 school year, several
states, responding to accelerated deficits, have reduced school funding support.
Fourteen states have excluded K - 12 education from budget cuts including
Colorado, Hawaii, Idaho, Indiana, Kentucky, Mississippi, Nevada, New Jersey,
North Carolina, Ohio, and Washington. The remaining 38 states vary as to their
fiscal condition but all are concerned or pessimistic about maintaining school
funds at the 2002 level. (Source: The Fiscal Survey Of States: National Governor
Association, November 2002)

In early 2002, Congress passed and the president signed the revised Elementary
and Secondary Education Act (ESEA). The last authorization of the ESEA was in
1994. The new ESEA, called "No Child Left Behind," provides for the largest
dollar increase ever in federal funding for education. Because much of the new
federal money failed to reach states and schools in 2002, and confusion
regarding rules and regulations slowed state application fees and funds, the "No
Child Left Behind" Act had little impact in 2002 and won't be felt until 2003.
Although the federal money will be helpful, the state budget crisis is severe
enough that the Company expects that school districts will be cautious when it
comes to instructional material purchases. (Source: Council of Chief State
School Officers as of February 4, 2003 and Simba January 6, 2003)

Instructional and Textbook

For the period 1999 - 2001 the K-12 instructional materials market grew at a
compound annual growth rate of 9.9%. In 2002, the sales declined 5.0%. High
school sales declined 5.8% and elementary school sales were down 4.8%. For 2003
sales are expected to increase only slightly or remain flat. (Source:
Association of American Publishers Year End December 2002)


Supplementary Materials Funding

PPG operates in the supplementary materials market segment, which is a subset of
the larger Instructional Materials and Textbook market. Supplementary materials
include workbooks, multimedia, electronic, and other products focused on
specific skills, standards, or subject areas. The Company believes supplemental
materials, which represent smaller expenditures, will fair better than the
high-cost basal textbook market in part because budget conscious school
administration will find it easier to support the purchase of supplementary
materials and will delay the purchase of basal textbooks.

Test Preparation Funding

Although no funding figures are available from an outside source for the test
preparation market, all states have state standards-based assessment
requirements that are linked to graduation or promotion, and hold schools
accountable for results by rating the performance of all schools or identifying
low-performing ones. In most states, tests are given two to three times in a
student's school life. The Company believes that test preparation is one of the
fastest growing niches in the supplementary materials market due to the present
political mandate of school accountability. As such, schools and school
districts will continue to aggressively purchase test preparation materials to
meet these needs.

The "No Child Left Behind" Act of 2001 is expected to increase the
accountability pressure on all the states. States are being forced to revise
their existing assessment programs to comply with the new federal mandates
requiring states to administer annual reading and mathematics tests to all
students in grades 3 - 8 by 2005 - 2006. States are still free to design their
own tests, but they must be aligned with their academic standards. In addition
to the annual testing in grades 3 - 8 in reading and mathematics, ESEA also
requires that states test students at least once in grades 10 - 12 in reading
and mathematics. Also by 2007 - 2008, the states will be required to give
students a science test at least once in grades 3 - 5, 6 - 9, and 10 - 12.
States that fail to meet the new testing requirements stand to lose federal
funding and assistance. The new legislation will impact virtually every public
school in the country. The state standards-based products, like those published
by PPG, are expected to play an important instructional role in preparing
students for the new tests. The federal legislation increases accountability
pressure uniformly across all states. The current accountability pressure to
prepare students for the existing state tests is a primary driver of classroom
instruction. The new role of the federal government is expected to further
increase the accountability pressure in schools and provide an increased
opportunity for sale of PPG test preparation materials. The growth in demand for
test preparation and other supplementary

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educational materials has outpaced the growth in demand for basal, mainstream
textbooks because of increasing pressure from parents, colleges, and employers
for improved student performance and for accountability by schools and teachers,
and repeated reports highlighting the poor comparative performance of U.S.
students in mathematics and science.

Advanced Placement Funding

Advanced Placement materials are used in high school courses for college credit
using college textbooks. PPG has agreements with two college publishers giving
PPG exclusive rights to distribute these publishers' college texts to high
schools. Several factors support optimistic funding predictions for Advanced
Placement programs including the increased emphasis on state standards,
accountability, testing, and an annual double-digit growth in the number of
students taking the Advanced Placement examinations. According to the College
Board, 937,951 students were enrolled in Advanced Placement courses in 2002,
with 1,571,918 Advanced Placement exams taken that year. Between 2001 - 2002,
the number of Advanced Placement students increased by 11.0%. (Source: College
Board.) High scores on the Advanced Placement examination add to a school's
prestige and recognition as a quality school.

PRODUCTS

Print supplementary educational materials are predominantly softcover books that
can be sold efficiently through catalogs, direct mail, telemarketing and sales
representatives to the schools. The market for supplementary educational
materials consists of a large and growing number of distinct niches. PPG's
strategy is to develop products for individual niches. PPG develops and sells
its own proprietary products and also distributes other publishers' products.
PPG's current product line consists of supplementary educational materials in
three market niches:

       -      Test Preparation: PPG publishes proprietary materials for use by
              schools to help prepare students for required state proficiency
              tests, grades 2 - 12. Given the increasing legislative mandates
              and funding for testing of all public school students several
              times throughout their K - 12 education, PPG took the initiative
              during 1997 of entering the test preparation market by developing
              a successful group of test preparation materials. The test
              preparation materials represented approximately 40.6% of the
              Company's 2002 product line revenue.

       -      Instruction: Proprietary and distributed texts and related
              materials which focus on remedial and multicultural instruction
              grades K - 12. PPG's current Instruction products include a
              particular emphasis on social studies and life skills. Instruction
              materials represented approximately 7.1% of the Company's 2002
              product line revenue.

       -      Advanced Placement: PPG is the exclusive distributor of college
              texts published by two college publishers. These texts are used in
              senior high schools as part of Advanced Placement and honors
              classes. Advanced Placement revenues represented approximately
              52.3% of the Company's 2002 product line revenue. The Advanced
              Placement program, sponsored by the College Board, is an intense
              program of college level curricula and examinations that provide
              high school students with an opportunity to earn advanced
              placement, college credits, or both at nearly 3,000 universities
              and colleges across the country.

PRODUCT DEVELOPMENT

PPG combines its internal product development resources with outside freelance
talent to develop and design its proprietary products in a cost-effective
manner. PPG utilizes a variety of outside authors, writers, editors, and
development houses to develop products. Sometimes this outside talent is
compensated with a flat fee, sometimes with a royalty contract where payment is
made contingent on actual sales of the product. Some authors, especially Test
Preparation authors, are provided advances against future royalty earnings.
Royalties paid by PPG range from 0.5% to 15.0%.

PPG's Editorial Department expanded in 2002 with the addition of 4 full time
editors. With this expansion, the responsibility for maintaining editorial
quality, schedules, and budgets has shifted from authors to PPG. Having
editorial procedures in place and the staff to implement those procedures are
expected to result in timely product that meets the needs of the market.



                                       3
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PPG's book production, comprised of design, art and graphics, page makeup, and
permissions, is carried out by a combination of in-house staff and contracted
personnel with tight in-house control. PPG maintains an in-house system of
computers, scanners, and advanced software to maximize state-of-the-art
computer-based layout systems, making it possible to complete nearly the entire
production cycle in-house, resulting in digitized material.

A book concept can originate from a number of sources such as (i) analysis of
PPG's sales statistics for an existing book to help assess how a similar book in
a similar subject area will perform, (ii) analysis of demographics and other
social and economic factors from current philosophical trends in education,
(iii) review of competitors' books to determine if and how PPG can publish a
superior book on a similar topic, and (iv) maintaining close personal contact
with current successful authors and writers, teachers, administrators,
counselors, and distributors as they come forward with ideas. Once conceived, a
book proposal is circulated to the management group for input. Depending on
their input and additional market research, the proposal will go forward or be
terminated. A pro forma financial statement is prepared to aid in determining if
the new title is desirable for publication. If there is a favorable decision,
PPG will contract with an appropriate author or writer. PPG believes it has
excellent relationships with its authors, including many well-known names in the
field.

All printing is contracted to outside vendors by competitive bidding. All
printers utilized by PPG are located in the United States. The Company does not
rely on the services of any one printer.

PPG's products require varying periods of development time depending upon the
complexity of the graphics and design and the writing and editing process. Most
of PPG's multi-book programs can be developed in a period that ranges from six
to eighteen months. The Company believes that PPG's use of outside authors,
illustrators, and freelancers for writing, editing, some artwork, some design,
and copy editing allows PPG to produce the budgeted number of books per year
with a relatively small staff and allows the flexibility needed for PPG to
continue to produce and expand its product lines and retain flexibility to enter
niches with new product lines, such as Test Preparation, quickly.

CUSTOMER BASE

No customer during 2002 or 2001 represented more than 10% of total revenues.

SALES, MARKETING, AND DISTRIBUTION

Overview

PPG conducts its sales activities through an inside sales group, direct mail,
conventions, workshops, and outside sales representatives, which consist of both
salaried and independent representatives. The Company believes this system is
well suited to the supplementary educational material market where purchasing
decisions are typically made at the local or school level. As the Company grows,
the sales and marketing infrastructure will expand along with increases in the
numbers of inside and outside sales representatives.

Over the past 11 years, PPG has created niche catalogs, built an in-house
customer list, and systematically mailed catalogs each school year (September -
June), reaching approximately 250,000 catalogs mailed in 2002.

PPG continues to add resources to grow its marketing and sales efforts. Test
Preparation and Advanced Placement distribution will benefit from additional
resources. In 2002, the marketing and sales departments increased significantly.
For 2003, PPG plans to add an Adoption Manager and additional field and sales
representatives. PPG also intends to increase marketing spending for teacher
workshops and staff development, sample books, exhibits, advertising, direct
mail, and marketing support.

Integrated Catalog/Inside and Outside Sales Model

In the 2002 - 2003 school year, approximately 250,000 copies of three catalogs
will reach PPG's various market niches and include both proprietary and
distributed products. Catalogs are mailed to house lists and other appropriate
contact individuals at K - 12 school sites throughout the United States.
Catalogs are generally produced and mailed for each product line two to three
times per year. Inside and outside sales representatives work collaboratively to
close sales to PPG's customers and prospects. The sales activities are supported
by a computerized contact management and database system.



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Website

The PPG website (located at www.peoplespublishing.com) contains an online
catalog of PPG's remedial titles, multicultural titles, test preparation titles,
specific state standards, and tests, as well as Advanced Placement links to the
two college publishers whose materials PPG distributes. The website also
contains information on PPG, information on manuscript submission, a form for
requesting review copies of titles, sample lessons, useful sections for
teachers, and for links to 9 state-specific websites for the Measuring Up
Series. (www.standardshelp.com)

Sales Representatives

PPG utilizes the services of outside representatives to sell PPG's products. PPG
ended 2002 with 45 independent sales representatives and 2 salaried
representatives in the field. Additionally, PPG employs 15 inside sales
representatives, who sell primarily through telemarketing. The Company plans to
continue utilization of a sales organization with a mix of independent and
salaried sales representatives.

Warehouse and Distribution

PPG has outsourced warehousing and distribution/shipping services to Mercedes
Distribution Center (MDC), located in Brooklyn, NY. MDC warehouses and ships
PPG's Instruction and Test Preparation products. Orders for Advanced Placement
materials are billed by PPG and drop shipped by the college publishers to PPG's
customers. PPG operates and maintains its own internal data processing system.
MDC provides the warehousing and distribution/shipping services. The services
that MDC provides are material to PPG.

COMPETITION

In 2001, the print portion of the supplementary educational publishing market
size was estimated at $1.6 billion. Print supplements accounted for 25% of the
media used in U.S. classrooms in 2000; about half of the 48% share held by
textbooks. Print supplements, as a segment, grew at a compound annual growth
rate of 14.5% between 1998 - 2000. The top nine supplementary publishers
accounted for approximately $1.0 billion or 67.0% of the 2000 supplemental
sales. These sales cover a wide variety of print products, including workbooks,
magazines, and library/trade books (non-textbooks) used in schools. The leading
supplemental publishers are McGraw-Hill, WRC Media, Scholastic, and Pearson
Education. (Source: Print Publishing for the School Market: 2001 - 2002 Reviews,
Trends, and Forecast)

There are also numerous other companies, and divisions of the large companies
noted above, that are competitors of PPG. These publishers include American
Guidance Systems (remedial materials), Educational Design (test preparation),
Curriculum Associates (test preparation), and Globe Books (remedial and
multicultural). In addition, the Company competes with the major college
publishers who sell their textbooks and other products in the high school
Advanced Placement market. Many of the Company's competitors are
well-established, significantly larger, and have substantially greater financial
and marketing resources than the Company.

PROTECTION OF PROPRIETARY RIGHTS

All of PPG's books have been copyrighted in the United States with United States
rights, most in the name of PPG. On the few titles that are copyrighted by the
author, PPG has secured unlimited exclusive rights to sell and update the
titles. Therefore, PPG owns the exclusive rights to exploit the copyright in the
marketplace. On books created in-house by PPG, PPG has registered United States
rights for all markets, including first and second serialization, commercial
rights, electronic rights, foreign and translation rights, reprint rights, and
rights to any means yet to be developed for transmitting information in any
form. There are a limited number of books for which foreign rights and
electronic rights will revert to the author if PPG does not exploit them in a
given period of time, usually within two years after publication. Foreign rights
are not usually lucrative for supplementary materials, but opportunities are
considered on a one-by-one basis. PPG believes it has adequately protected its
copyrights, but the loss of copyrights or failure of copyright protection could
have a material adverse effect on the Company.

EMPLOYEES

As of December 31, 2002, the Company had approximately 97 employees. The Company
has never experienced a work stoppage and its employees are not covered by a
collective bargaining agreement. The Company believes its relations with its
employees are good.


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ITEM 2.  DESCRIPTION OF PROPERTY

The Company and PPG own no real property. The Company and PPG conduct their
operations in one facility. PPG leases approximately 13,000 square feet of
office space in Saddle Brook, New Jersey, at a current rental of $203,000 per
year. This lease expires October 31, 2004.

ITEM 3.  LEGAL PROCEEDINGS

The Company is not currently a party to any material legal proceedings.

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

NONE

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock was traded over the counter by broker/dealers in the
Minneapolis-St. Paul, Minnesota, metropolitan area from approximately December
1983 until October 1996, when all active trading ceased. Trading in the
Company's common stock had been extremely limited since at least 1993. The last
bid quote known to the Company for the Company's common stock was published as
of the close of business on October 22, 1996, and was $0.005 per share ($0.10 if
adjusted for the 20-to-1 reverse stock split which occurred after the date of
the last bid). The Company is unaware of any broker/dealer who has published bid
or asked quotations for the Company's common stock since October 22, 1996.

There were approximately 244 shareholders of record as of February 12, 2003,
including the Depository Trust Company which held 40,611 shares. The Company has
not paid any dividends on its common shares in the past two years and
anticipates retaining future earnings, if any, to finance operations of the
Company.

In December 2002, the Company borrowed $1,000,000 under a subordinated
convertible note payable to its largest stockholder. This note, plus accrued
interest, was converted to 289,785 shares of common stock at a conversion price
of $3.50 per share in February 2003.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS


FORWARD - LOOKING STATEMENTS

This Form 10-KSB contains forward-looking statements regarding the Company, PPG,
and their markets as defined in section 21E of the Securities Exchange Act of
1934. These forward-looking statements involve a number of risks and
uncertainties, including (1) demand from major customers, (2) effects of
competition, (3) changes in product or customer mix or revenues and in the level
of operating expenses, (4) rapidly changing technologies and the Company's
ability to respond thereto, (5) the impact of competitive products and pricing,
(6) local and state levels of educational spending, (7) the Company's and PPG's
ability to retain qualified personnel, (8) PPG's ability to retain its
distribution agreements in the Advanced Placement market, (9) the sufficiency of
PPG's copyright protection, and (10) PPG's ability to continue to rely on the
services of Mercedes Distribution Center, and other factors disclosed below and
throughout this report. The actual results that the Company or PPG achieve may
differ materially from any forward-looking statements due to such risks and
uncertainties. The Company undertakes no obligation to revise any
forward-looking statements in order to reflect events or circumstances that may
arise after the date of this report. Readers are urged to carefully review and
consider the various disclosures made by the Company in this report, including
the discussion set forth below and in the Company's other reports filed with the
Securities and Exchange Commission from time to time that attempt to advise
interested parties of the risks and factors that may affect the Company's
business and results of operations.



                                       6
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INTRODUCTION

PPG was incorporated in Delaware in 1989 and on March 19, 1990, completed an
asset purchase of a high school remedial education product line from New Readers
Press, a division of Laubach Literacy International. Effective November 1, 1998,
PPG merged into a subsidiary of Peoples Educational Holdings, Inc., a Minnesota
corporation ("the Company," formerly Concourse Corporation), a public company
with only minimal operations. As a result of the merger, PPG became a
wholly-owned subsidiary of the Company. In November 2001, the Company
reincorporated in Delaware. All of the Company's operations are currently
conducted through PPG. For accounting purposes, the merger was treated as if PPG
acquired Concourse Corporation in a purchase transaction.

Critical Accounting Policies

Our significant accounting policies are summarized in the footnotes to our
financial statements. Some of the most critical policies are also discussed
below.

The Company recognizes revenue upon shipment and estimates returns, if the right
of return exists. The allowances for returns are recorded as a reduction of
accounts receivable and are determined based on the Company's historical returns
experience, which is monitored on a monthly and annual basis.

The Company provides credit to its customers on a customer-by-customer basis.
The Company reviews the accounts receivable aging on a monthly basis along with
historical loss experience to estimate its allowance for doubtful accounts. The
allowance for doubtful accounts of $51,000 is believed to be adequate for any
exposure to loss at December 31, 2002.

The Company continuously monitors its inventory on hand for salability. This
monitoring includes review of historical sales experience, projected sales
activity by title, and any planned changes to a title that is known by
management. Any slow-moving or non-salable inventory identified is reserved or
written down at that time.

Prepublication costs, including advanced royalties beginning in 2001 are
amortized over three years (the estimated minimum lives of the related
publications) beginning from the date of initial publication. Prepublication
costs are continuously monitored for impairment by reviewing historical sales
experience of similar publications and projected sales activity. If impairment
is determined, the impaired publication is written off at that time.

Recently Issued Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement 144, Accounting for Impairment or Disposal of Long-Lived Assets.
Statement 144 addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and will be effective for the Company's fiscal
year ending December 2003. The Company does not believe that the adoption of
this pronouncement will have a material effect on its consolidated financial
statements.

In June 2002, the FASB issued Statement 146, Accounting for Costs Associated
with Exit or Disposal Activities. This Statement requires the recognition of a
liability for a cost associated with and exit or disposal activity when the
liability is incurred versus the date the Company commits to an exit plan. In
addition, this Statement states the liability should be initially measured at
fair value. The Statement is effective for exit or disposal activities that are
initiated after December 31, 2002. The Company does not believe that the
adoption of this pronouncement will have a material effect on its financial
statements.

In January 2003, the FASB issued Statement 148, Accounting for Stock-Based
Compensation -- Transition and Disclosure. This statement provides alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, Statement 148
also amends the disclosure requirements of Statement 123 to require more
prominent and frequent disclosures in the financials statements about the
effects of stock-based compensation. The transitional guidance and annual
disclosure provisions of Statement 148 is effective for the December 31, 2002
financial statements. The interim reporting disclosures requirements will be
effective for the Company's March 31, 2003 10-QSB. Because the Company continues
to account for employee stock-based compensation under APB opinion No. 25, the
transitional guidance of Statement 148 has no effect on the financial statements
at this time. However, the December 31, 2002 financial statements have
incorporated the enhanced disclosure requirements of Statement 148 as presented
below under the caption "Stock Based Compensation".

In January 2003, the FASB issued Interpretation No. 45 (FIN 45), Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. FIN 45 clarifies that a guarantor is
required to

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recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing certain guarantees. It also elaborates on
the disclosures in FASB Statement No. 5, Accounting for Contingencies, which are
to be made by a guarantor in its interim and annual financial statements about
its obligations under certain guarantees that it has issued, even when the
likelihood of making any payments under the guarantees is remote. The Company
does not believe that the adoption of this pronouncement will have a material
effect on its consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46) , Consolidation
of Variable Interest Entities. This interpretation establishes standards for
identifying a variable interest entity and for determining under what
circumstances a variable interest entity should be consolidated with its primary
beneficiary. Until now, a company generally has included another entity in its
consolidated financial statements only if it controlled the entity through
voting interests. FIN 46 changes that by requiring a variable interest entity to
be consolidated by a company if that company is subject to a majority of the
risk of loss from the variable interest entity's activities or is entitled to
receive a majority of the entity's residual returns or both. The requirements of
FIN 46 will apply to the Company for its quarter ended September 30, 2004. The
Company does not believe that the adoption of this pronouncement will have a
material effect on its consolidated financial statements.

REVENUE

Overview

2002 was a record revenue year for PPG, with product line revenues of
$17,359,000, an increase of 19.4% from 2001. The increase in 2002 revenues was
led by a 57.8% growth in Test Preparation revenue, and a 19.3% growth in
Advanced Placement revenue, offset by a decrease of 49.9% in Instruction revenue
as reflected in the following table.

<TABLE>
<CAPTION>
                                           2002             2001           Variance         % Variance
                                       -----------      -----------      -----------       -----------
<S>                                    <C>              <C>              <C>               <C>
Product Line Revenue
Test Preparation                       $ 7,048,000      $ 4,465,000      $ 2,583,000              57.8%
Advanced Placement                       9,076,000        7,609,000        1,467,000              19.3%
Instruction                              1,235,000        2,463,000       (1,228,000)            (49.9%)
                                       -----------      -----------      -----------       -----------
       Total Product Line Revenue       17,359,000       14,537,000        2,822,000              19.4%
Shipping and Handling Revenue            1,466,000        1,218,000          248,000              20.4%
                                       -----------      -----------      -----------       -----------
             Total Revenue             $18,825,000      $15,755,000      $ 3,070,000              19.5%
                                       ===========      ===========      ===========       ===========
</TABLE>

Test Preparation

Test preparation product line revenue was $7,048,000 in 2002 compared to
$4,465,000 in 2001, representing a 57.8% increase. The revenue growth can be
attributed to increased market penetration within states where the Company has
products, and the release of new products into a new state. In 2001, the Company
had state-specific products for seven states. In 2002, the Company had
state-specific products published for eight states. All test preparation
products are proprietary, and management believes this niche will continue to be
the Company's fastest growth area in the future. This expansion is not without
major competitors and similar efforts by other publishers will make this arena a
hotly contested environment.

Advanced Placement

Since its inception, PPG has been active in the marketing and selling of college
books and products to the advanced placement high school market. PPG has
exclusive sales and marketing agreements with two major college publishers who
do not have school divisions to sell their books into the high school market.
The distribution agreements are exclusive and cover all sales made to the K - 12
market, including each publisher's college, trade, and professional products.
Both agreements require PPG to reach annual sales performance targets and
include noncompete language which restricts PPG from selling works that compete
directly with the college publishers' products. The exclusive nature of both
agreements provides the basis upon which PPG commits considerable sales and
marketing resources to grow Advanced Placement sales. The loss of either
publisher agreement would have a material adverse effect on PPG's revenue and
net income. One of the agreements has been in place for twelve years and has an
expiration date of September 2005. The other agreement has been in place for six
years and has an expiration date of November 2004.

Advanced Placement product line revenue was $9,076,000 in 2002 compared to
$7,609,000 in 2001, representing an

                                       8
<PAGE>
increase of 19.3%. In 2002, the revenues from one of the college publishers
increased by 35.2% over 2001 while revenues from the other decreased by 6.2%.
The revenue increase from the one publisher was a result of several state,
county, and district level science and math adoptions being achieved, marking
significant increases in revenue. Going forward, intense focus is being placed
on high revenue adoption markets. In addition, plans to focus on the
ever-growing private and parochial markets are in place. The revenue decrease
from the other publisher was primarily due to the industry wide decline in K-12
non-adoption territory sales. The Company is in early stage discussion with this
college publisher to enter select state adoptions starting in 2003.

Instruction

Instruction products include two sales sources referred to as student-at-risk
and multicultural. Both include a mix of proprietary and nonproprietary titles.
PPG's sales and marketing emphasis is on proprietary products, and PPG uses
distributed products to round out or fill in a full catalog of product offerings
for PPG's customers. Instruction revenue decreased 49.9% in 2002 over the prior
year. Approximately half of this decrease can be attributed to a $608,000
isolated sale of a proprietary student-at-risk title to a large midwest school
district in 2001, which was not repeated in 2002. The remaining decrease is a
result of the Company shifting its strategic focus from this product line to its
Test Preparation and Advanced Placement product lines. We expect further revenue
decline in this product line in the future.

GROSS PROFIT AND COST OF REVENUE

Gross Profit increased from $6,697,000 in 2001 to $7,767,000 in 2002. Gross
Profit percentage decreased from 42.5% in 2001 to 41.3% in 2002. The increase in
dollars is a result of increased overall revenue growth. The decrease as a
percentage of revenue is primarily due to the increase in prepublication
amortization expense, which increased from 4.6% of revenue in 2001 to 6.4% of
revenue in 2002 due to an increase in number of books published.

Cost of Revenue consists of (1) product cost, which includes paper, printing,
binding, and prepress costs for proprietary products and product purchases for
non-proprietary products, (2) amortization of prepublication costs for
proprietary products, (3) royalty for proprietary products, and (4) warehousing
and shipping costs for proprietary and distributed products.

Product cost increased slightly from 43.2% in 2001 to 43.5% in 2002. The slight
fluctuation is due to product mix. Revenue for proprietary product within the
Instruction product line decreased $1,009,000 from the prior year. These
proprietary Instruction products have a slightly lower product cost than Test
Preparation and Advanced Placement products. As a result, product costs have
increased slightly along with the increased focus on Test Preparation and
Advanced Placement markets.

Prepublication costs include all the one-time expenses associated with
developing and producing new or revised proprietary products. Prepublication
costs include all editorial expenses, writing, page design and makeup, art and
other permissions, prepress, and any other costs incurred up to the print/bind
stage of the books. These prepublication costs also include expenses incurred
for other forms of product development, such as expert reviews. Such product
development usually involves creating sample lessons for each content area of a
prospective title; PPG then obtains feedback on these samples, which it applies
to the creation of the rest of the book. Prepublication costs are capitalized
and expensed over a three-year period beginning on the in-stock date of new and
revised products. PPG believes its policy for a three-year amortization schedule
is conservative and in line with industry practice. For 2002, PPG amortized
$1,212,000 of prepublication costs as compared to $731,000 in 2001. In book
publishing, prepublication expenditures serve as an important financial
indicator of new product commitment. For 2002, PPG's prepublication expenditures
increased 78.2% and were $3,406,000 compared to $1,911,000 in 2001.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

<TABLE>
<CAPTION>
                                            2002             2001           Variance        % Variance
                                        -----------      -----------      -----------       ----------
<S>                                     <C>              <C>              <C>               <C>
Selling, General and Administrative     $ 6,739,000      $ 5,454,000      $ 1,285,000          23.6%
</TABLE>

Selling, General and Administrative expenses increased by $1,285,000 from 2001
to 2002. As a percent of total revenues, these expenses increased from 34.6% to
35.8% of revenue.

The marketing and selling expenditures portion of the total increased by
$1,256,000 from 2001 to 2002, and from 16.6% to 20.4% of revenue. The 3.8%
increase as a percent of revenue is due to an increase in compensation expense
for

                                       9

<PAGE>
marketing and selling personnel (2.6%) and an increase in commission expense
paid to third party sales representatives (1.3%).

The general and administrative expenditures portion of the total was $2,833,000
in 2001 and $2,862,000 in 2002, representing a $29,000 increase. Salaries,
benefits, and taxes increased $226,000 from 2001 to 2002. This increase was
partially offset by a decrease of $135,000 in employment fees. In 2001 the
Company incurred expenses relating to the hiring of Brian Beckwith as the
Company's Chief Executive Officer and President. In addition, during 2001, the
Company entered into a new bank financing arrangement and incurred additional
amortization of bank financing costs of $75,000.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities for 2002 was $2,817,000. Cash was
primarily provided by the predepreciation and amortization profitability of the
Company, reductions in inventory and advance royalties and an increase in
accounts payable, offset by an increase in accounts receivable, prepaid catalog
expense and income taxes payable.

Accounts receivable and accounts payable increased as a result of increased
revenues and the costs associated with those revenues. Inventory decreased due
to improved controls and forecasting.

Net cash used in investing activities was $3,616,000, consisting of
prepublication expenditures of $3,406,000, and equipment purchases of $210,000.

Net cash used in financing activities was $327,000, consisting primarily of
repayment of borrowings under the Company's line of credit of $800,000 and
principal payments on long term debt of $42,000, offset by the issuance of
additional debt and capital leases of $1,169,000.

At December 31, 2002, the Company had a line-of-credit agreement with a bank
which allowed for total borrowings of up to $5,500,000, subject to renewal on
August 20, 2003. The agreement specified that $4,000,000 of the total borrowings
were under a two-year revolving credit agreement, with $1,000,000 of these
borrowings available for acquisitions, and that $500,000 of the total borrowings
were under a one-year revolving credit line and were available to support
deferred prepublication costs.

On February 24, 2003, the Company closed on a new $6,500,000 financing
arrangement with a financial institution. The arrangement includes three
separate revolving lines of credit. The arrangement provides for advances up to
$4,000,000 over two years, subject to borrowing base restrictions limited to 80
percent of eligible accounts receivable and 35 percent of inventory. The second
line of credit is $2,000,000 over two years, while the final $500,000 line of
credit is for a one-year period. All three lines of credit bear interest at
LIBOR plus 2.25 percent. Total borrowings are secured by substantially all
assets of the Company and are subject to certain financial covenants.

In December 2002, the Company borrowed $1,000,000 under a subordinated
convertible note payable to its largest stockholder. The terms of this note
provide for quarterly interest payments at a rate of 10 percent with principal
due December 30, 2004, and conversion into common stock if the Company secures a
certain level of debt financing. As a result of the aforementioned new financing
agreement this note, plus accrued interest, was converted to 289,785 shares of
common stock at a conversion price of $3.50 per share in February 2003.

A summary of the Company's contractual cash obligations at December 31, 2002,
giving effect the payments referred to above related to the Company's new credit
facility and to lease obligations, are as follows:

<TABLE>
<CAPTION>
                                                                              PAYMENTS DUE BY PERIOD
CONTRACTUAL CASH OBLIGATIONS                      TOTAL          2003           2004           2005           2006           2007
----------------------------                      -----          ----           ----           ----           ----           ----
<S>                                            <C>            <C>            <C>            <C>            <C>            <C>
Notes Payable Under Line of Credit             $  600,000     $  600,000     $       --     $       --     $       --     $       --
Capital Leases (including interest portion)       344,000        108,000        106,000        106,000         24,000             --
Operating Leases                                  476,000        259,000        208,000          9,000             --             --
                                               ----------     ----------     ----------     ----------     ----------     ----------
Total                                          $1,420,000     $  967,000     $  314,000     $  115,000     $   24,000     $       --
                                               ==========     ==========     ==========     ==========     ==========     ==========
</TABLE>


                                       10
<PAGE>
The Company believes that its cash and line of credit, together with cash
generated from anticipated sales and gross profit, will be sufficient to meet
its normal cash needs in 2003. The Company intends to continue investing in
prepublication costs for its proprietary, and test preparation products to the
extent cash flow allows. As the Company develops these products for more states,
additional investment in inventories will be required.

PRODUCT DEVELOPMENT

2002 was an active product development year. The Company entered one new state
with test preparation material and supplemented existing states with revisions
of older titles and additional books. Additional resources were committed to
strengthen both the internal book production and editorial departments and to
add outside editorial and author development capabilities needed to support an
ambitious 2003 test preparation publishing plan.

The state test preparation market continues to grow as the states demand higher
academic performance from students. Most states have high stakes testing
requirements, which means that students, teachers, and administrators are
rewarded for positive test performance or penalized for poor performance. The
support for state standards and testing has been considerably enhanced by the
mandated testing of all grade 3 - 8 students in the new ESEA federal
legislation. Presently, the Company publishes test preparation products for
eight states. During 2003, the Company intends to enter one additional state and
supplement existing states with additional products.

The Company has developed a strategy to develop new supplemental products that
align with state standards in mathematics, reading, and language arts for grades
2 - 12. Essential to this strategy is the market alignment of the instruction
and test preparation products so that both product lines are suitable for sale
to an identical customer base. This means that inside and outside sales and
catalog sales efforts will be synergistic, rather than isolated, unrelated
efforts. The Company has no plans at this time to update any student-at-risk or
multicultural backlist titles, and will not seek new title development in these
two areas. In multicultural publishing, the Company completed a significant
revision of the successful African American History: A Journey of Liberation
text in March 2001.

Presently, PPG does not produce any proprietary products for the advanced
placement market. However, the Company is considering a publishing program to
produce proprietary advanced placement supplements and ancillary materials.
PPG's products will not compete with any existing publisher agreements and will
be crafted as supplements to help teachers and students with the advanced
placement examinations.

The strategic growth plan for the Company calls for an emphasis on the internal
development of Test Preparation and Instruction product lines. Under favorable
circumstances, the Company would consider an acquisition of a supplemental
company.

SEASONALITY

The supplementary school publishing business is seasonal, cycling around the
school year that runs from September through May. Typically, the major marketing
campaigns, including mailings of new catalogs and focused sales efforts, begin
in September when schools reopen. This is the period when sample books are
provided free-of-charge for review to teachers for their purchase consideration.
General marketing efforts, including additional sales and marketing campaigns,
catalog mailings, and complimentary copies, continue throughout the school year.
Teachers and districts generally review and consider books throughout the school
year, make their decisions in the winter and spring, and place their purchase
orders with the district office or other administrative units at that time.
During spring and summer, the district offices process purchase orders and send
them to publishers.

For PPG, approximately 52 - 56% of purchase orders have historically been
received from July through September. The remainder of the year is slower for
sales of most product lines. An exception is the test preparation product line,
with purchases occurring near the time the state tests are administrated, as
well as during the summer months for summer programs that add extra test
preparation for students who are behind in their performance, and for the
upcoming school year.

This natural seasonality of the supplementary educational materials market means
that PPG's fiscal year (calendar year) does not coincide with the school
purchase year, so new product development and launch, as well as expenses, must
be planned around the school year. PPG receives and fulfills customer orders
throughout the year. The seasonality of the

                                       11
<PAGE>
Advanced Placement product line is significantly different than that of the
Instruction and Test Preparation product lines. For Advanced Placement, revenue
by quarter is approximately as follows: 1st quarter 6%, 2nd quarter 24%, 3rd
quarter 61% and 4th quarter 9%. For Instruction and Test Preparation revenue by
quarter is approximately as follows: 1st quarter 26%, 2nd quarter 18%, 3rd
quarter 30% and 4th quarter 26%.

ITEM 7.  FINANCIAL STATEMENTS

The information required under this heading is contained in Exhibit 99.1 filed
with this report.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None




                                       12
<PAGE>
                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT


The following individuals constitute the current directors and executive
officers of the Company:

<TABLE>
<CAPTION>
NAME AND AGE                         PRINCIPAL OCCUPATION                                                      DIRECTOR SINCE
------------                         --------------------                                                      --------------
<S>                                  <C>                                                                       <C>
Brian T. Beckwith (47)               President and Chief Executive Officer of the Company and PPG                   2001
                                     since December 2001.  Mr. Beckwith has over 20 years of
                                     publishing industry experience, including positions in market
                                     research, consumer marketing, operations, business development,
                                     and general management.  Prior to joining PPG, he was a principal
                                     in Beckwith & Associates, a publishing advisory firm specializing
                                     in start-ups, acquisitions, and Internet business development.
                                     From 1998 to 2000, he was President and Chief Operating Officer
                                     of Grolier, Inc., a $450 million publisher and direct marketer of
                                     children's books and other educational products.  Prior to that
                                     time, from 1991 to 1997, Mr. Beckwith served in various senior
                                     management positions with K-III (Primedia) including President
                                     and Chief Executive Officer of the Special Interest Magazine
                                     Group.  Mr. Beckwith has also held management positions with
                                     Murdoch Magazines, CBS Magazines, and Ziff-Davis Publishing.  He
                                     holds a B.A. from New England College and an M.B.A. from Fordham
                                     University's Graduate School of Business.

John C. Bergstrom (42)               Partner in RiverPoint Investments, Inc., a St. Paul, MN-based                  1998
                                     business advisory firm since 1995.  From November 1998 to January
                                     2000, Mr. Bergstrom served as the Company's and PPG's Chief
                                     Financial Officer.  He has served as the Secretary of the Company
                                     and PPG since November 1998.  From 1985 to 1995, Mr. Bergstrom
                                     was employed by Cherry Tree Investments,  Inc.  He also serves as
                                     a director of a number of private companies, including Dolan
                                     Media Co., Mall Marketing Media, LLC; Instrumental, Inc.; Linkup,
                                     Inc.; and Tecmark, Inc.  Mr. Bergstrom is a graduate of Gustavus
                                     Adolphus College, B.A., and the University of Minnesota, M.B.A.


Richard J. Casabonne (58)            President of Casabonne Associates, Inc., an educational research,              2002
                                     strategy and development firm that Mr. Casabonne founded in 1986.
                                     Mr. Casabonne served as the President of the Education and
                                     Training Group of Leapfrog Enterprises, Inc. from July 2001 to
                                     April 2002 and was a member of its board of directors from August
                                     2001 to April 2002. He has served in a number of senior executive
                                     positions for major educational publishing companies, including
                                     as Senior Vice President of Planning and Business Development for
                                     Harcourt, Inc. and as President and Chief Executive Officer of
                                     Steck-Vaughn Company, a publisher of supplementary
</TABLE>


                                       13

<PAGE>
<TABLE>
<S>                                  <C>                                                                       <C>
                                     education materials for kindergarten through adult education. In
                                     addition, Mr. Casabonne has held senior management positions at
                                     Grolier, Inc., McGraw-Hill Educational Resources, and Random
                                     House School Division, and he has taught at both the K-12 and
                                     college levels. He has a Bachelor of Arts degree from Brown
                                     University and a Master of Education degree in instructional
                                     technology from Boston University.

Anton J Christianson (50)            Chairman of Cherry Tree Companies.  Mr. Christianson is the                    1998
                                     co-founder and Managing General Partner of Cherry Tree
                                     Companies, a firm involved in asset management and investment
                                     banking.  He has been an active investor in private equities and
                                     micro-cap public equities for 25 years.  He serves as a director
                                     for several public and private companies including Transport
                                     Corporation of America, Inc.; AmeriPride Services, Inc.; Dolan
                                     Media Company; Fair, Isaac and Company; and Capella Education.
                                     Mr. Christianson is a graduate of St. John's University,
                                     Collegeville, MN and earned an M.B.A. from Harvard Business
                                     School.


Michael L. DeMarco  (38)             Chief Financial Officer of the Company and PPG since May 2002,                 n/a
                                     Vice-President of Finance and Operations of the Company and PPG
                                     from May 1999 to April 2002.  Mr. DeMarco has over 15 years of
                                     experience in finance and accounting.  Prior to joining PPG, Mr.
                                     DeMarco was Controller for Health Tech, a health care products
                                     company, from 1997 to 1999.  Prior to joining Health Tech, he
                                     was a Controller for Omnitech Corporate Solutions, a computer
                                     integration and software development company.  Mr. DeMarco also
                                     spent four years as an auditor with Ernst and Young.  Mr.
                                     DeMarco is a graduate of Pace University in New York and is a
                                     certified public accountant.

James P. Dolan (53)                  Since 1993, Chairman, President and Chief Executive Officer and                1999
                                     founder of Dolan Media Company, Minneapolis, a specialized
                                     business information company that is the world's largest public
                                     records gatherer, publishes daily and weekly business newspapers
                                     in 17 U.S. markets, and operates Henry M. Greene & Company, a
                                     leading business-to-business teleservices provider.  From 1989
                                     to 1993, he was executive vice president of the Jordan Group,
                                     New York City, an investment bank specializing in media.  He
                                     previously held executive positions with News Corporation Ltd.
                                     in New York, Sun-Times Company of Chicago, and Centel Corp.,
                                     Chicago, and also was an award-winning reporter and editor at
                                     newspapers in San Antonio, New York, Chicago, Sydney, and
                                     London.  He serves as a director of several private companies
                                     and is a journalism graduate of the University of Oklahoma.

Diane M. Miller (50)                 Co-founder and Executive Vice President of PPG since 1989, and                 1998
                                     Executive Vice President of Peoples Educational Holdings. Her
                                     educational publishing experience encompasses general
                                     management, market research, editorial, and marketing.  Prior to
                                     forming PPG, Ms. Miller was publisher of Globe Books, a
                                     remedial, supplementary
</TABLE>



                                       14
<PAGE>
<TABLE>
<S>                                  <C>                                                                       <C>
                                     education publisher owned by Simon and Schuster. Prior to joining Globe
                                     Books, she was Senior Editor of Reading for Harcourt Brace Jovanovich.
                                     Ms. Miller is a graduate of Centre College of Kentucky.

James J. Peoples (64)                Co-founder, Chairman, and Senior Advisor to the Company. Effective             1998
                                     December 2001, Mr. Peoples resigned as CEO and President of PPG and
                                     the Company and remains Chairman of the Board.  He has 37 years of
                                     experience in schoolbook publishing, including positions in sales,
                                     sales management, corporate staff assignments, and general
                                     management.  Prior to forming PPG, Mr. Peoples was President of the
                                     Prentice Hall School Group for seven years and served three years as
                                     Group President of the $350 million Simon and Schuster Educational
                                     Group.  Mr. Peoples is a graduate of Oregon State University.


Matti A. Prima (47)                  Senior Vice President of Business Development since August 1999, and           n/a
                                     also responsible for all sales and marketing of the state specific
                                     standards materials and assessment published by PPG.  Mr. Prima also
                                     serves as President, Education Development Division.  Mr. Prima has
                                     over 20 years of experience in finance, communications, and
                                     publishing.  Prior to joining PPG, Mr. Prima was VP Finance with Siegel
                                     Gale, an interactive brand management company, from 1998 to 1999, where
                                     he was responsible for all divisional budget decisions, funding
                                     decisions relating to commercial credit, investment banking, corporate
                                     finance, acquisitions, and risk management.  Prior to that, Mr. Prima's
                                     work experience included KPMG Peat Marwick, Corporate Transactions; and
                                     Henry Ansbacher as Senior Managing Director.  Mr. Prima is a graduate
                                     of Bloomsburg State University and has an M.B.A. from Pepperdine
                                     University.
</TABLE>


Board Committees. The Board of Directors has established an Audit Committee and
a Compensation Committee. The Audit Committee is currently composed of Messrs.
Christianson and Dolan. The Audit Committee meets with the Company's independent
auditors and representatives of management to review the internal and external
financial reporting of the Company, reviews the scope of the internal auditors'
examination, considers comments by the auditors regarding internal controls and
accounting procedures and management's response to these comments, and approves
any material non-audit services to be provided by the Company's independent
auditors.

The Compensation Committee is currently composed of Messrs. Bergstrom,
Christianson, and Dolan. The Compensation Committee reviews and makes
recommendations to the Board of Directors regarding salaries, compensation,
stock options and benefits of officers and employees. The Compensation Committee
has established a Stock Grant Subcommittee, currently composed of Messrs.
Christianson and Dolan, for the purpose of granting awards under the Company's
1998 Stock Plan.

The Company does not have a nominating committee.

Director Compensation. Each non-employee member of the Board of Directors
receives $2,000 per quarter, plus $1,000 for attending each regular quarterly
Board meeting, as compensation for his services. Non-employee directors are also
reimbursed for certain expenses in connection with attendance at Board and
committee meetings. In addition, each non-employee director will receive
annually, on the date of election or reelection as a director, a nonqualified
option to purchase 4,000 shares of the Company's common stock at an option price
equal to the fair market value of the Company's common stock on the date that
the option is granted. All such options are exercisable in increments of 25%
each over a three-year period during the eight-year term of such options. In
March 2002, all non-employee directors received options to purchase 4,000 shares
each at $3.00 per share upon the terms described above. In December 2002, Mr.
Casabonne received an option to purchase 20,000 shares of the Company's common
stock at $3.00 per share upon his appointment as a director.


                                       15
<PAGE>
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Not applicable.

ITEM 10.  EXECUTIVE COMPENSATION

The following table shows, for fiscal years 2002, 2001 and 2000, the cash
compensation paid by the Company, as well as certain other compensation paid or
accrued for those years, to Brian T. Beckwith, the Company's President and Chief
Executive Officer, and to the other executive officers of the Company whose
total cash compensation exceeded $100,000 during 2002 (together with Mr.
Beckwith, the "Named Executives"). Compensation to the Named Executives is paid
by the Company's wholly-owned subsidiary, PPG.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                            Long-Term Compensation
                                                                     Annual Compensation            Awards
                                                                   -----------------------        Securities            All Other
Name                       Position                      Year       Salary       Bonus (2)    Underlying Options    Compensation (3)
----                       --------                      ----       ------       ---------    ------------------    ----------------
<S>                        <C>                           <C>       <C>           <C>        <C>                     <C>
Brian T. Beckwith (1)      President and CEO             2002      $250,000      $ 60,025           125,000             $    192
                                                         2001      $     --      $     --           125,000             $     --

James J. Peoples           Chairman                      2002      $145,000      $ 30,012                --             $  1,178
                                                         2001      $145,000      $ 46,946                --             $  1,251
                                                         2000      $145,000      $ 29,451                --             $  1,179

Diane M. Miller            Executive                     2002      $140,662      $ 22,800                --             $    192
                           Vice President                2001      $131,923      $ 31,297            75,000             $    264
                                                         2000      $125,000      $ 19,634                --             $    192

Matti A. Prima             Senior Vice President of      2002      $125,000      $ 53,137                --             $    192
                           Business Development          2001      $125,000      $  6,394                --             $    264
                                                         2000      $125,000      $     --                --             $    192

Michael L. DeMarco         Chief Financial Officer       2002      $123,813      $ 17,100            30,000             $    192
                                                         2001      $104,337      $ 23,473                --             $    264
                                                         2000      $ 95,933      $ 14,725            10,000             $    192
</TABLE>

(1) Mr. Beckwith was appointed an executive officer in December 2001

(2) Represents bonuses earned in the year set forth in the table.

(3) Represents premiums paid by PPG for life insurance

The following table contains information concerning individual grants of stock
options to each of the Named Executives during the last fiscal year.

<TABLE>
<CAPTION>
                                                Percent of Total
                                               Options Granted to
                                Options           Employees in          Exercise       Expiration
         Name                   Granted           Fiscal Year           Price ($)         Date
         ----                   -------           -----------           ---------         ----
<S>                             <C>            <C>                      <C>            <C>
Brian T. Beckwith (1)           125,000               81%                 $3.00        12/18/2011
Michael L. DeMarco (2)           30,000               19%                 $3.00         5/17/2012
</TABLE>

(1) Becomes exercisable on January 1, 2004, 2005, 2006, 2007, 2008 in the
following increments, 8,332, 33,333, 33,333, 33,333 and 16,669

(2) Becomes exercisable 7,500 shares on May 17, 2002, 2003, 2004, 2005.


                                       16
<PAGE>
No options were exercised in 2002 by the Named Executives. The following table
sets forth information with respect to the Named Executives concerning
unexercised options held as of December 31, 2002.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                             Number of Securities
                                                                  Underlying                 Value of Unexercised
                           Shares                            Unexercised Options             In-The-Money Options
                          Acquired         Value             At Fiscal Year End            At Fiscal Year End $ (1)
       Name              on Exercise      Realized       Exercisable    Unexercisable    Exercisable    Unexercisable
       ----              -----------      --------       -----------    -------------    -----------    -------------
<S>                      <C>              <C>            <C>            <C>              <C>            <C>
Brian T. Beckwith                                           50,000         200,000        $ 25,000        $100,000
Diane M. Miller                 --              --          66,375          41,250        $ 91,913        $ 20,625
Matti A. Prima                  --              --          64,000          36,000        $ 32,000        $ 18,000
Michael L. DeMarco              --              --          27,000          25,000        $  9,750        $ 11,250
</TABLE>

(1) There is no established trading market for the Company's Common Stock and
the Company is not aware of recent trading. The values in the table have been
calculated assuming a per share price of $3.50 which reflects the price at which
the Company has most recently issued stock.

EMPLOYMENT AGREEMENTS

In December 2001, the Company and PPG entered into an employment agreement with
Brian T. Beckwith, the Company's President and Chief Executive Officer. The
agreement has an initial term of three years and will continue thereafter from
year to year unless terminated by either party by 180 days' prior notice before
the end of each contract year. The agreement contains non-competition and
non-solicitation covenants which continue in effect for a period ending one year
after Mr. Beckwith ceases to be employed. If Mr. Beckwith is terminated by the
Company without cause or if Mr. Beckwith resigns for good reason, Mr. Beckwith
is entitled to 18 months of severance, reduced by any salaries he receives from
third parties during the severance period. If the Company provides Mr. Beckwith
notice of non-renewal, Mr. Beckwith is entitled to 12 months of severance,
reduced by any salaries he receives from third parties during the severance
period. The agreement also provides for the Company's repurchase right and Mr.
Beckwith's put right to the Company with respect to Company stock owned by Mr.
Beckwith following termination of his employment which he has acquired upon
exercise of stock options and held for at least one year. Pursuant to this
agreement, which was entered into prior to the enactment of the Sarbanes-Oxley
of 2002, Mr. Beckwith is also entitled to pay the exercise price for his
options pursuant to a five-year recourse note.

James J. Peoples resigned as President and Chief Executive Officer of PPG and
the Company in December 2001. Mr. Peoples remains the Chairman of the Board of
Directors of PPG and the Company. PPG entered into an employment agreement with
Mr. Peoples in 1990. The employment agreement between Mr. Peoples and PPG
continues from year to year unless terminated by either party at least 60 days
prior to the end of each contract year. This agreement contains non-competition
and non-solicitation covenants which continue in effect for a period ending one
year after Mr. Peoples ceases to be employed by PPG.




                                       17
<PAGE>
In July 2001, the Company and PPG amended and restated the employment agreement
with Diane M. Miller, originally entered into in 1990. The agreement has an
initial term of three years and will continue thereafter for successive one-year
periods unless terminated by either party at least 60 days prior to the end of
the contract year. The agreement contains non-competition and non-solicitation
covenants which continue in effect for a period ending one year after Ms. Miller
ceases to be employed. If Ms. Miller is terminated without cause or if Ms.
Miller resigns for good reason, Ms. Miller is entitled to 12 months of
severance. The Company has a right of first refusal with respect to any share
transfers of Company stock by Ms. Miller to a competitor.

In October 2001, the Company entered into a two-year employment agreement with
Matti A. Prima, the Company's Senior Vice President - Business Development.
After the expiration of the initial term, the agreement may be extended by
mutual agreement. The agreement contains non-competition and non-solicitation
covenants which continue in effect for a period ending one year after Mr. Prima
ceases to be employed.

In May 2002, the Company entered into a three-year employment agreement with
Michael L. DeMarco, the Company's Chief Financial Officer. After the expiration
of the initial term, the agreement may be extended by mutual agreement. The
agreement contains non-competition and non-solicitation covenants which continue
in effect for a period ending one year after Mr. DeMarco ceases to be employed
by the Company. If Mr. DeMarco is terminated without cause or resigns for good
reason, Mr. DeMarco is entitled to the lesser of 12 months or the remainder of
his contract in severance.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

                              SECURITY OWNERSHIP OF
                    CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information provided to the Company as to the
beneficial ownership of the Company's Common Stock as of March 4, 2003 by (i)
the only stockholders known to the Company to hold 5% or more of such stock, and
(ii) each of the directors, the Named Executives set forth in the table on the
next page, and directors and officers as a group.

<TABLE>
<CAPTION>
                                                                   COMMON STOCK
BENEFICIAL OWNER                                                BENEFICIALLY OWNED             TOTAL (%)
----------------                                                ------------------             ---------
<S>                                                             <C>                            <C>
Brian T. Beckwith (1)                                                  50,000                     1.4%
John C. Bergstrom (1)                                                  67,067                     1.9%
Richard Casabonne (1)                                                   6,000                      *
Anton J. Christianson (1) (2)                                       1,372,192                    38.8%
Michael L. DeMarco (1)                                                 34,500                     1.0%
James P. Dolan (1)                                                     39,250                     1.1%
Dolphin Offshore Partners, Inc.                                       361,887                    10.3%
Diane M. Miller (1)                                                   307,909                     8.5%
NAP & CO - c/o Delaware State Pension Fund                            603,151                    17.1%
James J. Peoples (1)                                                  724,581                    20.5%
Matti A. Prima (1)                                                     66,857                     1.9%
Directors and Officers as a group (9 persons) (1) (2)               2,662,356                    69.6%
</TABLE>


           * Less than 1%

       (1)    Includes shares of Common Stock subject to outstanding stock
              options exercisable within 60 days as follows: Mr. Beckwith,
              50,000 shares; Mr. Bergstrom, 60,125 shares; Mr. Casabonne, 5,000
              shares, Mr. Christianson, 5,750 shares; Mr. DeMarco, 34,500
              shares; Mr. Dolan, 38,250 shares; Ms. Miller, 33,750 shares; Mr.
              Prima, 64,000 shares; and directors and officers as a group,
              291,375 shares.

       (2)    Includes ownership of 1,365,442 shares owned by School Power
              Limited Partnership, of which Mr. Christianson is Managing General
              Partner.




                                       18
<PAGE>
EQUITY COMPENSATION PLAN TABLE

The following table sets forth aggregate information regarding grants under all
equity compensation plans of the Company as of December 31, 2002

<TABLE>
<CAPTION>
                                                                                                 NUMBER OF SECURITIES
                                                                                                REMAINING AVAILABLE FOR
                                        NUMBER OF SECURITIES TO                                  FUTURE ISSUANCE UNDER
                                             BE ISSUED UPON            WEIGHTED-AVERAGE           EQUITY COMPENSATION
                                              EXERCISE OF              EXERCISE PRICE OF           PLANS (EXCLUDING
                                          OUTSTANDING OPTIONS,       OUTSTANDING OPTIONS,      SECURITIES REFLECTED IN
                                          WARRANTS AND RIGHTS         WARRANTS AND RIGHTS            COLUMN (A))
PLAN CATEGORY                                     (A)                         (B)                         (C)
<S>                                     <C>                          <C>                       <C>
Equity compensation plans
approved by security holders                    676,064                      $2.79                      74,998

Equity compensation plans not
approved by security holders                     37,500                      $3.00                           0

Total                                           713,564                      $2.80                      74,998
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In July 1998, prior to PPG becoming a wholly-owned subsidiary of the Company,
Mr. Peoples and Ms. Miller each exercised a stock option to purchase 50,000
shares of PPG shares at $1.25 per share. These options had been granted to Mr.
Peoples and Ms. Miller in 1993. PPG loaned Mr. Peoples and Ms. Miller each
$62,500 to exercise such options. The nonrecourse promissory notes evidencing
such loans together with the interest accruing at 6% per annum are due and
payable on July 31, 2003 and are reflected as reductions to shareholders'
equity.

In December 2002, the Company borrowed $1,000,000 under a subordinated
convertible note payable to School Power Limited Partnership in which Mr.
Christianson serves as Managing General Partner. The terms of this note provided
for quarterly interest payments at a rate of 10 percent with principal due
December 30, 2004, and conversion into common stock if the Company secures a
certain level of debt financing. This note, plus accrued interest, was in
February 2003 converted to 289,785 shares of common stock at a conversion price
of $3.50 per share.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.

The following exhibits are included with this Annual Report on Form 10-KSB (or
incorporated by reference) as required by Item 601 of Regulation S-B.

<TABLE>
<CAPTION>
EXHIBIT
  NO.       DESCRIPTION
<S>         <C>
3.1         Certificate of Incorporation of the Registrant (incorporated by
            reference to Exhibit 3.1 to the Registrant's Form 10-KSB for the
            year ended December 31, 2001).

3.2         Bylaws of the Registrant (incorporated by reference to Exhibit 3.2
            to the Registrant's Form 10-KSB for the year ended December 31,
            2001).
</TABLE>


                                       19
<PAGE>
<TABLE>
<S>         <C>
10.1        Registrant's 1998 Stock Plan (incorporated by reference to Exhibit
            10.1 to the Registrant's Form 10-KSB for the year ending December
            31, 1998).

10.2        Amended and Restated Agreement and Plan of Merger dated as of June
            4, 1998, between the Registrant, Peoples Acquisition Corporation and
            The Peoples Publishing Group, Inc. (incorporated by reference to
            Exhibit 10.6 to the Registrant's Form 10-KSB for the years ended
            December 31, 1997, 1996 and 1995).

10.3        Employment Agreement between The Peoples Publishing Group, Inc. and
            James J. Peoples (incorporated by reference to Exhibit 10.2 to the
            Registrant's Form 10-KSB for the year ended December 31, 1998).

10.4        Amended and Restated Employment Agreement between The Peoples
            Publishing Group, Inc. and Diane M. Miller (incorporated by
            reference to Exhibit 10.8 to the Registrant's Form 10-KSB for the
            year ended December 31, 2001).

10.5        Employment Agreement between the Company and Matti A. Prima
            (incorporated by reference to Exhibit 10.5 to the Registrant's Form
            10-KSB for the year ended December 31, 2001).

10.6        Amended and Restated Employment Agreement between the Company and
            Michael L. DeMarco (incorporated by reference to Exhibit 10 to the
            Registrant's Form 10-QSB for the quarter ended June 30, 2002).

10.7        Employment Agreement between the Company and Brian T. Beckwith
            (incorporated by reference to Exhibit 10.7 to the Registrant's Form
            10-KSB for the year ended December 31, 2001).

21          Subsidiaries of the Registrant: The Peoples Publishing Group, Inc.,
            a Delaware corporation.

99.1        The Registrant's Audited Financial Statements for the Years Ended
            December 31, 2002 and 2001, with notes thereto and the auditor's
            report thereon.

99.2        Certification Pursuant To 18 U.S.C. Section 1350, As Adopted
            Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002.

99.3        Certification Pursuant To 18 U.S.C. Section 1350, As Adopted
            Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002.

(b)         Reports on Form 8-K. : None
</TABLE>

ITEM 14. CONTROLS AND PROCEDURES.

The Company's management, including the Chief Executive Officer and Chief
Financial Officer, have conducted an evaluation of the effectiveness of the
design and operation of the Company's disclosure controls and procedures
pursuant to Rule 15d-15 under the Securities Exchange Act of 1934 (the "1934
Act") within 90 days prior to the filing date of this annual report. Based on
that evaluation, the Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in ensuring that information required to be disclosed by the Company
in the reports it files or submits under the 1934 Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms.

There have been no significant changes in internal controls, or in other factors
that could significantly affect internal controls, subsequent to the date the
Chief Executive Officer and Chief Financial Officer completed their evaluation.




                                       20
<PAGE>
SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                        PEOPLES EDUCATIONAL HOLDINGS, INC.
Date:  March 24, 2003


                         /s/ Brian T. Beckwith
                        --------------------------------------------------------
                        Brian T. Beckwith, Chief Executive
                        Officer and President (principal executive officer)


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on March
24, 2003.

                         /s/ Brian T. Beckwith
                        --------------------------------------------------------
                        Brian T. Beckwith, Chief Executive Officer and President



                         /s/ Michael L. DeMarco
                        --------------------------------------------------------
                        Michael L. DeMarco, Chief Financial Officer



                         /s/ James J. Peoples
                        --------------------------------------------------------
                        James J. Peoples, Chairman



                         /s/ Diane M. Miller
                        --------------------------------------------------------
                        Diane M. Miller, Director



                         /s/ John C. Bergstrom
                        --------------------------------------------------------
                        John C. Bergstrom, Director



                         /s/ Richard J. Casabonne
                        --------------------------------------------------------
                        Richard J. Casabonne, Director



                         /s/ Anton J. Christianson
                        --------------------------------------------------------
                        Anton J. Christianson, Director



                         /s/ James P. Dolan
                        --------------------------------------------------------
                        James P. Dolan, Director




                                       21
<PAGE>
                                 CERTIFICATIONS


I, Brian T. Beckwith, certify that:

1. I have reviewed this annual report on Form 10-KSB of Peoples Educational
Holdings, Inc.;

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

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

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

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

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

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

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

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

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

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

Date: March 24, 2003


 /s/ Brian T. Beckwith
-------------------------------------
Brian T. Beckwith,
President and Chief Executive Officer





<PAGE>
I, Michael L. DeMarco, certify that:

1. I have reviewed this annual report on Form 10-KSB of Peoples Educational
Holdings, Inc.;

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

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

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

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

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

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

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

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

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

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

Date: March 24, 2003

 /s/ Michael L. DeMarco
-----------------------
Michael L. DeMarco,
Chief Financial Officer





<PAGE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS

Pursuant to the requirements of Instructions to Form 10-KSB, the registrant
supplementally files herewith for the information of the Commission is a copy of
the Company's proxy statement mailed to shareholders in connection with the 2003
Meetings of Shareholders.