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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2003



Commission File Number 333-86484



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Ocean West Holding Corporation

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



|Delaware                 |  | 71-0876952                          
|------------------------ |  | ------------------------------------
|(State of incorporation) |  | (IRS Employer Identification Number)



15991
Redhill Avenue, Suite 110 Tustin, California 92780

(Address of principal executive offices)



(714) 247-4220

(Issuers telephone number)



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State the
number of shares outstanding of each of the issuers classes of common stock as of the latest practicable date.



Class B and Class D Common Stock, $.01 Par Value,

5,585,104 Common Shares, 210,096 Class B Common Shares and 0 Class D Common Shares as of May 16, 2003



Transitional Small Business Disclosure Format:  Yes ̈No  x



Exhibit Index at page 13.

This document consist of 17 pages.



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PART
1FINANCIAL INFORMATION



Item 1. Consolidated
Financial Statements.



|                                                                                                                    |  | Page
|------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                   
|Consolidated Balance SheetAs of March 31, 2003 (unaudited)                                                         |  | 3   
|                                                                                                                   
|Consolidated Statements of OperationsFor the Three Months and Six Months Ended March 31, 2003 and 2002 (unaudited) |  | 4   
|                                                                                                                   
|Consolidated Statements of Cash FlowsFor the Six Months Ended March 31, 2003 and 2002 (unaudited)                  |  | 5   
|                                                                                                                   
|Notes to Consolidated Financial Statements (unaudited)                                                              |  | 6   



2



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OCEAN WEST HOLDING CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

(unaudited)

|                                                                                                         |  | March 31, 2003 |           
|-------------------------------------------------------------------------------------------------------- |  | -------------- | ----------
|ASSETS                                                                                                   |  |                |           
|Current assets:                                                                                          |  |                |           
|Cash and cash equivalents                                                                                |  | $              | 192,692   
|Restricted cash                                                                                          |  |                | 326,099   
|Receivable from loans sold                                                                               |  |                | 15,158,707
|Mortgage loans held for sale                                                                             |  |                | 2,284,645 
|Due from related party                                                                                   |  |                | 57,605    
|Prepaid and other current assets                                                                         |  |                | 451,364   
|                                                                                                         |  |                |           
|Total current assets                                                                                     |  |                | 18,471,112
|                                                                                                         |  |                |           
|Property and equipment, net                                                                              |  |                | 346,526   
|                                                                                                         |  |                |           
|Other assets:                                                                                            |  |                |           
|Originated mortgage servicing rights                                                                     |  |                | 41,827    
|Property held for sale                                                                                   |  |                | 65,144    
|Deposits                                                                                                 |  |                | 22,548    
|                                                                                                         |  |                |           
|Total other assets                                                                                       |  |                | 129,519   
|                                                                                                         |  |                |           
|Total assets                                                                                             |  | $              | 18,947,157
|                                                                                                         |  |                |           
|LIABILITIES AND STOCKHOLDERS
EQUITY                                                                     |  |                |           
|Current liabilities:                                                                                     |  |                |           
|Accounts payable and accrued expenses                                                                    |  | $              | 1,422,985 
|Client trust payable                                                                                     |  |                | 326,099   
|Current maturities of long-term debt                                                                     |  |                | 83,075    
|Current maturity of capital lease obligation                                                             |  |                | 41,510    
|Warehouse lines of credit                                                                                |  |                | 16,472,058
|                                                                                                         |  |                |           
|Total current liabilities                                                                                |  |                | 18,345,727
|Long-term liabilities:                                                                                   |  |                |           
|Long-term debt, less current maturities                                                                  |  |                | 123,778   
|Accrued expenses                                                                                         |  |                | 22,500    
|Amount due to related party                                                                              |  |                | 15,000    
|Notes payablestockholders, less current maturities                                                      |  |                | 303,147   
|                                                                                                         |  |                |           
|Total long-term liabilities                                                                              |  |                | 464,425   
|Stockholders equity:                                                                                    |  |                |           
|Preferred stock, $.01 par value, 10,000,000 shares authorized:                                           |  |                |           
|Series C, 1,000 shares issued and outstanding                                                            |  |                | 100,000   
|Series E, 680 shares issued and outstanding                                                              |  |                | 170,000   
|Series F, 1,050 issued and outstanding                                                                   |  |                | 105,000   
|Series G, 2,000 shares issued and outstanding                                                            |  |                | 200,000   
|Series I, 125 shares issued and outstanding                                                              |  |                | 12,500    
|Series L, 1,000 shares issued and outstanding                                                            |  |                | 1,000,000 
|Series M, 5,000 shares authorized, 250 shares issued and outstanding                                     |  |                | 3         
|Class B common stock, $.01 par value, 5,000,000 shares authorized, 210,096 shares
issued and outstanding |  |                | 2,101     
|Class D common stock, $.01 par value, 600,000 shares authorized, none issued and
outstanding             |  |                |          
|Common stock, $.01 par value 30,000,000 shares authorized, 5,585,104 issued and
outstanding              |  |                | 55,851    
|Additional paid-in capital                                                                               |  |                | 1,791,952 
|Accumulated deficit                                                                                      |  |                | (3,300,402
|                                                                                                         |  |                |           
|Total stockholders equity                                                                               |  |                | 137,005   
|                                                                                                         |  |                |           
|Total liabilities and stockholders equity                                                               |  | $              | 18,947,157
|                                                                                                         |  |                |           

The accompanying notes are an integral part of these financial statements.



3



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OCEAN WEST
HOLDING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



|                                                                                       |  | Three Months Ended March 31, 2003 |           |   | Three Months Ended March 31, 2002 |   |           | Six Months Ended March 31, 2003 |  | Six Months Ended March 31, 2002 |          
|-------------------------------------------------------------------------------------- |  | --------------------------------- | --------- | - | --------------------------------- | - | --------- | ------------------------------- |  | ------------------------------- | ---------
|Revenues:                                                                              |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Revenues from origination and sale of mortgage loans, net                              |  | $                                 | 3,055,379 |   |                                   | $ | 1,805,062 |                                 |  | $                               | 6,354,029
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Operating expenses:                                                                    |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Salaries and wages                                                                     |  |                                   | 1,306,253 |   |                                   |   | 1,218,836 |                                 |  |                                 | 2,638,689
|Payroll taxes                                                                          |  |                                   | 262,805   |   |                                   |   | 194,582   |                                 |  |                                 | 441,370  
|Other general and administrative expenses                                              |  |                                   | 1,447,580 |   |                                   |   | 1,137,688 |                                 |  |                                 | 2,844,515
|Depreciation & amortization                                                            |  |                                   | 15,646    |   |                                   |   | 26,963    |                                 |  |                                 | 62,273   
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Total operating expenses                                                               |  |                                   | 3,032,284 |   |                                   |   | 2,578,069 |                                 |  |                                 | 5,986,847
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Income (loss) from operations                                                          |  |                                   | 23,095    |   |                                   |   | (773,007  | )                               |  |                                 | 367,182  
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Provision for income taxes                                                             |  |                                   |          |   |                                   |   |          |                                 |  |                                 |         
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Net income (loss)                                                                      |  |                                   | 23,095    |   |                                   |   | (773,007  | )                               |  |                                 | 367,182  
|Dividends on preferred shares                                                          |  |                                   | 50,010    |   |                                   |   | 49,526    |                                 |  |                                 | 110,454  
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Net (loss) income applicable to common shareholders                                    |  | $                                 | (26,915   | ) |                                   | $ | (822,533  | )                               |  | $                               | 256,728  
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Net income (loss) applicable to common shareholders per common share basic and
diluted |  | $                                 | 0.00      |   |                                   | $ | (0.18     | )                               |  | $                               | 0.05     
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          
|Weighted average number of common shares outstanding basic and diluted                 |  |                                   | 5,585,104 |   |                                   |   | 4,507,204 |                                 |  |                                 | 5,585,104
|                                                                                       |  |                                   |           |   |                                   |   |           |                                 |  |                                 |          



The
accompanying notes are an integral part of these financial statements.



4



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OCEAN WEST
HOLDING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                  |  | Six Months Ended March 31, 2003 |            |   | Six Months Ended March 31, 2002 |  
|--------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------- | -
|Cash flows provided by (used for) operating activities:                           |  |                                 |            |   |                                 |  
|Net income (loss)                                                                 |  | $                               | 367,182    |   |                                 | $
|Adjustments to reconcile net income to net cash provided by operating
activities: |  |                                 |            |   |                                 |  
|Depreciation and amortization                                                     |  |                                 | 62,273     |   |                                 |  
|Changes in operating assets and liabilities:                                      |  |                                 |            |   |                                 |  
|(Increase) decrease in assets:                                                    |  |                                 |            |   |                                 |  
|Restricted cash                                                                   |  |                                 | (209,622   | ) |                                 |  
|Receivable from loans sold                                                        |  |                                 | 6,254,326  |   |                                 |  
|Mortgage loans held for sale                                                      |  |                                 | (2,761,662 | ) |                                 |  
|Prepaid and other current assets                                                  |  |                                 | (15,003    | ) |                                 |  
|Decrease in liabilities:                                                          |  |                                 |            |   |                                 |  
|Accounts payable and accrued expenses                                             |  |                                 | (194,841   | ) |                                 |  
|Client trust payable                                                              |  |                                 | 209,622    |   |                                 |  
|                                                                                  |  |                                 |            |   |                                 |  
|Net cash provided by operating activities                                         |  |                                 | 3,712,275  |   |                                 |  
|                                                                                  |  |                                 |            |   |                                 |  
|Cash flows (used for) provided by investing activities:                           |  |                                 |            |   |                                 |  
|Purchases of property and equipment                                               |  |                                 | (33,468    | ) |                                 |  
|Net change in notes receivable                                                    |  |                                 | (8,000     | ) |                                 |  
|                                                                                  |  |                                 |            |   |                                 |  
|Net cash (used for) provided by investing activities                              |  |                                 | (41,468    | ) |                                 |  
|                                                                                  |  |                                 |            |   |                                 |  
|Cash flows provided by financing activities:                                      |  |                                 |            |   |                                 |  
|Net payments under warehouse lines of credit                                      |  |                                 | (3,544,788 | ) |                                 |  
|Redemption of common stock                                                        |  |                                 |           |   |                                 |  
|Principal repayments on long-term debt                                            |  |                                 | (43,429    | ) |                                 |  
|Payments on capital lease obligations                                             |  |                                 | (53,051    | ) |                                 |  
|Payments on notes payable, stockholders                                           |  |                                 | (164,255   | ) |                                 |  
|Repurchase of series M preferred                                                  |  |                                 | (250,000   | ) |                                 |  
|Proceeds from sale of preferred stock                                             |  |                                 | 500,000    |   |                                 |  
|Preferred stock dividends                                                         |  |                                 | (110,454   | ) |                                 |  
|                                                                                  |  |                                 |            |   |                                 |  
|Net cash used for financing activities                                            |  |                                 | (3,665,977 | ) |                                 |  
|                                                                                  |  |                                 |            |   |                                 |  
|Net increase (decrease) in cash and cash equivalents                              |  |                                 | 4,830      |   |                                 |  
|Cash and cash equivalents,beginning of period                                     |  |                                 | 187,862    |   |                                 |  
|                                                                                  |  |                                 |            |   |                                 |  
|Cash and cash equivalents,end of period                                           |  | $                               | 192,692    |   |                                 | $
|                                                                                  |  |                                 |            |   |                                 |  
|Supplemental disclosure of cash flow information                                 |  |                                 |            |   |                                 |  
|Interest paid                                                                     |  | $                               | 405,273    |   |                                 | $
|                                                                                  |  |                                 |            |   |                                 |  
|Income taxes paid                                                                 |  | $                               |           |   |                                 | $
|                                                                                  |  |                                 |            |   |                                 |  



The
accompanying notes are an integral part of these financial statements.





5



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Notes to Consolidated Financial Statements

March 31, 2003 and 2002

(unaudited)



|(1) |  | Basis of Presentation:
|--- |  | ----------------------



The accompanying unaudited interim consolidated financial statements of Ocean West Holding Corporation, and its subsidiary Ocean
West Enterprises, Inc. dba Ocean West Funding (collectively the Company), reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods presented. All such
adjustments are of a normal recurring nature.



|(2) |  | Nature of Business:
|--- |  | -------------------



Ocean West Holding Corporation (Ocean West) was organized in the State of Delaware on August 15, 2000 as a holding company
with negligible assets and liabilities. During March 2002, Ocean West acquired all of the issued and outstanding shares of preferred and common stock of Ocean West Enterprises, Inc. dba Ocean West Funding (Ocean West Enterprises) in an
exchange of shares. Since the shareholders of Ocean West Enterprises are the controlling shareholders of Ocean West after the exchange, Ocean West Enterprises treated the transaction as a recapitalization, and the historical financial statements
reflect the operations of Ocean West Enterprises.



Ocean West Enterprises, a California C corporation, was incorporated in November 1988 for the purpose of engaging in mortgage banking activities. It is involved in the process of originating, packaging and funding of HUD and other
government-insured loans and non-government-insured loans in the United States.



|(3) |  | Principles of Consolidation:
|--- |  | ----------------------------



The consolidated financial statements include the accounts of Ocean West and its wholly owned subsidiary, Ocean West Enterprises. All
significant inter-company accounts and transactions have been eliminated.



|(4) |  | Going Concern:
|--- |  | --------------



The Company has historically had recurring losses from operations and sustained negative cash flows from operations and as of April 30,
2003, the warehouse line of credit with First Collateral Services has expired. The Company had not maintained the HUD minimum net worth requirements. Management believes the following arrangements will be sufficient to fund its capital expenditures,
working capital requirements, and other cash requirements through September 30, 2003.



The Company intends to operate as a public company and issue shares of stock in which the proceeds shall be used to increase business and cash flow.



The Company is forecasting an increase in total loan funding
in the fiscal year ending September 30, 2003.



The Company is in negotiations with lenders to establish new lines of credit with terms, conditions and covenants suitable to the Companys financial position.



There can be no assurance the Company will be able to obtain sufficient additional funds when needed or that
such funds, if available, will be on terms satisfactory to the Company.



|(5) |  | Interim Period:
|--- |  | ---------------



These financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. Operating results for
the six months ended March 31, 2003 are not necessarily indicative of the results that may be expected for the full year ending September 30, 2003.



The unaudited interim consolidated financial statements should be read in conjunction with the Companys audited financial statements
and notes thereto for the past fiscal year ended September 30, 2002, included in the Companys Annual Report on Form 10-KSB.



Earnings per share has been calculated based upon the weighted average number of common shares outstanding during both reporting periods.
Common stock equivalents, consisting of warrants for the purchase of 3,000,000 Common Shares at $1.25 per share, which is greater than market price, as of March 31, 2003, have been excluded from diluted earnings per share because their effect would
be antidilutive.



|(6) |  | Fiscal Year:
|--- |  | ------------



The Company has changed its fiscal year end from March 31 to September 30, making September 30, 2003 the end of the Companys next
fiscal year.



6



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Item 2. Managements
Discussion and Analysis or Plan of Operation.



General



Ocean
West is a holding company, which holds all of the issued and outstanding stock of Ocean West Enterprises. Ocean West Enterprises is a wholesale and retail mortgage banking company primarily engaged in the business of originating and selling loans
secured by real property with one to four units. The Company offers a wide range of products aimed primarily at high quality, low risk borrowers. However, the Company has recently expanded into the higher risk sub-prime market to assist in efforts
to diversify its lending practices. Our income mainly consists of gains from sales of mortgage loans on the secondary market and to private investors. We also generate revenues through fees such as brokerage fees, underwriting fees, processing fees
and document drawing fees, in connection with the funding or brokering of a loan. For the most part, we fund loans through credit facilities. The amount drawn from a line of credit for a particular loan is repaid when that loan is sold to an
investor.



We face strong competition in
originating, purchasing and selling mortgage loans and related mortgage servicing rights. Our competition is principally from savings and loans associations, other mortgage companies, commercial banks and, to a lesser degree, credit unions and
insurance companies, depending upon the type of mortgage loan product offered. In addition to offering a wide array of competitive products, we compete with these entities by striving to provide helpful and timely service to mortgage brokers and
borrowers alike. Many of these institutions have greater financial resources than we do and maintain a significant number of branch offices in the areas in which we conduct operations. Increased competition for mortgage loans from other lenders may
result in a decrease in the volume of mortgage loans that we are able to originate and purchase. If we are unable to compete effectively, our operations and financial condition could be materially and adversely affected.



Ocean West changed its year-end subsequent to March 31, 2002
from March 31 to September 30 effective in 2002. The reasons for the change were a reduction in auditing costs as fewer companies use a September 30 year-end and to aid in HUD reporting.



Results of Operations



The uncertainty that potentially has the single largest effect on the results of operations of Ocean West
Enterprises is interest rate trends. Trends in interest rates are not only important to the refinance business, but are also very important in the purchase market as well. As interest rates rise, more individuals are eliminated as potential
borrowers. The reason for this is simpleas interest rates get higher, so do the mortgage payments. Higher payments mean fewer people have the ability to qualify for loans. Historically, a rising interest rate market is more difficult for
mortgage bankers like us to deal with than for banks. The reason for this is that banks tend to have an advantage in an adjustable rate market, because banks have the ability to hold loans and, therefore, can be more creative in designing adjustable
rate loans to fit the borrowers needs. Mortgage bankers are limited to loan products that can be sold in the secondary market or securitized. These programs have become more competitive in recent years, but banks still retain a competitive
advantage.



Inflation has an impact on us because
it typically has an impact on interest rates. As the threat of inflation becomes more of a concern, interest rates tend to rise. This result is based upon the perception that the Federal Reserve will revise short-term interest rates to keep
inflation in check. This concern ultimately affects mortgage rates.



During the last five fiscal years, we have had operating losses and in the year prior to those, had a significant decrease in operating income. Management attributes the decrease in income and increase in loss to the
following:



| |  |  | Broker fraud resulting in loss on two loans of approximately $250,000 which was recognized in fiscal year 1998
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | Decrease in loan volume resulting from the adoption of stricter pre-funding quality control measures
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | Costs of operating the telemarketing division which was shut down
| | - |  | -----------------------------------------------------------------



7



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To counter the reduction in
loan volume, we lowered some of our prices and volume levels increased. More favorable pricing was then reestablished and for the most part loan volumes are holding up; there was a decrease in loan volume for the third quarter of fiscal year 2002
which management believes was due to the slow down in the economy resulting from the events of September 11, 2001.



Our revenues are currently derived approximately two-thirds from sale of loans and one-third from fees generated in connection with such
sales. Revenues generated from the sale of a loan vary based on loan type and size. Premiums paid can range from 1/8% to 5% of the loan amount. Conventional conforming loans have lowest profit margins while FHA, alternative A and sub-prime loans have higher premiums. Sub-prime loans typically have the largest margins. Fees received also vary
depending on loan type and origination source and generally range from $495 to $995 per loan. For example, typically FHA refinances generate $495 in fees and conventional conforming loans generate $995 in fees.



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



During the quarter ended March
31, 2003, Ocean West Enterprises funded 1,169 loans with an aggregate dollar value of approximately $215 million compared to 953 loans with an aggregate dollar value of approximately $160 million in the quarter ended March 31, 2002. The average loan
size for the quarter ended March 31, 2003 was approximately $185,000, which was an increase from an average loan size of $167,700 for the quarter ended March 31, 2002. Most of the loans originated were in principal amounts between $100,000 and
$180,000.



Net revenues from origination and/or
sale of loans increased to $3.1 million for the quarter ended March 31, 2003 from $1.8 million for the quarter ended March 31, 2002. The increase in revenues can be attributed to an increase in loan volume from the growth of the Companys
branch system and favorable market conditions.



Total operating expenses increased by $455,000 to $3.0 million for the quarter ended March 31, 2003 from $2.6 million for the quarter ended March 31, 2002. Salary, wages and payroll taxes were $1.6 million for the quarter ended March
31, 2003 compared to $1.4 million for the March 31, 2002. The increase of $156,000 was primarily due to an increase in office staff in the various branch locations which was needed to support the additional loan production. Other general and
administrative expenses were primarily made up of rent, advertising services, fees for professional services, insurance and office expenses. These expenses increased $310,000 to $1.4 million for the quarter ended March 31, 2003 from $1.1 million for
the same period in 2002. Rent, insurance and related office expenses increased as more branch officers were added as we continued to move from primarily originating loans through independent brokers to originating loans primarily though our
employees.



Ocean West had a net income of
$23,095 for the quarter ended March 31, 2003 compared to a net loss of $773,007 for the same quarter of 2002. The significant increase in income for the March 31, 2003 quarter was due to the increase in loan production.



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



During the six months ended
March 31, 2003, Ocean West Enterprises made 2,391 loans with an aggregate dollar value of approximately $421 million compared to 2,486 loans with an aggregate dollar value of approximately $397 million in the six months ended March 31, 2002. The
average loan size for the six month period ended March 31, 2003 was approximately $177,000. This was an increase from an average loan size of $160,000 in the six month period ending March 2002. Most of the loans originated were in principal amounts
between $100,000 and $180,000.



Net revenues from
origination and/or sale of loans increased to $6.4 million for the six months ended March 31, 2003 from $4.7 million for the six months ended March 31, 2002. The increase in revenues can be attributed to an increase in the loan size from the growth
of the Companys branch system and favorable market conditions.



Total operating expenses increased by $583,000 to $6.0 million for the six months ended March 31, 2003 from $5.4 million for the six months ended March 31, 2002. Salary, wages and payroll taxes were $3.08 million for the six



8



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months ended March 31, 2003 compared to $3.06 million for the six months ended March 31, 2002. The
increase of $18,000 was primarily due to the increase in office staff at the various branch locations, which was needed to support the additional loan production. Other general and administrative expenses were primarily made up of rent, advertising
services, fees for professional services, insurance and office expenses. These expenses increased $564,000 to $2.8 million for the six months ended March 31, 2003 from $2.3 million for the same period in 2002. Rent, insurance and related office
expenses increased as more branch officers were added as we continued to move from primarily originating loans through independent brokers to originating loans primarily though our employees. Depreciation and amortization for the first six months of
both fiscal year 2003 and 2002 were approximately $62,000.



Ocean West had net income of $367,182 for the six month period ended March 31, 2003 compared to a net loss of $720,958 for the same period of 2002. The significant increase in income for the six month period ended on March 31, 2003
quarter was due to the increase in loan production.



Liquidity and Capital Resources



Liquidity is the ability of a company to generate funds to support asset growth, satisfy disbursement needs, maintain reserve requirements and otherwise operate on an ongoing basis. If our loan volume increases too rapidly, the
increase could have a severe impact on liquidity. The warehouse facilities limit the amount that may be advanced on each loan funded. Therefore, cash must be used to fund the additional dollars needed to close escrow. Thus, it is crucial that the
loan volume closely is monitored closely.



Ocean
West funds operations through a combination of borrowings and issuance of stock. The primary need for operating capital is to fund mortgage loans upon closing prior to their eventual delivery to purchasers in the secondary market. Loans that are
closed using the Companys own credit facilities are funded through short term borrowing on the warehouse lines of credit. Ocean West pays interest on funds advanced under the warehouse lines of credit at a pre-negotiated rate. The rate at
which the Company borrows is variable in nature and typically averages between 4.5% and 5.5%. Typically the loans are funded through the warehouse lines of credit. The average time between funding a mortgage and the receipt of the proceeds from the
sale of the mortgage was approximately fifteen days during fiscal 2002 and continued as such during the six months which ended March 31, 2003. Currently the Company has two warehouse facilities, Warehouse One and Provident Consumer Financial
Services.



Until recently Ocean West has funded
the majority of its loans through First Collateral Services. First Collateral ceased providing Ocean West funds under the line effective April 30, 2003. The balance on the line is being paid off as the loans securing the line are sold. Currently,
the Company is funding loans through a line of credit with Provident Consumer Financial Services and Warehouse One. The lending limit on the line of credit through Provident Consumer Financial Services is currently $8 million and Warehouse One
lending limit is at $5 million.



The
Companys ability to finance and purchase mortgage loans depends on our ability to secure warehousing lines with acceptable terms. The interest rates charged on these lines currently used by Ocean West to fund loans are approximately 1% higher
than the rate First Collateral charged. The fees associated with the Warehouse One and Provident lines are also $50 to $100 more per transaction than those charged by First Collateral. In addition the lending limits on the First Collateral line of
credit had been larger than those granted by the current providers. The loss of First Collateral as the primary warehouse lender has increased Ocean Wests cost of funds, limited its ability to fund a higher volume of loans and may have a
material adverse impact on results of operations. To the extent the Company is not successful in using these alternate warehousing sources, Ocean West may have to curtail its mortgage loan origination activities, which would also have a material
adverse effect on the operations and financial condition.



To help addressing the lower limits on the lines of credit, in March 2003, the Company began participating in a fast funding program offered by Union Federal Bank, one of the regular purchases of its loans. The program
has significantly eased the restraints on funding imposed by the limits on the lines of credit by allowing the Company to remove loans that are funded through the warehouse lines in a shorter period of time, freeing up the line for new loans.
Participation in the program is an additional $150 fee per loan. The program is designed to roll loans on and off the warehouse facility within 48 to 72 hours of funding. However, the Company does not receive the profits from the loan at the time it
is taken off the warehouse facility. The profits are paid when the file has been reviewed and cleared, typically within seven to ten days, which is consistent with the companys current revenue recognition policy.



Ocean West Enterprises is an approved FHA mortgagee. A portion
of its loan volume is FHA loans. The



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percentage of FHA loans funded in the period ended March 31, 2003 was 9% based on dollar volume, compared
to 11% for the same period ended March 31, 2002. If Ocean West were to lose its FHA authority it could have a significant impact on its ability to survive. We are currently not in compliance with HUDs minimum required net worth. Management has
submitted a Capital Restoration Plan with its required audit to HUD and is waiting for HUDs response.



At the present time, Ocean Wests liquidity resources are minimal. The Company has not consistently met the HUD net worth
requirements. HUD has not rescinded Ocean Wests certifications. If HUD rescinded the certification, this would have a significant impact on the business. At this time, management believes that it is able to fund current production levels,
provided that the Company is able to maintain production levels sufficient to produce profits. Currently Ocean West depends on a mix of loans that it funds in house and loans that it brokers which are funded through other entities. The mix of in
house funded and brokered loans affects its profitability. In the quarter ended March 31, 2003, the average monthly loan volume of in house funded and brokered loans was $70,110,500 with approximately 35% being in house funded loans. This mix of in
house funded and brokered loans resulted in a profitable quarter. Other mixes at the same volume or the same mix at a different volume may not provide profitable results.



In the future, Ocean West hopes to be able to increase its capital and liquidity so that loan production can
be increased. Management believes that, in the long-term, a development of the marketing of its stock should aid in increasing capital. Management intends to retain earnings for the foreseeable future to help increase liquidity and anticipates that
the share price will be high enough so that some of the warrants are exercised. Future offerings are possible, although management does not currently have any specific offering plans.



In the short term, managements goal is to maintain current production levels with no significant
increases or decreases until our liquidity increases. Management believes that the increase in net income will aid liquidity.



During the first six months of fiscal 2003 and 2002 the Company had net cash provided by operating activities of $3.7 and $8.5,
respectively. The primary sources of this reduction in cash used was a decrease in the amount of mortgage loans held for sale and receivables from loans sold over the six month period ending March 31, 2002. As investors purchase loans, the amounts
advanced for such loans through the warehouse line of credit are paid. At that time, the receivables are cleared and the cash deposited in our operating account. These accounts vary significantly depending upon where the bulk of the loans are in the
process of funding and selling.



Net cash used
for investing activities during the first six months of fiscal 2003 was $41,000 and was attributable to the issuance of notes receivable and purchase property and equipment. For the six months ended March 31, 2002, net cash provided by investing
activities was $9,570. The difference between the two was due to equipment purchases of $33,000 during the 2003 period.



Net cash used for financing activities for the six months ended March 31, 2003, was $3.7 million. This consisted primarily of payments
under the warehouse lines of credit of $3.5 million. Repurchase of Series M preferred stock was $250,000. Proceeds from sale of preferred stock were $500,000. Payments of $164,000 on notes payable to stockholders, $43,000 on long-term debt and
$53,000 on capital lease obligations as well as dividends paid of $110,000 offset cash provided by financial activities for the period. Net cash used for financing activities for the six months ended March 31, 2002 was $9.1 million. This consisted
primarily of payments of $8.9 million under the warehouse lines of credit. Payments of dividends of $104,000, payments of $73,000 on capital lease obligations and payments of $17,000 on principal on long-term debt were also made as well as $10,000
spent to redeem common stock.



As of September
30, 2002, Ocean West Enterprises had net operating loss carryforward for Federal income tax purposes of approximately $2,057,000 and, for state reporting purposes, of approximately $1,200,000, available to reduce future taxable income, portions of
which expire on various dates through 2020.



Other Factors
Relating to Forward-Looking Statements



Statements contained in this Form 10-QSB that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as
believes, anticipates, expects and similar expressions are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements or events, or timing of events, to differ materially from any future results, performance or achievements or events, or timing of events, expressed or implied by such forward-looking
statements.



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We cannot assure that we will be able to anticipate or respond timely to the changes that could adversely
affect our operating results in one or more fiscal quarters. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in
the price of our securities.



In the event Ocean
West needs additional financing, there can be no assurance that any such financing will be available on acceptable terms. If such financing is not available on satisfactory terms, Ocean West may be unable to expand or continue its business as
desired and operating results may be adversely affected. Debt financing will increase expenses and must be repaid regardless of operating results. Equity financing could result in dilution to existing stockholders.



Some of the more prominent known risks and uncertainties of
Ocean Wests business are set forth below. However, this section does not discuss all possible risks and uncertainties to which Ocean West is subject, nor can it be assumed that there are not other risks and uncertainties which may be more
significant.



| |  |  | the Companys continuing losses;
| | - |  | --------------------------------



| |  |  | the Companys failure to continuously meet HUD minimum net worth requirements;
| | - |  | ------------------------------------------------------------------------------



| |  |  | the Companys dependence on the warehouse lines of credit which has been reduced and past failures to comply with restrictive covenants relating to its lines of
credit;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Companys need for additional funding sources so that its ability to originate and fund loans is not impaired and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | the Companys ability to compete with banks and other mortgage lenders that are significantly larger.
| | - |  | -----------------------------------------------------------------------------------------------------



Item 3. Controls and Procedures.



Evaluation of Disclosure Controls and Procedures



Within the ninety days prior to the date of this report, the
Companys Chief Executive Officer and the Chief Financial Officer carried out an evaluation of the effectiveness of the design and operations of the Companys disclosure controls and procedures. The Companys disclosure controls and
procedures are designed to ensure that information required to be disclosed by the Company in its periodic SEC filings is recorded, processed and reported within the time periods specified in the SECs rules and forms. Based upon that
evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective in timely alerting him to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Companys periodic SEC filings.



Changes in Internal Controls



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



PART IIOTHER INFORMATION



Item 1. Legal Proceedings



Ocean West v. California Mortgage Loan, David R. Nickal
& Sanjesh Prasaid Sharma: On November 22, 2002, Ocean West Enterprises filed a complaint against California Mortgage Loan in the Los Angeles Superior Court, Central District for breach of contract, common count, negligent misrepresentation
and intentional misrepresentation. In compliance with the broker agreement executed by California Mortgage Loan and Ocean West Enterprises dated May 11, 1999, the Company withheld the commission payment on five loans due to previous mortgage loans
that were either early payment default or misrepresented material facts. Ocean West Enterprises counter-claimed for the repurchase demand of fourteen loans due to the early payment default or misrepresented material facts. Through arbitration, the
complaint of



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California Mortgage Loan v. Ocean West was settled. Ocean West utilized the withheld commissions to
offset the established deficiency on two loans. The cross-complaint of Ocean West v. California Mortgage Loan was settled pending that California Mortgage Loan cooperate and repurchase certain loans from Ocean West Enterprises. California
Mortgage Loan failed to comply with the arbitrated settlement agreement. As such, the Company was forced to reopen its cross-complaint. Mediation is to be completed by July 15, 2003 and, if mediation fails trial is scheduled for October 2003.



Wells Fargo Home Mortgage v. Ocean West:
On March 7, 2001, Wells Fargo Home Mortgage filed a complaint against Ocean West Enterprises in the Orange County Superior Court, Central Justice Center, Santa Ana, California for breach of contract. Wells Fargo Home Mortgage alleged Ocean West
Enterprises caused defaults on mortgage loans that were sold to Wells Fargo Home Mortgage in the secondary mortgage loan market. The action was settled on May 1, 2002. Ocean West agreed to pay Wells Fargo $180,000 over two years. On May 1, 2003, the
remaining balance was $90,000. Payments of $7,500 are due monthly with the remaining payment of $15,000 due April 1, 2004.



Poehlman v. Jochen, et al: Arthur Poehlman filed a complaint against Tracy Jochen et at to cease a foreclosure proceeding because
Poehlman did not receive the pay off funds when Jochen refinanced his home with Ocean West. Jochen was an employee of Ocean West. As such, Poehlman claims that the transaction was completed with unclean hand. Unfortunately, Ocean West was not aware
of Jochens activities pertaining to his loan, such as unsupported appraisal report and forged notice of reconveyance. In addition, Title Company provided Jochen with the notice of reconveyance to have Poehlman execute same instead of
communicating same directly to Poehlman. Ocean Wests errors and omissions insurance agreed to defend this claim. In addition, Ocean Wests attorneys are in the process of filing a claim against title policy and errors and omissions
against the appraiser. Trial which was scheduled for May 27, 2003 has been postponed pending a possible settlement among the parties.



Item 2. Changes in Securities.



Ocean West registered 5,247,676 Common Shares and 3,000,000 Common Stock Purchase Warrants on a registration statement (file number
333-86484) which became effective on August 12, 2002. On August 12, 2002 all of the warrants and 300,000 of the shares were sold to the underwriter, Monogenesis Corporation, most of which were distributed by Monogenesis to its shareholders as
described in the registration statement. Ocean West received $13,104 for such shares and warrants which it used as working capital. Each warrant may be exercised by holders to purchase one Common Share at a price of $1.25 per share through June 12,
2003. No warrants have been exercised. The remaining shares registered represent the 3,000,000 Common Shares underlying the warrants and 1,965,776 shares held by security holders. There are not any net offering proceeds to Ocean West at this time
and will not be any unless a significant amount of the warrants are exercised.



The selling security holders are expected to offer their shares for sale from time to time (but not through Monogenesis). The offering price for the sale of selling shareholder shares until the shares
were quoted on the OTC Bulletin Board was $1.70 per share. Ocean West does not know the amount, if any, of shares sold by selling shareholders.



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



|     |  |                                                     |  |                                                                                                                   |  | Exhibit Table Number |  | Page Number
|---- |  | --------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------- |  | -------------------- |  | -----------
|I.   |  | Articles of Incorporation and Bylaws                |  | 3                                                                                                                 |  |                     
|     |  | (i)                                                 |  | Certificate of Incorporation of Ocean West Holding Corporation                                                    |  |                      |  | +          
|     |  | (ii)                                                |  | Bylaws of Ocean West Holding Corporation                                                                          |  |                      |  | +          
|II.  |  | Instruments Defining the Rights of Security Holders |  | 4                                                                                                                 |  |                     
|     |  | (i)                                                 |  | Common Stock Purchase Warrant Agreement Between Ocean West Holding Corporation and Registrar and Transfer
Company |  |                      |  | x          
|III. |  | Additional Exhibits                                 |  | 99                                                                                                                |  |                     
|     |  | (i)                                                 |  | CertificationsChief Executive Officer, Marshall L. Stewart                                                       |  |                      |  | 14         
|     |  | (ii)                                                |  | CertificationsChief Financial Officer, Daryl S. Meddings                                                         |  |                      |  | 15         
|     |  | (iii)                                               |  | Certification§ 906-Chief Executive Officer, Marshall L. Stewart                                                  |  |                      |  | 16         
|     |  | (iv)                                                |  | Certification§ 906-Chief Financial Officer, Daryl S. Meddings                                                    |  |                      |  | 17         



|+ |  | Previously filed as an exhibit to the Registration Statement of Ocean West Holding Corporation (File No. 333-95927) filed on February 1, 2000.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------



|x |  | Previously filed as an exhibit to the Registration Statement of Ocean West Holding Corporation (File No. 333-86484).
|- |  | --------------------------------------------------------------------------------------------------------------------



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



SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



OCEAN WEST HOLDING
CORPORATIONBy:

/s/    MARSHALL L.
STEWARTMarshall L. Stewart, President and Chief Executive OfficerDate:    May 16, 2003By:

/s/    DARYL S.
MEDDINGSDaryl S. Meddings, Executive Vice President and Chief Financial OfficerDate:    May 16, 2003




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