As Filed with the Securities and Exchange Commission on August 19, 2003
==============================================================================
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

                                   (Mark One)

                [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

                       For the period ended June 30, 2003

                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                     OF THE EXCHANGE ACT

          For the transition period from              to
                                         ------------    -------------

                       COMMISSION FILE NUMBER: 033-15096-D

                             -----------------------

                             MILESTONE CAPITAL, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


           COLORADO                                               84-1111224
 ------------------------------                               -----------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                               39 Plymouth Street
                               Fairfield, NJ 07004
                     --------------------------------------
                    (Address of principal executive offices)

                                 (973) 808-5770
                            -------------------------
                           (Issuer's Telephone Number)


     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of August 19, 2003, the
registrant had 82,077,000 shares of common stock, no par value, issued and
outstanding.

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

================================================================================

<PAGE>


                    MILESTONE CAPITAL, INC. AND SUBSIDIARIES




                                                                           PAGE
                                                                           ----

Part I - Financial Information

Item I.    Financial Statements

           Condensed Consolidated Balance Sheet at June 30, 2003
            (Unaudited)                                                     F-2

           Condensed Consolidated Statements of Operations
           Six and Three Months Ended June 30, 2003 and 2002
            (Unaudited)                                                     F-3

           Condensed Consolidated Statement of Changes in Stockholders'
           Deficiency
           Six Months Ended June 30, 2003 (Unaudited)                       F-4

           Condensed Consolidated Statements of Cash Flows
           Six Months Ended June 30, 2003 and 2002 (Unaudited)              F-5

           Notes to Condensed Consolidated Financial Statements            F-6/9

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

Item 3.    Controls and Procedures                                           7


Part II - Other Information

Item 5.    Other Information                                                 8

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

           Signatures                                                        9


                                      F-1

<PAGE>


                    Milestone Capital, Inc. and Subsidiaries

                      Condensed Consolidated Balance Sheet
                                  June 30, 2003
                                   (Unaudited)

                                     ASSETS

Current assets:
     Cash                                                          $      1,837
     Mortgage loans held for sale                                       534,000
     Prepaid expenses and other receivables                             177,183
                                                                   ------------
         Total current assets                                           713,020

Property and equipment, net                                             505,525
Deferred acquisition costs                                              490,833
Other assets                                                             58,746
                                                                   ------------

         Totals                                                    $  1,768,124
                                                                   ============


                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                    ----------------------------------------

Current liabilities:
     Borrowings under warehouse line of credit                     $    534,000
     Accounts payable and accrued expenses                            1,526,243
     Notes payable (including related party of $350,811)                430,591
     Convertible debt                                                   275,000
     Current portion of capital lease obligations                       176,915
                                                                   ------------
         Total current liabilities                                    2,942,749

Capital lease obligations, net of current portion                        11,174
Other liabilities                                                        29,114
                                                                   ------------
         Total liabilities                                            2,983,037
                                                                   ------------

Commitments and contingencies

Stockholders' deficiency:
     Preferred stock, no par value; 5,000,000 shares authorized;
         none issued                                                       --
     Common stock, no par value; 500,000,000 shares authorized;
         82,077,000 shares issued and outstanding                     7,831,885
     Additional paid-in capital                                       3,817,078
     Accumulated deficit                                            (12,863,876)
                                                                   ------------
              Total stockholders' deficiency                         (1,214,913)
                                                                   ------------

              Totals                                               $  1,768,124
                                                                   ============


See Notes to Condensed Consolidated Financial Statements.

                                      F-2

<PAGE>
<TABLE>
<CAPTION>


                              Milestone Capital, Inc. and Subsidiaries

                           Condensed Consolidated Statements of Operations
                          Six and Three Months Ended June 30, 2003 and 2002
                                             (Unaudited)



                                               Six Months                    Three Months
                                             Ended June 30,                 Ended June 30,
                                      ----------------------------    ----------------------------
                                          2003            2002            2003            2002
                                      ------------    ------------    ------------    ------------

Revenue:
   <S>                                <C>             <C>             <C>             <C>
    Broker fee income                 $    913,974    $    477,508    $    435,552    $     77,392
    Loan origination and processing        982,840         373,798         555,153         320,832
    Gain on sale of loans                   23,539         100,546          20,071          27,607
    Interest                                 3,499          26,642           2,369           9,084
    Other                                    8,895                           8,895
                                      ------------    ------------    ------------    ------------
       Totals                            1,932,747         978,494       1,022,040         434,915
                                      ------------    ------------    ------------    ------------

Operating expenses:
    Direct                                 820,395         315,512         512,453         221,505
    General and administrative           1,796,285       2,177,950         872,198         599,675
    Interest                                 1,359          25,033                          15,526
                                      ------------    ------------    ------------    ------------
       Totals                            2,618,039       2,518,495       1,384,651         836,706
                                      ------------    ------------    ------------    ------------

Loss from operations                      (685,292)     (1,540,001)       (362,611)       (401,791)
Other interest expense                      94,658         184,253          25,602         118,503
                                      ------------    ------------    ------------    ------------

Net loss                              $   (779,950)   $ (1,724,254)   $   (388,213)   $   (520,294)
                                      ============    ============    ============    ============


Basic loss per common share           $       (.01)   $       (.02)   $       ( - )   $       (.01)
                                      ============    ============    ============    ============


Basic weighted average common
    shares outstanding                  82,077,000      80,131,326      82,077,000      81,111,692
                                      ============    ============    ============    ============


See Notes to Condensed Consolidated Financial Statements.

                                                F-3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                     Milestone Capital, Inc. and Subsidiaries

                       Condensed Consolidated Statement of Changes in Stockholders' Deficiency
                                          Six Months Ended June 30, 2003
                                                    (Unaudited)



                              Series A Convertible          Series B Convertible
                                Preferred Stock               Preferred Stock                  Common Stock
                           ---------------------------   ---------------------------   ---------------------------
                              Shares         Amount         Shares         Amount         Shares         Amount
                           ------------   ------------   ------------   ------------   ------------   ------------
<S>                          <C>            <C>            <C>             <C>           <C>          <C>
Balance, January 1, 2003           --             --             --             --       82,077,000   $  7,831,885

Forgiveness of Salaries            --             --             --             --             --             --

Reversal of Unearned
   Compensation                    --             --             --             --             --             --

Net Loss                           --             --             --             --             --             --
                           ------------   ------------   ------------   ------------   ------------   ------------

Balance, June 30, 2003             --     $       --             --     $       --       82,077,000   $  7,831,885
                           ============   ============   ============   ============   ============   ============


                                                       F-4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                         Milestone Capital, Inc. and Subsidiaries

           Condensed Consolidated Statement of Changes in Stockholders' Deficiency
                              Six Months Ended June 30, 2003
                                        (Unaudited)



                            Additional
                             Paid-in         Unearned       Accumulated
                             Capital       Compensation       Deficit         Total
                           ------------    ------------    ------------    ------------
<S>                        <C>             <C>             <C>             <C>
Balance, January 1, 2003   $  4,049,524    $   (329,028)   ($12,083,926)   $   (531,545)

Forgiveness of Salaries          96,582            --              --            96,582

Reversal of Unearned
   Compensation                (329,028)        329,028            --              --

Net Loss                           --              --          (779,950)       (779,950)
                           ------------    ------------    ------------    ------------

Balance, June 30, 2003     $  3,817,078    $       --      $(12,863,876)   $ (1,214,913)
                           ============    ============    ============    ============


See Notes to Condensed Consolidated Financial Statements.

                                        F-4(Con't)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                     Milestone Capital, Inc. and Subsidiaries

                                  Condensed Consolidated Statements of Cash Flows
                                      Six Months Ended June 30, 2003 and 2002
                                                    (Unaudited)



                                                                                          2003           2002
                                                                                       -----------    -----------
Operating activities:
    <S>                                                                               <C>            <C>
    Net loss                                                                           $  (779,950)   $(1,724,254)
    Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization                                                       196,462        194,307
       Issuance of common stock to consultant in connection with reverse acquisition                      221,250
       Forgiveness of current year salaries                                                 96,582        175,665
       Charges to interest expense associated with:
          Beneficial conversion feature                                                                   152,850
          Amortization of debt discount and deferred financing costs                        35,400         29,365
       Amortization of unearned compensation                                                               91,090
       Issuance of shares in exchange for services                                                        276,473
       Deferred acquisition costs                                                            5,000
       Changes in operating assets and liabilities:
          Mortgage loans held for sale                                                     (85,700)       972,479
          Prepaid expenses and other receivables                                           (84,698)        21,786
          Other assets                                                                                         69
          Borrowings under warehouse line of credit                                         85,700       (967,200)
          Accounts payable and accrued expenses                                            284,079         34,747
          Other liabilities                                                                 (7,278)         4,359
                                                                                       -----------    -----------
              Net cash used in operating activities                                       (254,403)      (517,014)
                                                                                       -----------    -----------

Investing activities - purchases of property and equipment                                                (45,970)
                                                                                                      -----------

Financing activities:
    Proceeds from issuance of convertible debentures                                                      305,000
    Payments of notes payable                                                              (15,000)
    Proceeds from notes payable                                                            114,500        140,000
    Payments under capital lease obligations                                                              (44,158)
    Net proceeds from sale of common stock                                                                214,000
                                                                                       -----------    -----------
              Net cash provided by financing activities                                     99,500        614,842
                                                                                       -----------    -----------

Net increase (decrease) in cash                                                           (154,903)        51,858
Cash, beginning of period                                                                  156,740          6,257
                                                                                       -----------    -----------

Cash, end of period                                                                    $     1,837    $    58,115
                                                                                       ===========    ===========

Supplemental disclosure of noncash investing and financing activities:
    Reversal of unearned compensation                                                  $   329,028
                                                                                       ===========
    Common stock related transactions:
       Conversion of convertible debt and accrued interest thereon into shares
          of common stock                                                                             $   620,046
                                                                                                      ===========

       Issuance of common stock in connection with convertible debentures                             $   164,853
                                                                                                      ===========

    Other noncash investing and financing activities:
       Acquisition of property and equipment under capital lease obligations                          $    59,034
                                                                                                      ===========


See Notes to Condensed Consolidated Financial Statements.

                                                        F-5
</TABLE>

<PAGE>


                    Milestone Capital, Inc. and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


Note 1 - Organization and business:
            Milestone Capital, Inc. ("Milestone") was organized under the laws
            of the State of Colorado in February 1987 under the name Shield
            Enterprises, Inc. In 1989, Milestone completed an initial public
            offering of its securities. In May 1990, Milestone merged with
            Milestone Capital, Inc., a Delaware corporation engaged in the
            business of investing in and providing managerial assistance to
            developing companies. Prior to January 3, 2002, Milestone was an
            inactive "shell company" that had no material business operations
            and virtually no assets.

            On January 3, 2002, Milestone entered into an exchange agreement
            (the "Exchange") with EliteAgents Mortgage Services, Inc. (formerly
            EliteAgents, Inc.) ("Elite"), a licensed mortgage banker. As of
            January 3, 2002, Milestone had, effectively, 8,000,000 shares of no
            par common stock outstanding. As of that date, Milestone effectively
            issued 72,000,000 shares of common stock as follows: (i) 37,148,544
            shares were issued for all of the outstanding shares of Elite common
            stock; (ii) 2,543,277 shares were issued for all of the outstanding
            shares of Elite Series A preferred stock; (iii) 14,445,832 shares
            were issued for all of the outstanding shares of Elite Series B
            preferred stock; (iv) 12,615,588 shares were issued for the
            effective conversion of outstanding Elite convertible debentures
            with a principal balance of $615,290 and accrued interest of $4,756
            into Milestone common stock and (v) 5,246,759 shares were issued to
            other investors that had agreed to purchase shares of Elite common
            stock or had performed services for elite which were payable in
            shares of Elite common stock. As a result of the exchange, Elite
            became a wholly-owned subsidiary of Milestone, and Milestone had
            80,000,000 shares of common stock outstanding of which 72,000,000,
            or 90%, were owned by the former stockholders of Elite and 8,000,000
            shares, or 10%, were owned by the stockholders of Milestone. Since
            the former stockholders of Elite became the owners of the majority
            of the outstanding common shares of Milestone after the Exchange,
            the Exchange was treated as a "purchase business combination" and a
            "reverse acquisition" for accounting purposes in which Milestone was
            the legal acquirer and Elite was the accounting acquirer. As a
            result, the assets and liabilities of Elite, the accounting
            acquirer, continued to be recorded at their historical carrying
            values upon completion of the Exchange. All share and per share
            amounts set forth herein prior to the Exchange have been
            retroactively restated to reflect the effects of the Exchange.

            Elite has continued its mortgage banking activities and other
            financial services subsequent to the Exchange. It has focused on
            mortgage loan originations through the uses of the internet and
            proprietary technology. In addition, effective May 8, 2002,
            Milestone formed a wholly-owned subsidiary, EliteAgents Leasing
            Services, Inc. ("Leasing"), for the purpose of establishing
            equipment financing and leasing operations. Leasing had not
            generated significant revenues as of June 30, 2003.

                                      F-6

<PAGE>

                    Milestone Capital, Inc. and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)



Note 1 - Organization and business (concluded):
            The "Company" as used herein refers to Elite prior to January 3,
            2002, the date of the Exchange and Milestone together with Elite and
            Leasing subsequent to that date.

            In the opinion of management, the accompanying unaudited condensed
            consolidated financial statements reflect all adjustments,
            consisting of normal recurring accruals, necessary to present fairly
            the financial position of the Company as of June 30, 2003, its
            results of operations for the six and three months ended June 30,
            2003 and 2002, its changes in stockholders' equity for the six
            months ended June 30, 2003 and its cash flows for the six months
            ended June 30, 2003 and 2002. Pursuant to the rules and regulations
            of the United States Securities and Exchange Commission (the "SEC"),
            certain information and disclosures normally included in financial
            statements prepared in accordance with accounting principles
            generally accepted in the United States of America have been
            condensed in or omitted from these consolidated financial statements
            unless significant changes have taken place since the end of the
            most recent fiscal year. Accordingly, these unaudited condensed
            consolidated financial statements should be read in conjunction with
            the audited financial statements as of December 31, 2002 and for the
            year then ended and the notes thereto (the "Audited Financial
            Statements") and the other information included in the Company's
            Annual Report on Form 10-KSB for the year ended December 31, 2002
            that was previously filed with the SEC.

            The results of the Company's operations for the six and three months
            ended June 30, 2003 are not necessarily indicative of the results of
            operations to be achieved for the full year ending December 31,
            2003.


Note 2 - Basis of presentation:
            The accompanying condensed consolidated financial statements have
            been prepared assuming that the Company will continue as a going
            concern. As of June 30, 2003, the Company had a working capital
            deficiency of $2,230,000. In addition, the Company had net losses of
            $780,000 and $3,210,000 and negative cash flows from operating
            activities of $254,000 and $777,000 for the six months ended June
            30, 2003 and the year ended December 31, 2002, respectively.
            Management believes it is probable that the Company will need to
            obtain additional equity or debt financing to be able to sustain its
            operations until it can achieve profitability, if ever.

                                      F-7

<PAGE>


                    Milestone Capital, Inc. and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


Note 2 - Basis of presentation (concluded):
            Management believes that the commercial success and profitability of
            the Company will depend on its ability to expand its operations and
            achieve recognition as a national financing company. In addition to
            relying on in-house loan offerings, the Company has also sought to
            provide mortgage origination services through real estate agency
            offices, accountants, financial planners and other financial
            services firms. Employees at branch offices have direct access to
            the loan origination process through the Company's web site and
            related support software and database information. In addition,
            management has pursued expansion of its mortgage banking activities
            through the acquisition of other established mortgage bankers (see
            Note 4 to the Audited Financial Statements), and is seeking to
            expand the variety of lending activities in which it engages
            including, but not limited to, the equipment financing and leasing
            activities that Leasing, the Company's newly-formed subsidiary, will
            conduct.

            To enable the Company to sustain its operations through at least
            June 30, 2004 and, ultimately, complete its marketing and
            development program and achieve profitability, management plans to
            seek additional financing for the Company through sales of debt and
            equity securities. However, management cannot assure that the
            Company will be able to obtain the necessary additional debt or
            equity financing on acceptable terms and, accordingly, management
            cannot assure that the Company will be able to sustain its
            operations through at least June 30, 2004.

            The accompanying condensed consolidated financial statements do not
            include any adjustments related to the recoverability and
            classification of assets or the amount and classifications of
            liabilities that might be necessary should the Company be unable to
            continue as a going concern.

Note 3 - Net earnings (loss) per common share:
            The Company presents "basic" earnings (loss) per common share and,
            if applicable, "diluted" earnings per common share pursuant to the
            provisions of Statement of Financial Accounting Standards No. 128,
            "Earnings Per Share". Basic earnings (loss) per common share is
            calculated by dividing income or loss applicable to common stock by
            the weighted average number of common shares outstanding during each
            period. As of June 30, 2003 and 2002, the Company had 20,049,560 and
            30,406,977 of potentially dilutive securities.

Note 4 - Convertible debentures:
            As of June 30, 2003, convertible debentures consist of notes that
            bear interest at 10%, can be converted at any time at the option of
            the holder or the Company into shares of the Company's common stock
            at $.20 per share and were initially scheduled to mature on March 1,
            2003; however, the maturity date was extendable for six months at
            the discretion of the Company. During the six months ended June 30,
            2003, the company exercised its right to extend the maturity date of
            the outstanding debentures until September 1, 2003 (see Note 9 to
            the Audited Financial Statements).

                                      F-8

<PAGE>

                    Milestone Capital, Inc. and Subsidiaries

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


Note 5 - Stockholders' equity:

            Stock option plan:
               Pursuant to the terms of the Exchange, the Company adopted
               Milestone's stock option plan. The exchange agreement further
               required the Board of Directors of the Company to ratify the plan
               within one year of the consummation of the Exchange. As the plan
               was never ratified, options to purchase 9,344,392 shares of the
               Company's common stock were effectively cancelled. As a result,
               during the six months ended June 30, 2003, the Company reversed
               unearned compensation associated with such options totaling
               $329,028 (see Note 10 to the Audited Financial Statements).

            Forgiveness of officer salaries:
               During the six months ended June 30, 2003, officers of the
               Company forgave aggregate salaries of $96,582. Such amount was
               treated as a contribution to capital.

Note 6 - Income taxes:
            As of June 30, 2003, the Company had net operating loss
            carryforwards of approximately $9,700,000 available to reduce future
            Federal and state taxable income which, if not used, will expire at
            various dates through 2023. The Company had no other material
            temporary differences as of that date. Due to the uncertainties
            related to, among other things, the changes in the ownership of the
            Company, which could subject those loss carryforwards to substantial
            annual limitations, and the extent and timing of its future taxable
            income, if any, the Company offset the deferred tax assets
            attributable to the potential benefits of approximately $3,880,000
            from the utilization of those net operating loss carryforwards by an
            equivalent valuation allowance as of June 30, 2003.

            The Company had also offset the potential benefits of $3,157,000
            from net operating loss carryforwards by an equivalent valuation
            allowance as of June 30, 2002. As a result of the increases in the
            valuation allowance of $151,000 and $206,000 during the six months
            ended June 30, 2003 and 2002, respectively, there are no credits for
            income taxes reflected in the accompanying consolidated statements
            of operations to offset pre-tax losses.

            Due to certain limitations established by the internal revenue code,
            the amount of net operating loss carryforwards available for use in
            any one year is limited.

Note 7- Net worth requirements:
            The Company is subject to various minimum net worth requirements
            pursuant to various state and HUD-imposed mandates as well as
            requirements from its permanent investors. As of June 30, 2003, the
            Company was required to maintain an adjusted minimum net worth of
            $250,000. As of June 30, 2003, the Company did not meet such minimum
            net worth requirements. If such requirements are not properly cured,
            the Company's ability to continue as a going concern in the mortgage
            banking industry could be impaired. In addition, at various times
            during the year, the Company's net worth may be less than required
            minimum amounts.

                                      F-9

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

General

On January 3, 2002, Milestone completed a share exchange transaction (the
"Exchange Transaction") with EliteAgents, Inc. ("EliteAgents"), whereby
Milestone issued shares of its Common Stock to the shareholders of EliteAgents
in exchange for all of the issued and outstanding ownership interests in
EliteAgents. EliteAgents was originally incorporated in New Jersey in 1999 under
the name MortgageBANC, Inc. as a New Jersey Correspondent Mortgage Banker, with
the name changed to QuickFinance, Inc. and then to EliteAgents, Inc. in March
2000. In February 2002, EliteAgents amended its Articles of Incorporation to
change its name to EliteAgents Mortgage Services Inc. As a result of the
Exchange Transaction, EliteAgents Mortgage Services, Inc. is a wholly owned
operating subsidiary of Milestone.

Significant Transactions

In July 2002, Milestone entered into a non-binding letter of intent to acquire a
mortgage-banking corporation that conducts business in approximately 30 states
and generated approximately $1.8 billion in mortgage originations during the
period from January 1, 2002 to December 31, 2002. This entity generates revenues
from retail, wholesale and correspondent operations. Through this transaction,
Milestone may also acquire a mortgage document preparation corporation and title
agency corporation. The original letter of intent has expired and the parties
have verbally agreed to extend the letter of intent. Milestone expects to
complete this transaction during the third quarter of 2003.

In October 2002, Milestone entered into a non-binding letter of intent to
acquire a mortgage broker operating in twelve states. This broker generated
approximately $2.0 billion in mortgage originations from retail operations and
strategic partnerships during the period from January 1, 2002 to December 31,
2002. The original letter of intent has expired and the parties have verbally
agreed to extend the letter of intent. Milestone expects to complete this
transaction during the fourth quarter of 2003.
Milestone has received a non-binding financing proposal to fund both of the
aforementioned proposed transactions through debt and equity financing to be
obtained from a public bank and a merchant bank, respectively. The debt and
equity financing and closing of each acquisition is subject to the successful
completion of due diligence reviews, execution of acceptable purchase and
lending agreements and receipt of various approvals.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations
are based upon our unaudited condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, we evaluate our
estimates, including those related to property and equipment, stock based
compensation, income taxes and contingencies. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

The accounting policies and estimates used as of December 31, 2002, which are
included in the notes to the consolidated financial statements in the Company's
previously filed Form 10-KSB filed on April 15, 2003, as amended by the
Company's Form 10-KSB/A filed on April 30, 2003, have been applied consistently
for the quarter ended June 30, 2003.

Results of Operations


2001 was the first full year in which we utilized our current sales distribution
model and Web-based technology in our loan origination business, and we
continued this activity in 2002 and the first six months of 2003. Since 2001, we
have increased our user base to include business professionals such as
accountants, financial planners and insurance agents in addition to real estate

                                       2

<PAGE>


professionals, and we have benefited from this broadened user base. Our sales
and marketing strategy going forward is to focus on various types of business
professionals who may have clients in need of either purchase or refinance
mortgages. We believe that expanding our user base beyond real estate
professionals to other types of business professionals will help us increase our
volume of purchase mortgages and maintain a higher ratio of purchase mortgage
business when compared to refinance mortgage business.

In addition, recruiting experienced mortgage professionals and loan officers
will be crucial to our success. Through our experiences, we have determined that
experienced mortgage professionals and loan officers are more likely to be
successful in providing ongoing account management to our business
professionals, which we believe is essential to maintaining and increasing sales
volume with a given account. Account management consists primarily of reminding
our users of the value-added service we may provide our users and their clients,
as well as educating them on new products we may offer, such as leasing
services. In addition, experienced mortgage professionals are also able to
generate their own loan originations. For these reasons, we plan to focus on
recruiting experienced mortgage professionals to work as salespeople.

Based on the challenges we have experienced in hiring mortgage professionals
during this boom period in the residential mortgage industry, Milestone has
determined that our growth objectives can best be met through acquisitions of
complementary companies. As noted above, Milestone has entered into two separate
non-binding letters of intent to acquire two mortgage companies that, if and
when they are acquired by Milestone are expected to lead to the addition of over
500 mortgage professionals. We believe that these companies would also provide
Milestone with significant additions to senior management, important strategic
relationships that will generate benefit from the EliteAgents system and a
substantially larger mortgage warehouse line.

We generate revenue primarily from (i) loan origination and broker fees, (ii)
net gain on the sale of mortgage loans in the secondary market and (iii)
interest income received on mortgage loans during the period in which we
warehouse loans pending their sale in the secondary market. Loan origination
fees, net gain on the sale of mortgage loans and interest income are largely
transaction oriented and volume driven. We did not engage in the warehousing of
mortgage loans until the fourth quarter of 2001.

We currently broker more than 75% of our loans to more than 20 lenders. As we
become more experienced in managing our warehouse line of credit, we expect that
we will increase the volume of loans that we fund through our warehouse line
of credit. We do not engage in the practice of servicing loans. All of the loans
funded by our warehouse line are sold out of the line within 30 days. The
proceeds of the loans sold out of our warehouse line are used to repay the line
of credit that originally funded the loans.

In the second quarter of fiscal year 2003, our loan origination volume increased
by 165% to $50.3 million on 226 loans from $19.0 million on 92 loans in the
second quarter of fiscal year 2002. Our net loss from operations for the second
quarter of fiscal year 2003 was ($362,611) compared to a net loss from
operations of ($401,791) in the second quarter of fiscal 2002, a decrease of
10%. For the second quarter of fiscal year 2003, revenues increased 135% to
$1,022,040 from $434,915 in the second quarter of 2002. Total operating expenses
increased by 65% to ($1,384,651) for the second quarter of 2003 from ($836,706)
in the second quarter of 2002.

For the first six months of fiscal year 2003, our loan origination volume
increased by 100% to $95.3 million on 428 loans from $47.7 million on 238 loans
in the first six months of fiscal year 2002. Our net loss from operations for
the first six months of fiscal year 2003 was ($685,292) compared to a net loss
from operations of ($1,540,001) in the first six months of fiscal 2002, a
decrease of 56%. For the first six months of fiscal year 2003, revenues
increased 98% to $1,932,747 from $978,494 in the first six months of 2002. Total
operating expenses increased by 4% to ($2,618,033) for the first six months of
2003 from ($2,518,495) in the first six months of 2002.

Loan Origination and Broker Fee Income. We recognize fees from purchase mortgage
loan originations at closing if the loan is brokered by us instead of warehoused
by us. Loan origination and broker fee income increased 151% to $999,705 in the
second quarter of fiscal year 2003 from $398,224 in the second quarter of fiscal
year 2002. Loan origination and broker fee income increased 123% to $1,896,814
in first six months of fiscal year 2003 from $851,306 in the first six months of
fiscal year 2002. The primary factor that contributed significantly to the
increase in revenue per loan we experienced during the second quarter and first
six months of 2003 compared to the second quarter and first six months of 2002
was the better margins that we received from the lending institutions we
utilized due to better relations with them and our improved understanding of
which institutions provide better margins.

                                       3

<PAGE>


Gains on Sale of Mortgage Loans. When we warehouse loans, we seek to sell those
loans in the secondary markets. Our gains and losses from the sale of mortgage
loans are affected by several factors including (i) competitive market forces
affecting our pricing structure at the time of origination, (ii) interest rate
increases or decreases between the time that we commit to originate or purchase
loans and the time that we commit to sell the loans in the secondary markets,
(iii) price subsidies and (iv) the recognition of gains relating to originated
mortgage servicing rights. Our net gain on the sales of mortgage loans from our
loan warehousing operations was $20,071 in the second quarter of 2003 compared
to $27,607 in the second quarter of 2002. Our net gain on the sales of mortgage
loans from our loan warehousing operations was $23,539 in the first six months
of 2003 compared to $100,546 in the first six months of 2002. The reason for the
decrease in the second quarter and first six months of 2003 was a departure of
personnel responsible for warehouse operations and management's decision to
decrease warehouse operations until suitable personnel have been installed.

Interest Income. Interest income consists primarily of the difference between
the interest income received on mortgage loans and the interest that we pay on
the short-term bank borrowings used to finance mortgage loans prior to the sale
of the loan into the secondary market. The conditions that affect net interest
income from period to period include the relationship between prevailing
mortgage rates and short-term borrowing rates, the mix of fixed-rate and
adjustable rate mortgage loans held for sale and the average holding period
before the loans are sold. Interest income also includes interest received on
our cash accounts. Interest income in the second quarter of 2003 was $2,369
compared to $9,084 for the second quarter of 2002. Interest income in the first
six months of 2003 was $3,499 compared to $26,642 for the first six months of
2002.

The major components of our total expenses are (i) compensation (including
commissions) and benefits, and (ii) general and administrative expenses. Total
operating expenses increased by 65% to ($1,384,651) for the second quarter of
2003 from ($836,706) in the second quarter of 2002. Payments of commissions for
loan originations increased by 1,074% to ($441,477) for the second quarter of
2003 from ($37,602) for the second quarter of 2002. Non-commission employee
compensation decreased by 7% to ($351,228) for the second quarter of 2003 from
($375,864) for the second quarter of 2002.

For the first six months of 2003, total operating expenses increased by 4% to
($2,618,039) from ($2,518,495) for the first six months of 2002. Payments of
commissions for loan originations increased by 283% to ($673,760) for the second
quarter of 2003 from ($176,092) for the second quarter of 2002. Non-commission
employee compensation decreased by 35% to ($714,353) for the second quarter of
2003 from ($1,100,705) for the second quarter of 2002.


Non Cash Expenses

During the second quarter of 2002, the Company incurred non-cash operating
expenses for depreciation and amortization, forgiveness of current year salaries
and interest expense associated with amortization of debt discount and deferred
financing costs. Depreciation and amortization decreased to $98,231 in the
second quarter of 2003 from $104,123 in the second quarter of 2002. Depreciation
and amortization charges were $196,462 and $194,307 for the first six months of
fiscal 2003 and 2002, respectively. Salaries forgiven by officers of the Company
were $43,582 and $46,832 for the three months ended June 30, 2003 and 2002,
respectively and $96,582 for the six months ended June 30, 2003. Interest
expense associated with the amortization of debt discount and deferred financing
costs was $116,465 during the three months ended June 30, 2002. The Company did
not incur similar charges during the three months ended June 30, 2003. Such
interest charges were $35,400 and $182,215 for the first six months of fiscal
2003 and 2002, respectively.


Equipment Leasing

We are expanding our business operations into the equipment leasing market
through our wholly owned subsidiary EliteAgents Leasing, Inc. Our focus will be
to provide leasing services to small and medium-sized customers. This is part of
our overall strategy of utilizing our sales distribution model (consisting of a
direct sales force and sales through network sites) in multiple markets. The
Web-based leasing software system that we are developing internally uses many of
the same features as the Web-based technology used in our loan origination
business. We did not generate any significant revenues in the equipment leasing
market during the six months ended June 30, 2003.

                                       4

<PAGE>


Income Taxes

We have incurred net operating losses since inception and, therefore, we have
not incurred any income taxes. We have a net operating tax loss carry forward of
approximately $9,700,000. However, due to certain limitations established by the
Internal Revenue Code, the amount of net operating loss carryforwards available
for use in any one year is limited.

Disclosure About Market Risk

We manage many risks in the normal course of business. However, we consider
interest rate risk to be one of the most significant market risks that could
materially impact our financial position and results of operations. The
movements in interest rates affect the value of capitalized mortgage servicing
rights, the mortgage inventory held for sale, volume of loan production and
total net interest income earned.

Liquidity and Capital Resources

As of June 30, 2003, we had a cash balance of $1,837 and a working capital
deficiency of $2,230,000. We believe that we may continue to incur negative cash
flows from operating activities for the foreseeable future. To control spending,
we have implemented several expense control measures. For Milestone to continue
its business operations as a going concern increase sales production and engage
in marketing efforts, with a goal of generating positive net income on a monthly
basis, it will be necessary for us to immediately obtain additional funding and
to continue to control expenses. However, there can be no assurance that we will
be able to obtain additional capital on terms acceptable to us. See "Need for
additional financing; uncertainty of additional financing" in the "Risk Factors"
section of Milestone's Annual Report on Form 10-KSB filed on April 15, 2003, as
amended by Milestone's Form 10-KSB/A filed on April 30, 2003.

Milestone has received a non-binding financing proposal from a bank to provide a
significant amount of debt financing for our proposed acquisitions and for
working capital purposes. Assuming that the debt financing transaction and the
acquisitions are consummated and perform as expected, we anticipate that the
financing we will receive from this bank and the cash generated by the two
companies Milestone intends to acquire will enable Milestone to execute our
business strategy and will be sufficient to meet Milestone's working capital
needs for the next twelve months.

Milestone has accrued significant accounts payable in connection with the
negotiation of one of the proposed acquisitions, and in the event that we do not
obtain the debt financing, our need to obtain alternative sources of financing
in order to continue our ongoing business operations and satisfy our accounts
payable will be increased.

Net cash used in operating activities was $254,403 for the six months ended June
30, 2003, as compared to net cash used in operations of $517,014 for the six
months ended June 30, 2002. The decrease in net cash used in operating
activities was primarily due to the reduction in the operating net loss during
the six months ended June 30, 2003, as compared to the six months ended June 30,
2002.

During the first fiscal quarter of 2002, we engaged in two capital raising
initiatives. In February 2002, we closed an offering of unregistered common
stock of Milestone from which we raised $214,000 through the sale of 4,356,184
shares. The shares issued in this transaction were exempt from registration
requirements pursuant to the exemption from registration contained in Rule 506
of Regulation D of the Securities Act of 1933 as amended to date.

On March 1, 2002, we initiated an offering of up to $1.15 million in
unregistered convertible debentures to accredited investors. The convertible
debentures bear interest at 10% per year and can be converted at any time at the
option of the holder into shares of our unregistered common stock at $0.20 per
share. The convertible debentures mature on September 1, 2003. In addition,
holders of the convertible debentures receive one share of our unregistered
common stock for each $1.00 of convertible debentures purchased. We closed this
offering during the first quarter of 2002. We raised $350,000 from this
offering. The notes and shares issued in this offering were exempt from
registration requirements pursuant to the exemption from registration contained
in Rule 506 of Regulation D of the Securities Act of 1933 as amended to date.

The proceeds of these raises have been used to fund operating expenses, increase
advertising and marketing in the mortgage division, and launch the equipment
leasing division. At various times during 2002, holders converted the debentures
into 375,000 shares of the Company's common stock. The debentures that were
converted had an aggregate principal balance of $75,000.

                                       5

<PAGE>


In September 2002 Milestone initiated a new private placement to raise capital
to fund our due diligence costs and other transaction costs associated with our
pending acquisitions, to pay down certain accounts payable and to fund operating
expenses. Milestone is offering up to 110,000 Units for $10 per Unit. Each Unit
consists of (i) 50 shares of Milestone's unregistered common stock, (ii) a
warrant exercisable for up to 25 shares of Milestone's unregistered common stock
at an exercise price of $0.40 per share, and (iii) a warrant exercisable for up
to 25 shares of Milestone's unregistered common stock at an exercise price of
$0.60 per share. The Units will be offered solely to a limited number of
accredited investors. The Units have not been registered under the Securities
Act of 1933 as amended to date, and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements. From October 1, 2002 through November 4, 2002, Milestone had
raised $145,000 from this offering, and the issued securities were exempt from
registration requirements pursuant to the exemption from registration contained
in Rule 506 of Regulation D of the Securities Act of 1933 as amended to date.

During 2002, the Company issued 905,575 shares of common stock of the Company in
exchange for services. Of the 905,575 shares issued, 890,575 were issued to
officers of the Company for the reimbursement of expenses of $43,750. All shares
issued to officers were issued through a private placement the Company was then
offering to accredited investors. The securities issued in this transaction were
exempt from registration requirements pursuant to the exemption from
registration contained in Section 4(2) and Rule 506 of Regulation D of the
Securities Act of 1933 as amended to date.

In addition, during 2002, the Company issued 271,250 shares of common stock with
a fair value of $54,300 in exchange for general and administrative costs. The
securities issued in this transaction were exempt from registration requirements
pursuant to the exemption from registration contained in Section 4(2) and Rule
506 of Regulation D of the Securities Act of 1933 as amended to date.

During 2002, certain officers of the Company advanced an aggregate of $221,000
to the Company to fund ongoing operations. The Company issued warrants to
purchase 1,080,000 shares of the Company's common stock at an exercise price of
$.20 per share that expire on September 30, 2007 in consideration for the
provision by these officers of the funding. The securities issued in this
transaction were exempt from registration requirements pursuant to the exemption
from registration contained in Section 4(2) and Rule 506 of Regulation D of the
Securities Act of 1933 as amended to date.

During the first six months of 2003, certain officers of the Company advanced an
aggregate of $34,500 to fund ongoing operations. This debt accrues interest at
10% per year and matures in May 2004. Another person advanced an aggregate of
$45,000 in May 2003 to fund ongoing operations. The Company is obligated to
repay this debt in 10 equal monthly payments of $5,000, beginning in July 2003.
The Company has not yet begun to repay this debt. In addition, another person
advanced an aggregate of $30,000 in February 2003 to fund ongoing operations.
This debt accrues interest at 10% per year and matures in February 2004. The
Company has already repaid $15,000 of the amount due under this loan.

The Company maintains a warehouse line of credit with The Provident Bank. The
warehouse line of credit is subject to quarterly review.

Inflation

Inflation may significantly affect our ability to originate loans. Interest
rates typically increase during periods of high inflation and decrease during
periods of low inflation. Generally, the mortgage banking industry, and in
particular the refinance mortgage industry, has experienced increased
origination volume in response to low interest rates, and loan originations,
particularly refinance mortgage originations, have generally decreased during
periods of high interest rates.

Special Cautionary Notice Regarding Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-QSB
contains forward-looking statements that involve risks and uncertainties that
could cause actual results to differ materially. Factors that might cause or
contribute to such differences include, but are not limited to, those discussed
in "Management's Discussion and Analysis or Plan of Operation" as well as inthis
Quarterly Report generally. You should carefully review the risks described in
this Quarterly Report as well as the risks described in our Annual Report on
Form 10-KSB filed on April 15, 2003, as amended by our Form 10-KSB/A filed on
April 30, 2003. In addition, when used in this Quarterly Report, the words
"anticipates," "plans," "believes," "intends," "estimates," and "expects" and
similar expressions are generally intended to identify forward-looking
statements. Such statements are subject to a number of risks and uncertainties.
Our actual results, performance or achievements could differ materially from the
results expressed in, or implied by these forward-looking statements or us. We
undertake no obligation to revise these forward-looking statements to reflect
any future events or circumstances.

                                       6

<PAGE>


Cautionary Statements

We continue to be subject to certain factors that could cause our results to
differ materially from expected and historical results. You should carefully
review the risks described in this Quarterly Report as well as the risks
described in our Annual Report on Form 10-KSB filed on April 15, 2003, as
amended by our Form 10-KSB/A filed on April 30, 2003.

ITEM 3.  CONTROLS AND PROCEDURES

          (a) Evaluation of disclosure controls and procedures. As of the end of
the period covered by this report, management including our principal executive
officer and principal financial officer, evaluated the effectiveness of the
design and operation of our disclosure controls and procedures. Based upon, and
as of the date of that evaluation, our principal executive officer and principal
financial officer concluded that, our disclosure controls and procedures
effectively provided reasonable assurance that information required to be
disclosed in the reports that we file or submit under the Securities and
Exchange Act of 1934 are recorded, processed, summarized and reported within the
time periods specified by the Securities and Exchange Commission's rules and
forms.

          (b) Changes in internal controls. There was no change in internal
controls over financial reporting during the quarter ended June 30, 2003 that
has materially affected, or that is reasonably likely to materially affect, our
internal control over financial reporting.


PART II OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

In the ordinary course of its business, the Company may at times be subject to
various legal proceedings. However, the Company is not party to, and is not
aware of, pending or threatened litigation that we currently anticipate that
would have a material adverse effect on the Company.

ITEM 2.  CHANGES IN SECURITIES

During the first fiscal quarter of 2002, we engaged in two capital raising
initiatives. In February 2002, we closed an offering of unregistered common
stock of Milestone from which we raised $214,000 through the sale of 4,356,184
shares. The shares issued in this transaction were exempt from registration
requirements pursuant to the exemption from registration contained in Rule 506of
Regulation D of the Securities Act of 1933 as amended to date.

On March 1, 2002, we initiated an offering of up to $1.15 million in
unregistered convertible debentures to accredited investors. The convertible
debentures bear interest at 10% per year and can be converted at any time at the
option of the holder into shares of our unregistered common stock at $0.20 per
share. The convertible debentures mature on September 1, 2003. In addition,
holders of the convertible debentures receive one share of our unregistered
common stock for each $1.00 of convertible debentures purchased. We closed this
offering during the first quarter of 2002. We raised $350,000 from this
offering. The notes and shares issued in this offering were exempt from
registration requirements pursuant to the exemption from registration contained
in Rule 506 of Regulation D of the Securities Act of 1933 as amended to date.
The proceeds of these raises have been used to fund operating expenses, increase
advertising and marketing in the mortgage division, and launch the equipment
leasing division.

In September 2002 Milestone initiated a new private placement to raise capital
to fund our due diligence costs and other transaction costs associated with our
pending acquisitions, to pay down certain accounts payable and to fund operating
expenses. Milestone is offering up to 110,000 Units for $10 per Unit. Each Unit
consists of (i) 50 shares of Milestone's unregistered common stock, (ii) a
warrant exercisable for up to 25 shares of Milestone's unregistered common stock
at an exercise price of $0.40 per share, and (iii) a warrant exercisable for up
to 25 shares of Milestone's unregistered common stock at an exercise price of
$0.60 per share. The Units will be offered solely to a limited number of
accredited investors. The Units have not been registered under the Securities
Act of 1933 as amended to date, and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements. Through September 30, 2002, Milestone had not raised any proceeds
from this offering. From October 1, 2002 through November 4, 2002, Milestone had
raised $145,000 from this offering, and the issued securities were exempt from
registration requirements pursuant to the exemption from registration contained
in Rule 506 of Regulation D of the Securities Act of 1933 as amended to date.

                                       7

<PAGE>


In 2002, the Company issued 905,575 shares of common stock of the Company in
exchange for services. Of the 905,575 shares issued, 890,575 were issued to
officers of the Company for the reimbursement of expenses of $43,750. All shares
issued to officers were issued through a private placement the Company was then
offering to accredited investors. The securities issued in this transaction were
exempt from registration requirements pursuant to the exemption from
registration contained in Section 4(2) and Rule 506 of Regulation D of the
Securities Act of 1933 as amended to date.

In addition, during 2002, the Company issued 271,250 shares of common stock with
a fair value of $54,300 in exchange for general and administrative costs. The
securities issued in this transaction were exempt from registration requirements
pursuant to the exemption from registration contained in Section 4(2) and Rule
506 of Regulation D of the Securities Act of 1933 as amended to date.

During 2002, certain officers of the Company advanced an aggregate of $221,000
to the Company to fund ongoing operations. The Company issued warrants to
purchase 1,080,000 shares of the Company's common stock at an exercise price of
$.20 per share that expire on September 30, 2007 to two of these officers in
consideration for the provision by these officers of the funding. The securities
issued in this transaction were exempt from registration requirements pursuant
to the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act of 1933 as amended to date.


ITEM 5.  OTHER INFORMATION

Consistent with Section 10A(i)(2) of the Securities Exchange Act of 1934, as
added by Section 202 of the Sarbanes-Oxley Act of 2002, the Company is
responsible for listing the non-audit services approved in the second quarter of
2003 by the Company's Board of Directors to be performed by JH Cohn LLP, the
Company's external auditor. Non-audit services are defined in the law as
services other than those provided in connection with an audit or a review of
the financial statements of the Company. The non-audit services approved by the
Board of Directors in the second quarter of 2003 (see list below) are each
considered by the Company to be other services. Each of the services has been
approved in accord with a pre-approval from the Board of Directors.

During the quarterly period covered by this filing, the Board of Directors
approved new or recurring engagements of JH Cohn for the following non-audit
services: due diligence review related to the proposed acquisitions discussed
above.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit 31.1 - Certification of CEO pursuant to Section 302 of the
               Sarbanes-Oxley Act of  2002

Exhibit 31.2 - Certification of CFO pursuant to Section 302 of the
               Sarbanes-Oxley Act of  2002

Exhibit 32.1 - Certification of CEO pursuant to Section 906 of the
               Sarbanes-Oxley Act of  2002

Exhibit 32.2 - Certification of CFO pursuant to Section 906 of the
               Sarbanes-Oxley Act of  2002

                                       8

<PAGE>


                                   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.

                                            MILESTONE CAPITAL, INC.

Date:  August 19, 2003                      /s/  Charles J. DeMory
                                            -----------------------------------
                                                 Charles J. DeMory, Chairman,
                                                 Chief Executive Officer and
                                                 President


Date: August 19, 2003                       /s/  John Mangel III
                                            -----------------------------------
                                                 John Mangel III,
                                                 Chief Financial Officer and
                                                 Executive Vice President

                                       9