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

                                   FORM 10-QSB


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

For the quarterly period ended                  March 31, 2003
--------------------------------------------------------------------------------

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from  ____________________ to _____________________


                          Commission File Number  025449
                                                  ------

                          PCS Research Technology, Inc.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


         Delaware                                           33-0856651
---------------------------------                    ---------------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                          Identification No.)

3655 Nobel Drive, Suite 540, San Diego, California             92122
--------------------------------------------------------------------------------
(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code          (858) 623-1600
--------------------------------------------------------------------------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 of 15 (d) of the Securities and Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.

                             Yes [X]   No [ ]

As of May 15, 2003, there were 23,395,436 shares of common stock issued and
outstanding.
<PAGE>

                          PCS Research Technology, Inc.
                                   FORM 10-QSB
                                QUARTERLY REPORT
                                 March 31, 2003

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION   (UNAUDITED)

ITEM 1.  Condensed Consolidated Financial Statements:

         Consolidated Balance Sheets .......................................  3

         Consolidated Statements of Operations .............................  4

         Consolidated Statements of Cash Flows .............................  5

         Notes to Consolidated Financial Statements ........................  6


ITEM 2.  Management's Discussion and Analysis
          of Financial Condition and Results of Operations ................. 16

ITEM 3.  Controls and Procedures ........................................... 25

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings ................................................. 25

ITEM 2.  Changes in Securities and Use of Proceeds ......................... 26

ITEM 3.  Defaults Upon Senior Securities ................................... 26

ITEM 4.  Submission of Matters to a Vote of Security Holders ............... 26

ITEM 4.  Other Information ................................................. 26

ITEM 6.  Exhibits and Reports on Form 8-K .................................. 27

                                       2
<PAGE>

<TABLE>
<CAPTION>
                          Part I Financial Information

Item 1.  Condensed Consolidated Financial Statements
         -------------------------------------------

PCS Research Technology, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
                                                               March 31, 2003    December 31,
                                                                 (Unaudited)         2002
                                                                ------------     ------------
<S>                                                             <C>              <C>
  CURRENT ASSETS
   Cash and cash equivalents                                    $    309,029     $    390,079
   Restricted cash                                                        --          500,000
   Commissions and other receivables                                 186,959           44,636
   Receivable from related parties                                   125,000               --
   Prepaid research                                                  279,916               --
   Other current assets                                               38,957           50,097
   Assets of discontinued operations,  current portion               387,014        2,095,044
                                                                ------------     ------------
                                                                   1,326,875        3,079,856

 Property and equipment, net                                         668,099          724,917
 Assets of discontinued operations                                        --        4,127,702
 Receivable from related parties                                     125,000               --
 Other assets                                                         15,366           48,302
                                                                ------------     ------------
      Total assets                                              $  2,135,340     $  7,980,777
                                                                ============     ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
  CURRENT LIABILITIES
   Accounts payable and accrued liabilities                     $    601,756     $    533,652
   Accrued liabilities payable to related parties                         --        1,271,281
   Revolving credit facility                                         386,194        2,891,975
   Current portion of convertible debt, net                          316,817          967,125
   Notes payable                                                     300,000          300,000
   Notes payable - related parties                                   187,500          187,500
   Deferred revenue                                                  770,499          194,892
   Liabilities of discontinued operations                                 --        1,740,093
                                                                ------------     ------------
                                                                   2,562,766        8,086,518
  LONG-TERM LIABILITIES

   Convertible debt                                                1,254,808               --
                                                                ------------     ------------
      Total liabilities                                            3,817,574        8,086,518

   Minority interest in subsidiary                                   (81,906)           2,356

  STOCKHOLDERS' DEFICIT
   Preferred stock, $.0001 par value; 10,000,000
    authorized; no shares outstanding                                     --               --
   Common stock, $.0001 par value; 80,000,000 authorized;
    18,418,302 issued, 18,000,436 outstanding at March
    31, 2003 and 28,718,302 issued, 28,300,436 outstanding
    at December 31, 2002                                               1,842            2,872
   Additional paid-in capital                                     28,926,251       29,630,220
   Treasury stock, 417,866 common shares at cost at
    March 31, 2003 and December 31, 2002, respectively               (58,501)         (58,501)
   Accumulated deficit                                           (30,469,920)     (29,682,688)
                                                                ------------     ------------
      Total stockholders' deficit                                 (1,600,328)        (108,097)
                                                                ------------     ------------
      Total liabilities and stockholders' deficit               $  2,135,340     $  7,980,777
                                                                ============     ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
                                        3
<PAGE>

<TABLE>
<CAPTION>
PCS Research Technology, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

                                                          For the Three Months
                                                             Ended March 31,
                                                      -----------------------------
                                                          2003             2002
                                                      ------------     ------------
<S>                                                   <C>              <C>
 Revenues
  Data service revenues                               $    333,525     $    205,130
  Placement fees                                                --           24,125
  Commissions and other income                              42,000           57,132
  Interest and other                                           932            5,162
                                                      ------------     ------------
                                                           376,457          291,549

 Expenses
  Compensation and benefits                                412,573          739,725
  General and administrative                               287,799          677,689
  Depreciation and amortization                             71,579           79,091
  Product research expenses                                 59,870           37,793
  Minority interest expense                                 37,738               --
  Clearing and execution costs                                  --            7,571
                                                      ------------     ------------
                                                           869,559        1,541,869

 Operating loss                                           (493,102)      (1,250,320)

 Interest expense                                          468,247          547,704
                                                      ------------     ------------

 Loss from continuing operations                          (961,349)      (1,798,024)

 Discontinued Operations
  Income (loss) from discontinued operations               192,370          (57,062)
  Loss on transfer of assets of discontinued
   operations                                              (18,253)              --
                                                      ------------     ------------
  Net income (loss) from discontinued operations           174,117          (57,062)
                                                      ------------     ------------

        Net Loss                                      $   (787,232)    $ (1,855,086)
                                                      ============     ============

   Earnings (loss) per share - basic and diluted
        Loss per share - continuing operations        $      (0.04)    $      (0.08)

        Earnings per share - discontinued operations          0.01             0.00
                                                      ------------     ------------
        Total loss per share - basic and diluted      $      (0.03)    $      (0.08)
                                                      ============     ============
   Weighted average number of common shares -
     basic and diluted                                  24,523,769       22,861,483
                                                      ============     ============
</TABLE>

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

                                        4
<PAGE>

<TABLE>
<CAPTION>
PCS Research Technology, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

                                                                               For the Three Months
                                                                                 Ended March 31,
                                                                          -----------------------------
                                                                              2003             2002
                                                                          ------------     ------------
<S>                                                                       <C>              <C>
Cash flows from operating activities
 Loss from continuing operations                                          $   (961,349)    $ (1,798,024)
 Adjustments to reconcile net loss from continuing operations to
  net cash used in continuing operations operating activities:
    Depreciation and amortization                                               71,579           79,091
    Amortization of discounts on indebtedness                                  417,189          454,348
    Stock options issued for services rendered                                  16,000               --
 Net changes in assets and liabilities
  Increase in commissions and other receivables                               (142,323)         (71,750)
  Increase in prepaid research                                                (279,916)              --
  (Increase) decrease in other current assets                                   11,140          (85,001)
  Decrease in other assets                                                      32,936               --
  Increase (decrease) in accounts payable and accrued liabilities               68,103         (140,464)
  Increase in deferred revenue                                                 575,607           37,705
  Minority interest in subsidiary                                               37,738               --
                                                                          ------------     ------------
    Net cash used in continuing operations operating activities               (153,296)      (1,524,095)

    Income (loss) on discontinued operations                                   174,117          (57,062)
    Changes in assets and liabilities from discontinued operations           1,853,358       (1,570,353)
                                                                          ------------     ------------
  Net cash flows provided by (used in) discontinued operations               2,027,475       (1,627,415)
                                                                          ------------     ------------

  Net cash provided by (used in) operating activities                        1,874,179       (3,151,510)

Cash flows from investing activities
  Purchases of property and equipment                                          (14,759)         (82,420)
                                                                          ------------     ------------

 Net cash flows used in investing activities                                   (14,759)         (82,420)

Cash flows from financing activities
 Net borrowings (payments) under revolving credit facility                  (2,505,781)       2,748,825
 Decrease in restricted cash                                                   500,000               --
 Distributions to minority interests                                          (122,000)              --
 Net proceeds (payments) under notes payable                                    (8,375)         297,500
 Proceeds from issuance of common shares                                            --          220,000
 Net change in convertible debt                                                195,686               --
                                                                          ------------     ------------
 Net cash flows (used in) provided by financing activities                  (1,940,470)       3,266,325
                                                                          ------------     ------------

 Net (decrease) increase in cash and cash equivalents                          (81,050)          32,395

Cash and cash equivalents, beginning of period                                 390,079          276,701
                                                                          ------------     ------------

Cash and cash equivalents, end of period                                  $    309,029     $    309,096
                                                                          ============     ============
Supplemental disclosures of cash flow information
 Interest paid                                                            $     43,361     $         --
                                                                          ============     ============
 Taxes paid                                                               $         --     $      1,600
                                                                          ============     ============
</TABLE>

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

                                        5
<PAGE>

                 PCS Research Technology, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                             March 31, 2003 and 2002
                                   (Unaudited)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
---------------------

The accompanying unaudited condensed consolidated financial statements of PCS
Research Technology, Inc. and subsidiaries (the "Company"), formerly known as
DirectPlacement, Inc. ("DPI"), have been prepared pursuant to accounting
principles generally accepted in the United States of America ("US GAAP") for
interim financial statements and the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and note disclosures
normally included in annual financial statements prepared in accordance with US
GAAP have been condensed or omitted pursuant to those rules and regulations.
These consolidated financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
audited financial statements for the year ended December 31, 2002 filed on Form
10-KSB.

The consolidated financial statements include the accounts of the Company, its
wholly-owned broker-dealer subsidiaries, DP Securities, Inc. ("DPS"), PCS
Securities, Inc. ("PCS") and its majority-owned joint venture, DPBT, LLC
("DPBT"). All material inter-company accounts and transactions have been
eliminated in consolidation.

As discussed more fully in Note B - Discontinued Operations, the Company is in
the process of shutting down its PCS Securities subsidiary. Accordingly, all
revenue and expense activity and related balance sheet accounts of PCS
Securities for the periods presented have been reclassified and are presented as
discontinued operations.

In the opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the Company's financial
condition, results of operations and cash flows for the periods presented have
been included. The Company's quarterly results presented herein are not
necessarily indicative of results for a full year.

Going Concern and Liquidity
---------------------------

The accompanying consolidated financial statements have been prepared using the
going concern basis of accounting. As more fully discussed in Company's audited
financial statements contained in Form 10-KSB, the Company's December 31, 2002
audited financial statements included a "going concern" qualification from its
independent auditors due to the Company's lack of profitability, negative
working capital and the loss of future revenue associated with the decision to
close its PCS subsidiary during the first half of 2003.

In conjunction with the decision to close the PCS business unit, the Company and
its management recommitted to pursuing its long-term objective of becoming a
leading single source of independent research to the institutional community.
The Company and its management believe that the independent institutional
research market is a viable area in which the Company can compete. However, no
assurances can be provided that the Company will be successful.

Whereas management believes its anticipated cash flow from operations could be
adequate to fund operations for the next fiscal year, there can be no assurance,
however, that the Company will not require additional financing prior to or
after such time. Furthermore, there can be no assurance that any additional
financing will be available to the Company on acceptable terms, or at all. If
adequate funds are not available, the Company may be required to delay, scale
back or eliminate its operational plans.

                                        6
<PAGE>

Our inability to obtain additional financing could have a material adverse
effect on the Company's business, financial condition and results of operations.

The accompanying consolidated financial statements do not include any
adjustments that might result from the resolution of these matters.

Use of Estimates
----------------

The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the periods presented. Actual results
could differ materially from those estimates.

Revenue Recognition
-------------------

Data services revenue represents revenue from providing individual custom
reports or reports on a monthly or annual subscription basis. Revenue from
custom reports is recognized when the report is provided, and revenue from
subscriptions is recognized ratably over the contractual period. Deferred
revenue on the consolidated balance sheets consists of subscription revenues
that have been received but not yet earned.

Placement fees include gains, losses and fees, net of syndicate expenses,
arising from private equity and debt offerings in which the Company participates
as an underwriter or agent. The fees are recorded when the underwriting is
completed and the income is reasonably determinable. Referral fees related to
placement transactions are expensed when the revenue is recognized. Commissions
from security transactions are recorded on a settlement date basis, generally
the third business day following the transaction date, which is not materially
different than on a trade date basis.

Loss Per Share
--------------

The Company calculates loss per share in accordance with SFAS No. 128, "Earnings
Per Share" and SEC Staff Accounting Bulletin No. 98. Accordingly, basic loss per
share is computed using the weighted average number of common shares and diluted
loss per share are computed based on the weighted average number of common
shares and all common equivalent shares outstanding during the period in which
they are dilutive. Common equivalent shares consist of shares issuable upon the
exercise of stock options (using the treasury stock method) or warrants; common
equivalent shares are excluded from the calculation if their effect is
anti-dilutive.

Stock-Based Compensation
------------------------

The Company measures compensation expense related to the grant of stock options
and stock-based awards to employees in accordance with the provisions of
Accounting Principles Board ("APB") Opinion No. 25, under which compensation
expense, if any, is generally based on the difference between the exercise price
of an option, or the amount paid for the award and the market price or fair
value of the underlying common stock at the date of the award. Stock-based
compensation arrangements involving non-employees are accounted for under SFAS
No. 123, "Accounting for Stock-Based Compensation," under which such
arrangements are accounted for based on the fair value of the option or award.
As required by SFAS No. 123, following is pro forma net loss per share
information reflecting the effect of applying SFAS No. 123 fair value
measurement to employee and director arrangements.

The Company adopted the disclosure requirements of SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure," an amendment of FASB
Statement No. 123 as of January 1, 2003, which require certain disclosures about
stock-based employee compensation plans in an entity's accounting policy note.

                                        7
<PAGE>

Those disclosures include a tabular format of pro forma net income and, if
applicable, earnings per share under the fair value method if the intrinsic
value method is used in any period presented. Pro forma information in a tabular
format is also required in the notes to interim financial information if the
intrinsic value method is used in any period presented. The adoption of SFAS No.
148 did not have a material impact to these consolidated financial statements.

As of May 15, 2001, the Board of Directors of the Company adopted the 2001 Stock
Plan (the "2001 Plan"), which was approved by the Company's shareholders in
November 2001. The 2001 Plan provides for accelerated vesting provisions in the
event of a change in control and other events, as defined. As of March 31, 2003,
2,368,124 options to purchase shares of the Company's common stock were
outstanding pursuant to the 2001 Plan.

During the first quarter of 2003, the Company issued 100,000 stock options to
purchase the Company's common stock to employees at exercise prices equal to the
market value of the Company's stock at the grant date ranging from $0.08 - $0.10
per share. The options have a term of ten years and vest over 3 years.

In addition, in the first quarter of 2003, the Company issued 200,000 stock
options to purchase the Company's common stock in exchange for services
rendered. Fifty (50) percent of options vested at the date of the grant and the
remaining fifty (50) percent vest on the first anniversary of the date of grant.
The Company has accounted for these issuances in accordance with SFAS No. 123
and has recorded an expense of $16,000 representing the fair value of the
options using a Black-Scholes option-pricing model. The options are exercisable
at price of $0.08 per share and have a term of 10 years.

SFAS No. 123 requires the Company to provide pro forma information regarding net
income (loss) and income (loss) per share as if compensation cost for the
Company's stock option issuances had been determined in accordance with the fair
value based method prescribed in SFAS No. 123. The Company estimates the fair
value of each stock option at the grant date by using the Black-Scholes
option-pricing model with the following assumptions used for grants in the
quarter ended March 31, 2003: dividend yield of zero percent, risk-free interest
rates ranging from 2.90% to 3.50%, expected life of five years, and expected
volatility of 116%. For grants in fiscal 2002, the following assumptions were
used: dividend yield of zero percent, risk-free interest rates ranging from
4.30% to 4.34%, expected lives of five years, and expected volatility of 122%.

Under the accounting provisions of SFAS No. 123, as amended by SFAS No. 148, the
Company's pro forma net loss and loss per share for the quarters ended March 31,
2003 and 2002 would have been as follows:

                                                2003              2002
                                            ------------      ------------
Net Loss
 As reported                                $   (787,232)     $ (1,855,086)
 SFAS No. 123 effect                            (553,926)         (524,499)
                                            ------------      ------------
 Pro forma net loss                         $ (1,341,158)     $ (2,379,585)
                                            ------------      ------------
Loss per share
 As reported                                $      (0.03)     $      (0.08)
                                            ============      ============

 Pro forma                                  $      (0.06)     $      (0.10)
                                            ============      ============
Basic and diluted weighted
 average common shares outstanding            24,523,769        22,861,483
                                            ============      ============

                                       8
<PAGE>
Segment Information
-------------------

The Company complies with SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information" that requires public business enterprises to
report information regarding reportable operating segments. SFAS No. 131
superseded SFAS No. 14, "Financial Reporting for Segments of a Business
Enterprise."

During 2002, the Company had two primary business units comprised of (1) the
soft dollar brokerage unit and (2) the data services unit. Both business units
were involved in the marketing and distribution of research products to
institutional investors. In addition, the soft dollar broker unit provided for
collection of amounts owed from customers through the receipt of commission
revenues related to customer's securities trading activity. As discussed in Note
B - Discontinued Operations, the Company's PCS Securities subsidiary that was
conducting business as a soft dollar broker has been closed effective April 30,
2003, and its activities have been accounted for as discontinued operations in
the consolidated financial statements presented herein. Accordingly, the Company
is no longer operating the soft dollar brokerage unit, and separate segment
information is not being presented.

New Accounting Pronouncements
-----------------------------

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 is effective for activities
initiated after December 31, 2002. Activities include restructurings (such as
relocation of a business and fundamental reorganizations of a business itself),
which may give rise to costs such as contract cancellation provisions, employee
relocation, and one-time termination costs. SFAS No. 146 prohibits liability
recognition based solely on management's intent, and requires that liabilities
be measured at estimated fair value. Management has adopted the provisions of
SFAS No. 146. See Note B.

The FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others" - an interpretation of SFAS Nos. 5, 57 and 107 and rescission of FASB
Interpretation No. 34. This Interpretation elaborates on the disclosures to be
made by a guarantor in its interim and annual financial statements about its
obligations under certain guarantees that it has issued. It also clarifies that
a guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee.

The initial recognition and measurement provisions of this Interpretation are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. Implementation of these provisions of the Interpretation is
not expected to have a material impact on the Company's consolidated financial
statements. The disclosure requirements of the Interpretation are effective for
financial statements of interim or annual periods ended after December 15, 2002,
and have been adopted in the accompanying consolidated financial statements with
no additional disclosure required.

The FASB issued Interpretation No. 46, "Consolidation of Variable Interest
Entities" - an interpretation of Accounting Research Bulletin ("ARB") No. 51.
This Interpretation defines a variable interest entity and provides that if a
business enterprise has a controlling financial interest in a variable interest
entity, the assets, liabilities, and results of the activities of the variable
interest entity should be included in consolidated financial statements with
those of the business enterprise. Furthermore, the Board indicates that the
voting interest approach of ARB No. 51 is not effective in identifying
controlling financial interests in entities that are not controllable through
voting interest or in which the equity investors do not bear the residual
economic risk. This Interpretation applies immediately to variable interest
entities created after January 31, 2003, and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first
fiscal year or interim period beginning after June 15, 2003, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The Interpretation applies to public
enterprises as of the beginning of the applicable interim or annual period.
Management believes the implementation of this Interpretation will not have a
material impact upon the Company's consolidated financial statements.

                                        9
<PAGE>

Reclassifications
-----------------

Certain amounts from the 2002 consolidated financial statements have been
reclassified to conform to the 2003 presentation.

NOTE B - DISCONTINUED OPERATIONS

Shut down of PCS Securities Subsidiary and Asset Transfer
---------------------------------------------------------

In January 2003, the Board of Directors of the Company decided to wind down the
activities of PCS, and to close this subsidiary during the first half of 2003.
In connection with the decision to close the PCS subsidiary, the Company entered
into an agreement with the two former owners of PCS pursuant to which the
Company agreed to transfer ownership of two intangible assets, the name "PCS"
and trademarks related to such name (the "Trademarks") as well as a list of PCS
customers to the former owners of PCS (or their designee) in exchange for
consideration including cash, the relief of certain liabilities and the
surrender by them of an aggregate of 10.3 million shares of the Company's common
stock for cancellation. Pursuant to the agreement, each of the former owners of
PCS agreed to terminate their rights under employment and/or consulting
agreements between them and the Company. Furthermore, the former owners of PCS
agreed to pay to the Company an aggregate of $250,000 over a period two years
assuming that certain conditions are satisfied, to repay the Company's revolving
line of credit with Bear Stearns by June 30, 2003 in the event that there is an
outstanding balance as of such date and to repay or assume all customer credit
balances existing as of June 30, 2003.

In connection with this agreement, the Company granted a non-exclusive two year
license to use the Company's InterLeads software to the former owners of PCS and
agreed to use a new soft dollar brokerage firm to be formed by the former owners
of PCS as the Company's preferred brokerage firm for soft dollar transactions.

Furthermore, the parties agreed that the Company would transfer the remaining
$500,000 restricted cash balance to pay down the outstanding credit facility
balance, and that all commissions generated by the PCS subsidiary subsequent to
January 1, 2003 that clear through Bear Stearns, would be automatically applied
against the outstanding balance of the credit facility.

As a result of the transfer of the restricted cash balance, commissions
collected by the Company during the quarter and funds paid directly to Bear
Stearns by the former owners from commissions generated by a new soft dollar
brokerage firm controlled by these individuals, all of which was applied against
the credit line balance, the outstanding credit line balance was reduced to
$386,194 at March 31, 2003. As of March 31, 2003, PCS was not in compliance with
minimum net capital requirements required by the National Association of
Securities Dealers (NASD). Based on commissions collected in April 2003, the
credit line balance was paid in full as of April 30, 2003. As a result, the
Company plans to accelerate the closing of the PCS subsidiary, and has filed
with the NASD to withdraw the PCS broker-dealer license.

                                       10
<PAGE>

Results of Discontinued Operations
----------------------------------

Based on the Board of Directors' decision to shut down the PCS subsidiary in
January 2003 together with the execution of the asset transfer agreement and the
full repayment of the line of credit in connection with such agreement, the
Company has accounted for the activities of the subsidiary as discontinued
operations in the current quarter and all periods presented. Revenues and
expenses from PCS Securities for the three months ended March 31, 2003 and 2002
are summarized below:

                                                         (Unaudited)
                                                     2003            2002
                                                 ------------    ------------
Revenues
  Commission and other fees                      $  1,115,462    $  3,534,178

Expenses
  Independent research expense                        775,817       2,311,263
  Execution and clearing costs                        146,855         674,653
  Amortization of identifiable intangibles                 --         539,574
  General and administrative expense                      420          65,750
                                                 ------------    ------------
    Total expenses                                    923,092       3,591,240

    Income (loss) from discontinued operations   $    192,370    $    (57,062)
                                                 ============    ============

Commissions from independent research and directed brokerage arrangements ("soft
dollar") began with the merger with PCS effective December 21, 2001 and are
recorded as revenue when earned. Costs paid to third party research providers
for research reports and analysis made available to customers is charged to
expense over the term of soft dollar arrangements (generally one year or less).

An entity owned by one of the former owners of PCS (and former director of the
Company) provided research products to PCS under a guaranteed contract. The
research products are then marketed to institutional investor customers under
"soft dollar" arrangements at cost plus margins. Pursuant to the contract, the
entity owned by the director/stockholder is required to provide the Company's
subsidiary with a guaranteed volume of its research per year or may be subject
to penalty, as defined.

The contract was terminated in December 2002. For the three months ended March
31, 2003 and 2002, $0 and $1,586,000 was paid to this entity for research
products purchased.

The former owner of PCS provided services under a consulting agreement to
increase the Company's customer base. The consulting agreement was for a
five-year term (beginning January 1, 2002), and required the payment of a
monthly base fee of $95,833 ($1,150,000 annually). In addition, the consulting
agreement provided for incentive fees payable to the former owner of PCS when
certain specified revenue and targets are met. For the three months ended March
31, 2003 and 2002, the Company recorded an aggregate of $0 and $287,500,
respectively, in consulting and incentive fees expense under this agreement. As
discussed above, the consulting agreement was terminated in January 2003.

Rent expense of $0 and $6,400 was paid during the three months ended March 31,
2003 and 2002, respectively, on a property co-owned by the former owners of PCS
(who were also former directors of the Company).

                                       11
<PAGE>

Loss on Transfer of Assets
--------------------------

In connection with the Company's agreement to transfer the PCS trademark and
customer list intangibles to the former owners of PCS, in exchange for cash, the
relief of liabilities and the surrendering of 10.3 million shares of the
Company's common stock held by these individuals, the Company recorded a loss on
the transfer of $18,253. The components of the loss are summarized below:

Consideration To Be Received:
Cash                                                    (A)     $      250,000
Credit line repayment                                   (B)          1,076,556
Accrued liabilities relieved:
   Accrued compensation  payable to related parties     (C)          1,271,281
   Accrued research services - net                      (D)            398,723
Surrender and cancellation of common stock              (E)            721,000
Other                                                   (F)            391,889
                                                                --------------
                                                                     4,109,449

Carrying amount of intangibles transferred              (G)         (4,127,702)
                                                                --------------

Net loss                                                        $      (18,253)
                                                                ==============

     (A) Represents a $250,000 receivable from the former owners of PCS over 2
         years pursuant to the asset transfer agreement (125,000 of which is
         classified as current assets), subject to certain conditions as defined
         in the agreement.
     (B) Represents funds paid directly to Lender from the soft dollar brokerage
         firm that is controlled by the former owners.
     (C) Accrued compensation payable as of December 31, 2002 pursuant to
         respective employment and consulting agreements with the former owners
         of PCS.
     (D) Net customer credit balances of PCS subsidiary assumed by former owners
         of PCS.
     (E) 10.3 million shares of the Company's common stock surrendered by the
         former owners of PCS at fair market value. The fair market value of the
         Company's common stock at the date of the transaction was $0.07.
     (F) Additional net assets to be realized in connection with transaction.
     (G) Carrying amount of PCS trademark and customer list intangibles at date
         of transaction.

                                       12
<PAGE>

<TABLE>
<CAPTION>

Net Assets and Liabilities of Discontinued Operations
-----------------------------------------------------

At March 31, 2003 and December 31, 2002, the net assets and liabilities of the
discontinued operations were as follows:

                                                             (Unaudited)
                                                               March 31,     December 31,
                                                                 2003            2002
                                                             ------------    ------------
<S>                                                               <C>           <C>
Assets of discontinued operations-current portion
  Cash                                                                 --          58,481
  Commissions and other receivables                                    --         305,362
  Deferred research/service costs                                 387,014       1,731,202
                                                             ------------    ------------
    Total current assets                                          387,014       2,095,045

Assets of discontinued operations- noncurrent
  Identifiable intangibles                                             --       4,127,702

Liabilities of discontinued operations-current portion
  Accounts payable                                                     --          (6,647)
  Accrued research services                                                    (1,733,446)
                                                             ------------    ------------
    Total liabilities                                                  --      (1,740,093)
</TABLE>
<TABLE>
<CAPTION>

NOTE C - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                             (Unaudited)
                                                               March 31,      December 31,
                                                                 2003            2002
                                                             ------------    ------------

<S>                                                          <C>             <C>
Computer equipment and software                              $  1,278,260    $  1,263,498
Furniture and fixtures                                             37,797          37,797
Office equipment                                                   81,590          81,590
                                                             ------------    ------------
                                                                1,397,647       1,382,885
Less accumulated depreciation                                    (729,548)       (657,968)
                                                             ------------    ------------
                                                             $    668,099    $    724,917
                                                             ============    ============
</TABLE>
<TABLE>
<CAPTION>

NOTE D - INTANGIBLE ASSETS

Identifiable intangibles consist of the following:

                                                             (Unaudited)
                                                              March 31,      December 31,
                                                                 2003            2002
                                                             ------------    ------------
<S>                                                          <C>             <C>
Trademark                                                    $         --    $    841,736
Customer lists                                                         --       3,763,809
                                                             ------------    ------------
                                                                       --       4,605,545
Less accumulated amortization                                          --        (477,843)
                                                             ------------    ------------
                                                             $         --    $  4,127,702
                                                             ============    ============

</TABLE>

Identifiable intangibles shown above at December 31, 2002 represent the balance
of intangible assets acquired as part of the merger with PCS Securities in the
fourth quarter of 2001, net of impairment write downs recorded in 2002. In
connection with the asset transfer transaction with the former owners of PCS,
the intangible assets were written off during the first quarter 2003 (See Note
B).

                                       13
<PAGE>

NOTE E - REVOLVING CREDIT FACILITY

The Company has obtained a $3,000,000 revolving credit facility from Bear
Stearns, a U.S. brokerage firm (the "Lender"). At December 31, 2002, borrowings
outstanding under this revolving credit facility totaled $2,891,975. At that
date, the credit facility was secured by $500,000 in restricted cash of the
Company and personal guarantees by the Company's President and Chief Executive
Officer and the two formers owners of PCS Securities.

In connection with the Company's decision to close its PCS Securities subsidiary
during 2003 and the agreement reached with the former owners of PCS Securities
pursuant to which the Company agreed not to draw any additional funds from the
credit facility subsequent to January 1, 2003, the parties agreed that the
Company would transfer the remaining $500,000 restricted cash deposit balance to
pay down the outstanding credit facility balance, and that all commissions
generated by PCS Securities subsequent to January 1, 2003 that clear through the
Lender will be applied against the outstanding balance of the credit facility.

During the first quarter of 2003, after applying the $500,000 restricted cash
deposit, commissions generated by the Company during the quarter, and funds paid
by the former owners of PCS (including commissions generated by their new soft
brokerage firm), the line of credit balance was reduced to $386,194 at March 31,
2003. As of April 30, 2003, the line of credit balance was paid in full and the
credit facility was cancelled.

NOTE F- CONVERTIBLE DEBT

On December 17, 2001, the Company issued convertible debentures in the aggregate
principal amount of $1,600,000. These debentures had a maturity date of December
17, 2003, and bore interest at a rate of 10% per annum, which was due and
payable on the last day of each calendar quarter until they were paid in full or
converted into shares of the Company's common stock.

At issuance, proceeds from the debentures were allocated to the warrants based
on the fair value of the warrants using a Black Scholes valuation model totaling
$259,182. In addition, a discount of $541,536 was applied to account for the
beneficial conversion feature at the closing date of December 17, 2001.

In November 2002, the Company made a partial prepayment of principal in the
amount of $215,686.

At December 31, 2002, debentures with an aggregate principal balance of
$1,384,314, were carried net of unamortized discounts of $417,189 related to the
intrinsic value of the beneficial conversion feature, which is inclusive of the
effect of conversion price resets, and the warrants.

In February 2003, the Company and the debenture holders restructured certain
terms and provisions of the convertible debentures. In connection with the debt
restructuring, the Company was relieved of $137,844 in liquidated damages
previously accrued. The restructuring of the convertible debt has been accounted
for as a troubled debt restructuring and, accordingly, no gain or loss was
recognized. At March 31, 2003, the restructured convertible debt principal
totaled $1,571,625 of which $316,817 is classified as the current portion.

Following is a summary of primary terms of the restructured agreements:

$1,250,000 Original Principal Amount Note
-----------------------------------------

The original debenture was amended pursuant to which the principal balance was
changed to $1,425,000. The amended principal balance includes the original
principal amount plus accrued and unpaid liquidated damages and interest of
$150,000 and $25,000, respectively. The remaining balance of accrued interest at
February 28, 2003, totaling $26,736, was paid by the Company and $125,000 of
accrued liquidated damages were waived by the debenture holder.

                                       14
<PAGE>

The debenture matures on December 28, 2005 and bears interest at an annual rate
of 14%. The debenture requires fixed monthly payments of principal and interest
beginning on March 28, 2003 of $25,000 for the first five (5) months, $50,000
thereafter through November 28, 2005 and a final payment due December 28, 2005
in the amount of $271,100. The outstanding principal balance can be converted
into shares of the Company's common stock at the option of the holder based on a
fixed conversion price of $0.20, and the warrant exercise price is fixed at
$0.086 for the term of the warrants to purchase 160,000 shares of the Company's
common stock that were included in the original debenture. In addition, the
debenture holder agreed to waive all registration requirements with respect to
the convertible debenture, warrants and shares underlying the warrants.

$350,000 Original Principal Amount Note
---------------------------------------

The original debenture was amended pursuant to which the principal balance was
changed to $155,000. The amended principal balance includes the original
principal amount, less the partial principal payment in November 2002, of
$215,686 plus accrued and unpaid liquidated damages and interest of $16,656 and
$4,030, respectively. Accrued liquidated damages in the amount of $12,844 were
waived by the debenture holder. The debenture matures on February 28, 2005 and
bears interest at an annual rate of 14%. Payment of interest is required
quarterly, beginning March 30, 2003 and the principal balance is payable upon
the maturity date. The outstanding principal balance can be converted in shares
of the Company's common stock at the option of the holder based on a fixed
conversion price of $0.20, and the warrant exercise price is fixed at $0.086 for
the term of the warrants to purchase 35,000 shares of the Company's common stock
that were included in the original debenture. In addition, the debenture holder
agreed to waive all registration requirements with respect to the convertible
debenture, warrants and shares underlying the warrants.

NOTE G - STOCKHOLDERS' DEFICIT

During the quarter ended March 31, 2003, an aggregate of 10.3 million shares of
common stock was returned to the Company and cancelled. See Note B.

NOTE H - LOSS PER SHARE

Stock options, warrants, performance warrants and shares issuable upon
conversion of debt totaling 2,368,124, 663,906, 10,790,626 and 7,858,125,
respectively, at March 31, 2003 have not been included in the calculation of
loss per share since their inclusion would be anti-dilutive.

NOTE I - SUPPLEMENTAL DISCLOSURES OF NON-CASH INFORMATION

In January 2002, the Company issued 94,731 shares of common stock at market
value to an officer of the Company as payment of bonus earned in 2001 totaling
$169,000.

In February 2003, 10,300,000 shares of the Company's common stock were cancelled
in connection with an agreement between the Company and the two former owners of
PCS Securities. See Note B.

                                       15
<PAGE>

NOTE J - RELATED PARTY TRANSACTIONS

Loans and Advances
------------------

In January 2002, the Company borrowed $42,500 from a company controlled by an
officer/stockholder. In connection therewith, the Company issued an unsecured
promissory note to the lender, which was due and payable on January 31, 2003 and
bears interest at 12 % per annum. In January 2003, the Company received an
extension of the due date to July 1, 2003. In May 2001 and October 2001, the
Company borrowed an aggregate of $145,000 from the same company. These notes are
unsecured, bear interest at 12% and mature on May 14, 2003 and October 31, 2003,
respectively. In May 2003, the Company received a verbal committment to extend
the maturity date of the note originally scheduled to mature on May 14, 2003, to
July 16, 2003. At March 31, 2003, the aggregate outstanding balance of these
notes was $187,500. During the three months ended March 31, 2003 the Company
recorded interest expense in connection with these notes totaling $5,625, and as
of March 31, 2003 total interest payable in connection with these loans was
$9,385.

Consulting Services
-------------------

During the quarter ended March 31, 2003, the Company recorded $45,729 in
consulting expense to a corporation controlled by a party related to an
officer/stockholder of the Company.


NOTE K - SUBSEQUENT EVENTS

Common Stock
------------

In April 2003, an aggregate of 293,750 shares of common stock were returned to
the Company and cancelled in connection with a litigation settlement agreement
with two shareholders.

In April 2003, an aggregate of 5,688,750 shares of common stock were issued to
two officers of the Company and an entity controlled by one of the officers in
connection with the exercise of 5,765,626 performance warrants.

Notes Payable
-------------

In May 2003, the Company received a verbal committment to extend the maturity
date of the $300,000 note payable to July 16, 2003.

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.
         ----------------------

         The following discussion should be read in conjunction with the
financial statements and notes thereto of the Company. Such financial statements
and information have been prepared to reflect the Company's financial position
as of March 31, 2003 and December 31, 2002.

         Historical results and trends should not be taken as indicative of
future operations, especially in light of the Company's recent restructuring.
Management's statements contained in this report that are not historical facts
are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Actual results may differ materially from those
included in the forward-looking statements. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of complying with
those safe harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe future plans, strategies and expectations of
the Company, are generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project," "prospects" or similar
expressions. The Company's ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Information concerning the
Company and its business, including the risks faced by us described herein

                                       16
<PAGE>

and in our most recent annual report on Form 10-KSB could materially affect the
Company's financial results. The Company disclaims any obligation to update or
announce revisions to any forward-looking statements to reflect actual events or
developments.

GENERAL OVERVIEW

         PCS Research Technology, Inc., formerly DirectPlacement, Inc. ("DPI"),
based in San Diego, California and incorporated in Delaware in 1999, is a
financial technology company. We operate our business activities through the
parent entity, PCS Research Technology, Inc. (the "PCS Research", "we", or the
"Company") and through our two wholly owned subsidiaries, DP Securities, Inc.
("DPS"), a broker-dealer incorporated in the State of California, and PCS
Securities, Inc. ("PCS Securities" or "PCS"), a broker-dealer incorporated in
the State of Washington. We use advanced proprietary technology platforms to
distribute financial research, data, and analytics to the institutional
investment community. Our business strategy is to leverage our technology
expertise to become a leading single-source provider, developer, and marketer of
independent research for the institutional investment community.

         In the fourth quarter of 2001, the Company began offering trading
services for institutional investors through DPS, as a result of its acquisition
of certain assets of PCH Securities, Inc. ("PCH"). Also in the fourth quarter of
2001, the Company began offering soft-dollar brokerage services through PCS, as
a result of its merger with PCS Securities, Inc.

         In the second and third quarter of 2002, the Company closed the
institutional trading desk operations of DPS. In January 2003, the Company
announced plans to close PCS. Based on this restructuring, the Company's
business strategy and activities are now focused primarily on developing,
marketing and distributing independent research products and services.

Critical Accounting Policies

         Our discussion and analysis of our financial condition and results of
operations is based upon the Company's 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 liabilities.

         On an on-going basis, we evaluate our estimates, including those
related to credit risk on receivables, recoverability of long lived assets,
identified intangibles, goodwill and the valuation of deferred income taxes. 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.

Revenue Recognition
-------------------

         Revenue from research product subscriptions is recognized ratably over
the contractual period and revenue from custom research/analytical reports is
recognized when the report is provided to the customer. Amounts received related
to future subscription periods are reflected on our consolidated balance sheets
at March 31, 2003 and December 31, 2002 as deferred revenue.

         Placement fees arising from private equity and debt offerings in which
the Company participates as an underwriter or an agent are recorded when the
underwriting is completed and the income is reasonably determinable.

                                       17
<PAGE>

         Commissions from securities transactions are recorded on a settlement
date basis, generally the third business day following the transactions date,
which is not materially different than on a trade date basis.

         Commissions from independent research and directed brokerage
arrangements ("soft dollar") are recorded as revenue when earned. Such amounts
as of March 31, 2003 and 2002 are included in the Income (loss) on Discontinued
Operations in the Consolidated Statement of Operations. Deferred research
/service costs and accrued research/ services relating to these arrangements are
accounted for on a customer-by-customer basis, and are included in Assets of
Discontinued Operations in the consolidated balance sheets at March 31, 2003 and
December 31, 2002. See Note B - Discontinued Operations.

Identifiable Intangible Assets and Goodwill
-------------------------------------------

         Identifiable intangible assets and goodwill have been recorded and
accounted for in accordance with Statement of Financial Accounting Standards No.
141, Business Combinations ("SFAS No. 141") and Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets ("SFAS No.
142").

         In accordance with SFAS No. 142, we amortize identifiable intangible
assets over their estimated useful lives. At each balance sheet date, or earlier
if required, we evaluate the carrying amount of each intangible asset for
impairment. In accordance with SFAS No. 142, we do not amortize goodwill, but
instead perform an annual evaluation for impairment.

         As of December 31, 2002, the unamortized amount of certain identifiable
intangible assets, and the entire amount of goodwill previously capitalized in
connection with the PCH asset acquisition and the PCS merger in 2001, in the
aggregate amount of $17,996,957, were evaluated for impairment and written off.
As of March 31, 2003 the remaining identifiable intangible asset balance of
$4,127,702, previously capitalized in connection with the PCS merger, was
written off in connection with closing of PCS. See Note B - Discontinued
Operations.

RESULTS OF OPERATIONS

Three months ended March 31, 2003 compared to the three months ended March 31,
2002.

         Based on the closing of our PCS Securities subsidiary, the consolidated
statement of operations presented for the three months ended March 31, 2003 and
2002 has been segregated to reflect continuing and discontinued operations. As a
result, all revenue and expense activity related to PCS Securities' operations
for both periods presented have been excluded from the results from continuing
operations presented herein, and, instead, are reflected in the results from
discontinued operations.

LOSS FROM CONTINUING OPERATIONS

Revenues
--------

         Total revenues for the three months ended March 31, 2003 increased by
29% to $376,457 compared to $291,549 for the same period in 2002. This increase
is due primarily to increases in data services revenue and interest and other
income in 2003. For the 2003 period, data services revenue increased by 63% to
$333,525 from $205,130 in 2002. The increase in data services revenues in 2003
was due primarily to an increased number of research products being marketed and
to increased sales and marketing efforts in the current period.

         Partially offsetting these increases in the first quarter of 2003 were
decreases in placement fee revenue, commissions and other income and interest
and other income. During the first quarter of 2002, placement fee and
commission/other income totaled $81,257, and resulted from institutional trading
and investment banking operations of DPS. As a result of the closing of its
trading desk operations and discontinuing its investment banking activities
during the third quarter of 2002, there were no similar revenues during the
first quarter of 2003. Offsetting this decrease were fees related to DPBT, LLC
consulting activity in 2003 of $42,000.

Operating Expenses
------------------

         Total operating expenses for the three months ended March 31, 2003
decreased by 44% to $869,559 compared to $1,541,869 for the same period in 2002.
The decrease in 2003 operating expenses is due primarily to the following
changes:

                                       18
<PAGE>

Compensation and Benefits
-------------------------

         Compensation and benefits decreased by 44% in 2003 to $412,573 compared
to $739,725 in 2003. This decrease resulted primarily from the exclusion of
$287,500 of salaries and wages related to the employment agreement with one of
the former owners of PCS. In connection with the closing of PCS, and the
agreement reached between the Company and the former owners of PCS related to
the sale of certain PCS assets, the employment agreement was terminated, and
accordingly, there were no similar expenses incurred during the 2003 period.
Also contributing to the decrease in compensation expense were bonus expenses in
2002 which totaled $47,324. No similar expenses were incurred during the 2003
period.

General and Administrative
--------------------------

         General and administrative expenses decreased by 58% to $287,799 in the
first quarter of 2003 compared to $677,689 in 2002. This decrease is due
primarily to the inclusion of $287,500 of expenses in the 2002 period related to
the consulting agreement with one of the former owners of PCS. In connection
with the closing of PCS and the agreement reached between the Company and the
former owners of PCS related to the sale of certain PCS assets, the consulting
agreement was terminated, and accordingly, there were no similar expenses
incurred during the 2003 period. Also contributing to the decreased expenses
during the first quarter of 2003 were decreased professional fees related to
legal, accounting and public relations. Legal and accounting fees decreased by
35% to $110,000 in 2003 from $169,000 in 2002, due primarily to the inclusion in
the 2002 amount of fees related to PCS merger in December 2001. Public relations
expenses in the first quarter of 2002 totaled $30,326. There were no similar
expenses incurred in the first quarter of 2003.

Depreciation and Amortization
-----------------------------

         Depreciation and Amortization expense decreased by 9.5% to $71,579 in
2003 from $79,091 in 2002. This decrease resulted primarily from the inclusion
in the 2002 amount of $17,512 related to the amortization of identifiable
intangible assets acquired in the fourth quarter of 2001. Based on the write-off
of these assets in connection with the closing of the DPS trading desk during
the third quarter of 2002, there were no similar amortization expenses incurred
in 2003. Partially offsetting this decrease, were minor increases in
depreciation during the 2003 period associated with the Company's other fixed
assets.

Product Research Expenses
-------------------------

         Product research expenses represent costs associated with generating
data services revenues. In the first quarter of 2003, such costs increased by
58% to $59,870 in 2003 compared to $37,793 in 2002 as a result of higher data
services revenues in 2003.

Minority Interest Expense
-------------------------

         Minority interest expense was $37,738 during the first quarter of 2003,
and represents the income attributable to minority member's interest in DPBT,
LLC, a joint venture formed between the Company and Btech Investor, Inc. Through
the joint venture, DPBT, LLC developed and introduced BiotechTracker, a
proprietary web-based research service, which is currently marketed by the
Company, focused on research, analysis and valuation of the drug development
pipelines of biotechnology and pharmaceutical companies. As the joint venture
was formed during the third quarter of 2002, there were no similar charges in
the 2003 period.

Clearing and Execution Costs
----------------------------

         Clearing and execution costs incurred in the first quarter of 2002 were
$7,571 and represent fees charged by clearing brokers in connection with DPS
institutional trading activities. There were no similar expenses incurred in
2003 due to the closing of the trading desk during the third quarter of 2002.


                                       19
<PAGE>
Interest Expense
----------------

         Interest expense in the first quarter of 2003 totaled $468,247, and
includes $417,189 of non-cash interest charges related to the amortization of
discounts recorded in connection with the Company's convertible debt (issued
together with warrants) entered into during the fourth quarter of 2001. Also
included in the 2003 amount are net interest charges totaling $51,058. The 2003
interest total decreased by 15% from $547,704 in 2002. This decrease was
primarily due to a net decrease in 2003 of $37,159 from debt discount
amortization, a decrease of $14,929 in interest from the Bear Stearns credit
facility resulting primarily from lower average balances outstanding during the
2003 period and from a credit of $24,598 related to previously accrued
liquidated damages.

Loss From Continuing Operations
-------------------------------

         As a result of the revenue and expense items mentioned above, the
Company's net loss from continuing operations decreased 47% to $961,349 in the
three months ended March 31, 2003 from $1,798,024 in the same period a year ago.

Income (Loss) from Discontinued Operations
------------------------------------------

         Operating income (loss) from discontinued operations represents the net
revenue and expense activity from PCS and includes the following:

                                                   Three Months Ended March 31,
                                                      2003             2002
                                                  ------------     ------------

Revenues
  Commission and other fees                       $  1,115,462     $  3,534,178

Expenses
  Independent research expense                         775,817        2,311,263
  Execution and clearing costs                         146,855          674,653
  Amortization of identifiable intangibles                  --          539,574
  General and administrative expense                       420           65,750
                                                  ------------     ------------
    Total expenses                                     923,092        3,591,240

    Income (loss) from discontinued operations    $    192,370     $    (57,062)
                                                  ============     ============


Commission and Other Fees
-------------------------

         Commission and other fees decreased by 68% to $1,115,462 in 2003
compared to $3,534,178 in 2002 as a result of the Company's decision to wind
down the activities, and ultimately close PCS. Based on this decision, PCS did
not write any new business during the first quarter of 2003, and as such,
revenues during the quarter were limited to the recognition of deferred revenue
related to research subscriptions sold in 2002.

Independent Research Expense
----------------------------

         Independent research expense decreased by 66% to $775,817 in 2003 from
$2,311,263 in 2002. This was also due to the Company's decision to wind down the
activities, and ultimately close PCS, and the resulting lower commission and
other fee revenues.

Execution and Clearing Costs
----------------------------

         Execution and clearing costs decreased by 78% to $146,855 compared to
$674,653 in 2002. This decrease is primarily due to reduced commission levels
resulting from the wind down of the PCS business.

                                       20
<PAGE>

Amortization of Identifiable Intangibles
----------------------------------------

         During the first quarter of 2002, $539,574 was charged as amortization
expense in connection with identifiable intangible assets recorded as part of
the merger with PCS completed in the fourth quarter of 2001. During 2003, no
similar expenses were recorded since these assets were held for sale subject to
the asset transfer agreement.

General and Administrative
--------------------------

         General and administrative expenses decreased by 99% to $420 from
$65,750 in 2002 as a result of pending closing of PCS.

         Loss from discontinued operations represents the net asset and
liability activity recorded at March 31, 2003 in connection with the closing of
PCS and the related agreement between the Company and former owners of PCS.
There was no similar activity in 2002.

Loss on Transfer of Assets of Discontinued Operations
-----------------------------------------------------

         In connection with the Company's agreement to transfer the PCS
trademark and customer list intangibles to the former owners of PCS, in exchange
for cash, the relief of liabilities and the surrendering of 10.3 million shares
of the Company's common stock held by these individuals, the Company recorded a
loss on the transfer of $18,253 in the first quarter of 2003. No similar
activity occurred in 2002. The components of the loss are summarized below:

Consideration To Be Received:
Cash                                                         (A)   $    250,000
Credit line repayment                                        (B)      1,076,556
Accrued liabilities relieved:
   Accrued compensation  payable to related parties          (C)      1,271,281
   Accrued research services - net                           (D)        398,723
Surrender and cancellation of common stock                   (E)        721,000
Other                                                        (F)        391,889
                                                                   ------------
                                                                      4,109,449

Carrying amount of intangibles transferred                   (G)     (4,127,702)
                                                                   ------------

Net loss                                                           $    (18,253)
                                                                   ============

     (A) Represents a $250,000 receivable from the former owners of PCS over 2
         years pursuant to the asset transfer agreement (125,000 of which is
         classified as current assets), subject to certain conditions as defined
         in the agreement.
     (B) Represents funds paid directly to Lender from soft dollar brokerage
         firm controlled by the former owners.
     (C) Accrued compensation payable as of December 31, 2002 pursuant to
         respective employment and consulting agreements with the former owners
         of PCS.
     (D) Net customer credit balances of PCS subsidiary assumed by former owners
         of PCS.
     (E) 10.3 million shares of the Company's common stock surrendered by the
         former owners of PCS at fair market value. The fair market value of the
         Company's common stock at the date of the transaction was $0.07.
     (F) Additional net assets to be realized in connection with transaction.
     (G) Carrying amount of PCS trademark and customer list intangibles at
         date of transaction.

                                       21
<PAGE>

Net Loss
--------

         As a result of the revenue and expense items mentioned above, the
Company's net loss decreased 58% to $787,232 in the three months ended March 31,
2003 from $1,855,086 in the same period a year ago.


LIQUIDITY AND CAPITAL RESOURCES

Liquidity
---------

         The accompanying consolidated financial statements have been prepared
using the going concern basis of accounting. As more fully discussed in
Company's audited financial statements contained in Form 10-KSB, the Company's
December 31, 2002 audited financial statements included a "going concern"
qualification from its independent auditors due to the Company's lack of
profitability, negative working capital and the loss of future revenue
associated with the decision to close its PCS subsidiary during the first half
of 2003.

         In conjunction with the decision to close the PCS business unit, the
Company and its management recommitted to pursuing its long-term objective of
becoming a leading single source of independent research to the institutional
community. The Company and its management believe that the independent
institutional research market is a viable area in which the Company can compete.
However, no assurances can be provided that the Company will be successful.

         At March 31, 2003, the Company had $309,029 of cash and cash
equivalents to meet its immediate short-term liquidity requirements. Whereas
management believes its anticipated cash flow from operations could be adequate
to fund operations for the next fiscal year, there can be no assurance, however,
that the Company will not require additional financing prior to or after such
time. Furthermore, there can be no assurance that any additional financing will
be available to the Company on acceptable terms, or at all. If adequate funds
are not available, the Company may be required to delay, scale back or eliminate
its operational plans. Our inability to obtain additional financing could have a
material adverse effect on the Company's business, financial condition and
results of operations.

Operating Activities
--------------------

         Cash provided by operating activities increased to $1,874,179 during
the three months ended March 31, 2003 compared to cash used in operating
activities of $3,151,510 during the three months ended March 31, 2002.

                                       22
<PAGE>

         This increase is primarily attributable to changes in asset and
liabilities from discontinued operations of $3,423,711, a decrease in the net
loss from continuing operations in 2003 of $836,675, an increase in deferred
revenue of $537,902 in 2003, an increase in income from discontinued operations
of $231,179 and an incease in accounts payable and accrued liabilities of
$208,567. Partially offsetting these was an increase in prepaid research costs
of $279,916 in 2003.

Investing Activities
--------------------

         Cash used by investing activities decreased to $14,759 during the three
months ended March 31, 2003 compared $82,420 during the three month ended March
31, 2002. This decrease resulted primarily from fewer purchases of property and
equipment during 2003.

Financing Activities
--------------------

         Cash used in financing activities increased to $1,940,470 during the
three months ended March 31, 2003 compared to cash provided by financing
activities of $3,266,325 during the three months ended March 31, 2002. The
increase in cash used during the 2003 period is primarily due to activity during
the respective periods on the Company's credit facility with Bear Stearns. In
the 2003 period, the credit line was paid down by $2,505,781, whereas during the
2002 period, the credit line balance was increased by $2,748,825. Partially
offsetting this was a transfer of the $500,000 restricted cash balance that had
been held by Bear Stearns as cash collateral.

Financing
---------

Credit Facility
---------------

         In December 2001, the Company obtained a $3,000,000 working capital
credit facility from Bear Stearns in connection with the merger with PCS. The
credit facility was originally secured by $1.5 million in restricted cash of the
Company and personal guarantees by the Company's President and Chief Executive
Officer and the two formers owners of PCS Securities. In July 2002, the Lender
released $1.0 of the cash collateral in connection with discussions between the
parties to restructure the credit facility. The primary focus on these
discussions was to increase the maximum amount available under the credit
facility, and to release all, or a portion of the security deposit and
guarantees contained in the original agreements. These discussions were
terminated December 2002, when it became clear that acceptable terms could not
be reached. As of December 31, 2002 the outstanding balance owed on the credit
facility was $2,891,975.

         In connection with the Company's decision to close PCS during 2003 and
the agreement reached with the former owners of PCS Securities pursuant to which
the Company agreed not to draw any additional funds from the Bear Stearns credit
facility. Furthermore, the parties agreed that the Company would transfer the
remaining $500,000 security deposit balance to pay down the outstanding credit
facility balance, and that all commissions generated by PCS Securities
subsequent to January 1, 2003 that clear through Bear Stearns will be applied
against the outstanding balance of the credit facility. As a result of the
security deposit balance transfer in February 2003, and commissions applied
subsequent to January 1, 2003, the outstanding balance of the credit facility at
March 31, 2003 was $386,194. As of April 30, 2003 the credit facility balance
was paid in full, and the credit facility and related promissory note were
cancelled.

Convertible Debt
----------------

         On December 17, 2001, the Company issued convertible debentures in the
aggregate principal amount of $1,600,000. These debentures had a maturity date
of December 17, 2003, and bore interest at a rate of 10% per annum, which was
due and payable on the last day of each calendar quarter until they were paid in
full or converted into shares of the Company's common stock.

                                       23
<PAGE>

         At issuance, proceeds from the debentures were allocated to the
warrants based on the fair value of the warrants using a Black Scholes valuation
model totaling $259,182. In addition, a discount of $541,536 was applied to
account for the beneficial conversion feature at the closing date of December
17, 2001.

         In November 2002, the Company made a partial prepayment of principal in
the amount of $215,686.

         At December 31, 2002, debentures with an aggregate principal balance of
$1,384,314, were carried net of unamortized discounts of $417,189 related to the
intrinsic value of the beneficial conversion feature, which is inclusive of the
effect of conversion price resets, and the warrants.

         In February 2003, the Company and the debenture holders restructured
certain terms and provisions of the convertible debentures. In connection with
the debt restructuring, the Company was relieved of $137,844 in liquidated
damages previously accrued. The restructuring of the convertible debt has been
accounted for as a troubled debt restructuring and, accordingly, no gain or loss
was recognized. At March 31, 2003, the restructured convertible debt principal
totaled $1,571,625 of which $316,817 is classified as the current portion.

         Following is a summary of primary terms of the restructured agreements:

$1,250,000 Original Principal Amount Note
-----------------------------------------

         The original debenture was amended pursuant to which the principal
balance was changed to $1,425,000. The amended principal balance includes the
original principal amount plus accrued and unpaid liquidated damages and
interest of $150,000 and $25,000, respectively. The remaining balance of accrued
interest at February 28, 2003, totaling $26,736, was paid by the Company and
$125,000 of accrued liquidated damages were waived by the debenture holder. The
debenture matures on December 28, 2005 and bears interest at an annual rate of
14%. The debenture requires fixed monthly payments of principal and interest
beginning on March 28, 2003 of $25,000 for the first five (5) months, $50,000
thereafter through November 28, 2005 and a final payment due December 28, 2005
in the amount of $271,100. The outstanding principal balance can be converted
into shares of the Company's common stock at the option of the holder based on a
fixed conversion price of $0.20, and the warrant exercise price is fixed at
$0.086 for the term of the warrants to purchase 160,000 shares of the Company's
common stock that were included in the original debenture. In addition, the
debenture holder agreed to waive all registration requirements with respect to
the convertible debenture, warrants and shares underlying the warrants. The
Company made a scheduled payment of $25,000 in March 2003, resulting in the
application of $8,375 against the principal balance of the note. As of March 31,
2003 the outstanding principal balance was $1,416,625, of which $316,817 was a
current liability and $1,099,808 was a long-term liability.

$350,000 Original Principal Amount Note
---------------------------------------

         The original debenture was amended pursuant to which the principal
balance was changed to $155,000. The amended principal balance includes the
original principal amount, less the partial principal payment in November 2002,
of $215,686 plus accrued and unpaid liquidated damages and interest of $16,656
and $4,030, respectively. Accrued liquidated damages in the amount of $12,844
were waived by the debenture holder. The debenture matures on February 28, 2005
and bears interest at an annual rate of 14%. Payment of interest is required
quarterly, beginning March 30, 2003 and the principal balance is payable upon
the maturity date. The outstanding principal balance can be converted in shares
of the Company's common stock at the option of the holder based on a fixed
conversion price of $0.20, and the warrant exercise price is fixed at $0.086 for
the term of the warrants to purchase 35,000 shares of the Company's common stock
that were included in the original debenture.

                                       24
<PAGE>

         In addition, the debenture holder agreed to waive all registration
requirements with respect to the convertible debenture, warrants and shares
underlying the warrants. As of March 31, 2003 the outstanding principal balance
was $155,000, all of which was reflected as a long-term liability.

Promissory Notes
----------------

         On November 22, 2001, the Company borrowed $300,000 from an unrelated
party. In connection with such loan, the Company issued a note to the lender,
which note is unsecured, bears in interest at 15% per annum and was originally
due in July 2002. In addition, the Company issued 150,000 detachable warrants to
the lender exercisable for 150,000 shares of the Company's common stock at an
exercise price of $2.30 per share. The warrants are exercisable at the option of
the holder and expire in November 2006. In November 2002, the Company paid
interest accrued through October 31, 2002, totaling $42,875 and received and
extension of the maturity date of the note to May 15, 2003. In May 2003, the
Company received a verbal committment to further extend the maturity date of the
note to July 16, 2003.

         On May 14, 2001, October 31 2001 and January 13, 2002, the Company
borrowed an aggregate of $187,500 from an entity controlled by an
officer/stockholder of the Company. In connection with such loan, the Company
issued notes to lender which are unsecured, bear interest at 12% and mature on
May 14, 2003, October 31, 2003 and July 1, 2003 respectively. In May 2003, the
Company received a verbal committment to extend the maturity date of the note
originally scheduled to mature on May 14, 2003, to July 16, 2003.

Net Capital Deficiency
----------------------

         As of March 31, 2003, the Company's PCS Securities subsidiary failed to
meet the minimum net capital requirement of $5,000 required by the NASD. As
discussed in Note B, in April 2003, the Company filed with the NASD to withdraw
the PCS broker-dealer license.

New Accounting Pronouncements
-----------------------------

See accompanying notes to condensed consolidated financial statements for a
description.


Item 3.  Controls and Procedures
         -----------------------

         Within the 90 days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's President and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures, as defined in Exchange Act Rules 13a-14(c)
and 15d-14(c). Based upon that evaluation, the Company's President and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in enabling the Company to record, process, summarize
and report information required to be included in the Company's periodic SEC
filings within the required time period.

         There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect internal controls
subsequent to the date the Company carried out its evaluation.

                            Part II Other Information

Item 1.  Legal Proceedings.
         -----------------

         Except as set forth below, there are no material legal proceedings
pending or, to the Company's knowledge, threatened against the Company:

         On or about August 5, 2002, the Company commenced an action in the
Superior Court of the State of California, County entitled, DirectPlacement,
Inc. v. Barry Witz, et. al., Case No. GIC 793647, in which the Company claimed
that one or more of the defendants (i) breached their fiduciary duties, (ii)
were unjustly enriched, (iii) wrongfully converted the Company's property, and
(iv) committed legal malpractice.

         The Company is seeking (i) the return of all shares and warrants to
purchase shares of the Company obtained by the defendants, (ii) compensatory
damages plus interest until judgment is entered, (iii) punitive damages, (iv)
costs incurred in connection with the action, including reasonable attorneys'
fees, and (v) such other and further relief as the Court deems just and proper.

                                       25
<PAGE>

         Between October 2002 and March 31, 2003, defendant Witz and two other
co-defendants entered into Settlement and Mutual Release Agreements with the
Company. Under the terms of these agreements, the defendants agreed to return an
aggregate of 293,750 shares of common stock and 1,725,000 performance warrants
to the Company. In addition, the agreement with Witz provided that the Company
would grant Witz a warrant to purchase a number of shares of the Company's
common stock equal to 25% of the total number of shares of common stock conveyed
to the Company for cancellation as a result of default judgments being entered
and enforced against the other defendants in connection with this action, up to
a maximum of 250,000 shares. The exercise price of such warrants will equal the
average closing market price for the Company's common stock during the ten days
prior to the date of the warrant issue.

         Other defendants in the case, representing a total of 1,323,750 shares
of common stock and 3,971,250 performance warrants, have yet to file a response
to the Company's complaint. The Company intends to pursue default judgments and
seek the return of all shares and performance warrants from the remaining
defendants.

Item 2.  Changes in Securities and Use of Proceeds
         -----------------------------------------

         None

Item 3.  Default Upon Senior Securities
         ------------------------------

         On December 17, 2001, the Company issued convertible debentures with an
aggregate principal amount of $1,600,000. The debentures bore interest at a rate
of 10% per annum which interest was due and payable on the last day of each
calendar quarter beginning March 31, 2002 until the debentures were paid in full
or converted into shares of the Company's common stock. The maturity date of the
debentures was December 17, 2003.

         In addition, the Company granted the debenture holders with certain
demand and piggyback registration rights. The Company failed to file a
registration statement by February 15, 2002 as required by its agreement with
the debenture holder. As a result, the Company is obligated to pay to Purchaser,
an amount equal to two percent (2%) of the principal amount of debentures
outstanding for each 30-day period (pro rated) until the registration statement
is filed with the Commission. The Company is also obligated to have a
registration statement covering the shares of the Company's common stock
issuable upon conversion of the debentures declared effective by the Securities
and Exchange Commission by April 16, 2002.

         As described in Note F - Convertible Debt to the condensed consolidated
financial statements and in Part I - Item 2. Management's Discussion and
Analysis of Financial Conditions and Results of Operations, the debentures were
restructured effective February 28, 2003, and accordingly, the Company is no
longer in default.

Item 4.  Submission of Matters to a Vote of Security Holders.
         ---------------------------------------------------

         None

Item 5.  Other Information.
         -----------------

         None

                                       26
<PAGE>

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

    (a)  Exhibits
         --------

         10.1  Amended convertible debenture agreement dated February 28, 2003
               with GCA Strategic Investment Fund Limited
         10.2  Amended warrant agreement dated February 28, 2003 with GCA
               Strategic Investment Fund Limited
         10.3  Amended convertible debenture agreement dated February 28, 2003
               with Global Capital Funding Group, LP
         10.4  Amended warrant agreement dated February 28, 2003 with Global
               Capital Funding Group, LP
         10.5  Security agreement dated February 28, 2003 with Global Capital
               Funding Group, LP
         99.1  Certifications pursuant to Sarbanes-Oxley Act of 2002.


    (b)  Reports on Form 8-K
         -------------------

         Current Report on Form 8-K filed with the Commission on January 10,
         2003 with respect to Items 5 and 7.

         Current Report on Form 8-K filed with the Commission on February 7,
         2003 with respect to Items 5 and 7.

         Current Report on Form 8-K filed with the Commission on March 11, 2003
         with respect to Items 5.

                                       27
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-QSB to be signed on its behalf
by the undersigned thereunto duly authorized.


                                       PCS RESEARCH TECHNOLOGY, INC.


                                       By: /s/ BRIAN M. OVERSTREET
                                           -------------------------------------
                                           Name: Brian M. Overstreet
                                           Title: President and
                                           Chief Executive Officer

DATE: May 15, 2003


                                       28
<PAGE>

                                  CERTIFICATION
            Pursuant to Section 302 of the Sarbanes Oxley Act of 2002

I, Brian M. Overstreet, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of PCS Research
         Technology, Inc.;

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

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

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

         a)    designed such internal controls to ensure that material
               information relating to the registrant, including its
               consolidated subsidiaries (collectively the "Company"), is made
               known to the Certifying Officers by others within the Company,
               particularly during the period in which this quarterly report is
               being prepared;

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

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

5.       The registrant's Certifying Officers have disclosed, based on our most
         recent evaluation, to the registrant's auditors and the audit committee
         of the registrant's board of directors:

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

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

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

Date: May 15, 2003

/s/ BRIAN M. OVERSTREET
-------------------------------------
Brian M. Overstreet
President and Chief Executive Officer

                                       29
<PAGE>

                                  CERTIFICATION
            Pursuant to Section 302 of the Sarbanes Oxley Act of 2002

I, Michael H. Lorber, certify that:

1.       I have reviewed this quarterly report on Form 10-QSB of PCS Research
         Technology, Inc.;

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

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

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

         a)    designed such internal controls to ensure that material
               information relating to the registrant, including its
               consolidated subsidiaries, (collectively the "Company") is made
               known to the Certifying Officers by others within the Company,
               particularly during the period in which this quarterly report is
               being prepared;

         b)    Evaluated the effectiveness of the registrant's internal controls
               as of a date within 90 days prior to the filing date of this
               quarterly report (the "Evaluation Date"); and

         c)    Presented in this quarterly report the conclusions of the
               Certifying Officers about the effectiveness of the disclosure
               controls and procedures based on our evaluation as of the
               Evaluation Date;

5.       The registrant's Certifying Officers have disclosed, based on our most
         recent evaluation, to the registrant's auditors and the audit committee
         of the registrant's board of directors:

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

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

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

Date: May 15, 2003

/s/ MICHAEL H. LORBER
-------------------------------------
Michael H. Lorber
Chief Financial Officer

                                       30