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

                                    FORM 10-Q


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

                      For the quarter 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 No. 0-12374


                                  EQUITEX, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


Delaware                                                              84-0905189
-------------------------------                              -------------------
(State or other jurisdiction of                                    (IRS Employer
incorporation or organization)                               Identification No.)


                            7315 East Peakview Avenue
                            Englewood, Colorado 80111
               ---------------------------------------------------
               (Address of principal executive offices) (Zip code)


                                 (303) 796-8940
               ---------------------------------------------------
               (Registrant's telephone number including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]

Number of shares of common stock outstanding at May 20, 2003: 29,068,923

<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>

PART I    FINANCIAL INFORMATION                                                 Page
                                                                                ----
<S>                                                                             <C>
          Item 1. Financial statements:

                  Independent accountants' report                               3

                  Condensed consolidated balance sheets - March 31, 2003
                  (unaudited) and December 31, 2002                             4 - 5

                  Condensed consolidated statements of operations-
                  three months ended March 31, 2003 and 2002 (unaudited)        6

                  Condensed consolidated statement of changes in stockholders'
                  equity - three months ended March 31, 2003 (unaudited) 7 - 8

                  Condensed consolidated statements of cash flows -
                  three months ended March 31, 2003 and 2002 (unaudited)        9 - 10

                  Notes to condensed consolidated financial statements          11 - 18

          Item 2. Management's discussion and analysis of financial
                  condition and results of operations                           19 - 24

          Item 3. Quantitative and qualitative disclosures of market risk       24

          Item 4. Disclosure controls and procedures                            24

PART II   OTHER INFORMATION

          Item 1. Legal proceedings                                             24

          Item 2. Changes in securities and use of proceeds                     25

          Item 3. Defaults upon senior securities                               25

          Item 4. Submission of matters to a vote of security holders           25

          Item 5. Other information                                             25

          Item 6. Exhibits and reports on Form 8-K                              25

                  Signature                                                     26

                  Certification                                                 27
</TABLE>


<PAGE>

                         INDEPENDENT ACCOUNTANTS' REPORT



Board of Directors
Equitex, Inc.

We have reviewed the accompanying condensed consolidated balance sheet of
Equitex, Inc. and subsidiaries as of March 31, 2003, and the related condensed
consolidated statements of operations and cash flows for the three-month periods
ended March 31, 2003 and 2002, and the related condensed consolidated statement
of stockholders' equity for the three months ended March 31, 2003. These
financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Equitex, Inc. and subsidiaries as of December 31, 2002, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the year then ended (not presented herein); and in our report dated April 3,
2003 (which includes an explanatory paragraph relating to the adoption of
Statement of Financial Accounting Standards No. 141, BUSINESS COMBINATIONS and
Statement of Financial Accounting Standards No. 142, GOODWILL AND OTHER
INTANGIBLE ASSETS) we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 2002, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.



/S/ GELFOND HOCHSTADT PANGBURN, P.C.

Denver, Colorado
May 15, 2003

                                       3
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                         March 31,   December 31,
                                                           2003           2002
                                                        -----------   -----------
                                                        (Unaudited)
<S>                                                     <C>           <C>
Current assets:
 Cash and cash equivalents                              $ 5,710,620   $ 8,931,713
 Receivables, net                                         6,107,392     3,507,425
 Current portion of notes receivable, related parties       428,197       245,322
 Interest receivable, related parties                        78,183        95,547
 Prepaid expenses and other                                 699,150       354,433
                                                        -----------   -----------

   Total current assets                                  13,023,542    13,134,440
                                                        -----------   -----------

Notes receivable, net, including related parties of
   $1,016,736 (2003) and $1,480,030 (2002)                2,123,330     1,980,030
Property, equipment and leaseholds, net                   1,150,043     1,202,885
Deferred tax asset                                        1,380,000     1,380,000
Intangible and other assets, net                          3,913,393     4,098,393
Goodwill                                                  5,636,000     5,636,000
                                                        -----------   -----------
                                                         14,202,766    14,297,308
                                                        -----------   -----------

                                                        $27,226,308   $27,431,748
                                                        ===========   ===========
</TABLE>

                                  (Continued)
                                       4
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                           March 31,     December 31,
                                                                             2003             2002
                                                                         ------------    ------------
                                                                         (Unaudited)
<S>                                                                      <C>             <C>
Current liabilities:
 Accounts payable                                                        $  1,218,407    $  1,278,267
 Accrued expenses and other liabilities, including related
  party accruals of $255,880 (2003) and $375,109 (2002)                     1,632,770       1,379,878
 Accrued liabilities on casino contracts                                      669,589         622,361
 Current portion of long-term debt                                            301,727         251,727
 Line of credit, notes and loans payable                                   13,056,869      13,493,776
 Notes payable, related parties                                               150,000         254,194
 Due to credit card holders                                                   382,252         403,405
                                                                         ------------    ------------
   Total current liabilities                                               17,411,614      17,683,608
                                                                         ------------    ------------
Long-term debt, net of current portion                                        151,038         240,629
                                                                         ------------    ------------
   Total liabilities                                                       17,562,652      17,924,237
                                                                         ------------    ------------

Commitments and contingencies

Stockholders' equity:
 Preferred stock; 2,000,000 shares authorized:
  Series D, 6%; stated value $1,000 per share; 520 shares (2003) and
   575 shares (2002) issued and outstanding; liquidation preference
   of $728,000                                                                520,000         575,000
  Series G, 6%; stated value $1,000 per share; 370 shares
   issued and outstanding; liquidation preference of $543,000                 370,000         370,000
  Series I, 6%; stated value $1,000 per share; 1,600 shares (2003) and
   1,690 shares (2002) issued and outstanding; liquidation preference
   of $2,258,000                                                            1,600,000       1,690,000
  Series J, 6%; stated value $1,000 per share; 1,380 shares (2002)
   issued and outstanding                                                                   1,380,000
  Less preferred treasury stock; Series J, at cost; 650 shares (2002)                        (650,000)
 Common stock, $0.02 par value; 50,000,000 shares authorized;
  31,039,334 (2003) and 26,527,282 (2002) shares issued;
  29,122,266 (2003) and 26,111,425 (2002) shares outstanding                  620,787         530,546
 Additional paid-in capital                                                14,535,684      12,719,855
 Accumulated deficit                                                       (7,157,724)     (6,851,039)
 Less common treasury stock at cost; 1,917,068 shares (2003) and
   415,857 shares (2002)                                                     (825,091)       (256,851)
                                                                         ------------    ------------
    Total stockholders' equity                                              9,663,656       9,507,511
                                                                         ------------    ------------
                                                                         $ 27,226,308    $ 27,431,748
                                                                         ============    ============
</TABLE>

           See notes to condensed consolidated financial statements.
                                       5
<PAGE>

                       EQUITEX, INC. AND SUBSIDIARIES

                         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                 THREE MONTHS ENDED MARCH 31, 2003 AND 2002

                                 (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                 2003            2002
                                                                            ------------    ------------
<S>                                                                         <C>             <C>
Fee revenue                                                                 $  4,573,951    $  4,901,490
Credit card income, net of provision for losses                                  134,743       2,356,898
Application fees, net of direct marketing costs                                                  317,855
Other                                                                                            194,131
                                                                            ------------    ------------
       Total revenues                                                          4,708,694       7,770,374
                                                                            ------------    ------------

Third party servicing fees                                                        78,237       1,348,523
Fees paid to casinos                                                           1,508,242       1,476,338
Salaries, wages and employee benefits                                          1,625,235       2,608,551
Other operating expenses                                                       1,448,329       2,539,290
                                                                            ------------    ------------
                                                                               4,660,043       7,972,702
                                                                            ------------    ------------
Income (loss) from operations                                                     48,651        (202,328)
                                                                            ------------    ------------

Other income (expense):
  Interest income, including related party interest
    of $11,056 (2003) and $49,541 (2002)                                          14,442          49,541
  Interest expense, including related party interest of $3,582 (2003) and
    $157,201 (2002)                                                             (357,778)       (453,441)
  Other                                                                                         (134,000)
                                                                            ------------    ------------
                                                                                (343,336)       (537,900)
                                                                            ------------    ------------
Loss before income taxes                                                        (294,685)       (740,228)
Income tax expense                                                                12,000          18,000
                                                                            ------------    ------------

Net loss                                                                        (306,685)       (758,228)
Additional warrants issued to preferred stockholders                                             (53,000)
Warrant accretion                                                                 (3,290)
Redemption of convertible preferred stock for less than amount
  allocated to beneficial conversion features                                     38,430          86,000
Deemed preferred stock dividends                                                 (62,500)        (86,000)
                                                                            ------------    ------------
Net loss applicable to common stockholders                                  $   (334,045)   $   (811,228)
                                                                            ============    ============
Basic and diluted net loss per common share                                 $      (0.01)   $      (0.04)
                                                                            ============    ============
Weighted average number of common shares outstanding                          28,102,847      21,458,344
                                                                            ============    ============
</TABLE>
            See notes to condensed consolidated financial statements.
                                       6
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                 Convertible preferred stock  Preferred          Common stock
                                                  ------------------------     treasury     -----------------------
                                                    Shares        Amount        stock         Shares       Amount
                                                  ----------    ----------    ----------    ----------   ----------
<S>                                               <C>           <C>           <C>           <C>          <C>
Balances, January 1, 2003                              4,015     4,015,000    $ (650,000)   26,527,282   $  530,546

Exercises of warrants for common stock                                                         537,122       10,742

Conversion of accounts payable to common stock                                                 259,891        5,198

Redemption of Series I preferred stock for cash          (90)      (90,000)

Conversion of Series D preferred stock to
 common stock                                            (55)      (55,000)                    218,685        4,374

Conversion of Series J preferred stock to
  common stock                                        (1,380)   (1,380,000)      650,000     3,496,354       69,927

Sale of treasury stock for cash

Issuance of warrants for services

Repricing of warrants

Net loss
                                                  ----------    ----------    ----------    ----------   ----------

Balances, March 31, 2003                               2,490     2,490,000    $     --      31,039,334   $  620,787
                                                  ==========    ==========    ==========    ==========   ==========
</TABLE>
                                  (Continued)
                                       7
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                      Common        Additional                        Total
                                                     treasury        paid-in       Accumulated     stockholders'
                                                      stock          capital         deficit         equity
                                                  ------------    ------------    ------------    ------------

<S>                                               <C>             <C>             <C>             <C>
Balances, January 1, 2003                         $   (256,851)   $ 12,719,855    $ (6,851,039)   $  9,507,511

Exercises of warrants for common stock                                 183,934                         194,676

Conversion of accounts payable to common stock                         175,756                         180,954

Redemption of Series I preferred stock for cash                        (10,000)                       (100,000)

Conversion of Series D preferred stock to
  common stock                                                          50,626

Conversion of Series J preferred stock to
  common stock                                        (650,000)      1,310,073

Sale of treasury stock for cash                         81,760          20,440                         102,200

Issuance of warrants for services                                       76,000                          76,000

Repricing of warrants                                                    9,000                           9,000

Net loss                                                                              (306,685)       (306,685)
                                                  ------------    ------------    ------------    ------------

Balances, March 31, 2003                          $   (825,091)   $ 14,535,684    $ (7,157,724)   $  9,663,656
                                                  ============    ============    ============    ============
</TABLE>
           See notes to condensed consolidated financial statements.
                                       8
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                   THREE MONTHS ENDED MARCH 31, 2003 AND 2002

                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              2003           2002
                                                                          -----------    -----------
<S>                                                                       <C>            <C>
Cash flows provided by operating activities:
Net loss                                                                  $  (306,685)   $  (758,228)
                                                                          -----------    -----------
Adjustments to reconcile net loss to net cash (used in)
 provided by operating activities:
  Provision for losses                                                          1,382        118,124
  Depreciation and amortization                                               276,979        322,476
  Stock-based compensation expense                                             85,000        468,000
  Beneficial conversion features on convertible promissory notes                              40,000
  Amortization of discount on convertible promissory notes                                    16,700
  Changes in assets and liabilities:
   Increase in accounts receivable                                         (2,379,626)      (879,284)
   Decrease (increase) in other receivables                                    36,973       (483,818)
   (Increase) decrease in other assets                                       (344,717)        41,331
   (Decrease) increase in due to credit card holders                          (21,153)       955,097
   Increase in accounts payable and accrued liabilities                       156,214        476,186
                                                                          -----------    -----------
Total adjustments                                                          (2,188,948)     1,074,812
                                                                          -----------    -----------
Net cash (used in) provided by operating activities                        (2,495,633)       316,584
                                                                          -----------    -----------

Cash flows from investing activities:
  Net decrease (increase) in credit card receivables                           23,668       (532,894)
  Purchases of furniture, fixtures and equipment                              (57,010)       (64,572)
  Proceeds from sale of equipment                                               5,233
  Issuance of related party notes receivable                                 (327,200)       (76,651)
  Repayment of related party notes receivable                                   1,025         25,605
                                                                          -----------    -----------
Net cash used in by investing activities                                     (354,284)      (648,512)
                                                                          -----------    -----------

Cash flows from financing activities:
  Redemption of Series I preferred stock for cash                            (100,000)      (382,867)
  Proceeds from the exercise of warrants                                      194,676        201,000
  Proceeds from common stock private placements (net of offering costs)                      205,248
  Issuance of notes payable, related parties and other                        471,537        593,450
  Repayment of notes payable, related parties and other                      (589,589)      (407,485)
  Net (repayments) borrowings on line of credit                              (450,000)        29,538
  Sale of treasury stock                                                      102,200
                                                                          -----------    -----------
Net cash (used in) provided by financing activities                          (371,176)       238,884
                                                                          -----------    -----------
</TABLE>
                                  (Continued)
                                       9
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                   THREE MONTHS ENDED MARCH 31, 2003 AND 2002

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               2003           2002
                                                                           -----------    -----------
<S>                                                                         <C>               <C>
Decrease in cash and cash equivalents                                       (3,221,093)       (93,044)
Cash and cash equivalents, beginning                                         8,931,713      7,830,426
                                                                           -----------    -----------

Cash and cash equivalents, ending                                          $ 5,710,620    $ 7,737,382
                                                                           ===========    ===========

Supplemental disclosure of cash flow information:

 Cash paid for interest                                                    $   357,953    $   303,162
                                                                           ===========    ===========

 Cash paid for taxes                                                                      $     5,500
                                                                                          ===========

Supplemental disclosure of non-cash investing and financing activities:

  Conversion of preferred stock, including preferred treasury stock
   of $650,000 in 2003, to common stock                                    $ 1,435,000    $   300,000
                                                                           ===========    ===========

  Conversion of accounts payable to common stock                           $   180,954
                                                                           ===========

  Equipment exchanged for a reduction in a note payable                    $    12,640
                                                                           ===========

  Warrants attached to convertible promissory notes                                       $    15,000
                                                                                          ===========

  Amortization of additional warrants issued to preferred
   stockholders                                                                           $    53,000
                                                                                          ===========

  Deferred compensation agreement entered into with a consultant                          $    72,000
                                                                                          ===========

  Related party note receivable exchanged for related party note
   payable by shareholder                                                                 $   200,000
                                                                                          ===========

  Reclassification of receivables due from Net First and liabilities due
   to Net First card holders to a net receivable due from the FDIC:

   Credit card receivables, net                                                           $ 1,687,931
   Other receivables                                                                        6,048,087
   Accounts payable                                                                          (537,934)
   Due to credit card holders                                                              (5,235,559)
                                                                                          -----------

   Receivable from FDIC, as receiver for Net First                                        $ 1,962,525
                                                                                          ===========
</TABLE>
           See notes to condensed consolidated financial statements.
                                       10
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                   THREE MONTHS ENDED MARCH 21, 2003 AND 2002
                                   (UNAUDITED)


1. INTERIM FINANCIAL STATEMENTS, BASIS OF PRESENTATION AND RECENT EVENTS:

   INTERIM FINANCIAL STATEMENTS:

   The condensed consolidated interim financial statements of Equitex, Inc. and
     subsidiaries (the "Company") for the three-month periods ended March 31,
     2003 and 2002, have been prepared by the Company without audit by the
     Company's independent auditors. In the opinion of the Company's management,
     all adjustments necessary to present fairly the financial position, results
     of operations, and cash flows of the Company as of March 31, 2003, and for
     the periods ended March 31, 2003 and 2002, have been made. Except as
     described below, those adjustments consist only of normal and recurring
     adjustments.

   Certain information and note disclosures normally included in the Company's
     annual financial statements prepared in accordance with accounting
     principles generally accepted in the United States of America have been
     condensed or omitted. These condensed consolidated financial statements
     should be read in conjunction with a reading of the consolidated financial
     statements and notes thereto included in the Company's Form 10-K annual
     report filed with the Securities and Exchange Commission (`SEC") on April
     15, 2003. The results of operations for the three months ended March 31,
     2003, are not necessarily indicative of the results to be expected for the
     full year.

   BASIS OF PRESENTATION:

   The accompanying financial statements present the consolidated financial
     position of Equitex, Inc. and its wholly-owned subsidiaries, Key Financial
     Systems, Inc. ("Key"), Nova Financial Systems, Inc. ("Nova"), Chex
     Services, Inc. ("Chex"), and its majority-owned subsidiary, Denaris
     Corporation ("Denaris") as of March 31, 2003 and December 31, 2002. The
     results of operations and cash flows of the Company for the three months
     ended March 31, 2003 and 2002 present the consolidated results of Equitex,
     Key, Nova, Chex, and beginning August 16, 2002, Denaris. During the three
     months ended March 31, 2003, the net loss incurred by the Company's
     majority-owned subsidiary Denaris, exceeded the minority interest in the
     common equity (deficiency) of the subsidiary. The excess of 2003 losses
     applicable to the minority interest have been charged to the Company, and
     no minority interest is reflected in the Company's March 31, 2003
     consolidated financial statements. All significant intercompany accounts
     and transactions have been eliminated in consolidation.

   RECENT EVENTS:

   NASDAQ STOCK MARKET LISTING:

   In July 2002, the Company received notice from the Nasdaq Stock Market
     ("Nasdaq") that the minimum bid price of the Company's common stock had
     fallen below the $1.00 per share price required for continued inclusion.
     The Company had until January 14, 2003 to regain compliance with the
     minimum bid price requirement, which the Company did not meet. On January
     14, 2003, the Company received notice from Nasdaq that it met the initial
     inclusion criteria for the Nasdaq Small Cap Market listing and therefore
     Nasdaq provided the Company an additional 180 calendar days, or until July
     14, 2003, to regain compliance with the minimum bid price requirement. If
     at any time before July 14, 2003, the bid price of the Company's common
     stock closes at $1.00 per share or more for a minimum of 10 consecutive
     trading days, Nasdaq will provide written notification of compliance.

                                       11
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 21, 2003 AND 2002
                                   (UNAUDITED)

1. INTERIM FINANCIAL STATEMENTS, BASIS OF PRESENTATION AND RECENT EVENTS
   (CONTINUED):

   RECENT EVENTS (CONTINUED):

   NASDAQ STOCK MARKET LISTING (CONTINUED):

   If compliance cannot be demonstrated by July 14, 2003, the Company's
     securities will be delisted. At that time, the Company may appeal Nasdaq's
     determination to a Listing Qualifications Panel.

   AGREEMENT WITH PAYMASTER JAMAICA:

   In August 2002, the Company entered into a binding agreement with Paymaster
     (Jamaica) Limited ("Paymaster Jamaica") to form a jointly-owned and
     operated company to replicate Paymaster Jamaica's financial services
     business model throughout the Caribbean, North America and ultimately,
     worldwide. This newly-formed company is to be named Paymaster Worldwide,
     Inc. ("PWI"). Under the terms of the agreement, the Company advanced
     $500,000 to Paymaster Jamaica in exchange for a 6% promissory note that may
     be converted into stock of PWI. As of March 31, 2003, PWI has not yet been
     formed.

   Paymaster Jamaica, headquartered in Kingston, Jamaica, commenced operations
     in 1997, and offers revenue collection and customer care to businesses,
     institutions and consumers on the island of Jamaica. It offers its
     customers an alternative to retaining their own commercial offices. In
     addition, through its bill payment services, Paymaster Jamaica is
     developing cash remittance services, affording its customers the
     convenience to send and receive various types of remittances nationally or
     internationally via cash or debit cards.

   NET FIRST NATIONAL BANK CLOSURE AND KEY AND NOVA OPERATIONS:

   Through March 1, 2002, Key's credit card products were marketed for Net First
     National Bank ("Net First") under an agreement that provided the Company
     with a 100% participation interest in the receivables and related rights
     associated with credit cards issued, and required the payment of monthly
     servicing fees to Net First. The Company provided collection and customer
     services related to the credit cards issued. On March 1, 2002, federal
     banking regulators closed Net First, which was the sole issuing bank for
     Key's PAY AS YOU GO credit card program.

   On March 4, 2002, the Federal Deposit Insurance Corporation ("FDIC") notified
     the Company that it had been appointed receiver of all funds due from Net
     First to Key. As receiver, the FDIC elected to disaffirm, to the full
     extent, all contracts Key was a party to with Net First. On March 10, 2002,
     the Company was made aware that the FDIC was notifying Net First credit
     card holders that their accounts were to be closed, and accordingly, Key
     would not be able to transfer the existing PAY AS YOU GO credit card
     portfolio to a successor financial institution. In November 2002, the
     Company filed a lawsuit seeking to recover the full amount of a claim with
     the FDIC for all funds due from Net First to Key through the date federal
     banking regulators closed Net First (Note 4).

                                       12
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 21, 2003 AND 2002
                                   (UNAUDITED)


1. INTERIM FINANCIAL STATEMENTS, BASIS OF PRESENTATION AND RECENT EVENTS
   (CONTINUED):

   RECENT EVENTS (CONTINUED):

   NET FIRST NATIONAL BANK CLOSURE AND KEY AND NOVA OPERATIONS (CONTINUED):

   The Company immediately implemented steps to eliminate Key's operating costs
     associated with marketing and servicing the Net First program. These steps
     included employee lay-offs of all but essential management and employee
     personnel necessary to re-establish its marketing and servicing
     capabilities upon the establishment of a new relationship with another
     financial institution. The Company had discussions with financial
     institutions to initiate a new credit card program; however, the Company
     has not been successful in establishing such a relationship, and no longer
     intends to actively pursue such a relationship. As of March 31, 2003, Key
     and Nova operations consist solely of processing residual payments on
     remaining active accounts.

2. RECEIVABLES:

   Receivables at March 31, 2003 and December 31, 2002 consist of the following:

                                                       March 31,  December 31,
                                                          2003         2002
                                                      -----------  -----------

   Credit card and ATM processors                     $ 5,120,442  $ 2,652,504
   Credit card receivables, net of allowance for
     losses of $2,857 (2003) and $3,465 (2002)            130,947      155,997
   Other receivables                                      856,003      698,924
                                                      -----------  -----------

                                                      $ 6,107,392  $ 3,507,425
                                                      ===========  ===========

   Amounts due from credit card and ATM processors arise primarily from credit
     card and ATM advances by Chex to casino patrons. Credit card receivables
     include refundable and earned fees, which represent the balance reported to
     customers. Credit card receivables are reduced by allowances for refundable
     fees and losses. Other receivables at March 31, 2003 include approximately
     $270,000 due from Paymaster Jamaica, of which $265,000 represents amounts
     due for services performed by Denaris, which has been recorded as deferred
     revenue at March 31, 2003. Also included in other receivables at March 31,
     2003 and December 31, 2002, is $396,320 and $433,293, respectively, as due
     from third party financial institutions to Key. These amounts are held in
     trust under agreements to secure payment of reservation fees due customers.

3. GOODWILL, INTANGIBLE AND OTHER ASSETS:

   Statement of Financial Accounting Standards ("SFAS") No. 142, GOODWILL AND
     OTHER INTANGIBLE ASSETS, prescribes a two-phase process for impairment
     testing of goodwill, which is performed once annually, absent indicators of
     impairment. The first phase screens for impairment, while the second phase
     (if necessary) measures the impairment. The Company has elected to perform
     its annual analysis during the fourth calendar quarter of each year. No
     indicators of impairment were identified during the first quarter of 2003.

                                       13
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 21, 2003 AND 2002
                                   (UNAUDITED)

3. GOODWILL, INTANGIBLE AND OTHER ASSETS (CONTINUED):

   Intangible and other assets consist of the following at March 31, 2003 and
     December 31, 2002:
<TABLE>
<CAPTION>
                                         March 31, 2003                              December 31, 2002
                         --------------------------------------------  --------------------------------------------
                             Gross                           Net           Gross                           Net
                            carrying     Accumulated       carrying       carrying     Accumulated       carrying
                             amount     amortization        amount         amount     amortization        amount
                         -------------  -------------  --------------  -------------  -------------  --------------
<S>                      <C>            <C>            <C>             <C>            <C>            <C>
Casino contracts         $   4,300,000  $     899,440  $    3,400,560  $   4,300,000  $     749,440  $    3,550,560
Non-compete agreements         350,000        115,299         234,701        350,000         99,300         250,700
Customer lists                 250,000        121,601         128,399        250,000        102,600         147,400
Trade names                    100,000                        100,000        100,000                        100,000
                         -------------  -------------  --------------  -------------  -------------  --------------
Total intangible assets      5,000,000      1,136,340       3,863,660      5,000,000        951,340       4,048,660
Other assets                    49,733                         49,733         49,733                         49,733
                         -------------  -------------  --------------  -------------  -------------  --------------
                         $   5,049,733  $   1,136,340  $    3,913,393  $   5,049,733  $     951,340  $    4,098,393
                         =============  =============  ==============  =============  =============  ==============
</TABLE>

   The net carrying amount of intangible assets at March 31, 2003 is scheduled
     to be fully amortized by the end of 2009. Amortization expense for the net
     carrying amount of intangible assets at March 31, 2003, is estimated to be
     $555,000 for the remainder of 2003, and $735,000, $664,000, $659,000, and
     $600,000 in 2004, 2005, 2006 and 2007, respectively.

4. COMMITMENTS AND CONTINGENCIES:

   LITIGATION:

   In May 2002, Key filed a claim with the FDIC for all funds due from Net First
     to Key under the Credit Card Program Agreement through the date federal
     banking regulators closed Net First. The total amount of the claim was
     $4,311,027. In October 2002, the FDIC notified Key that it had determined
     to disallow all but $111,734 of the total claim. The notification states
     that as the FDIC liquidates the assets of the receivership, Key may
     periodically receive payments on the allowed portion of this claim through
     dividends. The Company does not agree with this disallowance. In November
     2002, the Company filed a lawsuit in the United States District Court for
     the Southern District of Florida seeking to recover the full amount of its
     claim. The FDIC answered the complaint, asserting a counterclaim for
     $1,000,000, which the FDIC asserts is for refunds to be made to customers
     who did not receive credit cards as a result of FDIC actions.

   While the Company believes that it will ultimately be successful in
     collecting on its claim, there is no assurance that collection will
     eventually occur. Accordingly, the Company has reserved 100% of the net
     remaining balance due of $2,151,207 from the FDIC, as receiver for Net
     First, in addition to amounts previously reserved.

                                       14
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 21, 2003 AND 2002
                                   (UNAUDITED)

4. COMMITMENTS AND CONTINGENCIES (CONTINUED):

   LITIGATION (CONTINUED):

   In August 2000, William G. Hays, Jr., liquidating agent for RDM Sports Group,
     Inc. and related debtors, filed an adversary proceeding against Equitex,
     Smith Gambrell and Russell, LLP, David J. Harris, P.C. and David J. Harris,
     in the United States Bankruptcy Court for the Northern District of Georgia,
     Newnan Division, Adversary Proceeding No. 00-1065. The liquidating agent
     alleges that the Company breached its October 29, 1987, consulting
     agreement with RDM, breached fiduciary duties allegedly owed to RDM, and
     that Equitex is liable for civil conspiracy and acting in concert with
     directors of RDM. The liquidating agent is seeking unspecified compensatory
     and punitive damages, along with attorney's fees, costs and interest. On
     April 2, 2001, the court granted Equitex's motion to enforce the
     arbitration clause contained in the consulting agreement. Because this
     matter is in the preliminary stages and no arbitration date has been set,
     it is too early to predict the outcome of this matter. In connection with
     the Company's distribution of its assets and liabilities to Equitex 2000 on
     August 6, 2001, Equitex 2000 has agreed to indemnify the Company and assume
     defense in this matter, as well as certain other legal actions existing at
     August 6, 2001. Although the Company believes this lawsuit is without
     merit, there is no assurance of a favorable outcome. The costs to defend
     this matter may be material, and an unfavorable outcome may have a material
     adverse effect on the Company should Equitex 2000 not be in a position to
     fulfill its indemnification to the Company for any losses that may be
     incurred.

   The Company is involved in various other claims and legal actions arising in
     the ordinary course of business. In the opinion of management, the ultimate
     disposition of these matters will not have a material adverse impact either
     individually or in the aggregate on consolidated results of operations,
     financial position or cash flows of the Company.

5. STOCKHOLDERS' EQUITY:

   SERIES D CONVERTIBLE PREFERRED STOCK:

   The Series D Preferred Stock is convertible, together with any cumulative
     unpaid dividends, at any time into shares of the Company's common stock at
     a conversion price equal to 65% of the average closing bid price of the
     Company's common stock as specified in the agreement.

   The holder of each share of Series D convertible preferred stock is entitled
     to a 6% cumulative annual dividend, payable quarterly. Dividends are
     payable in cash or, at the Company's option, in shares of the Company's
     common stock. The Series D Preferred Stock contains a liquidation
     preference equal to the sum of the stated value of each share plus an
     amount equal to 130% of the stated value plus the aggregate of all
     cumulative unpaid dividends on each share of Series D Preferred Stock until
     the most recent dividend payment date or date of liquidation, dissolution
     or winding up of the Company.

   During the three months ended March 31, 2003, 55 shares of Series D Preferred
     Stock, plus unpaid dividends of $14,787 were converted into 218,685 shares
     of common stock at conversion prices of $0.25 to $0.43 per share.

                                       15
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 21, 2003 AND 2002
                                   (UNAUDITED)

5. STOCKHOLDERS' EQUITY (CONTINUED):

   SERIES G CONVERTIBLE PREFERRED STOCK:

   The Series G Preferred Stock is convertible, together with any cumulative
     unpaid dividends, at any time into shares of the Company's common stock at
     a conversion price per share equal to the lesser of $6.50 or 65% of the
     average closing bid price of the Company's common stock as specified in the
     agreement.

   The holder of each share of the Series G Preferred Stock is entitled to
     cumulative dividends at 6% per annum plus a 4% dividend default rate,
     payable quarterly. Dividends are payable in cash or, at the Company's
     option, in shares of the Company's common stock. The Series G Preferred
     Stock contains a liquidation preference equal to the sum of the stated
     value of each share plus an amount equal to 130% of the stated par value
     plus the aggregate of all cumulative unpaid dividends on each share of
     Series G Preferred Stock until the most recent dividend payment date or
     date of liquidation, dissolution or winding up of the Company. All
     outstanding shares of Series G Preferred Stock automatically convert into
     common stock on August 31, 2003. The Series G Preferred Stock is redeemable
     at the Company's option at any time through August 31, 2003, at a
     redemption price equal to $1,350 per share plus any cumulative unpaid
     dividends.

   SERIES I CONVERTIBLE PREFERRED STOCK:

   The Series I Preferred Stock is convertible, together with any cumulative
     unpaid dividends, at any time into shares of the Company's common stock at
     a conversion price per share equal to the lesser of $5.98 or 65% of the
     average closing price of the Company's common stock as specified in the
     agreement.

   The holder of each share of Series I Preferred Stock is entitled to
     cumulative dividends at 6% per annum plus a 4% dividend default rate,
     payable quarterly. Dividends are payable in cash, or at the Company's
     option, in shares of the Company's common stock. The Series I Preferred
     Stock contains a liquidation preference equal to the sum of the stated
     value of each share plus an amount equal to 125% of the stated value plus
     the aggregate of all cumulative unpaid dividends on each share of Series I
     Preferred Stock until the most recent dividend payment date or date of
     liquidation, dissolution or winding up of the Company. All outstanding
     shares of the Series I Preferred Stock automatically convert into common
     stock on July 20, 2004. The Series I Preferred Stock is redeemable at the
     Company's option at any time through July 20, 2004, at a redemption price
     equal to $1,250 per share plus any cumulative unpaid dividends.

   In February 2003, the Company redeemed 90 shares of Series I Preferred Stock
     for $100,000. The redemption price was less than the amount originally
     allocated to the beneficial conversion feature, and as a result, loss
     applicable to common stockholders was reduced by $38,430 for the three
     months ended March 31, 2003.

   SERIES J CONVERTIBLE PREFERRED STOCK:

   The Series J Preferred Stock is convertible, together with any cumulative
     unpaid dividends, at any time into shares of the Company's common stock at
     a conversion price per share equal to 65% of the average closing bid price
     of the Company's common stock as specified in the agreement, but in no
     event shall the conversion price be less than $0.40 per share.

                                       16
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 21, 2003 AND 2002
                                   (UNAUDITED)

5. STOCKHOLDERS' EQUITY (CONTINUED):

   SERIES J CONVERTIBLE PREFERRED STOCK (CONTINUED):

   The holder of each share of the Series J Preferred Stock is entitled to
     cumulative dividends at 6% per annum plus a 4% dividend default rate,
     payable quarterly. Dividends are payable in cash or, at the Company's
     option, in shares of the Company's common stock. The Series J Preferred
     Stock contains a liquidation preference equal to an amount equal to 105% of
     the stated par value plus the aggregate of all cumulative unpaid dividends
     on each share of Series J Preferred Stock until the most recent dividend
     payment date or date or liquidation, dissolution or winding up of the
     Company. All outstanding shares of Series J Preferred Stock automatically
     convert into common stock on the third anniversary of the issuance. The
     Series J Preferred Stock is redeemable at the Company's option at any time
     through the third anniversary, at a redemption price equal to $1,250 per
     share plus any cumulative unpaid dividends.

   In January 2003, all of the outstanding shares of Series J Preferred Stock
     and unpaid dividends of $18,542 were converted into 3,496,354 shares of
     common stock at $0.40 per share.

   ISSUANCES OF COMMON STOCK:

   During the three months ended March 31, 2003, the Company issued 537,122
     shares of common stock upon the conversion of warrants for $194,676, at an
     average conversion price of $0.36 per share.

   During the three months ended March 31, 2003, the Company also converted
     accounts payable of $180,954 into 259,891 shares of common stock at
     conversion prices of $0.64 to $0.72 per share, the market price of the
     common stock at the date of issuance.

   STOCK OPTIONS AND WARRANTS:

   In January 2003, the Company issued a one-year warrant to a consultant to
     purchase 100,000 shares of the Company's common stock at $0.41 per share
     (the market price of the common stock at the date of the grant). These
     warrants were valued at $12,000 based upon the Black-Scholes option pricing
     model.

   In January 2003, the Company also issued two-year warrants to purchase
     400,000 shares of common stock at $0.54 per share (the market price of the
     common stock at the date of the grant) to consultants and unrelated
     parties. These warrants were valued at $64,000 based upon the Black-Scholes
     option pricing model.

   In January 2003, the Company reduced the exercise price of certain existing
     warrants to purchase up to 221,625 shares of the Company's common stock,
     including 80,000 warrants issued to Chex.  As a result of the reduction
     in exercise price, the Company recognized an additional $9,000 of stock
     based compensation expense relating to these repriced warrants.

                                       17
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 21, 2003 AND 2002
                                   (UNAUDITED)

5. STOCKHOLDERS' EQUITY (CONTINUED):

   TREASURY STOCK TRANSACTIONS:

   COMMON STOCK:

   In February 2003, Chex sold 146,000 shares of Equitex common stock for $0.70
     per share (the market price of the common stock at the date of the sale).
     The stock was acquired at an average cost of $0.56 per share and the cost
     of the shares sold ($81,760) has been removed from treasury stock. The
     difference between the sales price and cost of the shares sold ($20,440)
     has been classified as additional paid in capital.

   PREFERRED STOCK:

   In January 2003, Chex converted 650 shares of the Company's Series J
     Preferred Stock plus unpaid dividends of $8,884 into 1,647,211 shares of
     common stock. The cost of the preferred stock was $650,000, which has been
     reclassified from preferred treasury stock to common treasury stock at
     March 31, 2003.

6. OPERATING SEGMENTS:

   As of and for the three-month period ended March 31, 2003, segment results
     were as follows:

                                           Cash
                       Credit card     disbursement   Corporate
                         services        services     activities       Total
                      --------------   ------------  -----------   ------------
                      (Key and Nova)       (Chex)

   Revenues           $      134,743   $  4,573,951                $  4,708,694
   Net income (loss)          17,947        233,081   $ (557,713)      (306,685)
   Total assets              616,364     25,639,313      970,631     27,226,308

   As of and for the three-month period ended March 31, 2002, segment results
     were as follows:

                                           Cash
                       Credit card     disbursement   Corporate
                         services        services     activities       Total
                      --------------   ------------  -----------   ------------
                      (Key and Nova)       (Chex)

   Revenues           $    2,868,884   $  4,901,490                $  7,770,374
   Net income (loss)        (125,928)       349,983  $  (982,283)      (758,228)

                                       18
<PAGE>

                                    ITEM TWO
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

THIS REPORT MAY CONTAIN CERTAIN "FORWARD-LOOKING" STATEMENTS AS SUCH TERM IS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 OR BY THE
SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH
REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED TO,
STATEMENTS CONCERNING THE COMPANY'S OPERATIONS, ECONOMIC PERFORMANCE, FINANCIAL
CONDITION, GROWTH AND ACQUISITION STRATEGIES, INVESTMENTS, AMOUNTS RECEIVABLE
FROM NET FIRST NATIONAL BANK, AND FUTURE OPERATIONAL PLANS, FOR THIS PURPOSE,
ANY STATEMENTS CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY
BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, WORDS SUCH AS "MAY", "WILL", "EXPECT", "BELIEVE", "ANTICIPATE",
"INTENT", "COULD", "ESTIMATE", "MIGHT", OR "CONTINUE" OR THE NEGATIVE OR OTHER
VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL
RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL, AND
ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON THE VARIETY OF IMPORTANT
FACTORS, INCLUDING UNCERTAINTY RELATED TO THE COMPANY'S OPERATIONS, MERGERS OR
ACQUISITIONS, GOVERNMENTAL REGULATION, THE VALUE OF THE COMPANY'S ASSETS AND ANY
OTHER FACTORS DISCUSSED IN THIS AND OTHER COMPANY FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION.

OVERVIEW

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the consolidated/combined
financial statements and notes thereto for the years ended December 31, 2002,
2001 and 2000. The financial results presented for the three months ended March
31, 2003 and 2002, are those of Chex Services, Inc. ("Chex"), Key Financial
Systems, Inc. ("Key"), Nova Financial Systems, Inc. ("Nova") and Denaris
Corporation ("Denaris"), formed in August 2002, on a consolidated basis with
those of Equitex, Inc.

LIQUIDITY AND CAPITAL RESOURCES

For the year ending December 31, 2003, we presently anticipate our liquidity and
capital resource needs will be satisfied from cash flows generated from our
operating activities. Although the closure of Net First National Bank ("Net
First") and subsequent closure of Key operations have eliminated positive cash
flows at Key, we implemented actions in 2002 to reduce personnel, marketing and
other operating costs.

Our other operating subsidiary, Chex, anticipates positive cash flows in 2003.
Additionally, Chex plans on introducing new products during the year. These
products are complementary to its existing products and services. Future
products may include: cashless gaming smart cards, debit cards and customized
funds transfer systems for multi-jurisdictional gaming operators. Additionally,
included in notes payable are approximately $5.1 million of 12% notes payable by
Chex, due through December 2003. Chex is attempting to restructure some of these
notes, thereby reducing interest costs and further increasing cash flow in the
future.

                                       19
<PAGE>

Cash flow activity for the three months ended March 31, 2003, includes the
activity of Chex, Key and Nova, Equitex, and Denaris. The 2002 activity includes
the activity of Chex, Key and Nova and Equitex. For the three months ended March
31, 2003, net cash used in operating activities was $2,495,633 compared net cash
provided by operating activities of $316,584 for the three months ended March
31, 2002. The most significant portion of this change was the changes in current
assets and liabilities which used cash and adjusted the net loss by $2,552,309
in March 2003 compared to the changes in the same assets and liabilities for the
three months ended March 31, 2002 of $109,512 which changes provided cash. Of
this change, the most significant amount was the change in accounts receivable
of $2,379,626, which was due to a delayed payment of approximately $1.8 million
from one of the Company's ATM processors. This amount was subsequently received
in April 2003. This was partially offset by the decrease in net loss for the
three month period from $758,228 in 2002 to $306,685 in 2003. Non-cash
adjustments to the current year's results were $363,361 including depreciation
and amortization of $276,979 and stock based compensation of $85,000 compared to
total non-cash adjustments of $965,300, mostly comprised of $322,476 and
$468,000, respectively for depreciation and amortization and stock based
compensation for the period ended March 31, 2002.

Cash used in investing activities for the three months ended March 31, 2003 was
$354,284 compared to $648,512 for the three months ended March 31, 2002. Cash
used in 2003 investing activities was primarily attributable to advances of
$327,200 to related parties in exchange for notes receivable. Cash used in 2002
investing activities was primarily due to an increase of $532,894 in credit card
receivables.

Cash provided by financing activities for the three months ended March 31, 2002
was $238,884 compared to cash used in financing activities of $371,176 for the
three months ended March 31, 2003. The significant activity for the three months
ended March 31, 2003, included the Company receiving $194,676 from the exercise
of warrants; also Chex sold 146,000 shares of the Company's common stock for
$102,200. The Company received proceeds of $471,537 upon the issuance of
short-term notes payable to related parties and third parties and repaid
$589,589 of related party and third party notes. In addition, Chex repaid its
net borrowings by $450,000 under its line of credit. During the three months
ended March 31, 2003, the Company redeemed 90 shares of its Series I Preferred
Stock for $100,000 in cash. The significant activity for the three months-ended
March 31, 2002, included the company receiving $406,248 from the exercise of
warrants and the issuance of common stock, proceeds received of $593,450 upon
the issuance of short term related party and third party notes payable, and
payments of $407,485 on short term notes payable to related parties and third
parties. In addition, Chex increased its net borrowings by $29,538 under its
line of credit.

For the three months ended March 31, 2003, net cash decreased $3,221,093
compared to a decrease of $93,044 for the three months ended March 31, 2002, and
ending cash at March 31, 2003, was $5,710,620 compared to $7,737,382 at March
31, 2002.

Other sources available to us that we may utilize include the sale of equity
securities through private placements of common and/or preferred stock as well
as the exercise of stock options and/or warrants, all of which may cause
dilution to our stockholders. We may also be able to borrow funds from related
and/or third parties.

                                       20
<PAGE>

RESULTS OF OPERATIONS

REVENUES

Consolidated revenues for the three months ended March 31, 2003, were
$4,708,694, compared to consolidated/combined revenues of $7,770,374 for the
three months ended March 31, 2002. The decrease was due primarily to the
reduction of revenues from Key and Nova resulting from the closure of Net First
and our subsequent termination of our credit card programs.

REVENUE BY SEGMENT
                                       Three months ended
                                            March 31,
Segment                                2003           2002
                                    -----------   -----------

Cash disbursement services          $ 4,573,951   $ 4,901,490
Credit card services                    134,743     2,868,884
                                    -----------   -----------
                                    $ 4,708,694   $ 7,770,374
                                    ===========   ===========

CASH DISBURSEMENT SERVICES SEGMENT

Chex processed $200 and $210 million in cash transactions for the three months
ended March 31, 2003 and 2002, respectively. Revenues are derived principally
from check cashing fees, credit and debit card advance fees, automated teller
machine ("ATM") surcharge and transaction fees.

Chex cashes personal checks at its cash access locations for fees of between 5
and 6 percent based on its casino contracts. Chex also cashes "other" checks,
comprised of tax and insurance refunds, casino employee payroll checks and
casino jackpot winnings at a reduced rate. For the three months ended March 31,
2003, Chex cashed over $38 million of personal checks and also over $38 million
of "other checks" in the three months ended March 31, 2003. Fees earned on
personal and "other" checks were $1,998,205 and $298,818, respectively, for the
three months ended March 31, 2003. For the three months ended March 31, 2002,
Chex cashed personal checks and other checks of over $41 million and $40
million, respectively, and earned fees of $2,166,701 and $389,669, respectively.

For the quarter ended March 31, 2003, Chex processed approximately 105,000
credit/debit card transactions with approximately $36 million in advances and
earned fees of $1,301,239 on these transactions. For the three months ended
March 31, 2002, Chex processed approximately 128,000 credit/debit card
transactions with approximately $47 million in advances and earned fees of
$1,410,497. Additionally, for the three months ended March 31, 2003, Chex
processed over 890,000 ATM transactions and earned commissions or fees of
$822,279 on approximately $87 million of transactions. For the three months
ended March 31, 2002, Chex processed approximately 830,000 transactions, earning
commissions or fees of $786,961 on approximately $81.5 million of transactions.
Also, Chex collected fees of $129,389 on returned checks and had other income of
$24,021 for the three months ended March 31, 2003, compared to $111,056 on
returned checks and other income of $36,606 for the three months ended March 31,
2002.

                                       21
<PAGE>

CREDIT CARD SERVICES SEGMENT

CREDIT CARD INCOME

On March 1, 2002, the Office of the Comptroller of the Currency closed Net First
National Bank ("Net First") and appointed the FDIC as receiver. Key immediately
ceased all marketing and processing of new credit card accounts at the close of
business on March 1, 2002. In addition, the FDIC repudiated Key's contract with
Net First effective March 4, 2002, and has closed all the credit card accounts
subject to Key's contract with Net First. The FDIC's action results in the
termination of all future credit card servicing revenues to Key from the Net
First portfolio after March 4, 2002.

Through February 28, 2002, the Net First portfolio provided $2,121,220 of credit
card servicing fees. For the three months ended March 31, 2002, credit card
servicing fees, application fees and other was $2,868,884 compared to $134,743
for the three months ended March 31, 2003. The revenue in the current period is
the residual payments on remaining active accounts.

Prior to March 1, 2002, credit card servicing fees were the major component of
credit card income, which was Key and Nova's principal source of earnings before
the closure of Net First. Credit card fees were assessed on credit card accounts
owned by each company's client banks. These include monthly membership fees,
late charges, over limit fees, and return check fees. The fees were paid to Key
and Nova under a 100% loan participation agreement with the client bank. Credit
card servicing fees for the three months ended March 31, 2002, were $2,356,898.
During the quarter ending March 31, 2002, the average number of active accounts
was 5,290. The new account volume in the three months ended March 31, 2002, was
31,477. The Company has not issued any new cards since March 1, 2002, due to the
closure of Net First.

The provision for losses is the charge to operating earnings that management
feels is necessary to maintain the reserve for possible losses at an adequate
level. The provision is determined based on growth of the portfolio, the net
amount of losses incurred, and management's estimation of losses based on an
evaluation of the portfolio risks and economic conditions. For the three months
ended March 31, 2003, Key and Nova had a total provision of $1,382 compared to
$118,124 for the same period in 2002. This decrease is attributed to the FDIC's
closure of the Net First credit card accounts. The allowance for losses at March
31, 2003, was $2,857 or 2.2% of credit card receivables, net of unearned income,
compared to $11,768 or 5.1% of credit card receivables, net of unearned income,
at March 31, 2002. This decrease is also attributed to the FDIC's closure of the
Net First credit card accounts. Management believes that the reserve for
possible losses was adequate to provide for potential losses at March 31, 2003
and 2002.

APPLICATION FEES, NET OF DIRECT MARKETING COSTS

Key and Nova no longer receive application fees due to the closure of Net First
and the termination of all marketing programs related to the Net First credit
card. Application fees were $317,855 for the three months ended March 31, 2002.

OTHER INCOME, NET

There was no other income for Key and Nova for the three months ended March 31,
2003, compared to $194,131 for the three months ended March 31, 2002. This
income is mostly comprised of other marketing and lead income.

                                       22
<PAGE>

OPERATING EXPENSES

Total operating expenses for the three months ended March 31, 2003, was
$4,660,043, compared to $7,972,702 for the three months ended March 31, 2002.
The 2002 periods include expenses for the Company, Chex, Key and Nova. The 2003
periods include expenses of the Company, Chex, Key and Nova, and Denaris.

                                       Three months ended
                                            March 31,
Segment                                2003           2002
                                    -----------   -----------
Cash disbursement services          $ 4,014,174   $ 4,196,521
Credit card services                    115,734     2,994,812
Corporate activities                    530,135       781,369
                                    -----------   -----------
                                    $ 4,660,043   $ 7,972,702
                                    ===========   ===========


CASH DISBURSEMENT SERVICES SEGMENT

Chex operating expenses of $4,014,174 and $4,196,521 for the three months ending
March 31, 2003 and 2002 were comprised as follows:

                                              Three months         Three months
                                                 ended                ended
                                             March 31, 2003       March 31, 2002
                                             --------------       --------------

Fees to casinos                                $ 1,508,242          $ 1,476,388
Salaries and related costs                       1,481,874            1,472,759
Returned checks, net of collections                 38,114              169,654
General operating expenses                         718,330              796,823
Depreciation and amortization                      267,614              280,897
                                               -----------          -----------

                                               $ 4,014,174          $ 4,196,521
                                               ===========          ===========

CREDIT CARD SERVICES SEGMENT

The closing of Net First and the shut down of their portfolio has had a
significant impact in reducing operating expenses to $115,734 for the three
months ending March 31, 2002, compared to $2,994,812 for the three months ending
March 31, 2002. The majority of the operating expenses were directly related to
Key's credit card marketing efforts and portfolio servicing responsibilities
under the contract with Net First. Effective March 11, 2002, Key has eliminated
all direct costs associated with the Net First program. Included in operating
expenses for the three months ended March 31, 2003, were third party servicing
fees of $78,237 associated with the remaining active accounts. Additionally, for
the three months ended March 31, 2003, there were general operating expenses of
$37,137. Third party servicing fees for the three months ended March 31, 2002
were $1,348,523 and personnel costs were $1,048,617. Other expenses including
occupancy costs were $597,672 for the three months ended March 31, 2002.

                                       23
<PAGE>

CORPORATE ACTIVITY

Included in the three months ended March 31, 2003, are operating expenses for
Equitex and Denaris were $530,135. These expenses are comprised of selling,
general and administrative expenses of $301,395, stock-based compensation
expense of $85,000, and personnel costs of $143,740. Stock-based compensation
expense represents non-cash expenses related to issuances of warrants to third
party consultants for services. Included in the selling, general and
administrative expenses are professional fees of $99,166, and other general
operating costs of $202,229.


                                   ITEM THREE
             QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates
and prices, such as interest rates and a decline in the stock market. The
Company does not enter into derivatives or other financial instruments for
trading or speculative purposes. The Company has limited exposure to market risk
related to changes in interest rates. The Company does not currently invest in
equity instruments of public or private companies for business or strategic
purposes.

The principal risks of loss arising from adverse changes in market rates and
prices to which the Company and its subsidiaries are exposed relate to interest
rates on debt. The Company has both fixed and variable rate debt. Chex has
$13,156,542 and $13,644,132 of debt outstanding as of March 31, 2003 and
December 31, 2002, respectively, of which $12,153,776 and $12,208,776 has been
borrowed at fixed rates ranging from 8% to 12% at March 31, 2003 and December
31, 2002, respectively. This fixed rate debt is subject to renewal annually and
is payable upon demand with 90 days written notice by the debt holder. Chex also
has $1,002,766 and $1,455,356 of variable rate debt at March 31, 2003 and
December 31, 2002, respectively, owed to a bank. The lender presently charges
interest at .5% to .75% over the prime rate.

As most of the Company's average outstanding indebtedness is renewed annually
and carries a fixed rate of interest, a change in interest rates is not expected
to have a material impact on the consolidated financial position, results of
operations or cash flows of the Company during the year ending December 31,
2003.

                                    ITEM FOUR
                       DISCLOSURE CONTROLS AND PROCEDURES

A review and evaluation was performed by the Company's management, including the
Company's Chief Executive Officer (the "CEO")/Chief Financial Officer (the
"CFO"), of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of a date within 90 days prior to the
filing of this quarterly report. Based on that review and evaluation, the
CEO/CFO has concluded that the Company's current disclosure controls and
procedures, as designed and implemented, were effective. There have been no
significant changes in the Company's internal controls or in other factors that
could significantly affect the Company's internal controls subsequent to the
date of their evaluation. There were no significant material weaknesses
identified in the course of such review and evaluation and, therefore, no
corrective measures were taken by the Company.

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        None.

                                       24
<PAGE>

Item 2. Changes in Securities

During the quarter ended March 31, 2003, the Company issued a total of 259,891
shares of its $0.02 par value common stock, which were not registered under the
Securities Act of 1933, in various transactions as described below. For each of
the following transactions, the Company relied upon the exemptions from
registration provided by Sections 4(6) or 4(2) of the Securities Act and Rule
506 promulgated there under based upon (i) representations from each investor
that it is an accredited or sophisticated investor with experience in investing
in securities such that it could evaluate the merits and risks related to the
Company's securities; (ii) that no general solicitation of the securities was
made by the Company; (iii) each investor represented to the Company that it was
acquiring the securities for its own account and not with a view towards further
distribution; (iv) the securities issued were "restricted securities" as that
term is defined under Rule 144 promulgated under the Securities Act; (v) the
Company placed appropriate restrictive legends on the certificates representing
the securities regarding the restricted nature of these securities; and (vi)
prior to completion of the transaction, each investor was informed in writing of
the restricted nature of the securities, provided with all information regarding
the Company as required under Rule 502 of Regulation D and were given the
opportunity to ask questions of and receive additional information from the
Company regarding its financial condition and operations. The shares were issued
as follows:

On February 19, 2003, the Company issued 130,715 shares of its $0.02 par value
common stock to its legal counsel in payment of legal services totaling
$94,114.30 or $0.72 per share.

On February 26, 2003, the Company issued 104,176 shares of its $0.02 par value
common stock to an accredited investor pursuant to the conversion of accounts
payable balance of $70,839.57 or $0.68 per share.

On March 12, 2003, the Company issued 25,000 shares of its $0.02 par value
common stock to Russell Casement, a director of the Company, pursuant to the
conversion of an accounts payable balance of $16,000 or $0.64 per share.


Item 3. Defaults upon Senior Securities

        None.

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

        None.

Item 5. Other Information

        None.

Item 6. Exhibits and Reports on Form 8-K

        Exhibit 99.1 - Certification pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002

                                       25
<PAGE>


                                   SIGNATURES

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

                                      Equitex, Inc.
                                      (Registrant)

Date: May 20, 2003                    By: /s/ Henry Fong
                                          ----------------------------------
                                          Henry Fong
                                          President, Treasurer and
                                          Chief Financial Officer


                                       26
<PAGE>


        CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES
           EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

I, Henry Fong, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Equitex, Inc. and
     subsidiaries (the "Registrant");

       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. I am responsible for establishing and maintaining disclosure controls
       and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
       the Registrant and have:

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

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

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

       5. I have disclosed, based on my most recent evaluation, to the
       Registrant's auditors and the audit committee of Registrant's board of
       directors (or persons performing the equivalent function):

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

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

       6. I 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 my most
       recent evaluation, including any corrective actions with regard to
       significant deficiencies and material weaknesses.

Date:  May 20, 2003
                                                 /s/ Henry Fong

                                                 Henry Fong
                                                 President, Treasurer and
                                                 Chief Financial Officer

                                       27