UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   FORM 10-QSB

               |X| QUARTERLY REPORT UNDER SECTION 13 0R 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                       For the Quarter Ended May 31, 2004

                                       OR

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

        For the transition period from _______________ to ________________

                         Commission File Number 0-22969

                              MARKET CENTRAL, INC.
                 (Name of Small Business Issuer in its Charter)

          Delaware                                              59-3562953
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                  1650A Gum Branch Road, Jacksonville, NC 28540
                    (Address of Principal Executive Offices)

                                  910-478-0097
                           (Issuer's Telephone Number)

                                       N/A
              (Former name, former address and former fiscal year,
                          if changed since last report)

      State the number of shares  outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

      Class: Common Stock, $.001 par value

      Outstanding as of July 13, 2004: 13,336,469 shares

Transitional Small Business Disclosure Format (check one):  Yes|_|        No |X|

PART I.


<PAGE>

ITEM 1. FINANCIAL STATEMENTS

The following unaudited Condensed  Consolidated  Financial  Statements as of May
31, 2004 and 2003 and for the three  months and nine  months  ended May 31, 2004
and 2003,  respectively  have been prepared by Market Central,  Inc., a Delaware
corporation.


                                       2
<PAGE>

                              MARKET CENTRAL, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  MAY 31, 2004
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                                                          <C>
 ASSETS
 Current Assets:
 Cash and cash equivalents                                                   $    947,367
 Accounts receivable, net                                                       1,125,598
 Accounts receivable - related parties (Note F)                                   776,138
 Inventory                                                                         10,768
 Prepaid expenses and other assets                                                125,150
                                                                             ------------
 Total Current Assets                                                           2,985,021

 Property and Equipment:
 Furniture and fixtures                                                           930,659
 Computers and software                                                         1,914,009
 Leasehold improvement                                                          1,223,278
                                                                             ------------
                                                                                4,067,946
 Less: accumulated depreciation                                                 3,340,299
                                                                             ------------
 Total Property and Equipment:                                                    727,647

 Other Assets:
 Deposits                                                                          79,833
 Patents and trademarks                                                            97,319
 Organization costs                                                                   425
 Goodwill                                                                         745,050
                                                                             ------------
Total Other Assets                                                                922,627

 Total Assets                                                                $  4,635,295
                                                                             ============
 LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
 Current Liabilities:
 Cash disbursed in excess of available funds                                 $     13,423
 Accounts payable and accrued liabilities                                       4,692,599
 Accrued liabilities in connection with merger                                    335,136
 Note payable to related parties (Note C)                                         533,745
 Notes payable, current portion (Note C)                                        2,313,174
 Accrued preferred stock dividend                                                  30,828
 Current portion of capital lease obligation                                      570,584
                                                                             ------------
 Total Current Liabilities                                                      8,489,489

 Notes payable, long-term portion (Note C)                                          1,824
 Capital lease obligation - long-term portion                                      67,203

 Commitments and Contingencies (Note I)                                                --

 Deficiency in Stockholders' Equity (Note D):
 Preferred stock, par value $.001 per share; 10,000,000 shares authorized;
 Series A - 2,239,700 shares issued and outstanding at May 31, 2004                 2,240
 Series B - 350,000 shares issued and outstanding at May 31, 2004                     350
 Common stock, par value $.001 per share; 75,000,000 shares authorized;
 13,336,469 shares issued and outstanding at May 31, 2004                          13,336
 Additional paid-in-capital                                                    27,421,015
 Preferred stock dividend                                                        (875,000)
 Accumulated deficit                                                          (30,485,162)
                                                                             ------------
                                                                               (3,923,221)
                                                                             ------------
 Total Liabilities and Deficiency in Stockholders' Equity                    $  4,635,295
                                                                             ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements



                                       3
<PAGE>

                              MARKET CENTRAL, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF LOSSES
            FOR THE THREE AND NINE MONTHS ENDED MAY 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                   For the three months ended       For the nine months ended
                                                           May 31,                          May 31,
                                                      2004            2003           2004              2003
                                                  ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>
Revenues, net                                     $  1,975,300    $  2,132,299    $  5,972,704    $  6,966,637
Cost of sales                                        1,379,966       1,427,981       4,161,508       4,345,031
                                                  ------------    ------------    ------------    ------------
Gross profit                                           595,334         704,318       1,811,196       2,621,606

Operating expenses:
Selling, general and administrative                  1,687,096         995,518       4,461,059       2,638,573
Professional fees (Note H)                                  --              --              --         161,021
Impairment of goodwill (Note G)                             --              --       4,062,003              --
Depreciation and amortization                          258,091         248,454         753,626         745,511
                                                  ------------    ------------    ------------    ------------
Total operating expenses                             1,945,187       1,243,972       9,276,688       3,545,105

Loss from operations                                (1,349,853)       (539,654)     (7,465,492)       (923,499)

Other income (expenses):                                    --              --              --              --
Interest income (expenses)                            (190,307)       (110,165)       (593,881)       (288,041)
                                                  ------------    ------------    ------------    ------------
Total other expenses                                  (190,307)       (110,165)       (593,881)       (288,041)

Loss from continuing operations, before income
taxes and discontinued operations                   (1,540,160)       (649,819)     (8,059,373)     (1,211,540)
Provision for income taxes                                  --              --              --              --
                                                  ------------    ------------    ------------    ------------
Loss from continuing operations, before
discontinued operations                             (1,540,160)       (649,819)     (8,059,373)     (1,211,540)

Loss from discontinued operations (Note B)            (657,398)       (623,620)       (831,585)       (623,620)
Gain from disposal of discontinued operations
(Note B)                                             2,749,370              --       2,749,370              --
                                                  ------------    ------------    ------------    ------------

Net income (loss)                                 $    551,812    $ (1,273,439)   $ (6,141,588)   $ (1,835,160)
                                                  ============    ============    ============    ============
Preferred stock dividend - beneficial
conversion feature (Note D)                           (875,000)             --        (875,000)             --
Cumulative convertible preferred stock dividend
requirements (Note D)                                  (25,877)             --         (30,829)             --
                                                  ------------    ------------    ------------    ------------
Net loss attributable to common shareholders      $   (349,065)   $ (1,273,439)   $ (7,047,417)   $ (1,835,160)
                                                  ============    ============    ============    ============
Net earnings (loss) per common share              $      (0.03)   $      (0.10)   $      (0.53)   $      (0.14)
Continuing operations:
  Basic                                                  (0.18)          (0.05)          (0.67)          (0.09)
  Diluted                                                (0.18)          (0.05)          (0.67)          (0.09)
Discontinued operations:
  Basic                                                   0.15           (0.05)           0.14           (0.05)
  Diluted                                                 0.15           (0.05)           0.14           (0.05)
Weighted Average Shares Outstanding
  Basic                                             13,299,676      13,040,618      13,279,279      13,040,618
  Diluted                                           13,299,676      13,040,618      13,279,279      13,040,618
</TABLE>

 See accompanying notes to unaudited condensed consolidated financial statements

                                       4
<PAGE>

                              MARKET CENTRAL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       FOR THE NINE MONTHS ENDED
                                                                                 MAY 31,
                                                                         2004            2003
<S>                                                                   <C>            <C>
Cash flows used in operating activities                               $(3,337,184)   $(1,617,758)

Cash flows used in investing activities                                  (250,755)       (22,861)

Cash flows provided by financing activities                             4,197,353      1,678,624
                                                                      -----------    -----------
Net increase in cash and
   cash equivalents                                                       609,414         38,005

Cash and cash equivalents at beginning of period                          337,953        (38,856)
                                                                      -----------    -----------
Cash and cash equivalents at end of period                            $   947,367    $      (851)
                                                                      ===========    ===========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest                              $   328,805    $   288,041
Cash paid during the period for income taxes                                   --             --
Stock options and warrants issued in exchange for services rendered       662,587             --
Common stock issued for debts                                                  --        380,000
Preferred stock issued in exchange for debts                                   --      5,000,000
Reversal of preferred stock dividend                                           --       (221,000)
Disposal of US Convergion, Inc.: (Note B)
  Sylvia common stock received                                                500             --
  Assets disposed of                                                      (68,211)            --
  Debts assumed by buyer                                                2,967,081             --
  Net gain on disposal of segment                                      (2,749,370)            --
                                                                      -----------    -----------
  Net cash paid for disposition                                           150,000             --
                                                                      ===========    ===========
Acquisition of US Convergion, Inc.:
  Assets acquired                                                              --      2,588,152
  Goodwill                                                                     --      4,062,003
  Liabilities assumed                                                          --     (5,817,256)
  Common stock issued                                                          --       (671,899)
                                                                      -----------    -----------
  Net cash paid for acquisition                                                --        161,000
                                                                      ===========    ===========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements


                                       5
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE A - SUMMARY OF ACCOUNTING POLICIES

General

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with the  instructions  to Form 10-QSB,  and  therefore,  do not
include all the  information  necessary  for a fair  presentation  of  financial
position,  results of  operations  and cash flows in conformity  with  generally
accepted accounting principles.

In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Accordingly, the results from operations for the nine-month period ended May 31,
2004 are not necessarily  indicative of the results that may be expected for the
year ended August 31, 2004.  The  unaudited  consolidated  financial  statements
should be read in conjunction  with the  consolidated  August 31, 2003 financial
statements and footnotes thereto included in the Company's SEC Form 10-KSB.

Business and Basis of Presentation

Market Central,  Inc. (the "Company") is a global technology  management company
specializing in solutions that connect people and businesses  with  information.
The company  holds  multiple  patents and  patent-pending  technologies  and has
developed a suite of solutions that include software for next-generation search,
intelligent  document  recognition,   data  capture,   cleansing,   mining,  and
integration.

The unaudited condensed  consolidated  financial statements include the accounts
of the Company and its wholly owned subsidiaries, ecom and U.S. Convergion, Inc.
("Convergion").  All significant  inter-company  transactions  and balances have
been  eliminated in  consolidation.  In May 2004, the Company sold Convergion to
Sylvia  Holding Co.,  Inc.  ("Sylvia"),  a Nevada  Corporation,  in exchange for
500,000  shares  of  Sylvia's  common  stock,   and  other  goods  and  valuable
consideration.   The  Convergion   business   segment  is  accounted  for  as  a
discontinued  operation,  and accordingly,  amounts in the financial statements,
and  related  notes  for  all  periods  shown  have  been  restated  to  reflect
discontinued  operations  accounting.  Summarized  results  of the  discontinued
business  are further  described in Note B. The Company  currently  operates one
wholly-owned subsidiary, ecommerce support centers, inc. ("ecom"). ecom provides
outsourced contact center solutions.

Stock Based Compensation

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
amends SFAS No.  123,  "Accounting  for  Stock-Based  Compensation,"  to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee  compensation.  In addition,  this
statement  amends  the  disclosure  requirements  of  SFAS  No.  123 to  require
prominent  disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported  results.  The Company has chosen to continue to account
for stock-based  compensation using the intrinsic value method prescribed in APB
Opinion No. 25 and related  interpretations.  Accordingly,  compensation expense
for stock options is measured as the excess, if any, of the fair market value of
the  Company's  stock at the date of the grant  over the  exercise  price of the
related option. The Company has adopted the annual disclosure provisions of SFAS
No. 148 in its  financial  reports for the year ended  August 31, 2003 and adopt
the interim  disclosure  provisions for its financial reports for the subsequent
periods.


                                       6
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Stock Based Compensation (Continued)

Had compensation  costs for the Company's stock options been determined based on
the fair value at the grant dates for the  awards,  the  Company's  net loss and
losses  per share  would  have been as  follows  (transactions  involving  stock
options issued to employees and Black-Scholes model assumptions are presented in
Note E):

<TABLE>
<CAPTION>
                                                  For the three months ended         For the nine months ended
                                                             May 31,                            May 31,
                                                     2004              2003             2004              2003
                                                 -----------       -----------       -----------       -----------
<S>                                              <C>               <C>               <C>               <C>
Net income (loss) - as reported                  $   551,812       $(1,273,439)      $(6,141,588)      $(1,835,160)
Add: Total stock based employee
compensation expense  as  reported  under
intrinsic value method (APB. No. 25)                      --                --                --                --
Deduct: Total stock based employee
compensation  expense as reported
under fair  value  based  method  (SFAS No 123)      (27,930)         (146,413)          (56,280)         (158,360)
                                                 -----------       -----------       -----------       -----------
Net income (loss) - Pro Forma                    $   523,882       $(1,419,852)      $(6,197,868)      $(1,993,520)
                                                 ===========       ===========       ===========       ===========
Net loss attributable to common
stockholders - Pro forma                         $  (376,995)      $(1,419,852)      $(7,103,697)      $(1,993,520)
                                                 ===========       ===========       ===========       ===========
Basic  and  diluted  (loss)  per share - as
reported                                         $     (0.03)      $     (0.10)      $     (0.53)      $     (0.14)
Basic and  diluted  (loss)  per share - Pro
forma                                            $     (0.03)      $     (0.11)      $     (0.53)      $     (0.15)
</TABLE>

Reclassification

Certain  reclassifications were made to the prior periods' data so as to conform
to the current presentation.  These  reclassifications had no effect on reported
losses.

NOTE B - DISCONTINUED OPERATIONS

In May 2004, the Company sold its wholly owned subsidiary,  US Convergion,  Inc.
("Convergion") to Sylvia Holding Co., Inc.  ("Sylvia")  through a Stock Purchase
Agreement  ("Agreement").  Pursuant to the Agreement,  Sylvia  acquired  certain
assets and assumed certain  liabilities of Convergion and agreed to issue to the
Company a total of  500,000  shares of its  common  stock  valued at $0.001  per
share.

As a  result  of the  sale  of the  Convergion  business  segment,  the  Company
accounted for the segment as a  discontinued  operation,  and  accordingly,  the
amounts in the financial statements and related notes for all periods shown have
been  restated to reflect  discontinued  operations  accounting.  The  financial
statements  reflect  the  operating  results  and  balance  sheet  items  of the
discontinued operations separately from continuing operations.  Prior years have
been restated.  Operating results for the discontinued operations for the period
ended May 31, 2004 and 2003 were:


                                       7
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE B - DISCONTINUED OPERATIONS (CONTINUED)

                  For the three months                 For the nine months
                      ended May 31,                      ended May 31,
                 2004              2003             2004              2003
             -----------       -----------       -----------       -----------
Revenues     $    94,250       $ 1,041,073       $ 2,249,354       $ 1,041,073
Expenses        (751,648)       (1,664,693)       (3,080,939)       (1,664,693)
             -----------       -----------       -----------       -----------
Net (loss)   $  (657,398)      $  (623,620)      $  (831,585)      $  (623,620)
             ===========       ===========       ===========       ===========

The following  summarizes the gain on the disposition of the Convergion business
segment:

Sylvia common stock                                                 $       500
Debts assumed by Sylvia                                               2,967,081
Net assets disposed of                                                  (68,211)
Disposition costs                                                      (150,000)
                                                                    -----------
Net gain on disposal of segment                                     $ 2,749,370
                                                                    ===========

In connection with the Stock Purchase Agreement,  the Company issued to Sylvia a
promissory  note ("Note") in the amount of $500,000 to serve as security for the
obligations  of the Company under the Stock Purchase  Agreement.  The Note shall
only become due and  payable  upon the demand of Sylvia upon an event of default
of the Stock  Purchase  Agreement.  Additionally,  the  Company  entered  into a
Security Agreement with Sylvia. Pursuant to the Security Agreement,  the Company
granted  Sylvia a security  interest in any and all  existing or after  acquired
assets of the Company, up to $3,000,000,  securing the Company's  obligations to
Sylvia under the Note (collectively the "Escrow Document").  The Escrow Document
is held by the legal counsel of Sylvia and shall be released to the Company when
all covenants,  representation,  and conditions in the Stock Purchase  Agreement
are complied and satisfied.

In connection with the potential  settlement of the litigation described in Note
I, the Company may be required to amend the Stock  Purchase  Agreement to comply
with the Court's Order.  While remote,  the amendment would include,  but not be
limited to the rescission of the sale of U.S. Convergion, Inc.


NOTE C - NOTES PAYABLE AND NOTES PAYABLE TO RELATED PARTIES

Notes Payable at May 31, 2004 are as follows:

<TABLE>
<CAPTION>
                                                                                                                May 31, 2004
                                                                                                                ------------
<S>                                                                                                             <C>
Note payable in monthly installments of a least $50,000 including interest at 6% per annum; maturity
date is August, 31, 2004; collateralized by 500,000 shares held by a major stockholder and personal
guarantees by two stockholders.                                                                                 $  601,134
Note payable in monthly installments of $1,919 including interest at 7.34% per annum; unsecured;
maturity date is in May 2005.                                                                                       24,730
Note payable in monthly installments of $2,813 including interest at 6% per annum; unsecured;
maturity date is in February 2005.                                                                                  27,288
Note payable to Bank in monthly installments of interest only at LIBOR daily floating rate; maturity
date is June 9, 2004; collateralized by Company furniture and equipment.                                         1,250,000
Note payable on demand to a related party, interest payable at 6% per annum on repayment date;
unsecured. (Note F)                                                                                                179,690
Note payable on demand to a related party, interest payable at 6% per annum on repayment date;
unsecured. (Note F)                                                                                                234,056
Note payable on demand to a related party, non-interest bearing; unsecured; maturity date is in May
2004; the Company shall repay the note with Company common stock. (Note F)                                         120,000
</TABLE>


                                       8
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE C - NOTES PAYABLE AND NOTES PAYABLE TO RELATED PARTIES (CONTINUED)

                                                                     (Continued)
                                                                     -----------
Note payable revolving agreement secured by accounts receivable
with interest payable monthly at approximately 16%, maximum
borrowing capacity of $4,000,000                                       370,712
Note payable; liabilities assumed pursuant to Assets Purchase
Agreement with Pliant Technologies,Inc.; interest payable at
12% per annum, interest due and principal due in March 2004;
unsecured. The Company is currently in default under the terms
of the note agreement                                                   41,133
                                                                   -----------
                                                                     2,848,743

Less: current portion                                               (2,846,919)
                                                                   -----------
Long-term portion                                                  $     1,824
                                                                   ===========

Aggregate maturities of notes payable as of May 31, 2004 are as follows:

Fiscal Year                                                               Amount
-----------                                                          -----------
2004                                                                  $2,846,919
2005                                                                       1,824
                                                                     -----------
Total                                                                $ 2,848,743
                                                                     ===========

NOTE D - CAPITAL STOCK

The Company is authorized to issue 75,000,000  shares of common stock with $.001
par value per share and  10,000,000  shares of  preferred  stock  with $.001 par
value per share.  In February 2003, the Company  affected a one-for-ten  reverse
stock split of its outstanding shares of common stock. The Company's  75,000,000
authorized shares of common stock with $.001 par value remained  unchanged.  All
references  in  consolidated   financial   statements  and  notes  to  financial
statements,  numbers of shares and share  amounts have been  restated to reflect
the reverse  split.  As of May 31, 2004,  the Company has  13,336,469  shares of
common stock issued and outstanding.

During the period ended May 31, 2004,  the Company issued an aggregate of 67,500
shares of its  common  stock to a  consultant  in  exchange  for  stock  options
exercised at $0.01 per share. The Company received $68 of proceeds.  The Company
valued the stock  options at the fair value of its common shares at the date the
options were granted.  Compensation  costs of $91,800 were charged to operations
during the period ended May 31, 2004 (Note E).

In December 2003, the Company's Board of Directors  designated  2,251,407 shares
of Series A Convertible  Preferred Stock, par value $.001 per share (the "Series
A Preferred Stock") and 350,000 shares of Series B Convertible  Preferred Stock,
par value  $.001 per share (the  "Series B  Preferred  Stock ").  Both  Series A
Preferred Stock and Series B Preferred Stock have a liquidation  preference with
is senior to the Company's Common Stock.


                                       9
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE D - CAPITAL STOCK (CONTINUED)

In December 2003,  the Company  approved a private  placement  offering of up to
$3,000,000 of its authorized  Series A Preferred Stock at $1.3325 per share. The
Series A Preferred Stock is convertible  into one share of the Company's  common
stock after a one-year period from the date of issuance.  The Series A Preferred
Stock  provides  for a 4%  annual  cumulative  dividend,  that is  payable  when
declared by the  Company's  Board of  Directors  and is payable in shares of the
Series A  Preferred  Stock.  As of May 31,  2004,  the  Company  had  issued  an
aggregate  of  2,239,700  shares  of  Series  A  Preferred  Stock  and  received
$2,757,085 of proceeds,  net of offering costs and fees of $227,315. The Company
had accrued cumulative preferred stock dividends of $30,829 as of May 31, 2004.

During the quarter ended May 31, 2004 the Company issued an aggregate of 350,000
shares of Series B Preferred  Stock and received a total proceeds of $1,282,912,
net of cots and fees of $367,339.  The Series B Preferred  Stock is  convertible
into  common  stock at the  lesser of $1.75 per share or 80% of the  lowest  bid
price for the common stock in the 10 business days  preceding the conversion but
it cannot be less than 50% of the $1.75 or $.875. This results in the conversion
of a maximum  of  4,000,000  shares  and a minimum  of  2,000,000  shares of the
Company's common stock. The Series B Preferred Stock holders also have an option
to acquire additional common shares in an amount to permit the conversion rights
plus  this  option to result  in a total of  4,000,000  shares of the  Company's
common stock.

In  accordance  with  Emerging  Issues  Task Force Issue  98-5,  Accounting  for
Convertible  Securities  with a Beneficial  Conversion  Features or Contingently
Adjustable  Conversion Ratios ("EITF 98-5"),  the Company recognized an imbedded
beneficial  conversion  feature  present in the Series B  Convertible  Preferred
Stock.  The Company  recognized and measured an aggregate of $875,000,  which is
equal to the intrinsic value of the imbedded  beneficial  conversion feature, to
additional paid-in capital and a return to the Series B Preferred Stock holders.
Since the preferred shares were convertible at the date of issuance,  the return
to the preferred  shareholders  attributed to the beneficial  conversion feature
has been recognized in full at the date the Series B Preferred Stock was issued.

NOTE E - STOCK OPTIONS AND WARRANTS

Stock Options

The  following  table  summarizes  the  changes in options  outstanding  and the
related prices for the shares of the Company's common stock issued to employees,
consultants  and  shareholders  at May 31,  2004,  after  giving  effect to 1:10
reverse split in common stock in February 2003:

<TABLE>
<CAPTION>
                                     Options Outstanding
                                     -------------------                      Options Exercisable
                                      Weighted Average                  -----------------------------
                         Number       Contractual Life Weighted Average  Number      Weighted Average
Exercise Price        Outstanding        (Years)       Exercise Price   Exercisable  Exercise Price
--------------        -----------        -------       --------------   -----------  --------------
<C>                      <C>              <C>          <C>               <C>          <C>
$  .01 - $2.98           512,592          2.51         $    0.88         156,008      $    2.51
$ 7.00 - $9.50            20,000          0.86         $    8.25          20,000      $    8.25
$10.25 -$11.40            68,335          0.67         $   10.26          68,335      $   10.26
                         -------          ----         ---------         -------      ---------
                         600,927          1.38         $    2.06         244,343      $    4.81
                         =======          ====         =========         =======      =========
</TABLE>


                                       10
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE E - STOCK OPTIONS AND WARRANTS (CONTINUED)

Stock Options (Continued)

Transactions involving the Company's options issuance are summarized as follows:

                                                  Number        Weighted Average
                                                 of shares       Exercise Price
                                                 ---------      ----------------
Outstanding at August 31, 2001                    210,693           $   11.60
Granted                                            16,000                 .10
Exercised                                              --               --
Cancelled                                         (18,950)              24.80
                                                  -------           ---------
Outstanding at August 31, 2002                    207,743                9.00
                                                  =======           =========
Granted                                           185,000                2.30
Exercised                                              --               --
Cancelled                                         (90,533)               3.66
                                                  -------           ---------
Outstanding at August 31, 2003                    302,210                5.22
                                                  =======           =========
Granted                                           379,092                 .94
Exercised                                         (67,500)                .01
Cancelled                                         (12,875)              17.06
                                                  -------           ---------
Outstanding at May 31, 2004                       600,927           $    2.06
                                                  =======           =========

Warrants

The  following  table  summarizes  the changes in warrants  outstanding  and the
related prices for the shares of the Company's common stock issued to employees,
consultants and shareholders at May 31, 2004 after giving effect to 1:10 reverse
split in common stock in February 2003.

<TABLE>
<CAPTION>
                                 Warrants Outstanding                         Warrants Exercisable
                                 --------------------                         --------------------
                                   Weighted Average      Weighted                               Weighted
                       Number       Contractual Life      Average                               Average
Exercise Prices:    Outstanding        (Years)         Exercise Price    Number Exercisable  Exercise Price
----------------    -----------        -------         --------------    ------------------  --------------
<C>                  <C>                <C>             <C>                <C>                <C>
$ 1.33- $ 7.81       4,327,522          3.34            $    2.51          4,327,522          $    2.51
$10.00- $11.88         122,931          1.21            $   11.50            122,931          $   11.50
$12.81- $17.50          21,350          1.47            $   15.13             21,350          $   15.13
$25.00 -$33.75          16,250          0.68            $   25.67             16,250          $   25.67
                     ---------          ----            ---------          ---------          ---------
                     4,488,053          3.25            $    2.90          4,488,053          $    2.90
                     =========          ====            =========          =========          =========
</TABLE>



                                       11
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE E - STOCK OPTIONS AND WARRANTS (CONTINUED)

Warrants (Continued)

Transactions  involving  the  Company's  warrants  issuance  are  summarized  as
follows:

                                                 Number        Weighted Average
                                               of shares         Exercise Price
                                               ---------       ----------------
Outstanding at August 31, 2001                   868,056           $   25.60
Granted                                               --                0.00
Exercised                                             --                0.00
Cancelled                                       (265,622)              12.50
                                               ---------           ---------
Outstanding at August 31, 2002                   602,434           $   17.00
                                               =========           =========
Granted                                        3,891,014                2.83
Exercised                                             --                  --
Cancelled                                       (358,272)               7.94
                                               ---------           ---------
Outstanding at August 31, 2003                 4,135,176           $    3.43
                                               =========           =========
Granted                                          421,630                1.73
Exercised                                             --                  --
Cancelled                                        (68,753)              16.89
                                               ---------           ---------
Outstanding at May 31, 2004                    4,488,053           $    2.90
                                               =========           =========

The  weighted-average  fair  value of stock  options  and  warrants  granted  to
employees,  consultants and  shareholders  during the periods ended May 31, 2004
and May  31,  2003  and the  weighted-average  significant  assumptions  used to
determine those fair values,  using a Black-Scholes  option pricing model are as
follows:

                                                             2004           2003
                                                             ----           ----
Significant assumptions (weighted-average):
Risk-free interest rate at grant date                       1.00%          1.95%
Expected stock price volatility                               74%            23%
Expected dividend payout                                       --             --
Expected option life-years (a)                         3.0 to 4.0     3.0 to 5.0
(a)The expected option/warrant life is
based on contractual expiration dates.

The amount of the expense  charged to  operations  in  connection  with granting
stock options to consultants  was $19,787 and $8,251 during the period ended May
31, 2004 and 2003, respectively. The amount of the expense charged to operations
in connection  with granting  warrants to  consultants in exchange for financing
services was $413,200 and $30,593 during the period ended May 31, 2004 and 2003,
respectively.  If the Company recognized compensation cost for the non-qualified
employee  stock option plan in  accordance  with SFAS No. 123, the Company's pro
forma net loss and net loss per share would have been  $(7,103,697) and $(0.53),
respectively  for the nine-month  period ended May 31, 2004 and $(1,993,520) and
$(0.14), respectively for the nine-month period ended May 31, 2003.


                                       12
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE E - STOCK OPTIONS AND WARRANTS (CONTINUED)

Additionally,  included in the total numbers of stock options  outstanding  were
144,092  stock  options  the Company  granted to  consultants  in  exchange  for
services  rendered,  exercisable  at $0.01 per share.  The Company  valued those
options at the fair  market  value of its common  stock at the date the  options
were granted.  Compensation  costs of $229,600 were charged to operations during
the period ended May 31, 2004. As of May 31, 2004,  the Company  received $68 of
proceeds for 67,500 stock options exercised (Note D).

NOTE F - RELATED PARTY TRANSACTIONS

During the nine months and three month periods  ended May 31, 2004,  the Company
recognized  $974,953 and $296,590 of sales in connection with services  provided
Gibralter  Publishing,   Inc.,  and/or  its  successor  entities   ("Gibralter")
representing 16% and 15%,  respectively of the Company's sales for each of these
periods.  Gibralter  was  indebted to the Company for  services in the amount of
$648,559 (net of allowance for doubtful  account of $60,000) and $535,172 at May
31,  2004 and  2003,  respectively.  Additionally,  Gibralter  owes the  Company
$80,755 for certain administrative  expenses that the Company paid on its behalf
in prior  years.  Gibralter  was owned by the  Company's  officer,  director and
significant shareholder.

The Company also provides services to J&C Nationwide, Inc. and Cheapseats, Inc.,
entities owned by a director and  significant  shareholder  of the Company.  The
Company  recognized a total of $464,222 and $127,579 of sales in connection with
services provided to these two entities, representing 8% and 6%, respectively of
the  Company's  sales for the nine month and three month  periods  ended May 31,
2004. J&C Nationwide, Inc. and Cheapseats, Inc. were indebted to the Company for
services  in  the  amount  of  $127,579  and  $0  at  May  31,  2004  and  2003,
respectively.

During the three month period ended May 31, 2004, two of the Company's principal
shareholders  advanced funds in the form of unsecured notes, interest payable at
6% per annum, to the Company for working capital  purposes.  As of May 31, 2004,
the amount due to the shareholders is $413,746 (Note C). Additionally, a Company
principal  shareholder advanced funds in the form of an unsecured,  non-interest
bearing note to the Company for working  capital  purposes.  As of May 31, 2004,
the amount due to the  shareholder is $120,000 (Note C). The Company shall repay
the note with  common  stock at the rate of 100,000  shares of common  stock per
$120,000 of advances.

NOTE G - IMPAIRMENT OF GOODWILL

The Company has adopted  Statement of  Financial  Accounting  Standards  No. 142
"Goodwill and Other Intangible  Assets" (SFAS No. 142) effective August 1, 2002.
SFAS No. 142 addresses how intangible  assets that are acquired  individually or
with a group of other  assets  should be accounted  for in financial  statements
upon their acquisition.  This statement requires goodwill  amortization to cease
and for goodwill to be periodically reviewed for impairment.

Under  SFAS No.  142,  goodwill  impairment  occurs  if the net book  value of a
reporting  unit exceeds its  estimated  fair value.  A majority of the Company's
goodwill is included in its  customer  relationship  management  (CRM)  services
reporting  unit  ("Convergion"),  which is  included in the  outsourced  contact
center solutions and customer  Relationship  Management (CRM) services  segment.
The test completed in the second quarter  indicated that the recorded book value
of this reporting unit exceeded its fair value, as determined by discounted cash
flows. The decrease in fair value is a result of:

      o     Significant operating losses during the past six months
      o     Unanticipated decline in revenues and profitability
      o     Loss of key personnel


                                       13
<PAGE>

                              MARKET CENTRAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004
                                    UNAUDITED

NOTE G - IMPAIRMENT OF GOODWILL (CONTINUED)

As a result of these events and circumstances,  Company management believes that
more likely than not the fair value of the  reporting  unit's  goodwill has been
reduced  below  its  carrying  value.  As  a  result,  management  performed  an
evaluation of the reporting  unit's tangible and intangible  assets for purposes
of  determining  the implied fair value of goodwill at February  29, 2004.  Upon
completion of the assessment,  management  recorded a non-cash impairment charge
of $4,062,003, net of tax, or $0.30 per share on February 29, 2004 to reduce the
carrying value of goodwill in this reporting unit to its estimated value of $0.

Considerable   management   judgment  is  necessary  to  estimate   fair  value.
Accordingly,   actual  results  could  vary   significantly   from  managements'
estimates.

NOTE H - PROFESSIONAL FEES

Professional  fees consist of legal fees related to the Company's sale of common
stock in February  2003.  This sale of common stock  resulted in a change in the
controlling  interest of the Company and fees related to this  transaction  have
been shown as a cost of the period.

NOTE I - COMMITMENT AND CONTINGENCIES

Litigation

In October 2003, Tweddle Litho Company ("Tweddle") filed a complaint against the
Company and Gibralter Publishing, Inc. ("Gibralter", the Company's predecessor),
in the United States District  Court,  Eastern  District of North Carolina.  The
complaint  alleges  that the Company and  Gibralter  had engaged in a fraudulent
conveyance in December 2002, at such time that  Gilbralter  released the Company
from two promissory notes totaling  approximately $5 million in exchange for the
issuance of certain  Company  stock and warrants.  The action in North  Carolina
arose out of a judgment that Tweddle had obtained against  Gibralter in Michigan
for  approximately  $400,000.  As of May 31,  2004,  the Company has accrued and
included in its accrued  liabilities an aggregate of $400,000 of settlement fees
in connection with the litigation.

Subsequent to the Company's filing of an answer to the complaint,  Tweddle filed
a motion for  summary  judgment.  As a result of the  failure  of the  Company's
counsel to receive  notice of such motion,  on May 13, 2004, the court entered a
judgment against the Company finding, among other things that the release of the
two  promissory  notes  payable to Gibralter  was a fraudulent  conveyance,  and
decreeing, among other things, that: (a) the Company assign the promissory notes
and the assets  securing  these notes to Tweddle;  (b) the Company was  enjoined
from  transferring  any of its assets  out of the  ordinary  course of  business
pending  satisfaction of the Gibralter judgment in favor of Tweddle; and (c) the
December 10, 2002  transfer by  Gibralter of its right to payment  under the two
promissory  notes in exchange for common stock and stock warrants of the Company
was null and void. On May 24, 2004,  the company filled its Motion for New Trial
seeking to vacate the Order.  Subsequently,  on June 11, 2004, Tweddle filed its
Motion For Order to Show Cause Why Market  Central,  Inc.  Should Not Be Held In
Contempt of Court.  On July 15, 2004, the Court held a hearing at which time the
Company  presented its arguments for the vacating of the summary judgment order.
The Court has  scheduled a subsequent  hearing to be held on September 10, 2004,
at which time it will hear additional arguments and, it is believed, will render
its decision.

In connection with the potential  settlement of the litigation,  the Company may
be required to amend the U.S. Convergion Inc. Stock Purchase Agreement (see Note
B) to comply with the May 13, 2004 Court's  Order.  While remote,  the amendment
would  include,  but  not be  limited  to the  rescission  of the  sale  of U.S.
Convergion, Inc.

The Company is actively  seeking an acceptable  settlement of the claims arising
from the  litigation.  Dependent  upon the ultimate  outcome of the matter,  the
Company will vigorously  pursue third parties for  reimbursement of amounts,  if
any, paid by the Company to settle the claim who may have liability with respect
to an unfavorable resolution of the litigation, by settlement or otherwise.


                                       14
<PAGE>

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

Overview

Market Central,  Inc. (the "Company") is a global technology  management company
specializing in solutions that connect people and businesses  with  information.
The company  holds  multiple  patents and  patent-pending  technologies  and has
developed a suite of solutions that include software for next-generation search,
intelligent  document  recognition,   data  capture,   cleansing,   mining,  and
integration.   During  the  three  months  ended  May  31,  2004,   the  Company
discontinued operations of its U.S. Convergion, Inc. subsidiary and sold it to a
third party.  All operations of Convergion  have been shown in the  accompanying
financial statements as discontinued operations. The discontinuation and sale of
the  subsidiary  resulted  in a gain in the quarter  ended May 31, 2004  because
Convergion's liabilities exceeded its assets at the time of sale.

The  Company's  unaudited  condensed   consolidated   financial  statements  are
presented on a going concern basis, which contemplates the realization of assets
and  satisfaction  of liabilities in the normal course of business.  As with any
new  venture,  concerns  must be  considered  in light of the  normal  problems,
expenses and complications  encountered by entrance into established markets and
the  competitive  environment  in which  the  Company  operates.  The  unaudited
condensed  consolidated financial statements do not include, nor does management
feel it necessary, any adjustments to reflect any possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities  that may  result  from the  possible  inability  of the  Company to
continue as a going concern.

The Company  maintains  business  relationships  with three related  businesses,
Gibralter Publishing, Inc. ("Gibralter") and/or its successor,  Cheapseats, Inc.
and J&C Nationwide,  Inc. Each of these companies has call center contracts with
the Company's  ecom  subsidiary  and is owned or controlled by an officer and/or
board  member of the  Company.  These  three  related  companies  accounted  for
approximately $424,169 or 19.9% of the revenues for the three-month period ended
May 31, 2004.

RESULTS OF OPERATIONS

The following table sets forth the percentage relationship to the total revenues
of principal items contained in the Company's Condensed Consolidated  Statements
of  Operations  for the  three  and nine  months  ended  May 31,  2004 and 2003,
respectively.

<TABLE>
<CAPTION>
                                        Three months Ended        Nine months Ended
                                             May 31,                  May 31,
                                        2004         2003         2004         2003
                                        -------------------       ------------------
                                           (UNAUDITED)              (UNAUDITED)
<S>                                     <C>          <C>          <C>          <C>
Total revenues                            100%         100%         100%         100%

Cost of revenues                         69.9%        66.9%        69.7%        62.4%
                                        -----        -----       ------        -----

Gross profit                             30.1%        33.1%        30.3%        37.6%

Operating expenses                       98.5%        58.3%       155.3%        50.9%
                                        -----        -----       ------        -----

Loss from operations                    (68.3%)      (25.2%)       (125%)      (13.3%)

Interest expense                         (9.6%)       (5.1%)       (9.9%)       (4.1%)

Net loss from continuing
 operations, before income taxes
 and discontinued operations            (78.0%)      (30.3%)     (134.9%)      (17.4%)
Income tax benefits                        --           --           --           --
                                        -----        -----       ------        -----

Loss from continuing
operations, before discontinued
operations                              (78.0%)      (30.3%)     (134.9%)      (17.4%)
                                        -----        -----       ------        -----

Loss from discontinued
Operations                              (33.3%)      (29.2%)      (13.9%)       (9.0%)
Income from disposal of
discontinued operations                 139.2%          --         46.0%          --
                                        -----        -----       ------        -----
Income (loss) from discontinued
operations                              105.9%       (29.2%)       32.1%        (9.0%)

Net income (loss)                        27.9%       (59.7%)     (102.8%)      (26.3%)
                                        -----        -----       ------        -----
</TABLE>


                                       15
<PAGE>

COMPARISON  OF THE THREE MONTHS ENDED MAY 31, 2004 TO THE THREE MONTHS ENDED MAY
31, 2003

Revenues for the three months  ended May 31, 2004 and 2003 were  $1,975,300  and
$2,132,299,  respectively,  representing  a  7.3%  decrease.  This  decrease  of
$156,999  was due  entirely  to the  decrease  in  revenue  from  the  Gibralter
contract.  The Company's revenue from Gibralter has declined a total of $546,714
from the  three-month  period  ending May 31,  2004  compared  to May 31,  2003.
Revenue from unrelated third parties has increased  approximately  $390,000 from
the three month period ended May 31, 2003 to May 31, 2004.

Cost of revenues were $1,379,966 and $1,427,981,  for the three months ended May
31, 2004 and 2003,  respectively which represents 69.9% and 66.9% of revenue for
the respective  periods.  The decrease in cost of revenues is due to the decline
in revenue for the period.  The increase as a percentage  of revenue of 3.0% was
due to slight pressures on margins.  Gross profit  decreased  $108,984 or 15.5%,
from the three  months  ended May 31, 2003 to May 31, 2004 and the gross  margin
declined from 33.1% to 30.1% during those periods.  The decrease in gross profit
is due to the  decrease  in revenue  while the  decline  in gross  margin is due
primarily to the Company  being unable to reduce costs  related to operations as
quickly as the revenue declines are occurring.  The semi-fixed nature of some of
the cost of revenue  components  will  result in an  erosion of gross  margin at
lower revenue levels.

Operating  expenses,  including  depreciation  and  amortization,  increased  to
$1,945,187 from $1,243,972 which  represented 98.5% and 58.3% of revenue for the
three  months  ended  May 31,  2004 and 2003,  respectively.  This  increase  of
$701,215 is the result of the Company's  acquisition of certain assets of Pliant
Technologies,  Inc.  in July  2003 and the  payroll  costs  associated  with the
personnel that were hired by the Company in connection  with the asset purchase.
During the three months ended May 31, 2004,  operating expenses of $138,833 were
incurred  relating to these  employees  as compared to none in the three  months
ended May 31, 2003. Additionally, the Company granted stock options and warrants
to  consultants  in  exchange  for  services   rendered,   the  Company  charged
compensation  costs of  approximately  $361,000 to  operations  during the three
month ended May 31, 2004 in  connection  with the issuance of stock  options and
warrants.  The Company also accrued $400,000 of legal  liabilities in connection
with a litigation filed by Tweddle Litho Company during the period ended May 31,
2004.

Interest expense increased from $110,165 to $190,307, for the three months ended
May 31, 2003 as compared to the three months ended May 31, 2004. As a percentage
of revenue this increase is from 5.1% to 9.6% and is  attributable  to increased
borrowings in the May 2004 quarter compared to the May 2003 quarter.

Income (loss) from discontinued  operations relates to the Company's disposal of
its U.S. Convergion, Inc. subsidiary during the three-month period ended May 31,
2004.  Operating results of Convergion for the three-month period ending May 31,
2003 have been  reclassified  to  discontinued  operations  in the  accompanying
financial  statements.  Losses from  discontinued  operations  were $657,398 and
$623,620 for the quarter ended May 31, 2004 and 2003, respectively.  The quarter
ended May 31, 2004 also included the gain of $2,749,370 attributable to the sale
of  Convergion,  this gain was due  entirely to the excess of  liabilities  over
assets that existed at the time of disposal.  In  connection  with the potential
settlement  of the  litigation,  the  Company  may be required to amend the U.S.
Convergion,  Inc.  Stock  Purchase  Agreement  to comply  with the May 13,  2004
Court's Order. While remote, the amendment would include,  but not be limited to
the rescission of the sale of U.S. Convergion, Inc.

Net income (loss) for the three-months  ended May 31, 2004 and 2003 was $551,812
and $(1,273,439), respectively.


                                       16
<PAGE>

COMPARISON  OF THE NINE MONTHS  ENDED MAY 31, 2004 TO THE NINE MONTHS  ENDED MAY
31, 2003

Revenues  for the nine months  ended May 31, 2004 and 2003 were  $5,972,704  and
$6,966,637,  respectively,  representing  a  $993,933  or 14.3%  decrease.  This
decrease  was due  entirely  to the  decrease  in  revenue  from  the  Gibralter
contract.  The  Company's  revenue  from  Gibralter  has  declined  a  total  of
$1,889,386  from the  nine-month  period ending May 31, 2004 compared to May 31,
2003. Revenue from unrelated third parties has increased  approximately $895,000
from the nine-month period ended May 31, 2003 to May 31, 2004.

Cost of revenues  decreased to $4,161,508  from  $4,345,031  for the nine months
ended  May 31,  2004 and  2003,  respectively,  representing  69.7% and 62.4% of
revenue for those  periods.  The decrease in cost of revenues of $183,523 is due
to the decline in revenue  for the  period.  The  increase  as a  percentage  of
revenue of 7.3% was due to increased telephone and payroll costs as a percentage
of revenue. Gross profit decreased $810,410 or 30.9%, from the nine months ended
May 31, 2003 to May 31, 2004 and the gross margin  declined  from 37.6% to 30.3%
during  those  periods.  The  decrease in gross profit is due to the decrease in
revenue  while the decline in gross margin is due primarily to the Company being
unable to reduce costs related to operations as quickly as the revenue  declines
are occurring.  The semi-fixed nature of some of the cost of revenue  components
will result in an erosion of gross margin at lower revenue levels.

Operating  expenses,  which include the impairment  charge and  depreciation and
amortization,  have  increased  dramatically  as percentage of revenue to 155.3%
from  50.9%  for  the  nine  months  ended  May  31,  2004  and  May  31,  2003,
respectively.  This increase of  $5,731,583  to  $9,276,688  for the nine months
ended May 31,  2004 is due  primarily  to the  impairment  charge of  $4,062,003
related to the write off of goodwill  recorded in April 2003 at the  acquisition
of Convergion.  The remaining increase of approximately  $1,600,000  consists of
$314,000 of expenditures  related to the Company's Pliant activities in the nine
months  ended May 31, 2004  compared to none in the  previous  year's nine month
period.  Consulting and legal costs have increased  approximately  $365,000 from
the nine month  period ended May 31, 2003 to the nine month period ended May 31,
2004. Payroll costs have grown approximately  $300,000 for the nine months ended
May 31, 2004 compared to the nine months ended May 31, 2003.  Additionally,  the
Company  granted  stock  options and  warrants to  consultants  in exchange  for
services  rendered,  the Company  charged  compensation  costs of  approximately
$660,000 to  operations  during the nine month ended May 31, 2004 in  connection
with the  issuance of stock  options and  warrants.  The  Company  also  accrued
$400,000 of legal  liabilities in connection with a litigation  filed by Tweddle
Litho Company during the period ended May 31, 2004.

Interest expense increased from $288,041 to $593,881,  for the nine months ended
May 31, 2003 as compared to the nine months ended May 31, 2004.  As a percentage
of revenue this increase is from 4.1% to 9.9% and is  attributable  to increased
borrowings  during the nine months ended May 2004  quarter  compared to the nine
months ended May 2003.

Professional  fees for the nine months  ended May 31, 2003 consist of legal fees
related to the  Company's  sale of a majority  interest  of its common  stock in
February  2003 and  various  other  actions  related  its  special  shareholders
meeting.  These fees are  infrequently  occurring  items  related to the sale of
stock of the  Company  that  resulted  in a change in  control.  These  costs of
$161,021  for the  nine-months  ended May 31, 2003 are 2.3% of revenue.  For the
nine months ended May 31, 2004, none of these types of transactions occurred and
no such costs were present.

Income (loss) from discontinued  operations relates to the Company's disposal of
its U.S. Convergion,  Inc. subsidiary during the nine-month period ended May 31,
2004.  Operating  results of Convergion for the nine-month period ending May 31,
2003 have been  reclassified  to  discontinued  operations  in the  accompanying
financial  statements.  Losses from  discontinued  operations  were $831,585 and
$623,620 for the  nine-month  period ended May 31, 2004 and 2003,  respectively.
The  nine-month  period ended May 31, 2004 also  included the gain of $2,749,370
attributable to the sale of Convergion, this gain was due entirely to the excess
of liabilities over assets that existed at the time of disposal.

Net loss for the nine  months  ended May 31,  2004 and 2003 was  $6,141,588  and
$1,835,160,  respectively. This increase of $4,306,428 in the net loss from 2003
to 2004 represents a 234.7% increase in net loss.


                                       17
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The  Company  is not  currently  generating  positive  cash  flow  and its  cash
resources on hand are insufficient for its long term needs. As a result, certain
vendor  payables,  capital  leases and other  obligations  are in arrears and in
default.  Sale of Series A Convertible  Preferred shares since December 2003 has
resulted in approximately  $3,000,000 in capital for the Company through May 31,
2004. This is a significant part of a funding plan to stabilize liquidity issues
at the Company.  During the three  months  ended May 31, 2004,  the Company sold
Series B Convertible stock that resulted in approximately  $1,300,000 in capital
for the  Company.  The Company is  continuing  pursue other  capital  sources to
enable it to grow and enhance its operations going forward.

The Company's two principal shareholders (who took control of the Company in the
February  2003  transaction)  have also  consistently  provided the Company with
additional  capital in the form of loans throughout the year, on a discretionary
basis.  Advances  have been in  response  to a pressing  need to meet a critical
obligation of the Company.  As of May 31, 2004, these  shareholders had provided
the Company with net advances of $416,746.  The Company expects that the need to
rely on these loans will be greatly diminished with the success of other capital
raising activities.

The  Company's  principal  cash  requirements  are  for  selling,   general  and
administrative  expenses,  employee  costs,  funding of accounts  receivable and
capital  expenditures.  During the  three-month and nine month periods ended May
31, 2004, the Company has not borrowed any additional funds from the individuals
who were principals in the February 2003 transaction described above.

Cash used in operating  activities  was $3,337,184 for the nine months ended May
31, 2004. This was due primarily as a result of operating losses,  caused by the
revenue levels that are at less than a breakeven volume.  Increasing revenues or
further  cost  cutting  will be  required in the  future.  The Company  invested
$250,755 in computers and leasehold improvements during this period. The Company
met its cash  requirements  during the nine  months  ended May 31,  2004  mainly
through the receipt of approximately $4,040,000 in proceeds from its sale of its
Preferred Stock and common stock, and approximately $150,000 of proceeds, net of
repayments, from issuance of notes payable and advances from related parties.

While the Company has  continued  to raise  capital to meet its working  capital
requirements,  additional  financing is required in order to meet future  needs.
There are no  assurances  the Company  will be  successful  in raising the funds
required  and any equity  raised  would be  substantially  dilutive  to existing
shareholders.

INFLATION

In the opinion of  management,  inflation  has not had a material  effect on the
operations of the Company.

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

Certain  statements  made in this report,  and other written or oral  statements
made by or on behalf of the Company may constitute "forward-looking  statements"
under the Private  Securities  Litigation  Reform Act of 1995. When used in this
report,  the words  "believes,"  "expects,"  "estimates,"  "intends," "will" and
similar  expressions  are  intended  to  identify  forward-looking   statements.
Statements  regarding future events and developments and our future performance,
as well as the Company's expectations,  beliefs, plans, intentions, estimates or
projections  relating to the future, are  forward-looking  statements within the
meaning of these laws.  Examples of such  statements in this report  include the
Company's  current  plans for  improving  liquidity  and its future  acquisition
plans.  Forward-looking  statements  involve risks and uncertainties  that could
cause actual results to differ  materially from those expressed in or implied by
the  statements,  including,  but not  limited to the  ability of the Company to
provide for its debt  obligations  and to provide for working capital needs from
operating  revenue;  general  economic  conditions;  the  ability  to  integrate
acquisitions  successfully  and without  disruptions to normal  operations;  and
other  risks  detailed  in  the  Company's  periodic  report  filings  with  the
Securities   and  Exchange   Commission.   The  Company   believes   that  these
forward-looking  statements are reasonable;  however, you should not place undue
reliance on such statements.  These statements are based on current expectations
and speak only as of the date of such  statements.  The  Company  undertakes  no
obligation to publicly update or revise any forward-looking  statement,  whether
as a result of future events, new information or otherwise.


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<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

(a) On May 31,  2004,  we made an  evaluation  of our  disclosure  controls  and
procedures.  In our opinion, the disclosure controls and procedures are adequate
because the systems of controls and  procedures  are  designed to assure,  among
other items, that 1) recorded  transactions are valid; 2) valid transactions are
recorded;  and 3)  transactions  are  recorded in the proper  period in a timely
manner to produce  financial  statements  which  present  fairly  the  financial
condition, results of operations and cash flows for the respective periods being
presented.  Moreover, the evaluation did not reveal any significant deficiencies
or material weaknesses in our disclosure controls and procedures.

(b) There have been no significant  changes in our internal controls or in other
factors that could significantly affect these controls since the last evaluation

PART II

ITEM  1. LEGAL PROCEEDINGS

      TWEDDLE CASE

In an action originally filed against the Company and Gibralter Publishing, Inc.
("Gibralter")  in October  2003, in the United States  District  Court,  Eastern
District of North Carolina,  Tweddle Litho Company  ("Tweddle") alleged that the
Company and Gibralter had engaged in a fraudulent  conveyance in December  2002,
at such time that  Gilbralter  released  the Company from two  promissory  notes
totaling  approximately  $5  million in  exchange  for the  issuance  of certain
Company stock and warrants. The action in North Carolina arose out of a judgment
that  Tweddle had  obtained  against  Gibralter  in Michigan  for  approximately
$400,000.  Subsequent  to the  Company's  filing of an answer to the  complaint,
Tweddle filed a motion for summary  judgment.  As a result of the failure of the
Company's  counsel to receive notice of such motion,  on May 13, 2004, the court
entered a judgment  against the  Company  finding,  among other  things that the
release of the two  promissory  notes  payable  to  Gibralter  was a  fraudulent
conveyance,  and decreeing, among other things, that: (a) the Company assign the
promissory notes and the assets securing these notes to Tweddle; (b) the Company
was enjoined from  transferring  any of its assets out of the ordinary course of
business pending satisfaction of the Gibralter judgment in favor of Tweddle; and
(c) the  December 10, 2002  transfer by Gibralter of its right to payment  under
the two promissory  notes in exchange for common stock and stock warrants of the
Company was null and void.  On May 24, 2004,  the company  filled its Motion for
New Trial seeking to vacate the Order.  Subsequently,  on June 11, 2004, Tweddle
filed its Motion For Order to Show Cause Why Market Central,  Inc. Should Not Be
Held In Contempt of Court.  On July 15, 2004,  the Court held a hearing at which
time the  Company  presented  its  arguments  for the  vacating  of the  summary
judgment  order.  The Court has  scheduled  a  subsequent  hearing to be held on
September 10, 2004, at which time it will hear  additional  arguments and, it is
believed,  will render its decision. In connection with the potential settlement
of the litigation, the Company may be required to amend the U.S. Convergion Inc.
Stock Purchase  Agreement to comply with the May 13, 2004 Court's  Order.  While
remote, the amendment would include, but not be limited to the rescission of the
sale of U.S. Convergion, Inc.

The Company is actively  seeking an acceptable  settlement of the claims arising
from the  litigation.  Dependent  upon the ultimate  outcome of the matter,  the
Company will vigorously  pursue third parties for  reimbursement of amounts,  if
any, paid by the Company to settle the claim who may have liability with respect
to an unfavorable resolution of the litigation, by settlement or otherwise.

ITEM  2. CHANGES IN SECURITIES AND USE OF PROCEEDS

In December 2003,  the Company  approved a private  placement  offering of up to
$3,000,000 of its authorized  Series A Preferred Stock at $1.3325 per share. The
Series A Preferred Stock is convertible  into one share of the Company's  common
stock after a one-year period from the date of issuance.  The Series A Preferred
Stock  provides  for a 4%  annual  cumulative  dividend,  that is  payable  when
declared by the  Company's  Board of  Directors  and is payable in shares of the
Series A  Preferred  Stock.  As of May 31,  2004,  the  Company  had  issued  an
aggregate  of  2,239,700  shares  of  Series  A  Preferred  Stock  and  received
$2,757,085 of proceeds,  net of offering costs and fees of $227,315. The Company
had accrued cumulative preferred stock dividends of $30,829 as of May 31, 2004.


                                       19
<PAGE>

During the quarter ended May 31, 2004 the Company issued an aggregate of 350,000
shares of Series B Preferred  Stock and received a total proceeds of $1,282,912,
net of cots and fees of $367,339.  The Series B Preferred  Stock is  convertible
into  common  stock at the  lesser of $1.75 per share or 80% of the  lowest  bid
price for the common stock in the 10 business days  preceding the conversion but
it cannot be less than 50% of the $1.75 or $.875. This results in the conversion
of a maximum  of  4,000,000  shares  and a minimum  of  2,000,000  shares of the
Company's common stock. The Series B Preferred Stock holders also have an option
to acquire additional common shares in an amount to permit the conversion rights
plus  this  option to result  in a total of  4,000,000  shares of the  Company's
common stock.

ITEM  3. DEFAULTS UPON SENIOR SECURITIES

      None

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

      None

ITEM  5. OTHER INFORMATION

      On April 19, 2004,  Terrence J. Leifheit  resigned as CEO and President of
      the Company.  On July 16, 2004 Mr. Leifheit  resigned as a director of the
      Company.  As a result of an on-going internal  investigation,  the Company
      has  determined  that  certain  actions  taken  by Mr.  Leifheit  may have
      resulted  in  damages  to  the  Company.  The  Company  has  entered  into
      negotiations  with Mr.  Leifheit  with  respect to the  settlement  of all
      mutual claims between the Company and Mr.  Leifheit.  The Company  expects
      such negotiations to be completed in approximately thirty (30) days.

      In April 2004, the Company signed a Letter of Intent to acquire the assets
      of  Convey  Systems,  Inc.  from  The TAG  Group,  Inc.  Pursuant  to this
      agreement both parties are preparing its financial information for review.
      Due to the  preliminary  stage there can be no assurance  the  transaction
      will be successfully completed.

      On April 1, 2004,  I-Gate,  Inc.  filed a Complaint  in the United  States
      District  Court  for the  Eastern  District  of North  Carolina,  Southern
      Division  against  Gibraltar  Publishing,  Inc.  and the  Company.  In the
      Complaint,  I-Gate  alleged  that the  release  of the  Company's  alleged
      obligations  to Gibraltar in December,  2002, in exchange for the issuance
      of 1,000,000 shares of Market Central,  Inc.'s common stock and 10,000,000
      in warrants  for common stock  (later  reduced in a 10 to 1 reverse  stock
      split to 1,000,000  shares of common  stock) was a fraudulent  conveyance.
      The Complaint seeks damages in excess of $800,000. The Company believes it
      has meritorious  defenses to these claims and intends to vigorously defend
      itself against such claims.

ITEM  6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits
      No.      Description
      ----     ------------

      4.1      Certificate of Designations, Powers, Preferences and Relative,
               Participating, Optional and Other Special Rights of the Series A
               Convertible Preferred Stock of Market Central, Inc.
               (filed herewith)
      4.2      Certificate of Designation of the rights and preferences of
               Series B Convertible referred Stock of Market Central, Inc.
               (filed herewith)
      31.1     Certification of Doyal G. Bryant Pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002 (filed herewith).
      31.2     Certification of Clifford A. Clark Pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002 (filed herewith).

(b)   The Company  filed a Form 8-K on April 29, 2004 under Item 5. Other Events
      attaching three Press Releases


                                       20
<PAGE>

                                   SIGNATURES

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

                                        MARKET CENTRAL, INC.

Date:      July 26, 2004                By /s/  Doyal G. Bryant
                                        -------------------------------------
                                        Doyal G. Bryant
                                        President and Chief Executive Officer


Date:      July 26, 2004                By /s/ Clifford Clark
                                        -------------------------------------
                                        Clifford Clark
                                        Chief Financial Officer


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