SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

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

For the quarterly period ended: March 31, 2003

                                       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: 0-29459

                                   PACEL CORP.
                    ----------------------------------------
             (Exact name of registrant as specified in its charter)

VIRGINIA                                                54-1712558
----------------------------------              --------------------------------
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization                           Identification Number)


7900 Sudley Road, SUITE 601
MANASSAS, VIRGINIA                                      20109-3795
----------------------------------------        --------------------------------
(Address of principal executive offices)                  (ZIP Code)


Registrant's telephone number, including area code: (703) 257-4759

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 (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 day:  Yes [X] No [_]

Transitional Small Business Disclosure Format (check one)

Yes [_] No [X]

State the number of Shares outstanding of each of the issuer's classes of common
equity, as of the latest date:

As of May 19, 2002,  there were 304,804,510  shares of the  Registrant's  common
stock outstanding.



<PAGE>


                          PACEL CORP. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION (unaudited)

Item 1. Index to Consolidated Condensed Financial Statements
        Condensed Consolidated Balance Sheets                               F-2
        Consolidated Condensed Statements of Income of Operations           F-3
        Consolidated Statements of Cash Flows                               F-4
        Notes to Consolidated Condensed Financial Statements                F-5

Item 2. Management's  Discussion and Analysis
        of Financial Results of Operations

Item 3. Controls and Procedures                                              10

PART II.      OTHER INFORMATION

Item 1. Legal Proceedings                                                    11

Item 2. Changes in Securities                                                11

Item 3. Defaults upon Senior Securities                                      11

Item 4. Submission of Matters to Vote of Security Holders                    11

Item 5. Other Information                                                    11

Item 6. Exhibits and Reports                                                 11

Item 7. Signatures                                                           12


<PAGE>


<TABLE>
<CAPTION>
                          PACEL CORP. AND SUBSIDIARIES
                                  Balance Sheet


                                                                                   March 31,      December 31,
                                                                                      2003            2002
                                                                                ---------------- --------------
                                                                                    Unaudited        Audited
<S>                                                                             <C>              <C>
                                ASSETS
Current assets:
   Cash and cash equivalents                                                    $        211,545 $        8,379
   Accounts receivable, net of allowance for doubtful accounts of $0
       and $1,311 respectively                                                                 -              -
   Inventory                                                                                                  -
   Deposit on Benecorp                                                                    96,000         96,000
   Other receivables                                                                      46,164         16,499
      Total current assets                                                               353,709        120,878
                                                                                ---------------- --------------
Property and equipment, net of accumulated depreciation
      of $129,388 and $73,946 respectively                                                23,713         24,961
                                                                                ---------------- --------------
Non-current assets:
     Note receivable                                                                           -              -
     Goodwill                                                                                  -              -
     Security deposits                                                                     3,991          3,991
                                                                                ---------------- --------------
        Total non-current assets                                                           3,991          3,991
      Total assets                                                              $        381,413 $      149,830
                                                                                ================ ==============

              LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Accounts payable                                                             $      1,299,519 $    1,353,022
   Accrued expense                                                                       259,381        234,602
   Loans payable officers-Stockholders                                                 1,006,839        956,309
   Notes payable                                                                         873,750        873,750
   Notes payable bank                                                                     35,437         45,565
                                                                                ---------------- --------------
         Total current liabilities                                                     3,474,926      3,463,248

Long Term liabilities:
   Convertible debentures                                                                287,618        409,111
                                                                                ---------------- --------------
         Total long term liabilities                                                     287,618        409,111
      Total liabilities                                                                3,762,544      3,872,359
                                                                                ---------------- --------------

Minority interest Commitments:

Stockholders' equity (deficit)
Preferred stock, no par value, no liquidation value, 5,000,000 shares
 authorized, issued 1,000,000 shares 1997 class A convertible
 preferred stock                                                                          11,320         11,320
Common stock - no par value, 200,000,000,000 and 650,000,000
shares authorized in 2003 and 2002, respectively. 119,791,243 and 21,184,591
shares outstanding  in 2003 and 2002, respectively                                    11,365,769     10,685,520

   Cumulative currency translation adjustment                                            (18,720)       (18,720)
       Deficit                                                                       (14,739,501)   (14,400,649)
   Total stockholders' equity  (deficit)                                              (3,381,132)    (3,722,529)
   Total liabilities and stockholders' equity                                   $        381,413 $      149,830
                                                                                ================ ==============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      F-2


<PAGE>


<TABLE>
<CAPTION>
                                  Pacel Corp.
                Consolidated Statements of Income of Operations
                                   (Unaudited)

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

<S>                                                                             <C>               <C>
 Sales                                                                          $            583  $       205,989
 Cost of Goods Sold                                                                            0          185,310
Gross Profit                                                                                 583           20,679
                                                                                ----------------  ---------------

Operating costs and expenses:
      Research and development                                                                 0          103,371
      Depreciation & Amortization                                                          1,248            3,750
      Interest expense                                                                    27,556           35,295
      Sales and Marketing                                                                  1,014           58,879
      Financing Expenses                                                                       -            3,500
      General and Administrative                                                         309,615        1,112,138
                                                                                ----------------  ---------------
     Total operating costs and expenses                                                  339,434        1,316,933
                                                                                ----------------  ---------------

     Loss before extraordinary items ( including discontinued
        operations and the effect of an accounting change)                              (338,852)      (1,296,254)

      Gain on write-off of extinguishment of debt
   Discontinued operations (Note 3)
       Loss from operations of discontinued
            E-Bstore business                                                                            (131,992)
       Gain on disposal of E-Bstore business                                                                    -

     Cumulative effect of accounting change                                                              (407,049)
                                                                                ----------------  ---------------
           Net (loss)                                                           $       (338,852) $    (1,835,295)
                                                                                ================  ===============

Net  (loss) per common share
     Basic                                                                                 (0.01)          (63.65)
     Diluted                                                                               (0.01)          (63.65)
                                                                                ================  ===============
Weighted Average shares outstanding
     Basic                                                                            27,296,056           28,834
     Diluted                                                                          27,296,056           28,834
                                                                                ================  ===============
</TABLE>


          See accompanying notes to consolidated financial statements.



                                      F-3


<PAGE>



<TABLE>
<CAPTION>
                          PACEL CORP. AND SUBSIDIARIES
                            Statements of Cash Flows
                                   (Unaudited)

                                                                       Three Months Ended
                                                                     March 31,    March 31,
                                                                       2003         2002
                                                                  ------------  ------------
<S>                                                               <C>           <C>
Cash flows from operating activities:
   Net (loss)                                                     $   (338,852) $ (1,835,295)
Adjustments to reconcile net (loss) to net cash
 (used in) provided by operating activities:
   Cumulative effect of accounting change                                            407,049
   Depreciation                                                          1,248         3,750
   Provision for Bad Debts                                                                 0
   Other non cash items                                                 66,332       835,500
   Gain on sale of EB-Store                                                  0
Increase (Decrease) in Cash from changes in:
    Accounts receivable                                                      0       218,741
    Other receivables                                                  (29,665)        2,270
    Inventory                                                                0             4
    Security deposits                                                        0       (15,237)
    Prepaid expenses                                                         0             0
    Accounts payable                                                   (53,503)      147,603
    Accrued expense                                                     24,779       112,191
    Loans Payable Officers-Stockholders                                 50,530        19,550
 Net cash (used in) operating activities                              (279,131)     (103,874)
                                                                  ------------  ------------

Cash flows from financing activities:
   Repayment of loans payable                                           (10,128)     (125,362)
   Notes payable convertible debenture                                                 25,000
   Notes payable                                                                            0
   Proceeds from sale of common stock options                           492,425       150,000
                                                                  ------------- -------------

   Net cash provided by financing activities                            482,297        49,638
Effect of exchange rates on cash                                              -        (1,000)
                                                                  ------------- -------------

Net increase (Decrease) in cash and cash equivalents                    203,166       (55,236)

Cash and cash equivalents at beginning of year                            8,379        65,761
                                                                  ------------- -------------

Cash and cash equivalents at end of period                        $     211,545 $      10,525
                                                                  ============= =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
     Cash paid for interest                                               2,777         2,380
                                                                  ------------- -------------
</TABLE>



          See accompanying notes to consolidated financial statements.


                                      F-4

<PAGE>


                          PACEL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    UNAUDITED
                                 March 31, 2003


1.   Basis of Presentation

The  unaudited  financial  statements  included  in the Form  10-QSB  have  been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-QSB and Item 310(b)
of  Regulation  SB. The  financial  information  furnished  herein  reflects all
adjustments,  which  in the  opinion  of  management  are  necessary  for a fair
presentation of the Company's financial position,  the results of operations and
cash flows for the periods presented.

Certain  information and footnote  disclosures  normally  contained in financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted, pursuant to such rules and regulations.

These interim statements should be read in conjunction with the audited December
31, 2002  consolidated  financial  statements  and related notes included in the
Company's year ended certified financial  statements.  The results of operations
for the  periods  ended  March 31, 2003 are not  necessarily  indicative  of the
operating  results for the year. The Company  presumes that users of the interim
financial  information  herein have read or have access to the audited financial
statements  for the  preceding  fiscal year and that the adequacy of  additional
disclosure needed for a fair presentation may be determined in that context. The
results of operations for any interim period are not  necessarily  indicative of
the results for the full year.

2. Related Party Transactions

The Company  purchased $30,000 of internet services from E-BStor owned by F. Kay
Calkins a director and the wife of David Calkins  CEO/President.  In addition we
advanced them an additional  $30,000 for work not  completed.  The Company has a
receivable of $46,164  which  consist of a receivable  for rent and the advanced
payament.

3.   Subsequent events

     a.   On March 17, 2003, the Company effected a one-for-thirty reverse split
          restating  the number of common  shares as of  December  31, 2002 from
          635,537,735 to 21,184,591.  All references to average number of shares
          outstanding and prices per share have been restated  retroactively  to
          reflect the split.

     b.   In January and March 2003, in connection  with our  acquisition of MRG
          California LLC, we issued a total of 49,385,707 unrestricted shares of
          our Common  Stock,  No Par Value per share,  to The Honor  Hedge Fund,
          LLC., a Nevada limited liability company;  Reisco  consulting,  Inc. a
          Nevada  Corporation;  Equities First, LLC a Delaware Limited Liability
          Company;  and MRG  California  LLC.  In addition  the  Company  issued
          120,000,000  shares of unrestricted  stock to David and F. Kay Calkins
          in exchange for $600,000 of debts owed to them. However,  because they
          are  "Affiliates"  of  Pacel,  Mr.  And Mrs.  Calkins  will be able to
          re-sell their shares only in compliance with Rules 144 and

                                      F-5

<PAGE>



          145.  These  shares were issued  pursuant to Section 3 (a) (10) of the
          Securities  Act of 1933,  as amended,  after a hearing with notice to,
          and an opportunity  to be heard from,  interested  parties,  as to the
          fairness of each  transaction,  by courts in Nevada and  Illinois  who
          specifically determined, prior to declaring that the transactions were
          exempt under Section 3 (a) (10),  that the  transactions  were fair to
          the interested parties.  All shares have been adjusted for the 30 to 1
          reverse.

     c.   In  April  2003,  the  Company  acquired  100%  2,940  shares  of  the
          outstanding  stock of Benecorp  Business Services Inc. to be accounted
          for as a purchase. The Company will assume approximately $1,000,000 of
          debt in connection with this purchase.  As  consideration  the Company
          will pay $300,000 in cash to and issued  200,000 shares of Section 144
          restricted  Pacel common stock.  The Company made a deposit of $96,000
          in 2002.  In  connection  with the  purchase  we  signed  two one year
          employment contracts with the officers for $75,000 each.

     d.   In April 2003, the Company  purchased up to  $100,000,000  of customer
          contracts from MRG  California  LLC for 3 times  annualized net profit
          margin on each contract in either cash or free trading stock.  We have
          issued  34,500,000  shares of the  Company's  free trading  stock.  In
          connection  with the  purchase of the  contracts  we have signed a one
          year servicing  agreement with MRG to services these  contracts  until
          RSG becomes registered as a PEO in the state of California.

     e.   In April 2003, the Company  acquired 100% of the stock of Asmara to be
          accounted for as a purchase.  The Company agreed to acquire all of the
          debts up to $2,000,000.  In connection  with this purchase the Company
          signed a two year  employment  contract  with an officer of Asmara for
          $150,000.  In  addition  he may be granted  options to  purchase up to
          1,500,000  shares of the  Company's  common  stock for .03 per  share.
          These options will be issued upon the Company reaching certain goals.

     f.   The  Securities  and Exchange  Commission  ("SEC")  filed an action in
          federal district court asserting various violations of securities laws
          against  us. The  complaint  alleges  that  defendant  Frank  Custable
          "orchestrated"  a "scheme"  to  illegally  obtain  stock from  various
          companies,  including the Company , through "scam  Commission Form S-8
          registration statements,  forged stock authorization form and at least
          one bogus attorney opinion letter arranged by Custable." The complaint
          alleges that , in connection  with this alleged  "scheme," the Company
          and its CEO,  David Calkins  violated  Section 17(a) of the Securities
          Act and Section 10(b) and Rule 10b-5 of the Exchange Act. The SEC asks
          that the  Company  and  Calkins be  permanently  enjoined  from future
          violations,  ordered  to pay  disgorgement  and  civil  penalties  and
          Calkins be barred from continued service as an office and director. As
          part of an ex parte  proceeding,  the  District  Court has ordered the
          Company and Calkins to provide an  accounting  of their assets and the
          transactions  that are the subject of the  complaint.  The Company has
          not yet been served with the complaint, and no further proceedings are
          scheduled at this time.

                                      F-6

<PAGE>


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

GENERAL BUSINESS

Management's  discussion  and analysis of results of  operations  and  financial
condition,  include  a  discussion  of  liquidity  and  capital  resources.  The
following discussion (presented in hundreds, except per share amounts) should be
read in  conjunction  with  the  consolidated  financial  statements  and  notes
thereto.

In 2002,  Pacel  completed an evaluation of its business model and the potential
success in its existing business initiatives. It was determined that the Company
should, as part of that review,  evaluate other potential  business markets that
could provide the potential for success.  In September 2002, Pacel announced its
intention to enter the Professional  Employer  Organization ("PEO") industry. In
addition,  the  Company  plans to provide  Administrative  Service  Organization
("ASO") services. The Company will provide human capital management solutions to
small business  clients within the United States.  Subsequent to March 31, 2003,
the Company successfully  completed the acquisition of two PEO organizations and
one  ASO  organization  and is  evaluating  additional  opportunities  with  the
potential  for  organic  growth in order to secure its  position  as an industry
leader.  The Company sees this initiative in these  industries as an opportunity
to tap into the lucrative small business market in the United States and intends
to compliment its activities  with  information  technology  services,  business
consulting and financial  services at a future time.

Through its PEO/ASO  business  unit,  the  Company  will market to its  clients,
typically  small to  medium-sized  businesses  with between five and one hundred
employees,  a broad range of products  and services  that provide an  outsourced
solution for the clients' human resources ("HR") needs.  The Company's  products
and  services  will   initially   include   benefits   administration,   payroll
administration,   governmental   compliance,   risk   management,   unemployment
administration,  and health,  welfare and  retirement  benefits.  The Company is
currently  working to establish the necessary  national vendor  relationships in
order to effectively and competitively provide such services to a broad range of
clients.

Three Months  ended March 31, 2003  compared to the Three Months ended March 31,
2002

Sales for the three  months ended March 31, 2003  decreased to $583  compared to
sales of $205,989  for the three  months  ended March 31,  2002.  The  Company's
revenue  in 2003 was  predominantly  derived  from the sale of  retail  software
products.  We were not actively  selling our  products  due to  resources  being
devoted to the development of our PEO business.

Cost of Goods sold  decreased  to $-0- in the three  months ended March 31, 2003
compared to $185,310 in the corresponding three months ended March 31, 2002. The
decrease  in the cost of goods  sold was  directly  related to the  decrease  in
sales.


                                       8
<PAGE>


Research &  Development  expenses  decreased  to $-0- in the three  months ended
March 31, 2003 as compared to $103,371  in the  comparable  three  months  ended
March 31, 2002.  The decrease in research and  development  expenses  during the
first three months of 2003 reflects the elimination of in the development  staff
for new software products.

General &  Administrative  expenses  decreased  to $309,615 in the three  months
ended March 31, 2003, compared to $1,112,138 in the three months ended March 31,
2002. The Company has significantly reduced its operating requirements. Until we
finished   the  planned   acquisitions   only  we  have  let  all   nonessential
administrative  staff go. We have moved to a new  facility  reducing our rent by
66%.

Depreciation  expenses  decreased  to $1,248 in the three months ended March 31,
2003, compared to $3,750 in the three months ended March 31, 2002.

Interest  Expense is interest paid and accrued on the Convertible  Notes,  Notes
payable and the interest due for the loan from a stockholder.  Interest amounted
to $27,556 in the three months  ended March 31, 2003  compared to $35,295 in the
three months ended March 31, 2002.

Finance Expense in the first three months ended March 31, 2003 was $-0- compared
to $3,500 in the three months ended March 31, 2002.

LIQUIDITY AND CAPITAL RESOURCES:

Cash and cash equivalents increased to $211,545 for the three months ended March
31, 2003 from $10,523 at March 31, 2002. Net cash used for operating  activities
was $279,131 during the three month ended March 31, 2003 compared to $103,874 in
the  corresponding  three months  ended March 31,  2002.  Cash used in operating
activities was derived from the net loss increases in other  receivables,  and a
decrease in accounts  payable  off set by an  increase in accrued  expenses  and
officers loans.

Net cash  provided by financing  activities  in the three months ended March 31,
2003 amounted to $482,297 compared to $49,638 in the corresponding  three months
ended March 31, 2002. This was directly  related to the issuance of common stock
relating to the two lines of credit that we sign.

In September 2002, we entered in an Equity line of credit for  $10,000,000  from
the Honor Hedge Fund and Reisco  Hedge Fund  through  High  Desert  Capital at a
variable  discount  rate of 12.5% to 50%. We can draw up to $500,000  per month.
The line will is being used for the acquisition of BeneCorp., other acquisitions
and working  capital.  We drew down $465,000 to date and issued 8,885,707 shares
of common stock.

In March 2003,  we entered  into an Equity line of credit for  $10,000,000  from
Equities  First Inc. at a discount rate of up to 50%. We can draw up to $500,000
per month. The line was being used for the acquisition  customer  contracts from
MRG California,  LLC.,  other  acquisitions  and working  capital.  We drew down
$172,200 and issued 6,000,000 shares of common stock.


                                       9
<PAGE>


In April 2003 we signed an agreement with MRG to purchase up to  $100,000,000 of
customer  contracts at a cost of 3times the  annualized  net profit  margin.  We
believe that  development of this business in conjunction  with the acquisitions
of other PEO companies will provide us with a direct  marketing  channel for our
IT consulting, System Security, hardware and Web based technologies.

In  October  2002,  we signed an  agreement  to  purchase  100% of the assets of
BeneCorp.  Business Services Inc. a human resource support company, for $720,000
to be paid  over the next six  months in equal  monthly  payments  of  $180,000.
$96,000 was transferred to BeneCorp in 2002.  However,  due to delays in funding
in the  implementation of the Section 3(a)(10)  reorganization we were unable to
make the payments as scheduled. Due to these delays the acquisition contract was
renegotiated as a stock purchase,  the final closing was in April, 2003. We will
assume  approximately  $1,000,000  in debt.  In  connection  with  the  BeneCorp
acquisition we signed two, employment  agreements with the officers of BeneCorp.
for $75,000 per year each. We believe that this acquisition will help expand the
TRSG  business.  We have filed an 8K, an  amended  filing is being  prepared  to
include the  audited  financial  statements  are being  prepared  along with the
pro-forma financial states

In April 2003, the Company  acquired 100% of the stock of Asmara to be accounted
for as a  purchase.  The  Company  agreed  to  acquire  all of the  debts  up to
$2,000,000.  In  connection  with this  purchase  the Company  signed a two year
employment  contract with an officer of Asmara for $150,000.  In addition he may
be granted  options to purchase up to 1,500,000  shares of the Companies  common
stock for .03 per share.  These options will be issued upon the Company reaching
certain goals.

The Company  purchased $30,000 of internet services from E-BStor owned by F. Kay
Calkins a director and the wife of David Calkins  CEO/President.  In addition we
advanced them an additional  $30,000 for work not  completed.  The Company has a
receivable of $46,164  which  consist of a receivable  for rent and the advanced
payament.

We have filed an 8K for the  acquisition  of  BeneCorp  and  Asmara,  an amended
filing is being prepared to include the audited financial  statements along with
the pro-forma financial statements.

Our cash  requirements  for funding our operations  continue to greatly exceeded
cash flows from  operations.  We continue to satisfy our capital  needs  through
equity  financing and short-term loans for from David and F. Kay Calkins Officer
and shareholder, until we can turn our cash flow around. Our liabilities consist
of over  extended  accounts  payable,  payroll  taxes,  loans from  officers and
accrued officer's compensation and interest expense.

Currently we have focused our efforts on developing strategic relationships with
other  organizations  associated  with  the PEO  business.  The  loss of  equity
financing would seriously hinder our ability to continue as a going concern.

We expect to continue our investing activities,  including  expenditures for PEO
acquisitions, including sales and marketing, product support, and administrative
support, as funds become available.

Forward Looking Statements

The  Company is making  this  statement  in order to satisfy  the "safe  harbor"
provisions contained in the Private Securities Litigation Reform Act of 1995.


                                       10
<PAGE>


This Form 10-QSB includes forward-looking statements relating to the business of
Pacel.  Forward-looking  statements contained herein or in other statements made
by Pacel are made based on  management's  expectations  and  beliefs  concerning
future  events  impacting  Pacel and are  subject to  uncertainties  and factors
relating to the Company's operations and business environment,  all of which are
difficult  to predict and many of which are beyond the  control of the  Company,
that could cause actual results of the Company to differ  materially  from those
matters  expressed  in or implied by  forward-looking  statements.  The  Company
believes  that the  following  factors,  among  others,  could affect its future
performance  and cause actual results of the Company to differ  materially  from
those expressed in or implied by forward-looking statements made by or on behalf
of the Company:  (a) the effect of  technological  changes;  (b) increases in or
unexpected losses; (c) increased  competition;  (d) fluctuations in the costs to
operate  the  business;   (e)  uninsurable   risks;  and  (f)  general  economic
conditions.

Item 3. CONTROLS AND PROCEDURES.

As of March 31, 2003, an evaluation was performed under the supervision and with
the participation of the Company's management, including the Principal Executive
Officer and the Principal Accounting Officer, of the effectiveness of the design
and operation of the Company's disclosure controls and procedures. Based on that
evaluation, the Company's management,  including the Principal Executive Officer
and the Principal  Accounting Officer,  concluded that the Company's  disclosure
controls and procedures were effective as of March 31, 2003.  There have been no
significant  changes in the Company's internal controls or in other factors that
could significantly affect internal controls subsequent to March 31, 2003.


PART II. OTHER INFORMATION

ITEM 3. LEGAL PROCEEDINGS

The  Securities  and  Exchange  Commission  ("SEC")  filed an action in  federal
district court asserting  various  violations of securities laws against us. The
complaint  alleges that defendant  Frank Custable  "orchestrated"  a "scheme" to
illegally obtain stock from various  companies,  including the Company , through
"scam Commission Form S-8 registration  statements,  forged stock  authorization
form and at least one bogus attorney  opinion letter  arranged by Custable." The
complaint  alleges that , in connection with this alleged  "scheme," the Company
and its CEO,  David Calkins  violated  Section 17(a) of the  Securities  Act and
Section  10(b) and Rule 10b-5 of the Exchange Act. The SEC asks that the Company
and  Calkins be  permanently  enjoined  from future  violations,  ordered to pay
disgorgement and civil penalties and Calkins be barred from continued service as
an office and director.  As part of an ex parte  proceeding,  the District Court
has ordered the Company and Calkins to provide an accounting of their assets and
the transactions that are the subject of the complaint.  The Company has not yet
been served with the complaint, and no further proceedings are scheduled at this
time.


                                       11
<PAGE>


We are a defendant in various lawsuits, with vendors from whom we owe monies. We
have hired a firm to try and settle our delinquent account payable. These claims
are recorded as liabilities.

Item 2. Changes in Securities

On March  17,  2003,  the  Company  effected  a one  -for-thirty  reverse  split
restating the number of common shares a of December 31, 2002 from 635,537,735 to
21,184,591.  All references to average number of shares  outstanding  and prices
per share have been restated retroactively to reflect the split.

Option Grants

None

Issuances of Stock for Services or in Satisfaction of Obligations

We issued 1,666,666  shares of No Par Value common stock for various  consulting
and Legal fees.

Item 3. Defaults Upon Senior Securities

None

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

None.

Item 5. Other Information

Acquisitions

In April 2003, the Company  acquired 100% 2,940 shares of the outstanding  stock
of Benecorp  Business  Services  Inc.  to be  accounted  for as a purchase.  The
Company will assume  approximately  $1,000,000 of debt in  connection  with this
purchase.  As consideration  the Company will pay $300,000 in cash to and issued
200,000 shares of Section 144 restricted  Pacel common stock. The Company made a
deposit of $96,000 in 2002.  In  connection  with the purchase we signed two one
year employment contracts with the officers for $75,000 each.

In April 2003, the Company  purchased up to $100,000,000  of customer  contracts
from  MRG  California  LLC for 3 times  annualized  net  profit  margin  on each
contract in either cash or free trading stock. We have issued  34,500,000 shares
of the Company's  free trading  stock.  In  connection  with the purchase of the
contracts  we have signed a one year  servicing  agreement  with MRG to services
these  contracts  until  RSG  becomes  registered  as a  PEO  in  the  state  of
California.


                                       12
<PAGE>


In April 2003, the Company  acquired 100% of the stock of Asmara to be accounted
for as a  purchase.  The  Company  agreed  to  acquire  all of the  debts  up to
$2,000,000.  In  connection  with this  purchase  the Company  signed a two year
employment  contract with an officer of Asmara for $150,000.  In addition he may
be granted  options to purchase up to 1,500,000  shares of the Companies  common
stock for .03 per share.  These options will be issued upon the Company reaching
certain goals.


Item 6. Exhibits and Reports

None.




                                       13
<PAGE>


                                   Signatures

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  registrant  has duly caused this report to be signed in its behalf
by the undersigned thereunto duly authorized.


Pacel Corporation


BY:  /s/ David Calkins
-------------------------------
   David Calkins, CEO/CFO

DATED:   May 20, 2003











                                       14
<PAGE>

                                  CERTIFICATION


     I, David Calkins, CEO and CFO, certify that:

     1.  I  have  reviewed  this  quarterly  report  on  Form  10-QSB  of  Pacel
Corporation;

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

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

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and 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 our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  Board  of  Directors  (or  persons  performing  the
equivalent functions):

     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. The registrant's other certifying  officers and 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 our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

   May 20, 2003

   /s/David Calkins
------------------------------------
David Calkins, CEO and CFO





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