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

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

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

                                    FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2002
                          ------------------------------------------------------

                                       OR

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

For the transition period from ________________________ to______________________

                          Commission file number 1-8547
                                                 ------

                             LINCORP HOLDINGS, INC.
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                    23-2161279
-------------------------------          ---------------------------------------
(State or Other Jurisdiction of          (I.R.S. Employer Identification Number)
Incorporation or Organization)

   3900 Park Ave., Suite 102
           Edison, NJ                                     08820
-------------------------------          ---------------------------------------
(Address of Principal Executive                         (Zip Code)
            Offices)

Registrant's Telephone Number,
      Including Area Code:                           (732) 494-9455
-------------------------------          ---------------------------------------

Securities registered pursuant to Section 12(b) of the Act:

                                                  Name of each exchange
Title of each class                                on which registered
-------------------                      ---------------------------------------
Common Stock, par value $.01 per share                     NONE

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
requirements for the past 90 days.

               Yes |X|                               No |_|

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K is not considered  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

The  Company's  common  stock,  which  is  traded  over  the  counter,   had  no
identifiable  transactions  during 2002 and through March 21, 2003. Based on the
last identifiable  common stock  transaction,  the aggregate market value of the
Company's  common stock held by  non-affiliates  of the  registrant  would be an
indeterminate  nominal amount. On March 21, 2003, there were 1,730,559 shares of
registrant's common stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                       -----------------------------------

      See Item 14 (c) for a listing of exhibits incorporated by reference.
<PAGE>

                             LINCORP HOLDINGS, INC.
                                    FORM 10-K
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

                                     PART I

Items 1 and 2.  Business and Properties                                       1

Item 3.         Legal Proceedings                                             2

Item 4.         Submission of Matters to a Vote of Security Holders           3

                                     PART II

Item 5.         Market for Registrants Common Equity and Related
                Stockholder Matters                                           4

Item 6.         Selected Financial Data                                       4

Item 7.         Management's Discussion and Analysis of Financial
                Condition and Results of Operations                           6

Item 8.         Financial Statements and Supplementary Data                   7

Item 9.         Changes in and Disagreements with Accountants on
                Accounting and Financial Disclosure                           7

                                    PART III

Item 10.        Directors and Executive Officers of the Registrant            8

Item 11.        Executive Compensation                                       11

Item 12.        Security Ownership of Certain Beneficial Owners
                and Management                                               12

Item 13.        Certain Relationships and Related Transactions               12

<PAGE>

                             LINCORP HOLDINGS, INC.
                                    FORM 10-K
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

                                 PART IV

Item 14.        Exhibits, Financial Statements and Reports on Form 8-K       13

Signatures                                                                   18

Certification of Principal Executive Officer                                 20

Certification of Principal Financial Officer                                 21

<PAGE>

                                     PART I

ITEMS 1 AND 2. BUSINESS AND PROPERTIES

RECENT DEVELOPMENTS

      On July 23, 2001, Lincorp Holdings, Inc.'s (the "Company") parent company,
Wilmington Capital Management Inc.  ("Wilmington"),  formerly Unicorp Inc., sold
370,000 of the  Company's  common shares to two unrelated  third  parties.  This
transaction  reduced  Wilmington's  common  stock  ownership  in the  Company to
916,886 shares or 52.98%.

      At  the  same  time,   Wilmington  sold  its  rights  and  obligations  to
approximately  $168.9  million of the Company's  principal and accrued  interest
outstanding  under  several  of its  debt  obligations  to an  unrelated  party.
Wilmington  continues to hold  approximately  $7.2 million of the Company's debt
obligations.

      At December  31, 2002,  the Company had  approximately  $176.1  million of
principal  and  accrued  interest  (the  "Indebtedness")  outstanding  under its
various debt obligations. The Company is in payment default under several of the
debt obligations  comprising the Indebtedness.  The Indebtedness is secured by a
senior security interest in all of the Company's assets.

      The Company's debt holders have waived substantially all interest owing by
the Company on its  Indebtedness  to them that would have otherwise  accrued for
the twelve  months  ended  December  31,  2002.  The total  interest  waived was
approximately $10.9 million.

      The  Company's  sources of funds during the year ended  December 31, 2002,
and to date, have been primarily from its previously  existing cash balances and
advances from Wilmington. Unless the Company's debt holders continue to defer in
realizing on the pledged collateral, the Company will be unable to continue as a
going concern. As of December 31, 2002, the Company's  stockholders' deficit was
$179.9 million.

REAL ESTATE AND MORTGAGE LOAN TRANSACTIONS

      During the fourth quarter of 1997, the Company made a $0.6 million secured
first mortgage loan to Republic  Development Co. (the "Republic  Mortgage Loan")
for the purpose of developing a commercial real estate  property.  This loan was
scheduled to mature May 19, 1998.  To finance  this loan,  the Company  borrowed
funds from  Wilmington.  The Wilmington  borrowing was in the form of a $602,000
discounted note (the  "Wilmington  Republic Note") which matured on May 19, 1998
in the amount of $620,000 and is secured by the Republic Mortgage Loan.

      The Republic  Mortgage Loan was not repaid on May 19, 1998 and in November
1999, the Company  foreclosed on the Republic  Mortgage Loan and took possession
of the land. As of December 31, 2000, the Company  reduced the carrying value of
the land to $300,000  which it believes is the current  fair market value of the
land.  The  Wilmington  Republic  Note,  which matured on May 19, 1998,  was not
repaid by the Company as its payment was dependent upon  collecting the Republic
Mortgage  Loan.  Wilmington has agreed to defer the collection of its note until
the land is sold.


                                      -1-
<PAGE>

EMPLOYEES

      The Company presently has no compensated employees.

ITEM 3. LEGAL PROCEEDINGS

      (A) Joseph  Frazier  ("Frazier")  has  instituted  three lawsuits in which
Lincorp  Holdings,  Inc., the Company's  predecessors in interest,  Greit Realty
Trust Company and Unicorp America Corporation (collectively the "Company"),  and
other parties were named as defendants. All three actions arose from a series of
real estate-related transactions which began in 1978 with respect to property in
Bucks  County,  PA  (the  "Bucks  Property").   More   specifically,   Frazier's
partnership  used a  mortgage  as a vehicle  pursuant  to which  Greit  paid the
partnership $400,000 contemporaneously with entering into the agreement and gave
the  partnership  a  Promissory  Note in the amount of  $850,000  which  further
provided for nineteen annual payments of $10,000 each and a final installment of
$660,000. In return, the partnership assigned its rights in an Agreement of Sale
for the Bucks  Property  to Greit.  The  Company has not made any payment to the
partnership since 1992 and has a $730,000  unsecured  liability  recorded in its
financial statements.

      In 1993,  Frazier  instituted  an action  in the Court of Common  Pleas of
Philadelphia County asserting claims against the Company for fraud and breach of
contract,  I.E.,  the failure to make certain  payments due and owing to Frazier
and/or a general  partnership  in which he had an interest in connection  with a
mortgage granted to Frazier's  partnership by Greit. In 1997, Frazier instituted
a second  action in the Court of Common Pleas of  Philadelphia  County  alleging
fraudulent  conveyancing  of  the  Bucks  Property  by  five  separate  parties,
including  the Company.  These  actions have been  consolidated  with FRAZIER V.
ESTATE OF WRIGHT,  an action  previously  filed in the Court of Common  Pleas of
Philadelphia  County by Frazier  against his late  partner and  attorney,  Bruce
Wright,  alleging legal  malpractice.  The two actions  against the Company were
dismissed for failure to join an indispensable party. The appellate court denied
Frazier's appeal of that dismissal as premature until judgment is entered in the
FRAZIER V. ESTATE OF WRIGHT case.

      In 1998,  Frazier  instituted  an action  in the Court of Common  Pleas of
Bucks County, PA asserting vague claims arising from the conveyance of the Bucks
Property,  which remain pending against the Company. Frazier has asserted claims
against the Company and numerous  other  parties,  including  approximately  475
homeowners who currently  reside on the Bucks Property.  Frazier sought to eject
the homeowners from their homes and regain possession of the Bucks Property. The
Court has dismissed claims against the home-owners.  Frazier still seeks damages
of $84 million from the Company and from other defendants.  In 1999, the Company
moved to dismiss the Bucks County  action on the grounds  plaintiff's  claim was
time-barred; the Court denied the Company's motion to dismiss, without prejudice
to renew such  motions at a later date.  After  taking very little  discovery in
this case, and after permitting the court-ordered  discovery deadline to expire,
this year  plaintiff  attempted to open  discovery.  Many of the  defendants and
various  non-parties  either  objected to or moved to quash  discovery,  and the
Court  responded  by   circumscribing   plaintiff's  right  to  take  additional
discovery.  The Court has set forth a  schedule  for the  submission  of summary
judgment  and expert  reports,  and has stated that it expects to  schedule  the
trial in this


                                      -2-
<PAGE>

matter for October of 2003. The Company is vigorously  defending the claims that
have been asserted in the Bucks County action.

      (B) A tax assessment (the  "Assessment") has been made by the Commonwealth
of Massachusetts against a former wholly-owned  subsidiary of the Company, which
was dissolved in July 1990. The Massachusetts  Department of Revenue (the "MDR")
stated,  in a notice dated February 15, 1992,  that the amount due and owing was
$1.2 million and it is believed that additional  interest and/or  penalties have
been imposed with regard to the  Assessment.  On November 29, 1993,  an Offer in
Settlement (the "Offer") was forwarded to the MDR with respect to the Assessment
which was  rejected  by the MDR on  October  26,  1995,  and there  have been no
subsequent  developments on this matter since that date. The ultimate outcome of
the Assessment cannot be determined at this time.

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

            None.


                                      -3-
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      The Company's  Common Stock is traded over the counter.  During 2002 there
were no identifiable stock transactions.

      On March 21, 2003, there were  approximately 766 stockholders of record of
the Company's Common Stock. There were no dividends paid on the Company's Common
Stock in 2002 and 2001.

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                  -------------------------------------------------------
                                                    2002        2001        2000        1999        1998
                                                  -------     -------     -------     -------     -------
                                                                   (DOLLARS IN THOUSANDS)
<S>                                               <C>         <C>         <C>         <C>         <C>
INCOME STATEMENT DATA

Interest income ..............................    $    --     $    --     $    --     $    --     $    34
Interest expense .............................       (120)       (122)       (128)       (109)     (5,595)
Gain on sale of real estate assets ...........         --          --          --          --         135
Other income .................................         --          --          83           3          --
Other expense ................................        (85)        (70)       (401)       (237)       (213)
                                                  -------     -------     -------     -------     -------
Loss before income taxes .....................       (205)       (192)       (446)       (343)     (5,639)
Provision for (refund of) income taxes........         --          --         (11)         (4)         22
                                                  -------     -------     -------     -------     -------
Net loss .....................................    $  (205)    $  (192)    $  (435)    $  (339)    $(5,661)
                                                  =======     =======     =======     =======     =======
</TABLE>


                                      -4-
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA, CONTINUED

<TABLE>
<CAPTION>
                                                                            AT OR FOR THE YEAR ENDED DECEMBER 31,
                                                      -----------------------------------------------------------------------------
                                                          2002             2001             2000             1999            1998
                                                      ------------     ------------     ------------     ------------     ---------
                                                                          (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                   <C>              <C>              <C>              <C>              <C>
INCOME STATEMENT DATA

Per share amounts
Basic loss per share of common stock
     outstanding .................................    $      (0.12)    $      (0.11)    $      (0.25)    $      (0.20)    $   (3.27)
                                                      ============     ============     ============     ============     =========

Weighted average shares of common stock
     outstanding .................................           1,731            1,731            1,731            1,731         1,731
                                                      ============     ============     ============     ============     =========

BALANCE SHEET DATA

Total assets .....................................    $        305     $        311     $        370     $        652     $     746
                                                      ============     ============     ============     ============     =========

Other borrowed funds, excluding accrued interest .    $     97,154     $     97,154     $     97,154     $     97,154     $  97,154
                                                      ============     ============     ============     ============     =========

Total stockholders' deficit ......................    $   (179,868)    $   (179,663)    $   (179,471)    $   (179,036)    $(178,697)
                                                      ============     ============     ============     ============     =========
</TABLE>


                                      -5-
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

LIQUIDITY AND GOING CONCERN

      At December  31, 2002,  the Company had  approximately  $176.1  million of
principal  and  accrued  interest  (the  "Indebtedness")  outstanding  under its
various debt obligations. The Company is in payment default under several of the
debt obligations  comprising the Indebtedness.  The Indebtedness is secured by a
senior  security  interest  in all of the  Company's  assets.  See Note 5 to the
Company's Financial Statements.

      During 2002, the Company's debt holders agreed to waive  substantially all
interest owing by the Company on its  Indebtedness  to them that would otherwise
accrue for the twelve months ended  December 31, 2002,  which was  approximately
$10.9 million.

      The  Company's  sources of funds during the year ended  December 31, 2002,
and to date, have been primarily from its previously  existing cash balances and
advances from Wilmington. Unless the Company's debt holders continue to defer in
realizing on the pledged collateral, the Company will be unable to continue as a
going concern. As of December 31, 2002, the Company's  stockholders' deficit was
$179.9 million.

RESULTS OF OPERATIONS

2002 COMPARED TO 2001

      For the years ended December 31, 2002 and 2001, the Company had a net loss
of $0.2 million.

2001 COMPARED TO 2000

      For the year ended  December 31,  2001,  the Company had a net loss of $.2
million  compared to a net loss of $.4 million for the year ended  December  31,
2000.

FINANCIAL POSITION

MATERIAL CHANGES SINCE DECEMBER 31, 2001

      There were no  significant  changes in the  Company's  financial  position
since December 31, 2001.


                                      -6-
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The Financial  Statements of the Company are set forth in Part IV on pages
F-1 to F-11 and  incorporated  herein by  reference.  See  "Item  14.  Exhibits,
Financial  Statement  Schedules  and Reports on Form 8-K" for a complete list of
Financial Statements and Financial Statement Schedules.

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

a)    On March 5, 2003,  KPMG LLP ("KPMG")  resigned as the  independent  public
      accountants for Lincorp Holdings, Inc. (the "Company").  KPMG's reports on
      the Company's  financial  statements  for each of the years ended December
      31,  2001 and 2000  contained  a going  concern  qualification.  The going
      concern  qualification  was  reported  because as of December 31, 2001 and
      2000 the Company was in default on several of its credit  facilities,  had
      approximately  $175 million of indebtedness and accrual interest and had a
      net capital deficiency of approximately $179 million.

      During the year ended  December  31,  2001 and 2000 and  through  March 5,
      2003,  there were no  disagreements  with KPMG on any matter of accounting
      principle or practice,  financial statement disclosure,  or auditing scope
      or procedure  which,  if not resolved to KPMG's  satisfaction,  would have
      caused them to make  reference to the subject  matter in  connection  with
      their report on the Company's  financial  statements  for such years;  and
      there  were no  reportable  events  as  defined  in Item  304(a)(1)(v)  of
      Regulation S-K.

b)    On March 10, 2003, the Company engaged Postlethwaite & Netterville ("P&N")
      to serve as the  Company's  independent  public  accountants  for the year
      ended  December 31, 2002.  The  appointment  of P&N was  authorized by the
      Company's Board of Directors.

      During the years ended  December  31,  2001 and 2000 and through  March 5,
      2003,  the Company did not consult P&N with respect to the  application of
      accounting  principles  to a specified  transaction,  either  completed or
      proposed,  or the type of audit  opinion  that  might be  rendered  on the
      Company's financial statements,  or any other matters or reportable events
      as set forth in Item 304(a)(1)(v) of Regulation S-K.


                                      -7-
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS

      The  term of each  director  is for one  year  and  thereafter  until  his
successor  shall  have been  elected  and  qualified.  The  Company's  executive
officers are elected by, and serve at the discretion of the Board of Directors.

      The following  table sets forth certain  information  with respect to each
director and executive officer of the Company on March 21, 2003.

<TABLE>
<CAPTION>
                                                                                    Service with
Name                          Age           Position with Company                   Company from
----                          ---           ---------------------                   ------------
<S>                           <C>           <C>                                         <C>
George S. Mann                70            Chairman of the Board (1)                   1981

Ian G. Cockwell               55            Director (2)                                1994

Ralph V. Marra                65            Director (1)                                1994

Gordon Flatt                  40            Director, Vice President and                1998
                                            Chief Financial Officer (2)

Jack R. Sauer                 50            President                                   1996
</TABLE>

----------

(1)   Member of the Executive Committee.
(2)   Member of the Audit Committee.


                                      -8-
<PAGE>

      George S. Mann has served as  Chairman  of the Board  since  1981,  and as
President from 1989 through August,  1996. He served as Chairman of the Board of
Wilmington from 1983 until June 1990, and served as a Director until July 1998.

      Ian G. Cockwell has been President of Westcliff  Management  Services Inc.
since prior to 1988. He is currently the Chairman of  Wilmington.  He has been a
Director of the Company since November 1994.

      Ralph V. Marra has been Corporate Controller for SSR Realty Advisors, Inc.
since  April  1998.  Prior to that he was  Director  of  Planning  with New Plan
Reality Inc. from December 1997. From October 1994 through  December 1997 he was
the Senior Managing Director of Grubb and Ellis Inc.

      Gordon  Flatt has been the  Managing  Director of The Coastal  Corporation
since June 30, 2002. Prior to that he was President and Chief Investment Officer
of The Coastal Group since 1993.  From September 1997 to April 2000 Gordon Flatt
was an Officer of Unicorp Inc. (new Wilmington).  He has been the Vice President
and Chief  Financial  Officer of the Company since  December 1998 and a Director
since July 2002.

      Jack R. Sauer has been the President of the Company since August, 1996. He
is also the Vice  President  and  Director of the  Catalyst  Group,  Inc.  since
February, 1990.


                                      -9-
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

      Section  16(a) of the Exchange Act  requires  the  Company's  officers and
directors  and persons who own more than 10% of the  Company's  Common  Stock to
file initial reports of ownership and reports of changes of ownership  (Forms 3,
4 and  5) of the  Company's  Common  Stock  with  the  Securities  and  Exchange
Commission (the "SEC").  Officers,  directors and beneficial owners of more than
10% of the Company's Common Stock are required by the SEC regulations to furnish
the Company with copies of such forms that they file.

      To the Company's  knowledge,  based solely on the Company's  review of the
copies of such  reports  received  by the  Company,  all  Section  16(a)  filing
requirements applicable to its officers, directors and beneficial owners of more
than 10% of the Company's Common Stock, were complied with.

DIRECTORS REMUNERATION

      Directors of the Company  receive a fee of $600 for actual  attendance  at
each directors' or committee meeting.  Where meetings of the Board or committees
thereof are held by telephone conference,  directors receive a fee of $150. Fees
paid to all directors for attendance at the Board and committee  meetings during
the year ended December 31, 2002, totaled $1,200.

DIRECTORS MEETING AND COMMITTEES

      The Board of  Directors  of the  Company  held 4 meetings  during the year
ended December 31, 2002. During the year, the directors attended between 25% and
75% of the meetings.

      The Board of Directors has a standing Audit Committee which represents the
Board of Directors in its relations with the Company's  independent  accountants
and oversees the Company's  compliance  with operating  procedures and policies.
This  committee  also  approves the scope of the Company's  financial  statement
examinations,  monitors  the  adequacy of the  Company's  internal  controls and
reviews and monitors any other  activity that the committee  deems  necessary or
appropriate.  The Company does not have a standing  Compensation  or  Nominating
Committee.  The Executive  Committee is authorized to act on behalf of the Board
of Directors between Board meetings and to have such powers and duties which may
lawfully be assigned to it under Delaware law.

      The only Committee which held a meeting during the year ended December 31,
2002, was the Audit Committee which held one meeting.


                                      -10-
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

      No executive  officer of the Company,  received any compensation for their
services during any of the years ended December 31, 2002, 2001 or 2000. However,
in each of 2002, 2001 and 2000, Lincorp Holdings, Inc. paid an unrelated company
$24,000 each year for accounting services. The president of that company is also
the president of Lincorp Holdings, Inc.

      No compensation  committee report or performance  graph is included herein
because none of the executive officers draws any salary from the Company.


                                      -11-
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The table below sets forth information concerning the shares of the Common
Stock beneficially owned by the individual directors, all directors and officers
of the  Company as a group  without  naming them and each person who is known by
the Company to be the  beneficial  owner of more than five percent of the Common
Stock as of March 21, 2003.  The address of each of the directors is c/o Lincorp
Holdings,  Inc., 3900 Park Ave.,  Suite 102,  Edison,  NJ 08820.  The address of
Wilmington  Capital  Management Inc. is P.O. Box 762, Suite 4400, BCE Place, 181
Bay Street, Toronto, Canada M5J 2T3.

                                          Shares of
                                        Common Stock
                                        Beneficially
         Name of                         Owned as of                  Percent of
    Beneficial Owner                    March 21, 2003                  Class
    ----------------                    --------------                ----------

Wilmington Capital
     Management Inc. (1)                    916,886                     52.98%

Ian G. Cockwell (1)                         916,886                     52.98%

All officers and directors                1,216,886                     52.98%
as a group (1)

(1)   The  stockholdings  indicated for Mr.  Cockwell are all owned  directly by
      Wilmington  Capital  Management  Inc. Mr.  Cockwell  disclaims  beneficial
      ownership of all such shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      See Items 1 and 2 - Recent  Developments and Real Estate and Mortgage Loan
Transactions.


                                      -12-
<PAGE>

                                     PART IV

ITEM 14.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

                                                                            PAGE
                                                                            ----
      (a) (1)  Financial Statements
               Independent Auditors' Report for 2002.....................    F-1
               Independent Auditors' Report for 2001 and 2000............    F-2

               Balance Sheets as of
                 December 31, 2002 and 2001..............................    F-3

               Statements of Operations for the years ended
                 December 31, 2002, 2001, and 2000.......................    F-4

               Statements of Changes in Stockholders' Deficit for the
                 years ended December 31, 2002, 2001, and 2000...........    F-5

               Statements of Cash Flows for the years ended
                 December 31, 2002, 2001 and 2000........................    F-6

               Notes to Financial Statements.............................    F-7

          (2)  All schedules have been omitted because they are  not required or
               because the required  information  is  contained in the financial
               statements or notes thereto.

      (b) Reports on Form 8-K

                None.

      (c) Exhibits

                                                                            PAGE
                                                                            ----

        3.1    Restated Certificate of Incorporation of the Company,         *
               as amended to date (incorporated by reference to
               Exhibit 3.1 to the Company's Annual Report on Form 10-K
               for the year ended December 31, 1987).


                                 -13-
<PAGE>

        3.2    By-Laws of the Company as amended to date (incorporated       *
               by reference to Exhibit 3.2 to the Company's Annual
               Report Form 10-K for the year ended December 31, 1986).

      10.01    Subscription and Purchase Agreement dated December            *
               31, 1987, between the Company and Unicorp (incorporated
               by reference to Exhibit 2.2 to the Company's Current
               Report Form 8-K dated January 14, 1988).

      10.02    Letter Agreement re:  Line of Credit dated November 30,       *
               1989, between Unicorp and the Company (incorporated by
               reference to Exhibit 10.23 to the Company's Annual
               Report on Form 10-K for the year ended December 31,
               1989).

      10.03    Revolving Demand Note dated November 30, 1989,                *
               from the Company to Unicorp (incorporated by reference
               to Exhibit 10.24 to the Company's Annual Report on Form
               10-K for the year ended December 31, 1989).

      10.04    Consulting Agreement dated as of February 13, 1990,           *
               between the Company and Coscan Inc. (incorporated by
               reference to Exhibit 10.27 to the Company's Annual
               Report on Form 10-K for the year ended December 31,
               1989).

      10.05    Letter Agreement re:  Operating Deficit Loan Agreement        *
               dated February 13, 1990, between the Company and Coscan
               Inc. (incorporated by reference to Exhibit 10.28 to the
               Company's Annual Report on Form 10-K for the year ended
               December 31, 1989).

      10.06    Form of Promissory Note from the Company to Coscan Inc.       *
               (incorporated by reference to Exhibit 10.29 to the
               Company's Annual Report on Form 10-K for the year ended
               December 31, 1989).


                                 -14-
<PAGE>

      10.07    Closing Agreement, dated as of July 23, 1990, among           *
               the Company, Coscan Colorado Inc. ("CCI"), Coscan
               Colorado LHI Inc. and Coscan Commercial Limited
               Partnership, a California Limited Partnership ("Coscan
               California) (incorporated by reference to Exhibit 28.1
               to the Company's Report on Form 8-K dated August 13,
               1990).

      10.08    Closing Agreement, dated as of July 23, 1990, among the       *
               Company, Coscan California Commercial Inc. ("CCC"),
               Coscan California LHI Inc. and Coscan Commercial
               Limited Partnership, a California Limited Partnership
               ("Coscan California) (incorporated by reference to
               Exhibit 28.2 to the Company's Report on Form 8-K dated
               August 13, 1990).

      10.09    Agreement of Limited Partnership of Coscan Commercial,        *
               dated as of July 23, 1990 (incorporated by reference to
               Exhibit 28.3 to the Company's Report on Form 8-K dated
               August 13, 1990).

      10.10    Agreement of Limited Partnership of Coscan Commercial,        *
               dated as of July 23, 1990 (incorporated by reference to
               Exhibit 28.3 to the Company's Report on Form 8-K dated
               August 13, 1990).

      10.11    Letter Agreement, dated as of July 23, 1990, among CCI,       *
               CCC, the Company, Coscan Commercial and Coscan
               California, regarding loans by CCI and CCC
               (incorporated by reference to Exhibit 28.5 to the
               Company's Report on Form 8-K dated August 13, 1990).

      10.12    $24,000,000 Secured Revolving Credit Agreement, dated         *
               as of July 25, 1990 (the "Senior Credit Agreement"),
               among the Company, Hees International Bancorp Inc.
               ("Hees"), National Bank of Canada ("NBC") and NBC, as
               Agent (incorporated by reference to Exhibit 28.6 to the
               Company's Report on Form 8-K dated August 13, 1990).


                                 -15-
<PAGE>

      10.13    Amended and Restated Credit Agreement, dated as of            *
               July 25, 1990, between the Company and NBC
               (incorporated by reference to Exhibit 28.7 to the
               Company's Report on Form 8-K dated August 13, 1990).

      10.14    Letter Agreement, dated July 25, 1990, between Unicorp        *
               and the Company regarding the revolving line of credit
               from UCC to the Company (incorporated by reference to
               Exhibit 28.8 to the Company's Report on Form 8-K dated
               August 13, 1990).

      10.15    Securities Pledge Agreement, dated as of July 25, 1990,       *
               by the Company in favor of Unicorp (incorporated by
               reference to Exhibit 28.8 to the Company's Report on
               Form 8-K dated August 13, 1990).

      10.16    Lincorp Pledge Agreement, dated as of July 25, 1990, by       *
               Lincorp Inc. in favor of Unicorp (incorporated by
               reference to Exhibit 28.10 to the Company's Report on
               Form 8-K dated August 13, 1990).

      10.17    Subsidiaries Pledge Agreement, dated as of July 25, 1990,     *
               by Unicorp Delaware I, Inc., Unicorp Delaware II, Inc.
               and ITT Missouri Corp. in favor of Unicorp
               (incorporated by reference to Exhibit 28.11 to the
               Company's Report on Form 8-K dated August 13, 1990).

      10.18    Security Agreement, dated as of July 25, 1990, by the         *
               Company in favor of Unicorp (incorporated by reference
               to Exhibit 28.12 to the Company's Report on Form 8-K
               dated August 13, 1990).

      10.19    Agreement Relating to the Lincoln Savings Bank, FSB dated     *
               as of December 31, 1992, among the OTS, the Company and
               certain other parties (incorporated by reference to
               Exhibit A to the Company's Current Report on Form 8-K
               dated January 20, 1993).

      10.20    Trust Agreement dated as of January 20, 1993, among the       *
               OTS, the Company and certain other parties
               (incorporated by reference to Exhibit B to the
               Company's Current Report on Form 8-K dated January 20,
               1993).


                                 -16-
<PAGE>

      10.21    Consent Agreement dated March 4, 1994, among Unicorp,         *
               Union Holdings, Inc., Lincorp, Inc., the Company, Hees
               International Bancorp, Inc., National Bank of Canada,
               Anthony M. Frank, as trustee, the Lincoln Savings Bank,
               FSB and Anchor Savings Bank FSB (incorporated by
               referenced to Exhibit 10.23 to the Company's Annual
               Report on Form 10-K for the year ended December 31,
               1993).

      10.22    Loan Modification Agreement dated as of September 28,         *
               1995, by and between Coscan, Inc. and the Company
               (incorporated by reference to Exhibit B to the
               Company's Report on Form 8-K dated September 28, 1995).

      10.23    Loan Modification Agreement dated as of September 28,         *
               1995, by and between CCI and the Company (incorporated
               by reference to Exhibit C to the Company's Report on
               Form 8-K dated September 28, 1995.)

      10.24    Agreement dated as of September 5, 1995,by and among          *
               CCI, the Company, Coscan Limited Partner Corporation,
               CCC, Coscan California Limited Partner Corporation and
               Coscan, Inc.

      22       Subsidiaries of the Company.

      99(i)    Principal Executive Officer  Certification  Pursuant to 18 U.S.C.
               Section 1350, as Adopted  Pursuant to Section 906 of the Sarbanes
               - Oxley Act of 2002.

      99(ii)   Principal Financial Officer  Certification  Pursuant to 18 U.S.C.
               Section 1350, as Adopted  Pursuant to Section 906 of the Sarbanes
               - Oxley Act of 2002.

----------

*     Incorporated by reference.


                                      -17-
<PAGE>

                                   SIGNATURES

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

Dated: April 11, 2003

                                                 LINCORP HOLDINGS, INC.


                                                 By: s/ Jack R. Sauer
                                                     ---------------------------
                                                     Jack R. Sauer
                                                     President


                                      -18-
<PAGE>

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

NAME                             TITLE                                 DATE
----                             -----                                 ----


s/ George S. Mann                Chairman of the                  April 11, 2003
-------------------------        Board of Directors
George S. Mann


s/ Ian G. Cockwell               Director                         April 11, 2003
-------------------------
Ian G. Cockwell


s/ Ralph V. Marra                Director                         April 11, 2003
-------------------------
Ralph V. Marra


s/ Gordon Flatt                  Director                         April 11, 2003
-------------------------
Gordon Flatt


s/ Jack Sauer                    President                        April 11, 2003
-------------------------
Jack Sauer


                                      -19-
<PAGE>

                                  CERTIFICATION

I, Jack R. Sauer, certify that:

      1.    I have reviewed this annual report on Form 10-K of Lincorp Holdings,
            Inc.

      2.    Based on my  knowledge,  this  annual  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 annual report;

      3.    Based on my knowledge, the financial statements, and other financial
            information  included in this annual  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 annual report;

      4.    The registrant's  other certifying officer 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 we 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 annual 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 annual report (the "Evaluation Date");
                  and

            c.    presented  in this  annual  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  officer 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 function):

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

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

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


Date: April 11, 2003                                   /s/ Jack R. Sauer
                                                       -------------------------
                                                       Jack R. Sauer
                                                       President and
                                                       Chief Executive Officer


                                      -20-
<PAGE>

                                  CERTIFICATION

I, Gordon Flatt, certify that:

      1.    I have reviewed this annual report on Form 10-K of Lincorp Holdings,
            Inc.

      2.    Based on my  knowledge,  this  annual  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 annual report;

      3.    Based on my knowledge, the financial statements, and other financial
            information  included in this annual  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 annual report;

      4.    The registrant's  other certifying officer 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 we 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 annual 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 annual report (the "Evaluation Date");
                  and

            c.    presented  in this  annual  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  officer 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 function):

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

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

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


Date: April 11, 2003                                  /s/ Gordon Flatt
                                                      --------------------------
                                                      Gordon Flatt
                                                      Chief Financial Officer


                                      -21-
<PAGE>

                          Independent Auditors' Report

The Board of Directors and Stockholders
Lincorp Holdings, Inc.

We have  audited  the  accompanying  balance  sheet of  Lincorp  Holdings,  Inc.
("Company")  as of December 31, 2002 and the related  statements of  operations,
changes in stockholders'  deficit, and cash flows for the year then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits. The financial statements of Lincorp Holdings, Inc. as of and for the
years ended  December 31, 2001 and 2000,  were audited by other  auditors  whose
report  dated  March  7,  2002,  on those  statements  included  an  explanatory
paragraph  that  described  the Company's  net capital  deficiency  which raises
substantial  doubt about the Company's ability to continue as a going concern as
discussed in Note 2 to the financial statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.  We believe our audit  provides a reasonable
basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Lincorp Holdings,  Inc. as of
December 31, 2002 and the results of its  operations  and its cash flows for the
year ended December 31, 2002 in conformity with accounting  principles generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the  Company  is in  default  on  several  of its credit
facilities   and,  at  December  31,  2002,   has  $97.1  million  of  principal
indebtedness, and $78.4 million of accrued and unpaid interest. In addition, the
Company has a net capital  deficiency of $179.9 million as of December 31, 2002.
These matters raise substantial doubt about the Company's ability to continue as
a going  concern.  The  Company's  plans in  regard  to these  matters  are also
described in Note 2. The  financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainty.


                                            Postlethwaite & Netterville

Baton Rouge, Louisiana
April 9, 2003


                                      F-1
<PAGE>

                          Independent Auditors' Report

The Board of Directors and Stockholders
Lincorp Holdings, Inc.:

We have  audited  the  accompanying  balance  sheet of  Lincorp  Holdings,  Inc.
("Company") as of December 31, 2001,  and the related  statements of operations,
changes in  stockholders'  deficit,  and cash flows the years ended December 31,
2001  and  2000.  These  financial  statements  are  the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.  We believe our audits  provide a reasonable
basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Lincorp Holdings,  Inc. as of
December 31, 2001 and the results of its  operations  and its cash flows for the
years ended December 31, 2001 and 2000 in conformity with accounting  principles
generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the  Company  is in  default  on  several  of its credit
facilities   and,  at  December  31,  2001,   has  $97.1  million  of  principal
indebtedness, and $78.3 million of accrued and unpaid interest. In addition, the
Company has a net capital  deficiency of $179.7 million as of December 31, 2001.
These matters raise substantial doubt about the Company's ability to continue as
a going  concern.  The  Company's  plans in  regard  to these  matters  are also
described  in  Note  2.  The  2001  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.


                                               KPMG LLP

New York, New York
March 7, 2002


                                      F-2
<PAGE>

                             LINCORP HOLDINGS, INC.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               December 31,
                                                        -----------------------
                                                           2002          2001
                                                        ---------     ---------
                                                         (dollars in thousands)
<S>                                                     <C>           <C>
ASSETS

Cash ...............................................    $       5     $      11
Investment in real estate ..........................          300           300
                                                        ---------     ---------
                                                        $     305     $     311
                                                        =========     =========

LIABILITIES  AND  STOCKHOLDERS'  DEFICIT

Liabilities:
   Debt secured by real estate,
       including accrued interest ..................    $     620     $     620
   Other borrowed funds, including accrued interest       175,535       175,426
   Other liabilities ...............................        4,018         3,928
                                                        ---------     ---------
                                                          180,173       179,974
                                                        ---------     ---------

Commitments and contingent liabilities

Stockholders' deficit:
    Preferred stock, Series A;
       200 shares authorized;
       no shares issued and outstanding ............           --            --
    Preferred stock, $.01 par value;
       10,000 shares authorized;
       no shares issued and outstanding ............           --            --
    Common stock, $.01 par value;
       1,990,000 shares authorized;
       1,730,559 shares issued and outstanding .....           17            17
    Capital contributed in excess of par value .....      153,638       153,638
    Accumulated deficit ............................     (333,523)     (333,318)
                                                        ---------     ---------
                                                         (179,868)     (179,663)
                                                        ---------     ---------
                                                        $     305     $     311
                                                        =========     =========
</TABLE>

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


                                      F-3
<PAGE>

                             LINCORP HOLDINGS, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                            Year ended December 31,
                                                       -------------------------------
                                                         2002        2001        2000
                                                       -------     -------     -------
                                                            (in thousands, except
                                                              per share amounts)
<S>                                                    <C>         <C>         <C>
Income:
      Other income ................................    $    --     $    --     $    83
                                                       -------     -------     -------
           Total income ...........................         --          --          83
                                                       -------     -------     -------

Expense:
      Interest expense ............................        120         122         128
      Write-down real estate asset ................         --          --         311
      General and administrative expense ..........         85          70          90
                                                       -------     -------     -------
           Total expense ..........................        205         192         529
                                                       -------     -------     -------

Loss before income taxes ..........................       (205)       (192)       (446)

Refund of income taxes ............................         --          --         (11)
                                                       -------     -------     -------

Net loss ..........................................    $  (205)    $  (192)    $  (435)
                                                       =======     =======     =======

Basic loss per share of common stock outstanding ..    $ (0.12)    $ (0.11)    $ (0.25)
                                                       =======     =======     =======

Weighted average shares of common stock outstanding      1,731       1,731       1,731
                                                       =======     =======     =======
</TABLE>

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


                                      F-4
<PAGE>

                             LINCORP HOLDINGS, INC.

                 STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                        Capital
                                                      contributed
                                         Common        in excess     Accumulated
                                          stock       of par value     deficit
                                        ---------     ------------   -----------
                                                (dollars in thousands)
<S>                                     <C>            <C>            <C>
Balances, December 31, 1999 ......      $      17      $ 153,638      $(332,691)

    Net loss .....................             --             --           (435)
                                        ---------      ---------      ---------

Balances, December 31, 2000 ......             17        153,638       (333,126)

    Net loss .....................             --             --           (192)
                                        ---------      ---------      ---------

Balances, December 31, 2001 ......             17        153,638       (333,318)

    Net loss .....................             --             --           (205)
                                        ---------      ---------      ---------

Balances, December 31, 2002 ......      $      17      $ 153,638      $(333,523)
                                        =========      =========      =========
</TABLE>

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


                                      F-5
<PAGE>

                             LINCORP HOLDINGS, INC.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 Year ended December 31,
                                                              ---------------------------
                                                               2002       2001       2000
                                                              -----      -----      -----
                                                                 (dollars in thousands)
<S>                                                           <C>        <C>        <C>
OPERATING ACTIVITIES
Net loss ................................................     $(205)     $(192)     $(435)
Adjustments to reconcile net loss to net cash
    provided by  (used in) operating activities:
      Write-down real estate asset ......................        --         --        311
      Increase in other liabilities .....................        90         24         44
      Increase in interest payable ......................       109        109        109
                                                              -----      -----      -----
      Net cash (used in) provided by operating activities        (6)       (59)        29
                                                              -----      -----      -----

Net (decrease) increase in cash .........................        (6)       (59)        29

Cash, beginning of year .................................        11         70         41
                                                              -----      -----      -----

Cash, end of year .......................................     $   5      $  11      $  70
                                                              =====      =====      =====

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the year for:
      Income taxes ......................................     $  --      $  --      $  --
                                                              =====      =====      =====

      Interest Expenses .................................     $  --      $  --      $  --
                                                              =====      =====      =====
</TABLE>

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


                                      F-6
<PAGE>

                             LINCORP HOLDINGS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - CHANGE IN OWNERSHIP AND DEBT HOLDERS

      On July 23, 2001, Lincorp Holdings, Inc.'s (the "Company") parent company,
Wilmington Capital Management Inc.  ("Wilmington"),  formerly Unicorp Inc., sold
370,000 of the  Company's  common shares to two unrelated  third  parties.  This
transaction  reduced  Wilmington's  common  stock  ownership  in the  Company to
916,886 shares or 52.98%.

      At the same,  Wilmington sold its rights and obligations to  approximately
$168.9 million of the Company's principal and accrued interest outstanding under
several of its debt obligations to an unrelated party.  Wilmington  continues to
hold approximately $7.2 million of the Company's debt obligations.

NOTE 2 - LIQUIDITY AND GOING CONCERN

      At December  31, 2002,  the Company had  approximately  $176.1  million of
principal  and  accrued  interest  (the  "Indebtedness")  outstanding  under its
various debt obligations. The Company is in payment default under several of the
debt obligations  comprising the Indebtedness.  The Indebtedness is secured by a
senior security interest in all of the Company's assets.

      During 2000,  2001 and 2002,  the Company's  debt holders  agreed to waive
substantially all interest owing by the Company on its Indebtedness to them that
would  otherwise  accrue  for these  years.  For each of the three  years  ended
December 31, 2002 the interest waived was approximately $10.9 million per year.

      The  Company's  sources of funds during the year ended  December 31, 2002,
and to date, have been primarily from its previously  existing cash balances and
advances from  Wilmington.  Unless the Company's debt holders  continue to defer
realizing on the pledged collateral, the Company will be unable to continue as a
going concern.

NOTE 3 - REAL ESTATE OPERATIONS

      During the fourth quarter of 1997, the Company made a $0.6 million secured
first mortgage loan to Republic  Development Co. (the "Republic  Mortgage Loan")
for the purpose of developing a commercial real estate  property.  This loan was
scheduled to mature May 19, 1998.  To finance  this loan,  the Company  borrowed
funds from  Wilmington.  The Wilmington  borrowing was in the form of a $602,000
discounted note (the  "Wilmington  Republic Note") which matured on May 19, 1998
in the amount of $620,000 and was secured by the Republic Mortgage Loan.

      The Republic  Mortgage Loan was not repaid on May 19, 1998 and in November
1999, the Company  foreclosed on the Republic  Mortgage Loan and took possession
of the land. As of December 31, 2000, the Company  reduced the carrying value of
the land by $311,000 to  $300,000  which it believes is the current  fair market
value of the land. The


                                      F-7
<PAGE>

                             LINCORP HOLDINGS, INC.
                          NOTES TO FINANCIAL STATEMENTS

Wilmington  Republic Note,  which matured on May 19, 1998, was not repaid by the
Company as its payment was dependent upon collecting the Republic Mortgage Loan.
Wilmington  has  agreed to defer the  collection  of its note  until the land is
sold.

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INCOME TAXES

      Deferred  tax assets and  liabilities  are  recognized  for the future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
basis.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences are expected to be recovered or settled.  The effect on deferred tax
assets and  liabilities  of change in tax rates is  recognized  in income in the
period that includes the enactment date.

USE OF ESTIMATES

      The  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

INVESTMENT IN REAL ESTATE

      The investment in real estate is carried at estimated fair market value.

NOTE 5 - OTHER BORROWED FUNDS

      The Company's other borrowed funds are as follows:

                                                                December 31,
                                                         -----------------------
                                                           2002            2001
                                                         --------       --------
                                                          (dollars in thousands)
PRINCIPAL

Senior secured revolving credit facility (a) .....       $ 10,261       $ 10,261
Subordinated term loan (b) .......................         65,000         65,000
Junior line of credit (c) ........................         20,494         20,494
MSLL Note (d) ....................................          1,399          1,399
                                                         --------       --------
                                                           97,154         97,154
Accrued interest .................................         78,381         78,272
                                                         --------       --------
                                                         $175,535       $175,426
                                                         ========       ========


                                      F-8
<PAGE>

                             LINCORP HOLDINGS, INC.
                          NOTES TO FINANCIAL STATEMENTS

(a)   This debt facility,  of which $2.5 million is held by Wilmington,  expired
      in August  1991 and the  Company  has made no  interest  payments  on this
      facility since its expiration.

(b)   This  $65  million   facility  matured  in  August  1997,  and  calls  for
      interest-only  payments at a fixed rate of 11.4 %, payable  semi-annually.
      The  term  loan  includes  convenants,  among  others,  that  require  the
      maintenance  of a minimum level of tangible net worth and limit  aggregate
      levels of additional  indebtedness.  As a result of the losses incurred by
      the Company,  it was not in compliance with the above covenants and it has
      not paid its semi-annual interest payment since August 1991.

(c)   In November 1989, the Company  entered into an agreement that provided the
      Company  with a line of credit  in the  aggregate  amount  of $30  million
      (amended  to $25 million on July  25,1990)  due on demand with an interest
      rate of prime plus 3.5% and a standby fee of one quarter of one percent of
      the unused portion of the commitment.

(d)   This note with Wilmington  matures June 30, 2005, and has an interest rate
      of 6.38%.

      During 2002 and 2001, the weighted  average amount of total principal debt
      outstanding was $97.2 million.  There is no weighted average interest cost
      for 2002 and 2001 due to the debt holders waiver of interest  discussed in
      Note 2. The maximum amount of borrowed  principal funds outstanding at any
      one time during 2002 and 2001 was approximately $97.2 million.

      SFAS No.  107  "Disclosures  about Fair  Value of  Financial  Instruments"
      requires  entities to disclose the fair value of on and off-balance  sheet
      financial instruments. In view of the financial position of the Company at
      December 31, 2002,  management  has  determined it is not  practicable  to
      estimate the fair value of debt and other borrowed funds.

NOTE 6 - INCOME TAXES

      Set forth below is an analysis of the  Company's  refund for income  taxes
for the years ended December 31, 2002, 2001 and 2000.

                                               2002         2001         2000
                                             --------     --------     --------
                                                    (dollars in thousands)

Current provision (refund):
     State and local income taxes .....      $     --     $     --     $    (11)
                                             ========     ========     ========


                                      F-9
<PAGE>

                             LINCORP HOLDINGS, INC.
                          NOTES TO FINANCIAL STATEMENTS

      A reconciliation of the total benefit for income taxes to amounts computed
by applying the federal tax rate to the net loss is as follows:

                                                 2002         2001         2000
                                                -----        -----        -----
                                                     (dollars in thousands)

Computed at statutory rate ..............       $ (72)       $ (67)       $(152)
State and local income tax benefit ......          (2)          (2)          (4)
Change in valuation allowance ...........          74           69          145
                                                -----        -----        -----

Refund of income taxes ..................       $  --        $  --        $ (11)
                                                =====        =====        =====

      The Company records  deferred income taxes on the tax effect of changes in
temporary differences.  Deferred tax assets are subject to a valuation allowance
if their realization is less than 50% probable.  The accompanying balance sheets
reflect no deferred tax assets or liabilities as of December 31, 2002 and 2001.

NOTE 7 - LEGAL PROCEEDINGS

      (A) Joseph  Frazier  ("Frazier")  has  instituted  three lawsuits in which
Lincorp  Holdings,  Inc., the Company's  predecessors in interest,  Greit Realty
Trust Company and Unicorp America Corporation (collectively the "Company"),  and
other parties were named as defendants. All three actions arose from a series of
real estate-related transactions which began in 1978 with respect to property in
Bucks  County,  PA  (the  "Bucks  Property").   More   specifically,   Frazier's
partnership  used a  mortgage  as a vehicle  pursuant  to which  Greit  paid the
partnership $400,000 contemporaneously with entering into the agreement and gave
the  partnership  a  Promissory  Note in the amount of  $850,000  which  further
provided for nineteen annual payments of $10,000 each and a final installment of
$660,000. In return, the partnership assigned its rights in an Agreement of Sale
for the Bucks  Property  to Greit.  The  Company has not made any payment to the
partnership since 1992 and has a $730,000  unsecured  liability  recorded in its
financial statements.

      In 1993,  Frazier  instituted  an action  in the Court of Common  Pleas of
Philadelphia County asserting claims against the Company for fraud and breach of
contract,  I.E.,  the failure to make certain  payments due and owing to Frazier
and/or a general  partnership  in which he had an interest in connection  with a
mortgage granted to Frazier's  partnership by Greit. In 1997, Frazier instituted
a second  action in the Court of Common Pleas of  Philadelphia  County  alleging
fraudulent  conveyancing  of  the  Bucks  Property  by  five  separate  parties,
including  the Company.  These  actions have been  consolidated  with FRAZIER V.
ESTATE OF WRIGHT,  an action  previously  filed in the Court of Common  Pleas of
Philadelphia  County by Frazier  against his late  partner and  attorney,  Bruce
Wright,  alleging legal  malpractice.  The two actions  against the Company were


                                      F-10
<PAGE>

                             LINCORP HOLDINGS, INC.
                          NOTES TO FINANCIAL STATEMENTS

dismissed  for  failure to join an  indispensable  party.  The  appellate  court
squashed  Frazier's  appeal of that  dismissal  as premature  until  judgment is
entered in the FRAZIER V. ESTATE OF WRIGHT case.

      In 1998,  Frazier  instituted  an action  in the Court of Common  Pleas of
Bucks County, PA asserting vague claims arising from the conveyance of the Bucks
Property,  which remain pending against the Company. Frazier has asserted claims
against the Company and numerous  other  parties,  including  approximately  475
homeowners who currently  reside on the Bucks Property.  Frazier sought to eject
the homeowners from their homes and regain possession of the Bucks Property. The
Court has dismissed claims against the home-owners.  Frazier still seeks damages
of $84 million from the Company and from other defendants.  In 1999, the Company
moved to dismiss the Bucks County  action on the grounds  plaintiff's  claim was
time-barred; the Court denied the Company's motion to dismiss, without prejudice
to renew such  motions at a later date.  After  taking very little  discovery in
this case, and after permitting the court-ordered  discovery deadline to expire,
this year  plaintiff  attempted to open  discovery.  Many of the  defendants and
various  non-parties  either  objected to or moved to quash  discovery,  and the
Court  responded  by   circumscribing   plaintiff's  right  to  take  additional
discovery.  The Court has set forth a  schedule  for the  submission  of summary
judgment  and expert  reports,  and has stated that it expects to  schedule  the
trial in this matter for October of 2003.  The Company is  vigorously  defending
the claims that have been asserted in the Bucks County action.

      (B) A tax assessment (the  "Assessment") has been made by the Commonwealth
of Massachusetts against a former wholly-owned  subsidiary of the Company, which
was dissolved in July 1990. The Massachusetts  Department of Revenue (the "MDR")
stated,  in a notice dated February 15, 1992,  that the amount due and owing was
$1.2 million and it is believed that additional  interest and/or  penalties have
been imposed with regard to the  Assessment.  On November 29, 1993,  an Offer in
Settlement (the "Offer") was forwarded to the MDR with respect to the Assessment
which was  rejected  by the MDR on  October  26,  1995,  and there  have been no
subsequent  developments on this matter since that date. The ultimate outcome of
the Assessment cannot be determined at this time.


                                      F-11
<PAGE>

                                  EXHIBIT INDEX

EXHIBIT NO.    DOCUMENT NAME
-----------    -------------

22             Subsidiaries of the Company

99(i)          Principal Executive Officer  Certification  Pursuant to 18 U.S.C.
               Section 1350, as Adopted  Pursuant to Section 906 of the Sarbanes
               - Oxley Act of 2002.

99(ii)         Principal Financial Officer  Certification  Pursuant to 18 U.S.C.
               Section 1350, as Adopted  Pursuant to Section 906 of the Sarbanes
               - Oxley Act of 2002.