<PAGE>


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB



(Mark One)

[X]  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934

For the quarterly period ended     September 30, 2002

[ ]  Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from ___________ to ______________

Commission file number                     811-3584


                           Levcor International, Inc.

        (Exact Name of Small Business Issuer as Specified in Its Charter)

           Delaware                                             06-0842701
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                             Identification No.)

                     462 Seventh Avenue, New York, NY 10018
                    (Address of Principal Executive Offices)

                                 (212) 354-8500
                           (Issuer's Telephone Number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

Yes   X               No

As of November 12, 2002, 2,338,194 shares of the issuer's common stock, par
value $.56 per share, were outstanding.

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



<PAGE>


                                Table of Contents



<TABLE>
<CAPTION>
                                                                                                           Page
<S>                                                                                                         <C>

Part I. FINANCIAL INFORMATION................................................................................1

        Item 1.   Financial Statements.......................................................................1

                  Balance Sheet at September 30, 2002 (unaudited)............................................1

                  Statements of Operations and Accumulated Deficit for the Nine and Three Months Ended
                  September 30, 2002 and September 30, 2001 (unaudited)......................................2

                  Statements of Cash Flows for the Nine Months Ended
                  September 30, 2002 and September 30, 2001 (unaudited)......................................3

                  Notes to Financial Statements (unaudited)..................................................4

        Item 2.   Management's Discussion and Analysis of Financial Condition and
                  Results of Operations......................................................................7

        Item 3.   Procedures and Controls ..................................................................12

Part II. OTHER INFORMATION..................................................................................13

        Item 6.   Exhibits and Reports on Form 8-K..........................................................13

Signatures..................................................................................................14

Exhibit Index...............................................................................................16

</TABLE>



<PAGE>



PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                           LEVCOR INTERNATIONAL, INC.

                                  BALANCE SHEET

                               SEPTEMBER 30, 2002
                                   (Unaudited)


                                     ASSETS

<TABLE>
<S>                                                                            <C>
Current assets
   Cash                                                                         $        2,414
   Due from factor                                                                     228,214
   Accounts receivable, net of allowances of $48,999                                   219,258
   Inventories                                                                       1,573,012
   Prepaid expenses and other current assets                                            58,239
                                                                                --------------

           Total current assets                                                      2,081,137

Property and equipment, less accumulated depreciation
   and amortization of $90,258                                                          66,211
Assets held for sale                                                                   219,400
Security deposits                                                                       34,650
                                                                                --------------

                                                                                $    2,401,398
                                                                                ==============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities
   Accounts payable and accrued expenses                                        $    1,157,552

Long-term debt                                                                       3,000,000

Loans payable - officer/stockholder                                                    777,233

Commitment and contingencies                                                             -

Stockholders' deficiency
   Common stock - par value $.56 per share; authorized
     15,000,000 shares, issued 2,395,794 and outstanding 2,338,194 shares            1,341,644
   Capital in excess of par value                                                    5,276,739
   Accumulated deficit                                                              (9,074,583)
                                                                                ---------------
                                                                                    (2,456,200)
   Less - Treasury stock, at cost, 57,600 shares                                       (77,187)
                                                                                ---------------
                                                                                    (2,533,387)
                                                                                ---------------

                                                                                $    2,401,398
                                                                                ==============
</TABLE>



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



                                       -1-

<PAGE>


                           LEVCOR INTERNATIONAL, INC.

                STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                Nine Months Ended              Three Months Ended
                                                                  September 30,                    September 30,
                                                          ------------------------------  -----------------------------
                                                               2002            2001            2002            2001
                                                           ------------    ------------    ------------    ------------
<S>                                                       <C>             <C>             <C>             <C>
Net sales                                                  $  8,499,132    $16,879,492     $  1,404,919    $  4,014,204
Cost of goods sold                                            6,680,998     13,694,472        1,193,953       3,167,833
                                                           ------------    ------------    ------------    ------------

           Gross profit                                       1,818,134      3,185,020          210,966         846,371

Selling, general and administrative expenses                  2,152,009      2,473,095          770,249         738,800
                                                           ------------    ------------    ------------    ------------

           Income (loss) from operations                       (333,875)       711,925         (559,283)        107,571

Other income (expense)
   Interest expense                                            (161,524)      (356,752)         (40,577)        (96,444)
   Other income                                                  53,233         17,063           25,844           3,650
                                                           ------------    ------------    ------------    ------------

                                                               (108,291)      (339,689)         (14,733)        (92,794)
                                                           -------------   -------------   -------------   -------------

Net Income (loss)                                              (442,166)       372,236         (574,016)         14,777

Accumulated deficit at beginning of period                   (8,632,417)    (8,824,570)      (8,500,567)     (8,467,111)
                                                           ------------    ------------    ------------    ------------

Accumulated deficit at end of period                       $ (9,074,583)   $(8,452,334)    $ (9,074,583)    $(8,452,334)
                                                           ============     ==========     ============     ===========

Earnings per share:
   Basic
     Net income (loss)                                     $      (0.19)   $      0.16     $      (0.25)    $      0.01
                                                           ============    ===========     ============     ===========

   Diluted
     Net income (loss)                                     $      (0.18)   $      0.15     $      (0.25)    $      0.01
                                                           ============    ===========     ============     ===========

Weighted average number of shares
   outstanding - basic                                        2,335,572      2,376,299        2,338,194       2,376,299
Potential common stock                                           95,425         73,956           -               48,511
                                                           ------------    ------------    ------------     -----------

Weighted average number of shares
   outstanding - diluted                                      2,430,997       2,450,255       2,338,194       2,424,810
                                                           ============    ============    ============     ===========
</TABLE>




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



                                       -2-


<PAGE>


                           LEVCOR INTERNATIONAL, INC.

                             STATEMENT OF CASH FLOWS

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                        2002                2001
                                                                                   --------------      --------------
<S>                                                                               <C>                 <C>
Cash  flows from operating activities
   Net income (loss)                                                               $     (442,166)     $      372,236
   Adjustments to reconcile net income (loss) to net cash
     (used in) operating activities:
       Depreciation and amortization                                                       21,215              23,259
       Provision for doubtful accounts                                                     31,474               1,429
       Services paid in common stock                                                        5,238                -
       Changes in operating assets and liabilities:
         Accounts receivable                                                             (207,435)             10,877
         Inventories                                                                      638,491             926,603
         Prepaid expenses and other current assets                                         (9,089)             66,923
         Accrued interest on loan payable - officer/stockholder                            28,153              32,312
         Accounts payable and accrued expenses                                           (361,085)         (1,924,932)
         Deferred income                                                                  (33,267)            102,887
                                                                                   --------------      --------------

           Net cash (used in) operating activities                                       (328,471)           (388,406)
                                                                                   --------------      --------------

Cash flows from investing activities:
   Proceeds from sale of assets held for sale                                              15,000              20,650
   Purchases of property and equipment                                                       -                 (8,815)
                                                                                   --------------      --------------

           Net cash provided by investing activities                                       15,000              11,835
                                                                                   --------------      --------------

Cash flows from financing activities:
   Payment of long-term debt                                                           (1,680,999)           (511,221)
   Proceeds from long-term debt                                                         3,000,000                -
   Proceeds from (payments to) factor                                                  (1,016,543)            885,876
   Proceeds from exercise of stock options                                                 10,742                -
                                                                                   --------------      --------------

           Net cash provided by financing activities                                      313,200             374,655
                                                                                   --------------      --------------

Net (decrease) in cash                                                                       (271)             (1,916)

Cash at beginning of period                                                                 2,685               7,406
                                                                                   --------------      --------------

Cash at end of period                                                              $        2,414      $        5,490
                                                                                   ==============      ==============

Supplemental disclosure of cash flow information:
   Cash paid during the period for interest                                        $      118,114      $      100,987
                                                                                   ==============      ==============
</TABLE>



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



                                       -3-

<PAGE>


                           LEVCOR INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2002
                                   (unaudited)



         NOTE A - BASIS OF PRESENTATION, NATURE OF OPERATIONS AND LIQUIDITY

         The accompanying unaudited condensed financial statements of Levcor
         International, Inc. (the "Company") have been prepared in accordance
         with generally accepted accounting principles for interim financial
         information and with the instructions to Form 10-QSB. Accordingly, they
         do not include all the information and footnotes required by generally
         accepted accounting principles for complete financial statements. In
         the opinion of management, all adjustments, consisting of normal
         recurring accruals, necessary for a fair presentation have been
         included. Operating results for the nine and three months ended
         September 30, 2002 are not necessarily indicative of the results that
         may be expected for the year ending December 31, 2002. These statements
         should be read in conjunction with the financial statements and related
         notes included in the Company's annual report on Form 10-KSB for the
         year ended December 31, 2001.

         In 1995, the Company acquired a woven fabric converting business that
         converts cotton, synthetic and synthetic cotton-blend fabrics for sale
         to domestic apparel manufacturers. This acquisition formed the basis of
         the Company's current business. In 1999, the Company purchased a knit
         fabric and processing business that produces knit fabrics used in the
         production of apparel. During the fourth quarter of 2000, the Company
         started a new woven division selling to the dress market. As a result
         of the current soft retailing climate for dresses, the woven division
         has not produced management's anticipated results and therefore was
         scaled back significantly during the first quarter of 2002. All
         production for this division was done at outside contractors and
         therefore the Company had no investment in fixed assets to run this
         business.

         The Company sustained substantial losses in prior years that have
         adversely affected the Company's liquidity. On May 2, 2002, the Company
         borrowed $3,000,000 from JPMorgan Chase Bank pursuant to a promissory
         note due May 3, 2004. The note bears interest at a fixed rate per annum
         equal to the Adjusted LIBO Rate applicable to such note plus .75% (a
         "Eurodollar Loan"). The interest rate on the note at May 3, 2002 was
         2.90625%. In addition, Robert A. Levinson, a stockholder, officer and
         director of the Company, has provided certain additional collateral
         guaranteeing the note. The proceeds of the note were used to pay off
         the outstanding balance of $1,375,557 of the Company's term note with
         the CIT Group and pay down the Company's advance position of $1,160,000
         with the CIT Group. The remainder was used for working capital
         requirements. At September 30, 2002, the Company had working capital of
         approximately $924,000. Robert A. Levinson, a stockholder, officer and
         director of the Company, has agreed to continue to personally support
         the Company's cash requirements to enable the Company to meet its
         current obligations through January 2, 2004 and to fund future
         operations.




                                      -4-
<PAGE>


                           LEVCOR INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2002
                                   (unaudited)



         The Company has successfully implemented several actions to reduce
         losses and improve cash flow. Although there can be no assurance that
         these measures will continue to be successful, the Company believes
         that future operations and support from the stockholder, officer and
         director will provide sufficient liquidity to fund current operations.


         NOTE B - INVENTORIES

         Inventories consist of the following at September 30, 2002:

                   Raw materials                  $ 829,231
                   Work-in process                  230,039
                   Finished goods                   513,742
                                                 ----------

                   Inventory                     $1,573,012
                                                 ==========


         NOTE C - EARNINGS PER SHARE

         The computation of basic net income (loss) per share of common stock is
         based upon the weighted average number of common shares outstanding
         during the period. Diluted net income (loss) per share is calculated
         similarly to basic net income (loss) per share except that the weighted
         average of shares outstanding is increased to reflect additional shares
         from the assumed exercise of stock options, if dilutive. For the nine
         and three months ended September 30, 2002, there were 95,425 and 0
         stock options outstanding, respectively, and included in the fully
         diluted earnings per share calculations for the respective periods.


         NOTE D - RECENT ACCOUNTING PRONOUNCEMENTS

         In 2001, the Financial Accounting Standards Board issued Statement of
         Financial Accounting Standards (SFAS) No. 144, "Accounting for the
         Impairment or Disposal of Long-Lived Assets." This Statement addresses
         the conditions under which an impairment charge should be recorded
         related to long-lived assets to be held and used, except for goodwill,
         and those to be disposed of by sale or otherwise. The provisions of
         this Statement are effective on January 1, 2002. Pursuant to the
         transition provisions of this Statement, assets held for sale at
         December 31, 2001 are accounted for under the provisions of prior
         pronouncements.

         In June 2002, FASB issued SFAS No. 146, "Accounting for Costs
         Associated with Exit or Disposal Activities" (SFAS No. 146). SFAS No.
         146 requires that a liability for costs


                                      -5-
<PAGE>



                           LEVCOR INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2002
                                   (unaudited)


         associated with exit or disposal activities be recognized when the
         liability is incurred. Existing generally accepted accounting
         principles provide for the recognition of such costs at the date of
         management's commitment to an exit plan. In addition, SFAS No. 146
         requires that the liability be measured at fair value and be adjusted
         for changes in estimated cash flows.

         The provisions of the new standard are effective for exit or disposal
         activities initiated after December 31, 2002. It is not expected that
         SFAS No. 146 will materially affect the financial statements.

         NOTE E - RECLASSIFICATIONS

         Certain amounts in 2001 have been reclassified to conform to the
         presentation used in 2002.

         NOTE F - PROPOSED MERGER WITH CARLYLE INDUSTRIES, INC.

         In May 2002, the Company announced it had executed a definitive merger
         agreement with Carlyle Industries, Inc. ("Carlyle"). The merger
         agreement provides for the merger of Carlyle with and into the Company,
         and the issuance of one share of the Company's common stock in exchange
         for each five shares of common stock of Carlyle, and the issuance of
         one share of a new class of the Company's preferred stock, designated
         as Series A preferred stock, in exchange for each share of Series B
         preferred stock of Carlyle. The transaction is subject to the approval
         of the Company's and Carlyle's stockholders and other customary
         conditions, including the declaration of effectiveness by the
         Securities and Exchange Commission of a Registration Statement on Form
         S-4, and is expected to close in the fourth quarter of 2002. Robert A.
         Levinson, the Company's Chairman and President and also Chairman and
         Chief Executive Officer of Carlyle, beneficially holds 31.4% of the
         Company's common stock and approximately 20.4% of Carlyle's outstanding
         common stock and 98.3% of Carlyle's outstanding Series B preferred
         stock, which represents 38.7% of the voting power of Carlyle's capital
         stock.

         NOTE G - RELATED PARTY TRANSACTIONS

         In addition to being a director of the Company, Edward H. Cohen serves
         as counsel to Katten Muchin Zavis Rosenman, legal counsel to the
         Company. During the nine months ended September 30, 2002, fees for
         those services provided to the Company by Katten Muchin Zavis Rosenman
         totaled $18,437, of which $5,238 was settled through the issuance to
         Katten Muchin Zavis Rosenman of 2,381 shares of the Company's common
         stock with a fair market value of $2.20 per share on the date of such
         issuance.



                                      -6-
<PAGE>

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

GENERAL

This management's discussion and analysis of financial condition and results of
operations contains forward-looking information that involves risks and
uncertainties. Actual results could differ materially from those anticipated by
this forward-looking information. This management's discussion and analysis of
financial condition and results of operations should be read in conjunction with
financial statements and the related notes included in the Levcor International,
Inc. (the "Company") annual report on Form 10-KSB for the year ended December
31, 2001.

CRITICAL ACCOUNTING POLICIES

The following is a brief discussion of the critical accounting policies used in
the preparation of the Company's financial statements, including those
accounting policies and methods used by the Company which require subjective
judgments and are considered very important to the understanding of the
Company's financial condition.

Receivables

Under a factoring agreement, the factor purchases the trade accounts receivable
without recourse and assumes substantially all credit risks with respect to such
accounts. The agreement allows the Company to obtain advances, computed on a
borrowing base formula, from the factor that bear interest at 1/2% above the
bank's prime rate (4.75% at September 30, 2002). The amounts due to the Company
from the factor earn no interest. The Company has pledged its accounts
receivable and property and equipment as collateral under the factor loan.

Inventories

Inventories are stated at the lower of cost (principally average cost) or
market. Inventories consist of yarn and greige goods (collectively considered
raw materials), work in process and finished goods.

The Company estimates the markdowns required for inventories based upon future
marketability as well as general economic conditions. The Company believes that
it has recorded adequate markdowns and therefore the inventory valuation does
not require any additional valuation adjustments.

Revenue Recognition

Revenue is recognized when goods are shipped to customers. Usual sales terms are
FOB shipping point, at which time the Company has completed all performance
obligations to consummate the sale. On occasion, the Company recognizes revenue
on bill and hold sales. The Company recognizes revenue on these transactions
only when all of the following occurs: the risks of ownership have passed to the
buyer, the customer has made a fixed commitment to purchase the goods, the
customer has requested that the transaction be on a bill and hold basis even
though the goods are ready for shipment, there is a fixed date of delivery, the
Company has performed all performance obligations to consummate the sale and the
goods are segregated from the remainder of the Company's goods in the warehouse.
At September 30, 2002 and 2001, the Company did not recognize any revenues from
bill and hold transactions.


                                      -7-
<PAGE>

Debt and Debt Covenants

During the period ended September 30, 2002 and 2001, the Company was in
compliance with all debt covenants.

Cost of Sales

The significant items included in the Company's cost of sales include purchases
of yarn, purchases of greige goods, dyeing and finishing costs and freight in.

Selling, General and Administrative Expenses

The significant costs included in selling, general and administrative expenses
are salaries, sales commissions, benefits and related payroll taxes, rent and
utilities, professional fees, factor fees, product development costs, shipping
and warehousing, travel and entertainment and telecommunication expenses.

RELATED PARTY TRANSACTIONS

Robert Levinson has provided $500,000 of loans to the Company. The loans bear
interest at 6% per annum. Mr. Levinson has agreed to defer the payment of
interest during 2002. In addition, Mr. Levinson has agreed not to require
payment of these loans and $277,233 of the related accrued interest at September
30, 2002 prior to January 2, 2004.

In addition to being a director of the Company, Edward H. Cohen serves as
counsel to Katten Muchin Zavis Rosenman, legal counsel to the Company. During
the nine months ended September 30, 2002, fees for those services provided to
the Company by Katten Muchin Zavis Rosenman totaled $18,437, of which $5,238 was
settled through the issuance to Katten Muchin Zavis Rosenman of 2,381 shares of
the Company's common stock with a fair market value of $2.20 per share on the
date of such issuance.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2002 AS COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2001.

Sales for the nine months ended September 30, 2002 were approximately
$8,499,000, a decrease of approximately $8,380,000, or 49.7%, from approximately
$16,879,000 for the same period in 2001. The decrease results from a decline in
sales by the woven division combined with sales program with a customer from
2001 not repeated in the current year. As a result of the woven division not
producing management's anticipated results during the year 2001, the operations
of this division were scaled back significantly in the first quarter of 2002.

The cost of goods sold for the nine months ended September 30, 2002 were
approximately $6,681,000, a decrease of approximately $7,013,000, or 51.2%, from
approximately $13,694,000 in 2001. The decrease resulted from reduced sales in
2002 as compared with the prior year. The gross profit on sales for the nine
months ended September 30, 2002 was approximately $1,818,000, a decrease of
approximately $1,367,000 or 42.9%, from


                                      -8-
<PAGE>


approximately $3,185,000 in 2001. The decrease in gross profit dollars results
from reduced sales in the 2002 period as compared to the prior year period
combined with a one-time charge of approximately $60,000 resulting from a
dispute settlement in 2002.

The gross profit percentage was 21.4% for the nine months ended September 30,
2002 as compared to 18.9% for the same period of 2001. The gross profit
percentage increase resulted from the Company concentrating its business in
products with higher overall profit margins offset somewhat by the one-time
charge resulting from a dispute settlement in 2002.

The Company's total selling, general and administrative expenses for the nine
months ended September 30, 2002 were approximately $2,152,000, a decrease of
approximately $321,000, or 13.0%, from approximately $2,473,000 in the same
period in 2001. The decrease was due primarily to the cost savings generated by
the Company significantly scaling back the woven division, reduced factor fees
as sales were substantially less than last year and other cost-cutting measures
taken by the Company in 2002, offset somewhat by costs relating to the proposed
merger between the Company and Carlyle Industries, Inc. ("Carlyle") reported in
2002.

During the nine months ended September 30, 2002, the Company had a decrease of
interest expense of approximately $196,000 from approximately $357,000 in 2001
to approximately $161,000 in 2002, resulting from reduced borrowings and lower
interest rates. In addition, the Company replaced its old term note with a new
term loan on May 2, 2002 at a significantly lower interest rate.

Other income, which consisted principally of income earned in financing customer
import purchases, increased approximately $36,000 to approximately $53,000 in
2002 from $17,000 in 2001.

As a result of the foregoing, the Company reflected a net loss of approximately
$442,000 in the nine months ended September 30, 2002 compared to net income of
approximately $372,000 for the same period of 2001.

THREE MONTHS ENDED SEPTEMBER 30, 2002 AS COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2001.

Sales for the three months ended September 30, 2002 were approximately
$1,405,000, a decrease of approximately $2,609,000, or 65.0%, from approximately
$4,014,000 for the same period in 2001. The decrease primarily results from a
decline in sales by the woven division combined with a sales program with a
customer from 2001 not repeated in the current year. As a result of the woven
division not producing management's anticipated results during the year 2001,
the operations of this division were scaled back significantly in the first
quarter of 2002.

The cost of sales for the three months ended September 30, 2002 decreased
approximately $1,974,000, or 62.3%, from approximately $3,168,000 in 2001 to
approximately $1,194,000 in 2002. The decrease resulted from reduced sales in
2002 as compared with the prior year combined with a one-time charge resulting
from a dispute settlement in 2002. The gross profit on sales for the three
months ended September 30, 2002 was approximately $211,000, a decrease of
approximately $635,000, or 75.1%, from approximately $846,000 in 2001. The
decrease in gross profit dollars results from the reduced sales in 2002 period
as compared to the prior year combined with the one-time charge resulting from a
dispute settlement in 2002.


                                      -9-
<PAGE>


The gross profit percentage was 15.0% for the three months ended September 30,
2002 as compared to 21.1% for the same period of 2001. The gross profit
percentage decrease resulted from measures taken by the Company to remain
competitive in the marketplace combined with the one-time charge resulting from
a dispute settlement in 2002.

The Company's total selling, general and administrative expenses for the three
months ended September 30, 2002 were approximately $770,000, an increase of
approximately $31,000, or 4.2%, from approximately $739,000 in the same period
in 2001. The increase was due primarily to the costs relating to the proposed
merger between the Company and Carlyle of approximately $103,000, offset
somewhat by savings generated by the Company significantly scaling back the
woven division, reduced factor fees as sales were substantially less than last
year and other cost-cutting measures taken by the Company in 2002.

During the three months ended September 30, 2002, the Company had a decrease of
interest expense of approximately $55,000 from approximately $96,000 in 2001 to
approximately $41,000 in 2002, resulting from reduced borrowings and lower
interest rates. In addition, the Company replaced its old term note with a new
term loan on May 2, 2002 at a significantly lower interest rate.

Other income, which consisted principally of income earned in financing customer
import purchases, increased approximately $22,000 from approximately $4,000 in
2001 to approximately $26,000 in 2002.

As a result of the foregoing, the Company reflected a net loss of approximately
$574,000 in the three months ended September 30, 2002 compared to net income of
approximately $15,000 for the same period of 2001.

LIQUIDITY AND CAPITAL RESOURCES

Under a factoring agreement with CIT Group, the factor purchases the trade
accounts receivable without recourse and assumes substantially all credit risks
with respect to such accounts. The agreement allows the Company to obtain
advances, computed on a borrowing base formula, from the factor that bear
interest at 1/2% above the bank's prime rate (4.75% at September 30, 2002). The
amounts due to the Company from the factor earn no interest. The Company has
pledged its accounts receivable and property and equipment as collateral under
the factor loan. In addition, Robert A. Levinson, a stockholder, officer and
director of the Company, has provided certain side collateral against advances
provided under the agreement.

On December 15, 2000, the Company refinanced $1,500,000 of the factor loan into
a term note with the CIT Group. The Company and Robert A. Levinson have provided
substantially the same collateral that is provided under the factor loan as
collateral for the term note. The term note is payable in 35 equal consecutive
monthly installments of $8,696 beginning on February 1, 2001, with a final
installment of $1,195,652 due on January 1, 2004. In addition, the term note
contains covenants that include a limitation on the amount of capital
expenditures and certain procedural covenants.

There is no set limit on borrowings. The amount available for borrowing is based
on a formula consisting of 90 percent of eligible accounts receivable increased
by side collateral and reduced by both the current loan balance and outstanding
letters of credit.



                                      -10-
<PAGE>


On May 2, 2002, the Company borrowed $3,000,000 from JPMorgan Chase Bank
pursuant to a promissory note due May 3, 2004. The note bears interest at a
fixed rate per annum equal to the Adjusted LIBO Rate applicable to such note
plus .75% (a "Eurodollar Loan"). The interest rate on the note at May 3, 2002
was 2.90625%. In addition, Robert A. Levinson a stockholder, officer and
director of the Company, has provided certain additional collateral guaranteeing
the note. The proceeds of the note were used to pay off the outstanding balance
of $1,375,557 of its term note with the CIT Group and pay down the Company's
advance position of $1,160,000 with the CIT Group. The remainder was used for
working capital requirements.

If necessary, Mr. Levinson has agreed to personally support the Company's cash
requirements to enable it to fulfill its obligations through January 2, 2004. On
September 27, 2002, Mr. Levinson delivered to the Company his written commitment
that he will continue to support the Company's cash requirements until January
2, 2004, to the extent necessary, up to a maximum amount of $3 million. The
Company believes its reliance on such commitment is reasonable and that Mr.
Levinson has sufficient liquidity and net worth to honor such commitment. The
Company believes that Mr. Levinson's written commitment provides the Company
with the legal right to request and receive such advances. In the event that Mr.
Levinson did not honor such commitment, the Company would have the right to sue
Mr. Levinson for breach of his agreement; therefore, the Company's obligation to
repay the sums owed to Mr. Levinson is not a demand obligation until after
January 2, 2004.

The amount owed by the Company to Mr. Levinson as of September 30, 2002 under
loans he has made to the Company is $500,000 and is a demand obligation that Mr.
Levinson has promised not to demand until at least January 2, 2004. On June 5,
2002, the Company's board of directors determined that in light of the fact that
the financing arrangement with the CIT Group was paid off in May of 2002, the
Company currently has sufficient funds available, and the Company's other
sources of financing are at lower interest rates, it was in the Company's best
interest to prepay a portion of the outstanding principal amount owed to Mr.
Levinson in order to save interest expenses. On June 5, 2002, the Company
prepaid $220,000 of the outstanding principal amount owed to Mr. Levinson. Also,
the accrued interest on this obligation of $277,233 has been classified as a
long-term obligation because Mr. Levinson has promised not to demand payment
until at least January 2, 2004.

The Company believes that cash generated from its sale of fabrics, the advances
under the CIT Group factoring agreement, the proceeds from its term note with
JPMorgan Chase and loans from Mr. Levinson (if needed) will be sufficient to
fund the Company's operations through 2004. The Company's unrestricted cash at
September 30, 2002 was approximately $2,000 and was approximately $3,000 at
December 31, 2001.

The merger with Carlyle, if completed, will not impact the Company's liquidity
since Carlyle is self funding and no new debt is being incurred in the
acquisition other than the assumption by the Company of approximately $15.5
million of Carlyle's existing debt which includes an obligation commencing June
15, 2007 to redeem the Carlyle Series B preferred stock, which approximated $4.6
million at September 30, 2002.

Upon the consummation of the merger the Company will issue, in exchange for the
Carlyle Series B preferred stock, shares of the Company's Series A preferred
stock which shall by its terms be subject to mandatory redemption, solely to the
extent the Company has sufficient funds to lawfully do so, in three equal annual
installments on June 15, 2007, June 15, 2008 and


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<PAGE>



June 15, 2009, in each case from funds legally available therefore, at a price
per share of Series A preferred stock equal to $1 per share, together with an
amount representing accrued and unpaid dividends, whether or not declared, to
the date of redemption.

SEASONALITY

The business of the Company is seasonal and we typically realize higher revenues
and operating income in the second and fourth calendar quarters. Such
seasonality takes into account the standard lead-time required by the fashion
industry to manufacture apparel, which corresponds to the respective retail
selling seasons. Standard lead-time is the period of time commencing with when
the Company receives an order from a customer and ending with when the Company
ships the order to the customer.

IMPACT OF INFLATION

The Company's results are affected by the impact of inflation on operating
costs. Historically, the Company has used selling price adjustments, cost
containment programs and improved operating efficiencies to offset the otherwise
negative impact of inflation on its operations.

ITEM 3.  PROCEDURES AND CONTROLS

Within the 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, (including the person performing the functions of the Company's
Chief Executive Officer and Chief Financial Officer its principal executive
officer and principal financial officer), of the effectiveness of the design and
operation of the Company's disclosure controls and procedures pursuant to
Exchange Act Rule 13a-14. Based upon that evaluation, the person performing the
functions of the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information required to be included in our
periodic Securities and Exchange Commission filings. There were no significant
changes in the Company's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation.


This Quarterly Report on Form 10-QSB (the "Quarterly Report") contains
statements which constitute forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. Those statements appear in a
number of places in this Quarterly Report and include statements regarding the
intent, belief or current expectations of the Company, its directors or its
officers with respect to, among other things: (i) the Company's financing plans;
(ii) trends affecting the Company's financial condition or results of
operations; (iii) the Company's growth strategy and operating strategy; (iv)
customer concentration and the increasing consolidation of the Company's
customer base; and (v) negotiations with its lenders. Stockholders are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve risk and uncertainties including the risks referred to
above and identified in the Company's 10-KSB for the year ended December 31,
2001, and that actual results may differ materially from those projected in the
forward-looking statements as a result of various factors.


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<PAGE>



PART II.   OTHER INFORMATION

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

         (a)  Exhibits filed with this report:

               Exhibit No.      Description
               -----------      -----------

               10.9             Letter dated September 27, 2002 from Mr. Robert
                                A. Levinson (incorporated herein by reference to
                                Levcor International, Inc.'s Amendment No. 2 to
                                Registration Statement on Form S-4 filed with
                                the Securities and Exchange Commission on
                                October 4, 2002).

               99.1             Certification Pursuant to Section 906 of the
                                Sarbanes-Oxley Act of 2002.

         (b)   No Reports on Form 8-K were filed during the quarter ended
               September 30, 2002.






                                      -13-
<PAGE>



                                   SIGNATURES


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

                                                     LEVCOR INTERNATIONAL, INC.


Date November 14, 2002              /s/ Robert A. Levinson
     -------------------------      ------------------------------------
                                    Robert A. Levinson
                                    Chairman of the Board,
                                    President,  Secretary and the principal
                                    financial officer


                                  CERTIFICATION

I, Robert A. Levinson, the principal executive officer and principal financial
officer of Levcor International, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Levcor International,
Inc.;

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

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

4. The registrant's other certifying officer and I 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 I 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;


                                      -14-
<PAGE>


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. 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.

Date: November 14, 2002.

/s/ Robert A. Levinson
----------------------
 Robert A. Levinson,
 principal executive officer and principal financial officer




                                      -15-
<PAGE>


                                  EXHIBIT INDEX



          Exhibit Number        Description
          --------------        -----------
          99.1                  Certification Pursuant to Section 906 of the
                                Sarbanes-Oxley Act of 2002





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