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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended December 31, 2002

Commission File Number 0-2762

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

|                                         |  |                       
|---------------------------------------- |  | ----------------------
|Michigan                                 |  | 38-1792842            
|(State or other Jurisdiction of          |  | (I.R.S. Employer      
|Incorporation or Organization)           |  | Identification Number)
|                                        
|1118 Centennial Way                      |  |                       
|Lansing, Michigan                        |  | 48917                 
|(Address of principal executive offices) |  | (Zip Code)            

Registrants Telephone Number, including area code: (517) 321-3130

Indicate by check mark whether the registrant (1) has filed all annual, quarterly and other reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding twelve months and (2) has been subject to the
filing requirements for at least the past 90 days.

|    |  |   
|--- |  | --
|Yes |  | No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

|    |  |   
|--- |  | --
|Yes |  | No

Indicate the number of shares outstanding for each of the issuers classes of common stock, as of the latest practicable date.

|             |  |                                
|------------ |  | -------------------------------
|Class        |  | Outstanding at January 31, 2003
|Common Stock |  | 3,101,195 shares               



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TABLE OF CONTENTS



|                                                                                      |                                                 |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION                                                         
|                                                                                      | CONDENSED CONSOLIDATED BALANCE SHEETS          
|                                                                                      | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|                                                                                      | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|                                                                                      | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
|MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|PART II OTHER INFORMATION                                                            
|SIGNATURES                                                                           
|CERTIFICATION                                                                        
|EX-10.31 Asset Purchase Agreement                                                    
|EX-10.32 1st Amendment to Asset Purchase Agreement                                   
|EX-10.33 2nd Amendment to Asset Purchase Agreement                                   
|EX-99.1 Certifications Pursuant to 18 USC Sec.1350                                   



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PART I

FINANCIAL INFORMATION

CONDENSED CONSOLIDATED BALANCE SHEETS
Maxco, Inc. and Subsidiaries

|                                       |                                                                                          |                      |        |                |        |   |            |         |        | 
|-------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------- | ------ | -------------- | ------ | - | ---------- | ------- | ------ | 
|                                       |                                                                                          |                      |        | December 31,   |        |   | March 31,  |        
|                                       |                                                                                          |                      |        | 2002           |        |   | 2002       |        
|                                       |                                                                                          |                      |        |                |        |   | (Restated |        
|                                       |                                                                                          |                      |        | (Unaudited)    |        |   | Note 12)   |        
|                                       |                                                                                          |                      |        |                |        |   |            |        
|                                       |                                                                                          |                      |        | (in thousands) |       
|ASSETS                                 |                                                                                          |                      |        |                |        |   |            |        
|CURRENT ASSETS                         |                                                                                          |                      |        |                |        |   |            |        
|                                       | Cash and cash equivalents                                                                |                      | $      | 146            |        |   | $          | 345     |       
|                                       | Accounts and notes receivable, less allowance of
$144,000 ($143,000 at March 31, 2002)   |                      |        | 8,234          |        |   |            | 7,984   |       
|                                       | Note receivableshort-termNote 10                                                       |                      |        | 1,080          |        |   |            | 2,700   |       
|                                       | Advances
to affiliate                                                                    |                      |        | 3,008          |        |   |            | 3,008   |       
|                                       | Inventory                                                                                |                      |        | 316            |        |   |            | 356     |       
|                                       | Prepaid expenses and other                                                               |                      |        | 329            |        |   |            | 550     |       
|                                       | Income taxes receivable and deferred taxes                                               |                      |        | 425            |        |   |            | 4,506   |       
|                                       | Current assets of discontinued operationsNote 12                                        |                      |        |               |        |   |            | 15,223  |       
|                                       |                                                                                          |                      |        |                |        |  
|                                       |                                                                                          | TOTAL CURRENT ASSETS |        |                | 13,538 |   |            |         | 34,672 | 
|MARKETABLE SECURITIESLONG TERMNote 2 |                                                                                          |                      | 312    |                |        |   | 145        |        
|PROPERTY AND EQUIPMENT                 |                                                                                          |                      |        |                |        |   |            |        
|                                       | Land                                                                                     |                      |        | 446            |        |   |            | 491     |       
|                                       | Buildings                                                                                |                      |        | 6,165          |        |   |            | 9,033   |       
|                                       | Machinery, equipment, and fixtures                                                       |                      |        | 28,331         |        |   |            | 28,264  |       
|                                       |                                                                                          |                      |        |                |        |  
|                                       |                                                                                          |                      | 34,942 |                |        |   | 37,788     |        
|                                       | Allowances for depreciation                                                              |                      |        | (11,756        | )      |   |            | (10,252 | )     
|                                       |                                                                                          |                      |        |                |        |  
|                                       |                                                                                          |                      | 23,186 |                |        |   | 27,536     |        
|OTHER ASSETS                           |                                                                                          |                      |        |                |        |   |            |        
|                                       | Investments                                                                              |                      |        | 2,511          |        |   |            | 6,018   |       
|                                       | Notes and contracts receivable and other, less allowance
of $335,000 at March 31, 2002   |                      |        | 1,558          |        |   |            | 865     |       
|                                       | Note receivablerelated party, less allowance of $1,165,000
($956,000 at March 31, 2002) |                      |        | 2,140          |        |   |            | 2,349   |       
|                                       | Goodwill                                                                                 |                      |        | 1,424          |        |   |            | 1,424   |       
|                                       | Deferred income taxes                                                                    |                      |        | 529            |        |   |            |        |       
|                                       | Non-current assets of discontinued operationsNote 12                                    |                      |        | 474            |        |   |            | 14,029  |       
|                                       |                                                                                          |                      |        |                |        |  
|                                       |                                                                                          |                      | 8,636  |                |        |   | 24,685     |        
|                                       |                                                                                          |                      |        |                |        |  
|                                       |                                                                                          | $                    | 45,672 |                |        | $ | 87,038     |        
|                                       |                                                                                          |                      |        |                |        |  

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|                                               |                                                        |                                                                                                   |                            |                           |       |                |        |        |            |        |        | 
|---------------------------------------------- | ------------------------------------------------------ | ------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------- | ----- | -------------- | ------ | ------ | ---------- | ------ | ------ | 
|                                               |                                                        |                                                                                                   |                            |                           |       | December 31,   |        |        | March 31,  |       
|                                               |                                                        |                                                                                                   |                            |                           |       | 2002           |        |        | 2002       |       
|                                               |                                                        |                                                                                                   |                            |                           |       |                |        |        | (Restated |       
|                                               |                                                        |                                                                                                   |                            |                           |       | (Unaudited)    |        |        | Note 12)   |       
|                                               |                                                        |                                                                                                   |                            |                           |       |                |        |        |            |       
|                                               |                                                        |                                                                                                   |                            |                           |       | (in thousands) |       
|LIABILITIES AND STOCKHOLDERS EQUITY           |                                                        |                                                                                                   |                            |                           |       |                |        |       
|CURRENT LIABILITIES                            |                                                        |                                                                                                   |                            |                           |       |                |        |       
|                                               | Notes payableNote 6                                   |                                                                                                   | $                          | 19,918                    |       |                | $      | 10,479 |           
|                                               | Accounts payable                                       |                                                                                                   |                            | 2,923                     |       |                |        | 2,880  |           
|                                               | Employee compensation                                  |                                                                                                   |                            | 1,403                     |       |                |        | 1,346  |           
|                                               | Taxes, interest, and other liabilities                 |                                                                                                   |                            | 2,745                     |       |                |        | 2,033  |           
|                                               | Current maturities of long-term obligations            |                                                                                                   |                            | 836                       |       |                |        | 2,663  |           
|                                               | Current liabilities of discontinued operationsNote 12 |                                                                                                   |                            | 313                       |       |                |        | 29,109 |           
|                                               |                                                        |                                                                                                   |                            |                           |       |               
|                                               |                                                        |                                                                                                   |                            | TOTAL CURRENT LIABILITIES |       |                | 28,138 |        |            |        | 48,510 | 
|                                              
|LONG-TERM OBLIGATIONS, less current maturities |                                                        |                                                                                                   | 1,298                      |                           |       |                | 11,380 |       
|                                              
|DEFERRED INCOME TAXES                          |                                                        |                                                                                                   |                           |                           |       |                | 1,983  |       
|                                              
|NON-CURRENT LIABILITIES OF DISCONTINUED        |                                                        |                                                                                                   |                            |                           |       |                |        |       
|                                               | OPERATIONSNote 12                                     |                                                                                                   |                            |                          |       |                |        | 2,178  |           
|                                              
|STOCKHOLDERS EQUITY                           |                                                        |                                                                                                   |                            |                           |       |                |        |       
|                                               | Preferred stock:                                       |                                                                                                   |                            |                           |       |                |        |        |           
|                                               |                                                        | Series Three: 10% cumulative redeemable, $60 face
value; 14,784 shares issues and outstanding     |                            |                           | 678   |                |        |        | 678        |       
|                                               |                                                        | Series Four: 10% cumulative redeemable, $51.50 face
value; 46,414 shares issues and outstanding   |                            |                           | 2,390 |                |        |        | 2,390      |       
|                                               |                                                        | Series Five: 10% cumulative redeemable, $120 face
value; 6,648 shares issues and outstanding      |                            |                           | 798   |                |        |        | 798        |       
|                                               |                                                        | Series Six: 10% cumulative callable, $160 face
value; 20,000 shares authorized, issued  none     |                            |                           |      |                |        |        |           |       
|                                               |                                                        | Common stock, $1 par value; 10,000,000 shares
authorized, 3,101,195 shares issued and outstanding |                            |                           | 3,101 |                |        |        | 3,101      |       
|                                               | Net unrealized losses                                  |                                                                                                   |                            | (309                      | )     |                |        | (78    | )         
|                                               | Retained earnings                                      |                                                                                                   |                            | 9,578                     |       |                |        | 16,098 |           
|                                               |                                                        |                                                                                                   |                            |                           |       |               
|                                               |                                                        |                                                                                                   | TOTAL STOCKHOLDERS EQUITY |                           |       | 16,236         |        |        |            | 22,987 |       
|                                               |                                                        |                                                                                                   |                            |                           |       |               
|                                               |                                                        | $                                                                                                 | 45,672                     |                           |       | $              | 87,038 |       
|                                               |                                                        |                                                                                                   |                            |                           |       |               

See notes to consolidated financial
statements

3



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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Maxco, Inc. and Subsidiaries
(Unaudited)

|                                                                   |                                            |                                                                                             |                                     |                |      |                                       |       |       |          |            |        |  
|------------------------------------------------------------------ | ------------------------------------------ | ------------------------------------------------------------------------------------------- | ----------------------------------- | -------------- | ---- | ------------------------------------- | ----- | ----- | -------- | ---------- | ------ | -
|                                                                   |                                            |                                                                                             |                                     |                |      | Three Months Ended December 31,       |      
|                                                                   |                                            |                                                                                             |                                     |                |      |                                       |      
|                                                                   |                                            |                                                                                             |                                     |                |      |                                       |       |       |          | 2001       |       
|                                                                   |                                            |                                                                                             |                                     |                |      |                                       |       |       |          | (Restated |       
|                                                                   |                                            |                                                                                             |                                     |                |      | 2002                                  |       |       | Note 12) |           
|                                                                   |                                            |                                                                                             |                                     |                |      |                                       |       |       |          |           
|                                                                   |                                            |                                                                                             |                                     |                |      | (in thousands, except per share data) |      
|Net sales                                                          |                                            | $                                                                                           | 8,701                               |                |      | $                                     | 8,183 |      
|Costs and expenses:                                                |                                            |                                                                                             |                                     |                |      |                                       |       |      
|                                                                   | Cost of sales and operating expenses       |                                                                                             |                                     | 5,405          |      |                                       |       | 4,938 |         
|                                                                   | Selling, general and administrative        |                                                                                             |                                     | 2,873          |      |                                       |       | 2,703 |         
|                                                                   | Depreciation and amortization              |                                                                                             |                                     | 753            |      |                                       |       | 823   |         
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|                                                                   |                                            |                                                                                             | 9,031                               |                |      |                                       | 8,464 |      
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|                                                                   |                                            |                                                                                             |                                     | Operating Loss |      |                                       | (330  | )     |          |            | (281   | )
|Other income (expense)                                            
|                                                                   | Investment and interest income (loss), net |                                                                                             |                                     | 197            |      |                                       |       | (495  | )       
|                                                                   | Interest expense                           |                                                                                             |                                     | (683           | )    |                                       |       | (496  | )       
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|                                                                   |                                            | Loss
From Continuing Operations Before FederalIncome Taxes and Equity in Loss of Affiliates |                                     |                | (816 | )                                     |       |       | (1,272   | )         
|Federal income tax benefit                                         |                                            |                                                                                             | (169                                | )              |      |                                       | (426  | )    
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|Loss
From Continuing Operations Before Equity inLoss of Affiliates |                                            |                                                                                             | (647                                | )              |      |                                       | (846  | )    
|Equity in loss of affiliates, net of tax                           |                                            |                                                                                             | (76                                 | )              |      |                                       | (22   | )    
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|Loss
From Continuing Operations                                    |                                            |                                                                                             | (723                                | )              |      |                                       | (868  | )    
|Income (loss) from discontinued operations, net of tax             |                                            |                                                                                             | 151                                 |                |      |                                       | (783  | )    
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|                                                                   |                                            |                                                                                             |                                     | Net Loss       |      |                                       | (572  | )     |          |            | (1,651 | )
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|Less preferred stock dividends                                     |                                            |                                                                                             | (102                                | )              |      |                                       | (102  | )    
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|                                                                   |                                            |                                                                                             | Net Loss Applicable to Common Stock |                | $    | (674)                                 |       |       | $        | (1,753     | )     
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|Net Income (Loss) Per Common ShareBasic and Diluted               |                                            |                                                                                             |                                     |                |      |                                       |       |      
|Continuing operations                                              |                                            | $                                                                                           | (0.27                               | )              |      | $                                     | (0.32 | )    
|Discontinued operations                                            |                                            |                                                                                             | 0.05                                |                |      |                                       | (0.25 | )    
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      
|                                                                   |                                            | $                                                                                           | (0.22                               | )              |      | $                                     | (0.57 | )    
|                                                                   |                                            |                                                                                             |                                     |                |      |                                      

See notes to consolidated financial statements

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Maxco, Inc. and Subsidiaries
(Unaudited)

|                                              |                                            |                                                                     |                                                                                              |                                     |        |                                |        |        |          |            |        |  
|--------------------------------------------- | ------------------------------------------ | ------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ----------------------------------- | ------ | ------------------------------ | ------ | ------ | -------- | ---------- | ------ | -
|                                              |                                            |                                                                     |                                                                                              |                                     |        | Nine Months Ended December 31, |       
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                                |       
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                                |        |        |          | 2001       |       
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                                |        |        |          | (Restated |       
|                                              |                                            |                                                                     |                                                                                              |                                     |        | 2002                           |        |        | Note 12) |           
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                                |        |        |          |           
|                                              | (in thousands, except per share data)     
|Net sales                                     |                                            | $                                                                   | 26,535                                                                                       |                                     |        | $                              | 26,147 |       
|Costs and expenses:                           |                                            |                                                                     |                                                                                              |                                     |        |                                |        |       
|                                              | Cost of sales and operating expenses       |                                                                     |                                                                                              | 16,542                              |        |                                |        | 15,774 |         
|                                              | Selling, general and administrative        |                                                                     |                                                                                              | 8,452                               |        |                                |        | 7,848  |         
|                                              | Gain on sale of buildings                  |                                                                     |                                                                                              | (149                                | )      |                                |        |       |         
|                                              | Depreciation and amortization              |                                                                     |                                                                                              | 2,263                               |        |                                |        | 2,437  |         
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|                                              |                                            |                                                                     | 27,108                                                                                       |                                     |        |                                | 26,059 |       
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|                                              |                                            |                                                                     |                                                                                              | Operating Earnings (Loss)           |        |                                | (573   | )      |          |            | 88     |  
|Other
income (expense)                        |                                            |                                                                     |                                                                                              |                                     |        |                                |        |       
|                                              | Investment and interest income (loss), net |                                                                     |                                                                                              | (1,077                              | )      |                                |        | 94     |         
|                                              | Interest expense                           |                                                                     |                                                                                              | (1,545                              | )      |                                |        | (1,690 | )       
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|                                              |                                            |                                                                     | Loss From Continuing Operations Before Federal
Income Taxes and Equity in Loss of Affiliates |                                     |        | (3,195                         | )      |        |          | (1,508     | )     
|Federal income tax expense benefit            |                                            |                                                                     | (978                                                                                         | )                                   |        |                                | (479   | )     
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|                                              |                                            | Loss From Continuing Operations Before Equity in
Loss of Affiliates |                                                                                              |                                     | (2,217 | )                              |        |        | (1,029   | )         
|Equity in loss of affiliates, net of tax      |                                            |                                                                     | (2,487                                                                                       | )                                   |        |                                | (8     | )     
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|Loss
From Continuing Operations               |                                            |                                                                     | (4,704                                                                                       | )                                   |        |                                | (1,037 | )     
|Loss from discontinued operations, net of tax |                                            |                                                                     | (1,510                                                                                       | )                                   |        |                                | (491   | )     
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|                                              |                                            |                                                                     |                                                                                              | Net Loss                            |        |                                | (6,214 | )      |          |            | (1,528 | )
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|Less preferred stock dividends                |                                            |                                                                     | (306                                                                                         | )                                   |        |                                | (306   | )     
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|                                              |                                            |                                                                     |                                                                                              | Net Loss Applicable to Common Stock |        | $                              | (6,520 | )      |          | $          | (1,834 | )
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|Net Loss Per Common ShareBasic and Diluted   |                                            |                                                                     |                                                                                              |                                     |        |                                |        |       
|Continuing operations                         |                                            | $                                                                   | (1.61                                                                                        | )                                   |        | $                              | (0.43  | )     
|Discontinued operations                       |                                            |                                                                     | (0.49                                                                                        | )                                   |        |                                | (0.16  | )     
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               
|                                              |                                            | $                                                                   | (2.10                                                                                        | )                                   |        | $                              | (0.59  | )     
|                                              |                                            |                                                                     |                                                                                              |                                     |        |                               

See notes to consolidated financial
statements

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Maxco, Inc. and Subsidiaries
(Unaudited)

|                                                                                |                                             |                                                  |                                            |                                           |     |                                |         |       |          |            |        |  
|------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------------ | ------------------------------------------ | ----------------------------------------- | --- | ------------------------------ | ------- | ----- | -------- | ---------- | ------ | -
|                                                                                |                                             |                                                  |                                            |                                           |     | Nine Months Ended December 31, |        
|                                                                                |                                             |                                                  |                                            |                                           |     |                                |        
|                                                                                |                                             |                                                  |                                            |                                           |     |                                |         |       |          | 2001       |       
|                                                                                |                                             |                                                  |                                            |                                           |     |                                |         |       |          | (Restated |       
|                                                                                |                                             |                                                  |                                            |                                           |     | 2002                           |         |       | Note 12) |           
|                                                                                |                                             |                                                  |                                            |                                           |     |                                |         |       |          |           
|                                                                                |                                             |                                                  |                                            |                                           |     | (in thousands)                 |        
|Operating Activities                                                            |                                             |                                                  |                                            |                                           |     |                                |         |      
|Net Loss                                                                        |                                             | $                                                | (6,214                                     | )                                         |     | $                              | (1,528  | )    
|Loss from discontinued operations                                               |                                             |                                                  | 1,510                                      |                                           |     |                                | 491     |      
|                                                                                |                                             |                                                  |                                            |                                           |     |                               
|Loss from continuing operations                                                 |                                             |                                                  | (4,704                                     | )                                         |     |                                | (1,037  | )    
|Advances from (to) discontinued operations                                      |                                             |                                                  | (1,758                                     | )                                         |     |                                | 2,750   |      
|Adjustments to reconcile net loss to net cash provided by
operating activities: |                                             |                                                  |                                            |                                           |     |                                |         |      
|                                                                                | Depreciation and other non-cash items       |                                                  |                                            | 5,255                                     |     |                                |         | 2,360 |         
|                                                                                | Changes in operating assets and liabilities |                                                  |                                            | 6,971                                     |     |                                |         | (293  | )       
|                                                                                |                                             |                                                  |                                            |                                           |     |                               
|                                                                                |                                             |                                                  |                                            | Net Cash Provided By Operating Activities |     |                                | 5,764   |       |          |            | 3,780  |  
|Investing Activities                                                            |                                             |                                                  |                                            |                                           |     |                                |         |      
|Sale of businesses                                                              |                                             |                                                  | 8,233                                      |                                           |     |                                |        |      
|Sale of buildings                                                               |                                             |                                                  | 2,500                                      |                                           |     |                                |        |      
|Purchases of property and equipment                                             |                                             |                                                  | (433                                       | )                                         |     |                                | (556    | )    
|Sale of investment                                                              |                                             |                                                  |                                           |                                           |     |                                | 750     |      
|Payment received on notes receivable                                            |                                             |                                                  |                                           |                                           |     |                                | 591     |      
|Other                                                                           |                                             |                                                  | (57                                        | )                                         |     |                                | (59     | )    
|                                                                                |                                             |                                                  |                                            |                                           |     |                               
|                                                                                |                                             |                                                  |                                            | Net Cash Provided By Investing Activities |     |                                | 10,243  |       |          |            | 726    |  
|Financing Activities                                                            |                                             |                                                  |                                            |                                           |     |                                |         |      
|Net repayments on lines of credit                                               |                                             |                                                  | (10,206                                    | )                                         |     |                                | (900    | )    
|Repayments on other debt obligations                                            |                                             |                                                  | (6,000                                     | )                                         |     |                                | (2,696  | )    
|Payments on contingent liability                                                |                                             |                                                  |                                           |                                           |     |                                | (1,113  | )    
|Dividends paid on preferred stock                                               |                                             |                                                  |                                           |                                           |     |                                | (306    | )    
|                                                                                |                                             |                                                  |                                            |                                           |     |                               
|                                                                                |                                             |                                                  |                                            | Net Cash Used In Financing Activities     |     |                                | (16,206 | )     |          |            | (5,015 | )
|                                                                                |                                             |                                                  |                                            |                                           |     |                               
|                                                                                |                                             |                                                  |                                            | Decrease in Cash and Cash Equivalents     |     |                                | (199    | )     |          |            | (509   | )
|                                                                                |                                             | Cash and Cash Equivalents at Beginning of Period |                                            |                                           | 345 |                                |         |       | 836      |           
|                                                                                |                                             |                                                  |                                            |                                           |     |                               
|                                                                                |                                             |                                                  | Cash and Cash Equivalents at End of Period |                                           | $   | 146                            |         |       | $        | 327        |       
|                                                                                |                                             |                                                  |                                            |                                           |     |                               

See notes to consolidated financial
statements

6



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##### Table of Contents






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Maxco, Inc. and Subsidiaries
December 31, 2002
(Unaudited)

NOTE 1  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

| | The accompanying unaudited, condensed, consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting
principles generally accepted in the United States for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation of the results of
the interim periods covered have been included. For further information, refer to the consolidated financial statements and
notes thereto included in Maxcos annual report on Form 10-K for the year ended March 31, 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The results of operations for the interim periods presented are not necessarily indicative of the results for the full
year. Maxcos sales and operating results have varied substantially from quarter to quarter. Net sales are typically lower
in the second and third quarters. The most significant factors affecting these fluctuations are the seasonal buying
patterns of the Companys customers due to a customer changeover and the reduced number of business days during the holiday
season. In addition, the timing of acquisitions or the occasional sale of corporate investments may cause substantial
fluctuations of operating results from quarter to quarter. Maxco expects its net sales and operating results to continue to
fluctuate from quarter to quarter.



| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | The financial statements for the prior periods have been restated due to the sales of the Companys subsidiaries, Ersco
Corporation and Pak Sak Industries.



| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | Certain other amounts in the consolidated financial statements have been reclassified to conform to the current presentation.

NOTE 2  MARKETABLE SECURITIES

| | The Company classifies its investments in equity securities with readily determinable fair values as securities available
for sale under FASB 115, Accounting for Certain Investments in Debt and Equity Securities. Available-for-sale securities
are carried at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of
stockholders equity. A decline in the market value of Provant, Inc. common stock ($102,000 since March 31, 2002) has been
recorded in investment and interest income, net as the Company deemed the decline as other than temporary. On November 14,
2002 Maxco received 2,587,859 shares of Provant stock as part of the additional consideration to be received as one of the
former shareholders of Strategic Interactive, Inc. (see Note 10).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7



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##### Table of Contents



NOTE 3  EARNINGS PER SHARE

| | The following table sets forth the computation of basic and diluted earnings per share:
| | ---------------------------------------------------------------------------------------

|                                                                                          |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |        |   |      |        |        |  
|----------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  | - | ------------------------------------- | ---- | - | ----------------- | ------ | ------ | ---- | - | -------- | ------ | - | ---- | ------ | ------ | -
|                                                                                          |                                            |  |  |  |  |   | Three Months Ended                    |      |   | Nine Months Ended |       
|                                                                                          |                                            |  |  |  |  |   | December 31,                          |      |   | December 31,      |       
|                                                                                          |                                            |  |  |  |  |   |                                       |      |   |                   |       
|                                                                                          |                                            |  |  |  |  |   |                                       |      |   |                   | 2001   |        |      |   |          |        |   | 2001 |       
|                                                                                          |                                            |  |  |  |  |   | 2002                                  |      |   | Restated          |        |        | 2002 |   | Restated |       
|                                                                                          |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |       
|                                                                                          |                                            |  |  |  |  |   | (in thousands, except per share data) |     
|NUMERATOR:                                                                                |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |        |   |      |        |       
|                                                                                          | Loss from continuing operations            |  |  |  |  |   | $                                     | (723 | ) |                   | $      | (868   | )    |   | $        | (4,704 | ) |      | $      | (1,037 | )
|                                                                                          | Income (loss) from discontinued operations |  |  |  |  |   |                                       | 151  |   |                   |        | (783   | )    |   |          | (1,510 | ) |      |        | (491   | )
|                                                                                          |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |       
|                                                                                          | Net loss                                   |  |  |  |  |   |                                       | (572 | ) |                   |        | (1,651 | )    |   |          | (6,214 | ) |      |        | (1,528 | )
|                                                                                          | Preferred stock dividends                  |  |  |  |  |   |                                       | (102 | ) |                   |        | (102   | )    |   |          | (306   | ) |      |        | (306   | )
|                                                                                          |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |       
|Numerator for basic and diluted earnings per share
loss available to common stockholders |                                            |  |  |  |  | $ | (674                                  | )    |   | $                 | (1,753 | )      |      | $ | (6,520   | )      |   | $    | (1,834 | )     
|                                                                                         
|DENOMINATOR:                                                                              |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |        |   |      |        |       
|Denominator for basic and diluted earnings per
shareweighted average shares              |                                            |  |  |  |  |   | 3,101                                 |      |   |                   | 3,101  |        |      |   | 3,101    |        |   |      | 3,101  |       
|                                                                                         
|BASIC AND DILUTED EARNINGS (LOSS) PER SHARE                                               |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |        |   |      |        |       
|Continuing operations                                                                     |                                            |  |  |  |  |   | (0.27                                 | )    |   |                   | (0.32  | )      |      |   | 1.61     |        |   |      | (0.43  | )     
|Discontinued operations                                                                   |                                            |  |  |  |  |   | 0.05                                  |      |   |                   | (0.25  | )      |      |   | (0.49    | )      |   |      | (0.16  | )     
|                                                                                          |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |       
|                                                                                          |                                            |  |  |  |  | $ | (0.22                                 | )    |   | $                 | (0.57  | )      |      | $ | (2.10    | )      |   | $    | (0.59  | )     
|                                                                                          |                                            |  |  |  |  |   |                                       |      |   |                   |        |        |      |   |          |       

NOTE 4  COMPREHENSIVE INCOME

| | The components of comprehensive income for the three and nine months ended December 31, 2002 and 2001 are as follows:
| | ---------------------------------------------------------------------------------------------------------------------

|                                                   |  |                    |      |   |                   |                |        |      |  |   |        |   |  |   |        |  
|-------------------------------------------------- |  | ------------------ | ---- | - | ----------------- | -------------- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                   |  | Three Months Ended |      |   | Nine Months Ended |               
|                                                   |  | December 30,       |      |   | December 30,      |               
|                                                   |  |                    |      |   |                   |               
|                                                   |  | 2002               |      |   | 2001              |                |        | 2002 |  |   | 2001   |  
|                                                   |  |                    |      |   |                   |                |        |      |  |   |        |  
|                                                   |  |                    |      |   |                   | (in thousands) |        |      |  |   |       
|Net loss                                           |  | $                  | (572 | ) |                   | $              | (1,651 | )    |  | $ | (6,214 | ) |  | $ | (1,528 | )
|Unrealized gains (losses) on marketable securities |  |                    | (56  | ) |                   |                | 2,075  |      |  |   | (62    | ) |  |   | 1,140  |  
|Unrealized gains (losses) on swap agreement        |  |                    | 6    |   |                   |                | 49     |      |  |   | (169   | ) |  |   | (83    | )
|                                                   |  |                    |      |   |                   |                |        |      |  |   |        |  
|Comprehensive loss                                 |  | $                  | (622 | ) |                   | $              | 473    |      |  | $ | (6,445 | ) |  | $ | (471   | )
|                                                   |  |                    |      |   |                   |                |        |      |  |   |        |  



| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | The components of accumulated comprehensive loss, net of related tax at December 31, 2002 and March 31, 2002 are as follows:

|                                                |  |                |      |   |           |   |     |  
|----------------------------------------------- |  | -------------- | ---- | - | --------- | - | --- | -
|                                                |  | December 31,   |      |   | March 31, |  
|                                                |  | 2002           |      |   | 2002      |  
|                                                |  |                |      |   |           |  
|                                                |  | (in thousands) |     
|Unrealized gain (loss) on marketable securities |  | $              | (56  | ) |           | $ | 6   |  
|Unrealized loss on swap agreement               |  |                | (253 | ) |           |   | (84 | )
|                                                |  |                |      |   |           |  
|                                                |  | $              | (309 | ) |           | $ | (78 | )
|                                                |  |                |      |   |           |  

8



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##### Table of Contents



NOTE 5  INDUSTRY SEGMENT INFORMATION



| |                                                               
| | --------------------------------------------------------------
| | The following summarizes Maxcos industry segment information:

|                     |                                   |                           |   |                |        |  |          |           |        | 
|-------------------- | --------------------------------- | ------------------------- | - | -------------- | ------ |  | -------- | --------- | ------ | 
|                     |                                   |                           |   |                |        |  |          | March 31, |       
|                     |                                   |                           |   | December 31,   |        |  | 2002     |          
|                     |                                   |                           |   | 2002           |        |  | Restated |          
|                     |                                   |                           |   |                |        |  |          |          
|                     |                                   |                           |   | (in thousands) |       
|Identifiable assets: |                                   |                           |   |                |        |  |          |          
|                     | Heat treating                     |                           | $ | 28,407         |        |  | $        | 31,444    |       
|                     | Assets of discontinued operations |                           |   | 474            |        |  |          | 29,252    |       
|                     | Corporate and other               |                           |   | 14,280         |        |  |          | 20,324    |       
|                     | Investments and advances          |                           |   | 2,511          |        |  |          | 6,018     |       
|                     |                                   |                           |   |                |        | 
|                     |                                   | Total Identifiable Assets |   | $              | 45,672 |  |          | $         | 87,038 | 
|                     |                                   |                           |   |                |        | 

|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |        |       |    |        | 
|-------------------------------------- | ------------------- | ------------------------------------------- | ------------------------------- | -------------------------- | --- | ------------------ | ----- | ----- | ----------------- | -------------- | ----- | ------ | ----- | ---- | -------- | ------ | ----- | -- | ------ | 
|                                       |                     |                                             |                                 |                            |     | Three Months Ended |       |       | Nine Months Ended |               
|                                       |                     |                                             |                                 |                            |     | December 31,       |       |       | December 31,      |               
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |               
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   | 2001           |       |        |       |      |          |        | 2001  |   
|                                       |                     |                                             |                                 |                            |     | 2002               |       |       | Restated          |                |       | 2002   |       |      | Restated |       
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   | (in thousands) |       |        |       |      |         
|Net sales:                             |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       | Heat treating       |                                             | $                               | 8,663                      |     |                    | $     | 8,101 |                   |                | $     | 26,448 |       |      | $        | 25,900 |      
|                                       | Corporate and other |                                             |                                 | 38                         |     |                    |       | 82    |                   |                |       | 87     |       |      |          | 247    |      
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       |                     |                                             |                                 | Total Net Sales            |     | $                  | 8,701 |       |                   | $              | 8,183 |        |       | $    | 26,535   |        |       | $  | 26,147 | 
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|Operating earnings (loss):             |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       | Heat treating       |                                             | $                               | 327                        |     |                    | $     | 348   |                   |                | $     | 1,441  |       |      | $        | 1,872  |      
|                                       | Corporate and other |                                             |                                 | (657                       | )   |                    |       | (629  | )                 |                |       | (2,014 | )     |      |          | (1,784 | )    
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       |                     |                                             | Total Operating Earnings (Loss) |                            | $   | (330               | )     |       | $                 | (281           | )     |        | $     | (573 | )        |        | $     | 88 |       
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|Depreciation and amortization expense: |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       | Heat treating       |                                             | $                               | 740                        |     |                    | $     | 752   |                   |                | $     | 2,220  |       |      | $        | 2,221  |      
|                                       | Corporate and other |                                             |                                 | 13                         |     |                    |       | 71    |                   |                |       | 43     |       |      |          | 216    |      
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       |                     | Total Depreciation and Amortization Expense |                                 | $                          | 753 |                    |       | $     | 823               |                |       | $      | 2,263 |      |          | $      | 2,437 |   
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|Capital expenditures:                  |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       | Heat treating       |                                             | $                               | 270                        |     |                    | $     |      |                   |                | $     | 433    |       |      | $        | 556    |      
|                                       | Corporate and other |                                             |                                 |                           |     |                    |       |      |                   |                |       |       |       |      |          |       |      
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       
|                                       |                     |                                             |                                 | Total Capital Expenditures |     | $                  | 270   |       |                   | $              |      |        |       | $    | 433      |        |       | $  | 556    | 
|                                       |                     |                                             |                                 |                            |     |                    |       |       |                   |                |       |        |       |      |          |       



| |                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | Accounting policies of the business segments are consistent with those described in the summary of significant accounting
policies (see Note 1).



| |                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Identifiable assets are those assets that are used in Maxcos operations in each industry segment. Corporate assets are
principally cash, notes receivable, investments, and corporate office properties.
| |                                                                                                                                                                                                          
| | Maxco has no significant foreign operations or export sales.                                                                                                                                             

9



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NOTE 6  DEBT

| | The Company was in default of financial covenants required by its lenders. As such, the outstanding balance on the
borrowings with these lenders, $16.1 million at December 31, 2002, has been classified as current in the accompanying
financial statements. Forbearance agreements, which expire in less than one year, have been reached with the lenders. At
December 31, 2002 the Company was in default of certain covenants of one of the forbearance agreements and will work with
the lender to rectify the default issues.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has guaranteed various debt obligations of certain real estate investments of its less than majority owned
entities in the aggregate amount of approximately $33.0 million as of December 31, 2002. As a result of the sale of the
real estate portfolio of L/M Associates II, as described in Note 11, this guaranteed amount was reduced to approximately
$14.8 million subsequent to December 31, 2002. Certain of these debt agreements are currently in default. Extensions or
forbearance agreements have been issued by some of the respective banks and the applicable entities are currently working
with the lenders to rectify the default issues. However, efforts to negotiate a forbearance agreement or extension with one
of the lenders, representing approximately $8.6 million (reduced by $2.5 million in January 2003) in loans guaranteed or
assumed by Maxco and other guarantors, have failed and the lender has commenced a suit for foreclosure on the properties.
The Company is hopeful that the properties will be sold or refinanced prior to the completion of any foreclosure action. A
parcel was sold in January 2003 that reduced the above guaranteed amounts by $2.5 million. The Company does not believe
that there is any unusual degree of risk related to these guarantees because of sufficient underlying asset values
supporting the respective debt obligations.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern.
The Companys ability to meet its short term and long term debt service and other obligations (including compliance with
financial covenants) will be dependent upon its future operating performance and the successful renegotiation of its credit
facility. These dependencies will be subject to financial, business and other factors, certain of which are beyond the
Companys control, such as prevailing economic conditions. There can be no assurance that, in the event the Company were to
require additional financing, such additional financing would be available on satisfactory terms. The Company believes that
funds generated by its operations and funds available under its credit facility, will be sufficient to finance short term
capital needs, as well as to fund existing operations for the foreseeable future. However, in the event that the Company is
unable to successfully renegotiate its credit facility, the Company has long term equity investments that could be
liquidated within a year to meet its short term and long term debt service requirements and fund operating cash flows.

NOTE 7  FEDERAL INCOME TAXES

| | The Companys effective tax rate varied from the statutory rate of 34% due to certain expenses, which are not deductible for
tax purposes.
| | ------------------------------------------------------------------------------------------------------------------------------------------

NOTE 8  DIVIDENDS

| | Effective January 1, 2002, the Maxco Board of Directors suspended the payment of dividends on all preferred stock. These
dividend payments have been accrued in the accompanying financial statements and totaled approximately $510,000 at December
31, 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 9  GOODWILL AND OTHER INTANGIBLE ASSETS  ADOPTION OF SFAS No. 142

| | Effective April 1, 2002, the Company adopted SFAS No. 142 which resulted in the discontinuance of amortization of goodwill
and indefinite-lived intangible assets. During the second quarter of 2003, the Company performed the impairment tests of
its goodwill and indefinite-lived intangible assets required by SFAS No. 142. The Companys initial impairment
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



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##### Table of Contents





| |                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | test indicated that the fair value of its heat treating segment, which was determined by using discounted cash flows and
market multiples, exceeded the carrying value. As a result, the Company did not record an impairment charge for this
segment in the accompanying financial statements.



| |                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company will continue to perform an impairment review on an annual basis (or more frequently if impairment indicators
arise). The first annual review will take place in the fourth quarter of fiscal 2003.



| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | The following table presents net loss and net loss per share information as if goodwill were no longer amortized as of April
1, 2001:

|                                            |  |                                       |       |   |                   |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------- |  | ------------------------------------- | ----- | - | ----------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                            |  | Three Months Ended                    |       |   | Nine Months Ended |  
|                                            |  | December 31,                          |       |   | December 31,      |  
|                                            |  |                                       |       |   |                   |  
|                                            |  | 2002                                  |       |   | 2001              |   |        | 2002 |  |   | 2001   |  
|                                            |  |                                       |       |   |                   |   |        |      |  |   |        |  
|                                            |  | (in thousands, except per share data) |      
|Net loss                                    |  | $                                     | (572  | ) |                   | $ | (1,572 | )    |  | $ | (6,214 | ) |  | $ | (1,293 | )
|Net loss per common sharebasic and
diluted |  | $                                     | (0.22 | ) |                   |   | (0.51  | )    |  | $ | (2.10  | ) |  |   | (0.42  | )

NOTE 10  INVESTMENT IN PROVANT, INC.

| | The Company had a note receivable of $2.7 million representing its share of the additional consideration to be received as
one of the former shareholders of Strategic Interactive, Inc. (Maxcos former 45% owned affiliate sold to Provant, Inc. in
October 1998). A portion of the payment representing roughly $1.6 million was paid on November 14, 2002 in the form of
Provant common stock based on a per share price of $0.626. Since the market price of Provant stock was $0.14 at September
30, 2002, Maxco recognized a pre-tax charge of approximately $1.3 million in other income (expense) in the second quarter.
The remaining portion of the payment, approximately $1.1 million, was received in January 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 11  SALE OF REAL ESTATE PORTFOLIO

| | Maxco has an ownership interest ranging from 25-50% in primarily two LLCs that have been involved in the development and
ownership of real estate in central Michigan. Effective January 1, 2000, a Master LLC (L/M Associates II) was formed
consisting of the majority of the stabilized buildings in which Maxco had an ownership interest. At March 31, 2002 Maxcos
ownership interest in the Master LLC was approximately 31%. The other LLC (L/M Associates) includes buildable sites on
developed land, properties that are not fully leased, or individual properties not included in the Master LLC.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In early 2002, Maxco, as managing member of L/M Associates, began negotiations to sell the real estate portfolio of L/M
Associates II, of which L/M Associates is the manager. In June 2002, L/M Associates II entered into an agreement to sell
the properties within the Master LLC to an outside investor. The transaction was approved by more than 75% of the member
interests in July 2002. A preliminary closing occurred in August 2002. The transaction was completed in January 2003. As
part of this transaction, L/M Associates agreed to reinvest a portion of its distributable share of the proceeds to acquire
approximately a 15% interest in the acquiring entity. By agreement, this investment is scheduled to be repurchased by June
2004. Approximately $18.2 million of Maxcos guarantees on its real estate debt were eliminated as a result of the sale of
the Master LLC.



| |                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | An impairment charge of $2.0 million, net of tax, was recognized in the second quarter to reduce the carrying value of the
Companys investment in real estate to a realizable amount.

11



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##### Table of Contents



NOTE 12 - DISCONTINUED OPERATIONS

| | Effective September 27, 2002, Maxco agreed to sell the business and substantially all the assets (consisting principally of
accounts receivable, inventory and fixed assets) of Maxcos wholly owned subsidiary, Pak Sak Industries, Inc. to Packaging
Personified, Inc. and related parties. The assets were purchased for cash and an assumption of certain liabilities. The
Company adjusted the carrying value of Pak Sak to the sale price resulting in a pre-tax charge of $540,000 to discontinued
operations in the second quarter. The sale closed on November 27, 2002.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On November 14, 2002, Maxco completed an agreement to sell its wholly owned subsidiary, Ersco Corporation to Contractor
Supply Incorporated for cash and retired certain other debt of Maxco in excess of the sale price resulting in a note payable
to the purchaser of approximately $3.0 million. The Company adjusted the carrying value of Ersco to the estimated sale
price resulting in a pre-tax charge of $2.0 million to discontinued operations in the second quarter.



| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | Sales and operating earnings for Ersco and Pak Sak for the three and nine months ending December 31, 2002 and 2001 were as
follows:

|                           |         |   |                    |       |  |                   |                |        |              |   |        |        |   |   |        |        |  
|-------------------------- | ------- | - | ------------------ | ----- |  | ----------------- | -------------- | ------ | ------------ | - | ------ | ------ | - | - | ------ | ------ | -
|                           |         |   | Three Months Ended |       |  | Nine Months Ended |               
|                           |         |   | December 31,       |       |  | December 31,      |               
|                           |         |   | 2002(A)            |       |  | 2001              |                |        | 2002 (A) (B) |   |        | 2001   |  
|                           |         |   |                    |       |  |                   |                |        |              |   |        |       
|                           |         |   |                    |       |  |                   | (in thousands) |        |              |   |        |       
|Net sales:                 |         |   |                    |       |  |                   |                |        |              |   |        |        |   |   |        |       
|                           | Ersco   |   | $                  | 8,191 |  |                   | $              | 17,820 |              |   | $      | 61,233 |   |   | $      | 79,026 |  
|                           | Pak Sak |   |                    | 1,488 |  |                   |                | 3,046  |              |   |        | 8,047  |   |   |        | 9,848  |  
|                           |         |   |                    |       |  |                   |                |        |              |   |        |       
|                           |         | $ | 9,679              |       |  | $                 | 20,866         |        |              | $ | 69,280 |        |   | $ | 88,874 |       
|                           |         |   |                    |       |  |                   |                |        |              |   |        |       
|Operating earnings (loss): |         |   |                    |       |  |                   |                |        |              |   |        |        |   |   |        |       
|                           | Ersco   |   | $                  | 64    |  |                   | $              | (607   | )            |   | $      | (820   | ) |   | $      | 723    |  
|                           | Pak Sak |   |                    | 369   |  |                   |                | (162   | )            |   |        | (537   | ) |   |        | (154   | )
|                           |         |   |                    |       |  |                   |                |        |              |   |        |       
|                           |         | $ | 433                |       |  | $                 | (769           | )      |              | $ | (1,357 | )      |   | $ | 569    |       
|                           |         |   |                    |       |  |                   |                |        |              |   |        |       



| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| | (A) Results of operations for the three and nine month periods ended December 31, 2002 are through the respective dates of
sale.
|
| | (B) Results of operations for the nine month period ended December 31, 2002 include adjustments to the sales price.             



| |                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The results of operations for these units have been reported separately as discontinued operations in the consolidated
statements of operations for the current and prior periods.

12



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##### Table of Contents






MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Maxco, Inc. and Subsidiaries
December 31, 2002

MATERIAL CHANGES IN FINANCIAL CONDITION
Cash provided by operating activities amounted to $5.8 million for the nine months. Earnings and changes in working capital
components generated $7.6 million while advances to operations discontinued in the third quarter used $1.8 million.

Cash was generated by investing activities during the period as a result of the sales of Ersco and Pak Sak and two buildings
that were owned by the Company. These proceeds were used to retire debt.

Repayments on debt obligations amounted to $16.2 million for the nine month period.

At December 31, 2002, the Company classified certain of its borrowings as short term due to the Company being in default of
certain covenants. Forbearance agreements have been reached with the lenders that expire in less than one year. At December
31, 2002 the Company was in default of certain covenants of one of the forbearance agreements and will work with the lender to
rectify the default issues.

The Companys ability to meet its short term and long term debt service and other obligations (including compliance with
financial covenants) will be dependent upon its future operating performance and the successful renegotiation of its credit
facility. These dependencies will be subject to financial, business and other factors, certain of which are beyond the
Companys control, such as prevailing economic conditions. There can be no assurance that, in the event the Company were to
require additional financing, such additional financing would be available on satisfactory terms. The Company believes that
funds generated by its operations and funds available under the existing credit facility will be sufficient to finance short
term capital needs, as well as to fund existing operations for the foreseeable future. However, in the event that the Company
is unable to successfully renegotiate its credit facility, the Company has liquid long term equity investments that could be
used to meet its short term and long term debt service requirements and fund operating cash flows.

At December 31, 2002, the 2,240,605 shares of Integral Vision (formerly Medar) common stock that Maxco owns had an aggregate
market value of approximately $202,000. Maxcos investment in Integral Vision is reflected in Maxcos financial statements
under the equity method for all periods presented, as the Company owns greater than 20% of Integral Visions outstanding stock.

At December 31, 2002, the 2,837,089 shares of Provant common stock that Maxco owns had an aggregate market value of
approximately $312,000. On November 14, 2002 Maxco received 2,587,859 shares of Provant stock as part of the additional
consideration to be received as one of the former shareholders of Strategic Interactive, Inc. Maxcos investment in Provant is
reflected in Maxcos financial statements under the cost method as an available-for-sale security as the Company owns less than
20% of Provants outstanding stock.

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##### Table of Contents



MATERIAL CHANGES IN RESULTS OF OPERATIONS
Three Months Ended December 31, 2002 Compared to 2001

Net sales increased to $8.7 million compared to $8.2 million in last years third quarter. Third quarter results reflect an
operating loss of $330,000 compared to a loss of $281,000 for the comparable period in 2001. Net loss was $572,000 or $.22 per
share assuming dilution compared to last years net loss of $1.7 million or $.57 per share assuming dilution.

Sales and operating earnings for the three months ending December 31, 2002 and 2001 by the Companys heat treating segment were
as follows:

|              |  |                    |       |  |                    |                |     |           |  |   |          |  |           |   |     | 
|------------- |  | ------------------ | ----- |  | ------------------ | -------------- | --- | --------- |  | - | -------- |  | --------- | - | --- | 
|              |  | Three Months Ended |       |  | Three Months Ended |               
|              |  | December 31, 2002  |       |  | December 31, 2001  |               
|              |  |                    |       |  |                    |               
|              |  |                    |       |  |                    | Operating      |     |           |  |   |          |  | Operating |  
|              |  | Net Sales          |       |  | Earnings           |                |     | Net Sales |  |   | Earnings | 
|              |  |                    |       |  |                    |                |     |           |  |   |          | 
|              |  |                    |       |  |                    | (in thousands) |     |           |  |   |         
|Heat treating |  | $                  | 8,663 |  |                    | $              | 327 |           |  | $ | 8,101    |  |           | $ | 348 | 

Although sales at the heat treating unit increased over the prior year, a decline in sales of approximately 2.7% was offset by
higher sales to a customer where the Company is required to purchase and bill the customer for steel used in the heat treating
process. These steel purchases caused sales to increase for services other than heat treating. The decline in sales of 2.7%
was due to a customer moving some of their heat treating requirements in house or to another company.

Consolidated gross profit (net sales less cost of sales and operating expenses) increased to $3.3 million or 38% of net sales
from $3.2 million or 40% of net sales. Reductions in the cost of natural gas used in the heat treating process and other
expenses were offset by the cost of steel associated with the increased sales to the customer described above.

Selling, general, and administrative expenses increased to $2.9 million from $2.7 million in the prior year. Atmosphere
Annealings SG&A expenses increased as a result of higher insurance costs.

Depreciation and amortization expense for the three months ended December 31, 2002 decreased primarily as a result of the sale
of buildings that were owned by the Company and, as a result of adopting FAS 142, the discontinuance of amortization of goodwill.

As a result of the above, operating earnings decreased to a loss of approximately $330,000 from a loss of $281,000 in last
years comparable period.

Investment and interest income (loss), net increased from a loss of $495,000 to earnings of $197,000. In the prior year period
the Company recorded investment income of $2.0 million representing additional consideration to be received from Provant from
the sale of the Companys investment in Strategic Interactive, Inc. and a charge of $3.1 million to recognize a decline in the
value of its investment in Provant, Inc. that was deemed other than temporary. The Company also recognized a gain in the prior
year period of approximately $422,000 on the sale of its investment in Mid-State Industrial Services.

Equity in earnings (loss) of affiliates decreased to a loss of approximately $76,000 from a loss of $22,000 in the prior year
comparable period.

14



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##### Table of Contents



Nine Months Ended December 31, 2002 Compared to 2001
Net sales increased to $26.5 million compared to $26.1 million in last years comparable period. Results for this period
include an operating loss of $573,000 compared to earnings of $88,000 for the comparable period in 2001. Net loss was $6.2
million or $2.10 per share assuming dilution compared to last years net loss of $1.5 million or $.59 per share assuming
dilution.

Sales and operating earnings for the nine months ended December 31, 2002 and 2001 by the Companys heat treating segment were as
follows:

|              |  |                   |        |  |                   |                |       |           |  |   |        |  |          |           |       | 
|------------- |  | ----------------- | ------ |  | ----------------- | -------------- | ----- | --------- |  | - | ------ |  | -------- | --------- | ----- | 
|              |  | Nine Months Ended |        |  | Nine Months Ended |               
|              |  | December 31, 2002 |        |  | December 31, 2001 |               
|              |  |                   |        |  |                   |               
|              |  |                   |        |  |                   |                |       |           |  |   |        |  |          | Operating |      
|              |  |                   |        |  |                   | Operating      |       |           |  |   |        |  | Earnings |          
|              |  | Net Sales         |        |  | Earnings          |                |       | Net Sales |  |   | (Loss) | 
|              |  |                   |        |  |                   |                |       |           |  |   |        | 
|              |  |                   |        |  |                   | (in thousands) |       |           |  |   |       
|Heat treating |  | $                 | 26,448 |  |                   | $              | 1,441 |           |  | $ | 25,900 |  |          | $         | 1,872 | 

Although sales at the heat treating unit increased slightly over the prior year, a decline in sales of approximately 4.3% was
offset by higher sales to a customer where the Company is required to purchase and bill the customer for steel used in the heat
treating process. These steel purchases caused sales to increase for services other than heat treating. The decline in sales
of 4.3% was due to a customer moving some of their heat treating requirements in house or to another company.

Consolidated gross profit (net sales less cost of sales and operating expenses) decreased to $10.0 million or 38% of net sales
from $10.4 million or 40% of net sales. Reductions in the cost of natural gas used in the heat treating process, production
wages, and maintenance costs were offset by the cost of steel associated with the increased sales to the customer described
above.

Selling, general, and administrative expenses increased to $8.5 million from $7.8 million. The Company took a charge of
approximately $248,000 to write off certain other expenses. Atmosphere Annealings SG&A expenses increased as a result of
higher insurance costs.

Depreciation and amortization expense for the nine months ended December 31, 2002 decreased primarily as a result of the sale of
buildings that were owned by the Company and, as a result of adopting FAS 142, the discontinuance of amortization of goodwill.

As a result of the above, operating earnings decreased to a loss of approximately $573,000 from earnings of $88,000 in last
years comparable period.

Investment and interest income (loss), net decreased from income of $94,000 to a loss of $1.1 million. Maxco recognized a
pre-tax charge of approximately $1.3 million on Provant stock in the second quarter (see Note 10). Interest expense decreased
from the prior year period due to reduced borrowings.

Equity in earnings (loss) of affiliates decreased to a loss of approximately $2.5 million from a loss of $8,000 in the prior
year comparable period. A charge of $2.0 million, net of tax, was recognized in the second quarter to reduce the carrying value
of the Companys investment in real estate to a realizable amount.

15



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##### Table of Contents



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Companys variable interest expense is sensitive to changes in the general level of United States interest rates. While
approximately $2.1 million of Maxcos debt carries a fixed rate of interest, the Company entered into an interest rate swap
agreement based on a notional amount of $5.0 million to manage its exposure to interest rate changes. The swap involves the
exchange of fixed and variable interest payments without changing the notional principal amount. The Company had total
outstanding variable rate short and long term borrowings of $16.1 million at December 31, 2002. A 1% increase from the
prevailing interest rates at December 31, 2002 on the unhedged variable rate portion of the Companys short and long-term
borrowings would increase interest expense on an annualized basis by approximately $129,000 based on principal balances at
December 31, 2002.

CONTROLS AND PROCEDURES



|a) |  | Evaluation of disclosure controls and procedures                                                                                                                                                                                                                                                             
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Companys Chief Executive Officer and Chief Financial Officer believe Maxcos disclosure controls and procedures, as
defined in Securities Exchange Act Rules 13a-14 and 15d-14, are effective. This conclusion was reached after an evaluation
of these controls and procedures as of December 31, 2002.



|b) |  | Changes in internal controls                                                                                                                                                                                                                                                 
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | We are not aware of any significant changes in the Companys internal controls, including any corrective actions with regard
to significant deficiencies and material weaknesses, or in other factors that could significantly affect these controls
after December 31, 2002.

16



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##### Table of Contents






PART II
OTHER INFORMATION

|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 1.   |  | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|          |  | None                                                                                                                                                                                                                                                                                                                                                                                                                                             
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Item 2.   |  | Changes in Securities                                                                                                                                                                                                                                                                                                                                                                                                                            
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|          |  | None                                                                                                                                                                                                                                                                                                                                                                                                                                             
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Item 3.   |  | Defaults Upon Senior Securities                                                                                                                                                                                                                                                                                                                                                                                                                  
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|          |  | The Company is currently in default of certain covenants as required by its lines of credit with its two
principal lenders.                                                                                                                                                                                                                                                                                                                      
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                                                                                                                                                                              
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|          |  | None                                                                                                                                                                                                                                                                                                                                                                                                                                             
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Item 5.   |  | Other Information                                                                                                                                                                                                                                                                                                                                                                                                                                
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|          |  | None                                                                                                                                                                                                                                                                                                                                                                                                                                             
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Item 6(a) |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                         
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3         |  | Restated Articles of Incorporation are hereby incorporated from Form 10-Q dated February 13, 1998.                                                                                                                                                                                                                                                                                                                                               
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.1       |  | By-laws are hereby incorporated by reference from Form S-4 dated November 4, 1991 (File No. 33-43855).                                                                                                                                                                                                                                                                                                                                           
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.2       |  | Resolution establishing Series Three Preferred Shares is hereby incorporated by reference from Form S-4 dated
November 4, 1991 (File No. 33-43855).                                                                                                                                                                                                                                                                                              
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.3       |  | Resolution authorizing the redemption of Series Two Preferred Stock and establishing Series Four Preferred
Stock and the terms of the subordinated notes is hereby incorporated by reference from Form 10-Q dated February
14, 1997.                                                                                                                                                                                                             
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.4       |  | Resolution establishing Series Five Preferred Shares is hereby incorporated by reference from Form 10-K dated
June 5, 1997.                                                                                                                                                                                                                                                                                                                      
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.5       |  | Resolution establishing Series Six Preferred Shares is hereby incorporated by reference from Form 10-K dated
June 23, 1999.                                                                                                                                                                                                                                                                                                                      
|          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.1      |  | Incentive stock option plan adopted August 15, 1983, including the amendment (approved by shareholders August
25, 1987) to increase the authorized shares on which options may be granted by two hundred fifty thousand
(250,000), up to five hundred thousand (500,000) shares of the common stock of the company is hereby
incorporated by reference from the registrants annual report on Form 10-K for the fiscal year ended March 31,
1988.

17



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##### Table of Contents



|      |  |                                                                                                                                                                                                   
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.9  |  | Asset purchase agreement  Wright Plastic Products, Inc. is hereby incorporated by reference from Form 10-Q
dated November 14, 1996.                                                              
|      |  |                                                                                                                                                                                                   
|10.10 |  | Amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated September 30, 1996 is hereby
incorporated by reference from Form 10-Q dated November 14, 1996.                    
|      |  |                                                                                                                                                                                                   
|10.11 |  | Asset purchase agreement for the purchase of Atmosphere Annealing, Inc. is hereby incorporated by reference
from Form 8-K dated January 17, 1997.                                                 
|      |  |                                                                                                                                                                                                   
|10.13 |  | Loan agreement between Michigan Strategic Fund and Atmosphere Annealing, Inc. is hereby incorporated by
reference from Form 10-Q dated February 13, 1998.                                         
|      |  |                                                                                                                                                                                                   
|10.14 |  | Loan agreement between LAM Funding, L.L.C. and borrower including Guaranty-Maxco, Inc. is hereby incorporated
by reference from Form 10-Q dated February 13, 1998.                                
|      |  |                                                                                                                                                                                                   
|10.15 |  | First Amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated August 1,
1997, is hereby incorporated by reference from Form 10-K dated June 24, 1998.        
|      |  |                                                                                                                                                                                                   
|10.16 |  | Second amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated June 24,
1998 is hereby incorporated by reference from Form 10-K dated June 24, 1998.         
|      |  |                                                                                                                                                                                                   
|10.17 |  | Third amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated September
24, 1998, is hereby incorporated by reference from Form 10-Q dated November 12, 1998.
|      |  |                                                                                                                                                                                                   
|10.18 |  | Maxco, Inc. 1998 Employee Stock Option Plan is hereby incorporated by reference from Form 10-Q dated November
12, 1998.                                                                           
|      |  |                                                                                                                                                                                                   
|10.19 |  | Fourth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated June 22,
1999, is hereby incorporated by reference from Form 10-K dated June 23, 1999.        
|      |  |                                                                                                                                                                                                   
|10.20 |  | Fifth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated September 1,
1999 is hereby incorporated by reference from Form 10-Q dated November 12, 1999.  
|      |  |                                                                                                                                                                                                   
|10.21 |  | Sixth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated July 12,
2000 is hereby incorporated by reference from Form 10-K dated July 14, 2000.          
|      |  |                                                                                                                                                                                                   
|10.22 |  | Seventh amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated January
11, 2000 is hereby incorporated by reference from Form 10-Q dated February 14, 2001. 

18



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##### Table of Contents



|          |  |                                                                                                                                                                                                                                                                           
|--------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.23     |  | Eighth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated March 19,
2001 is hereby incorporated by reference from Form 10-K dated July 13, 2001.                                                                                
|          |  |                                                                                                                                                                                                                                                                           
|10.24     |  | Ninth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated October 1,
2001 is hereby incorporated by reference from Form 10-Q dated February 19, 2002.                                                                            
|          |  |                                                                                                                                                                                                                                                                           
|10.25     |  | Tenth amendment to amended and restated loan agreement between Comerica Bank and Maxco, Inc. dated February 19,
2002 is hereby incorporated by reference from Form 10-K dated July 16, 2002.                                                                              
|          |  |                                                                                                                                                                                                                                                                           
|10.26     |  | Financing arrangements among Comerica Bank, Maxco, Inc., Ersco Corporation, Pak Sak Industries, Inc., and Max
A. Coon dated November 8, 2002 is hereby incorporated by reference from Form 10-Q dated November 25, 2002.                                                  
|          |  |                                                                                                                                                                                                                                                                           
|10.27     |  | Financing arrangements among Comerica Bank, Maxco, Inc., Pak Sak Industries, Inc., and Max A. Coon dated
November 13, 2002 is hereby incorporated by reference from Form 10-Q dated November 25, 2002.                                                                    
|          |  |                                                                                                                                                                                                                                                                           
|10.28     |  | Assignment agreement among Comerica Bank, Contractor Supply Incorporated, Maxco, Inc., Ersco Corporation, Pak
Sak, Inc., Max A. Coon, and Ambassador Steel Corporation dated November 13, 2002 is hereby incorporated by
reference from Form 10-Q dated November 25, 2002.
|          |  |                                                                                                                                                                                                                                                                           
|10.29     |  | Obligor assignment agreement among Contractor Supply Incorporated, Maxco, Inc., and Ersco Corporation dated
November 14, 2002 is hereby incorporated by reference from Form 10-Q dated November 25, 2002.                                                                 
|          |  |                                                                                                                                                                                                                                                                           
|10.30     |  | Stock purchase agreement between Ersco Corporation, Maxco, Inc., and Contractor Supply Incorporated dated
November 14, 2002 is hereby incorporated by reference from Form 10-Q dated November 25, 2002.                                                                   
|          |  |                                                                                                                                                                                                                                                                           
|10.31     |  | Asset Purchase Agreement between Pak Sak Industries, Inc., Maxco, Inc., P-S Business Acquisition, Inc., and P&D
Real Estate, LLC and Packaging Personified, Inc. dated September 27, 2002.                                                                                
|          |  |                                                                                                                                                                                                                                                                           
|10.32     |  | First Amendment to Asset Purchase Agreement between Pak Sak Industries, Inc., Maxco, Inc., P-S Business
Acquisition, Inc., and P&D Real Estate, LLC and Packaging Personified, Inc. dated October 30, 2002.                                                               
|          |  |                                                                                                                                                                                                                                                                           
|10.33     |  | Second Amendment to Asset Purchase Agreement between Pak Sak Industries, Inc., Maxco, Inc., P-S Business
Acquisition, Inc., and P&D Real Estate, LLC and Packaging Personified, Inc. dated November 25, 2002.                                                             
|          |  |                                                                                                                                                                                                                                                                           
|99.1      |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350, as adopted).                                                                                                      
|          |  |                                                                                                                                                                                                                                                                           
|Item 6(b) |  | Reports on Form 8-K
None                                                                                                                                                                                                                                                  

19



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##### Table of Contents






SIGNATURES

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

|                           |  |                                                                                                                        |  |            
|-------------------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | -----------
|                           |  |                                                                                                                        |  | MAXCO, INC.
|                          
|Date:    February 14, 2003 |  | /s/ VINCENT
SHUNSKY
Vincent Shunsky, Vice President-Finance
and Treasurer (Principal Financial and
Accounting Officer)

20



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##### Table of Contents






CERTIFICATION

I, Max A. Coon, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Maxco, 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 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the Evaluation Date); and

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

5.  The registrants other certifying 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 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: February 14, 2003 |  |                                                    
|                       
|                        |  | /s/ Max A. Coon
Max A. Coon
Chief Executive Officer

21



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##### Table of Contents



CERTIFICATION

I, Vincent Shunsky, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Maxco, 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 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the Evaluation Date); and

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

5.  The registrants other certifying 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 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: February 14, 2003 |  |                                                            
|                       
|                        |  | /s/ Vincent Shunsky
Vincent Shunsky
Chief Financial Officer

22



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##### Table of Contents



EXHIBIT INDEX

|            |  |                                                                                                                                                                                                              
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                              
|10.31       |  | Asset Purchase Agreement between Pak Sak Industries, Inc., Maxco, Inc., P-S
Business Acquisition, Inc., and P&D Real Estate, LLC and Packaging Personified, Inc.
dated September 27, 2002.                   
|            |  |                                                                                                                                                                                                              
|10.32       |  | First Amendment to Asset Purchase Agreement between Pak Sak Industries, Inc.,
Maxco, Inc., P-S Business Acquisition, Inc., and P&D Real Estate, LLC and Packaging
Personified, Inc. dated October 30, 2002.  
|            |  |                                                                                                                                                                                                              
|10.33       |  | Second Amendment to Asset Purchase Agreement between Pak Sak Industries, Inc.,
Maxco, Inc., P-S Business Acquisition, Inc., and P&D Real Estate, LLC and Packaging
Personified, Inc. dated November 25, 2002.
|            |  |                                                                                                                                                                                                              
|99.1        |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350, as adopted).