UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)

     [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934

          For the quarterly period ended September 30, 2003

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

          For the transition period from ______________________ to ____________.

                        Commission File Number 000-26463
                                               ---------

                           MILITARY RESALE GROUP, INC.
--------------------------------------------------------------------------------
           (Name of small business issuer as specified in its charter)

            New York                                     11-2665282
----------------------------------           ----------------------------------
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)

                              2180 Executive Circle
                        Colorado Springs, Colorado 80906
     -----------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (719) 391-4564
        ----------------------------------------------------------------
                           (Issuer's telephone number)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

As of September 30, 2003,  there were  16,273,867  shares of the issuer's common
stock outstanding.

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



<PAGE>


                           MILITARY RESALE GROUP, INC.

                                   FORM 10-QSB


                                      INDEX


<TABLE>
<CAPTION>
                                                                                                  Page No.
                                                                                                  --------
PART I. Financial Information

Item 1. Financial Statements
<S>                                                                                                 <C>
        Balance Sheets - September 30, 2003 and December 31, 2002....................................1

        Statements of Operations - three and nine months ended September 30, 2003 and 2002...........2

        Statements of Cash Flows -nine months ended September 30, 2003 and 2002......................3

        Notes to Financial Statements................................................................5

Item 2. Management's Discussion and Analysis or Plan of Operation....................................9

Item 3. Controls and Procedures.....................................................................17

PART II. Other Information

Item 2. Changes in Securities and Use of Proceeds...................................................17

Item 6. Exhibits and Reports on Form 8-K............................................................18

Signatures..........................................................................................19

Certifications......................................................................................20
</TABLE>


                                       i
<PAGE>

ITEM 1.  FINANCIAL INFORMATION

                           Military Resale Group, Inc.
                            Condensed Balance Sheets

<TABLE>
<CAPTION>
                                                                                          September 30,      December 31,
                                                                                              2003               2002
                                                                                           (Unaudited)         (Audited)
                                                                                         ----------------  -----------------
                                     Assets
Current Assets
<S>                                                                                      <C>               <C>
     Cash                                                                                $           631   $          2,072
     Accounts receivable - trade                                                                 598,929            428,037
     Inventory                                                                                   253,818            227,416
     Prepaid consulting (Note 3)                                                                 406,947            116,417
     Deposits                                                                                     28,358             23,358
     Prepaid interest (Note 4)                                                                   333,953            133,333
     Other current assets                                                                             22                618
                                                                                         ----------------  -----------------
       Total Current Assets                                                                    1,622,658            931,251

Fixed Assets
     Office equipment                                                                             12,372             10,607
     Warehouse equipment                                                                         159,444            159,444
     Software                                                                                     16,324             16,324
                                                                                         ----------------  -----------------
                                                                                                 188,140            186,375
     Less accumulated depreciation                                                              (98,823)           (76,229)
       Net Fixed Assets                                                                           89,317            110,146
                                                                                         ----------------  -----------------
     Total Assets                                                                              1,711,975          1,041,397
           Liabilities and Stockholders' Equity (Impairment)
Current Liabilities
     Accounts payable and accrued expenses                                                     1,902,216          1,470,776
     Bank overdraft                                                                                7,616             11,068
     Due to related parties                                                                       40,944                  -
     Other current liabilities                                                                   126,864             81,726
     Current maturities of capital lease obligations                                              44,273             37,271
     Current portion of deferred rental obligation                                                   682             21,584
     Accrued interest payable                                                                     86,398             47,816
     Related party notes payable (Note 5 & 6)                                                          -            230,000
     Convertible notes payable - current  (Note 6)                                                85,000            255,000
     Promissory note payable (Note 8)                                                             89,210                  -
                                                                                         ----------------  -----------------
       Total Current Liabilities                                                               2,383,203          2,155,241
     Deferred rental obligation                                                                   83,917             57,557
     Obligations under capital leases, excluding current maturities                               45,878             51,735
     Related party convertible notes payable, less current portion (Note 5&6)                    350,000                  -
     Convertible notes payable - other, less current portion (Note 6)                            170,000                  -
                                                                                         ----------------  -----------------
         Total Liabilities                                                                     3,032,998          2,264,533
Commitment and Contingencies (Note 9)                                                                  -                  -

Stockholders' Equity (Impairment)
     Preferred stock, 10,000,000 shares authorized, 0 issued in 2003 and 2002                          -                  -
     Common stock, par value $.0001, 50,000,000 shares authorized,
       16,273,867 and 11,383,390 shares issued and outstanding in 2003 and                         1,627              1,138
       2002, respectively
     Additional paid-in capital                                                                3,789,625          2,050,690
     Accumulated deficit                                                                     (5,112,275)        (3,274,964)
                                                                                         ----------------  -----------------
         Total Stockholders' Equity (Impairment)                                             (1,321,023)        (1,223,136)
                                                                                         ----------------  -----------------
     Total Liabilities and Stockholders' Equity (Impairment)                             $     1,711,975   $      1,041,397
                                                                                         ================  =================
</TABLE>

See notes to the financial statements.


                                        1
<PAGE>

                           Military Resale Group, Inc.
                       Condensed Statements of Operations
             Three and Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                               Three Months Ended                    Nine Months Ended
                                                        September 30,      September 30,      September 30,     September 30,
                                                            2003               2002               2003               2002
                                                        ------------       ------------       ------------       ------------
Revenues
<S>                                                     <C>                <C>                <C>                <C>
     Resale revenue                                     $  1,143,846       $  1,548,384       $  4,290,820       $  4,561,198
     Commission revenue                                       83,095            102,706            364,649            226,690
                                                        ------------       ------------       ------------       ------------

       Total Revenues                                      1,226,941          1,651,090          4,655,469          4,787,888
                                                        ------------       ------------       ------------       ------------
Cost of goods sold                                         1,136,929          1,373,106          3,983,622          4,069,592
                                                        ------------       ------------       ------------       ------------
     Gross Profit                                             90,012            277,984            671,847            718,296
                                                        ------------       ------------       ------------       ------------


Operating Expenses

     Stock based compensation (Note 5 and 7)                 465,313            324,872          1,028,166            606,266
     Salary and payroll taxes                                 93,280            146,923            352,389            362,885
     Professional fees                                        76,535             73,044            276,625            273,134
     Occupancy                                                58,673             55,262            177,385            165,787
     General and administrative                              116,587            134,592            393,380            238,350
     Amortization/depreciation                                 4,933             15,160             22,594             36,413
                                                        ------------       ------------       ------------       ------------

       Total Operating Expenses                              815,321            749,853          2,250,539          1,682,835
                                                        ------------       ------------       ------------       ------------

         Net Loss From Operations                           (725,309)          (471,869)        (1,578,692)          (964,539)
                                                        ------------       ------------       ------------       ------------

Other Income (Expenses)
     Interest expense                                        (25,459)          (115,563)          (258,755)          (355,826)
     Interest income                                             136                367                136                409
                                                        ------------       ------------       ------------       ------------
       Total Other (Expense)                                 (25,323)          (115,196)          (258,619)          (355,417)
                                                        ------------       ------------       ------------       ------------

         Net Loss                                       $   (750,632)      $   (587,065)      $ (1,837,311)      $ (1,319,956)
                                                        ============       ============       ============       ============

Loss Per Share

     Net Loss Per Common Share - and diluted            $      (0.05)      $      (0.06)      $      (0.14)      $      (0.14)
                                                        ============       ============       ============       ============


     Weighted average number of shares
        outstanding - basic and diluted                   15,514,144          9,072,396         13,272,178          9,460,023
                                                        ============       ============       ============       ============
</TABLE>


See notes to the financial statements.

                                       2
<PAGE>



                           Military Resale Group, Inc.
                       Condensed Statements of Cash Flows
                  Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                 2003              2002
                                                              -----------       -----------

Cash Flows From Operating Activities
<S>                                                           <C>               <C>
     Net Loss                                                 $(1,837,311)      $(1,319,956)
     Adjustments to reconcile net loss to net cash
       used in operating activities
       Depreciation and amortization                               22,594            36,244
       Amortization of option based interest expense              164,780                --
       Stock based compensation                                   972,582           606,266
       Beneficial conversion feature                               43,000           225,000
       Stock issued in lieu of debt                                    --           150,000
       Stock issued for interest                                       --           150,000
       Loss on disposal of assets                                      --             6,380
     Changes in Assets and Liabilities
       Decrease (increase) in accounts receivable                (170,892)         (361,305)
       Decrease (increase) in inventory                           (26,402)          (29,646)
       Decrease (increase) in other assets                            596             2,994
       (Increase) in deposits                                      (5,000)           (2,812)
       Increase in accounts payable and accrued expenses          539,806           384,175
       Increase in deferred rent obligation                         5,458                --
       Increase in due to related parties                          40,944                --
       Decrease in other liabilities                               (2,678)               --
                                                              -----------       -----------

         Net Cash Used In Operating Activities                   (252,523)         (152,660)
                                                              -----------       -----------

Cash Flows From Investing Activities
       Purchase of fixed assets                                    (1,765)           (4,493)
                                                              -----------       -----------

Cash Flows Used In Investing Activities                            (1,765)           (4,493)
                                                              -----------       -----------

Cash Flows From Financing Activities
       Bank overdraft                                              (3,452)           (1,349)
       Payments on capital lease obligations                       (2,911)               --
       Proceeds from issuance of notes                            220,000           176,050
       Payments on notes payable                                  (10,790)               --
       Stock purchases for cash                                    50,000                --
                                                              -----------       -----------

Cash Flows Provided By Financing Activities                       252,847           174,701
                                                              -----------       -----------



Net Increase (Decrease)  in Cash and Cash Equivalents              (1,441)           17,548
Cash and Cash Equivalents at Beginning of Period                    2,072                --
                                                              -----------       -----------

Cash and Cash Equivalents at End of Period                    $       631       $    17,548
                                                              ===========       ===========
SUPPLEMENTAL INFORMATION
     Interest Paid                                            $     7,833       $     6,170
                                                              ===========       ===========

     Income Taxes Paid                                        $        --       $        --
                                                              ===========       ===========
</TABLE>


See notes to the financial statements.


                                       3
<PAGE>

                           Military Resale Group, Inc.
                       Condensed Statements of Cash Flows


Non-cash investing and financing activities:


<TABLE>
<CAPTION>
                                                                    2003          2002
                                                                  --------      --------
<S>                                                               <C>           <C>
Issuance of stock and options in exchange for services to be
  rendered over six months to one year                            $960,839      $     --
                                                                  ========      ========
Issuance of common stock in payment of accrued compensation       $121,171      $     --
                                                                  ========      ========
Issuance of stock in exchange for cancellation  of
  indebtedness of $150,000 and interest expense of $150,000
  on convertible notes                                            $     --      $300,000
                                                                  ========      ========
Issuance of stock options in exchange for note extensions         $365,400      $     --
                                                                  ========      ========
</TABLE>




See notes to the financial statements.



                                       4
<PAGE>
                           Military Resale Group, Inc.
                          Notes to Financial Statements

NOTE 1 - NATURE OF ORGANIZATION

     We were  organized  under  the  laws of the  State  of New  York  and are a
     regional  distributor  of  grocery  and  household  items  specializing  in
     distribution to commissaries of the U. S. Military.  Currently,  we service
     six military installations located in Colorado, Wyoming and South Dakota.

     On October  15,  2001,  we entered  into a stock  purchase  agreement  with
     Military  Resale  Group,  Inc., a Maryland  corporation  that was formed on
     October  6,  1997  ("MRG"),  pursuant  to which  98.2% of MRG's  stock  was
     effectively  exchanged  for a  controlling  interest in our  publicly  held
     "shell"  corporation.  Concurrently with the closing of that transaction we
     changed our name from Bactrol Technologies,  Inc. to Military Resale Group,
     Inc. This transaction is commonly  referred to as a "reverse  acquisition".
     For financial accounting purposes, this transaction has been treated as the
     issuance  of  stock  for  our  net  monetary   assets,   accompanied  by  a
     recapitalization  of MRG  with  no  goodwill  or  other  intangible  assets
     recorded.

     For financial  reporting  purposes,  MRG was considered  the acquirer,  and
     therefore,  the historical operating results of Bactrol Technologies,  Inc.
     are not presented.

     The financial statements have been prepared on a going concern basis, which
     contemplates   continuity  of   operations,   realization   of  assets  and
     liquidation of liabilities in the normal course of business.

     We have suffered  recurring  losses from  operations,  and are in a working
     capital deficit position that raises substantial doubt about our ability to
     continue as a going concern.

     Our  management is currently  pursuing  equity and/or debt  financing in an
     effort to continue operations.  The future success of our company is likely
     dependent  on our  ability to attain  additional  capital  to  develop  our
     business  and  ultimately,  upon our  ability to attain  future  profitable
     operations.  There  can be no  assurance  that  we will  be  successful  in
     obtaining such  financing,  or that we will attain  positive cash flow from
     operations.  The financial  statements do not include any adjustments  that
     might result from the outcome of this uncertainty.

NOTE 2 - BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with generally accepted  accounting  principles
     for interim financial  information and with the instructions to Item 310 of
     Regulation S-B. Accordingly, they do not include all of the information and
     footnotes required by generally accepted accounting principles for complete
     financial  statements.  In  the  opinion  of  management,  all  adjustments
     (consisting of normal recurring accruals)  considered  necessary for a fair
     presentation  have been included.  Operating results for the three and nine
     month periods ended  September 30, 2003 are not  necessarily  indicative of
     the results that may be expected for the year ended  December 31, 2003. For
     further  information,  refer to the consolidated  financial  statements and
     footnotes thereto included in our annual report on Form 10-KSB for the year
     ended December 31, 2002.

NOTE 3 - PREPAID CONSULTING

     Prepaid  consulting  expenses are recorded in connection  with common stock
     and options  issued to  consultants  for future  services and are amortized
     over the agreement  term.  During the nine months ended September 30, 2003,
     we incurred additional prepayments of $941,306 and stock-based compensation
     expense of $650,776.

                                       5
<PAGE>

NOTE 4 - PREPAID INTEREST

     Prepaid  interest  expense is recorded in  connection  with the issuance of
     options for the  extension of our notes  payable.  The interest  expense is
     being  amortized  over the  extension  period,  with  $164,780  charged  to
     interest expense in the current period.

NOTE 5 - RELATED PARTY TRANSACTIONS

     In January 2003, we entered into a one-year business  consulting  agreement
     with Edward Meyer,  Jr. for marketing and managerial  consulting  services,
     and an  executive  compensation  agreement  with Edward  Whelan,  our Chief
     Executive  Officer.  In consideration of the services to be rendered by Mr.
     Whelan and Mr. Meyer,  we will issue in respect of each month the number of
     shares determined by dividing $12,000 by the product of 80% and the average
     closing low price for our common stock during each quarter. During the nine
     months ended  September 30, 2003, we issued  473,063 shares of common stock
     under the terms of the agreement for the first and second quarters of 2003.
     The aggregate cost of the shares issued, which were expensed as stock based
     compensation, totaled $121,171.

     During the nine months ended September 30, 2003, we issued 192,414, 218,519
     and 254,545  shares of common stock as  consideration  under a January 2002
     and 2003 consulting and  compensation  agreements for the fourth quarter of
     2002 and the first  and  second  quarters  of 2003,  respectively  (332,738
     shares each to Mr. Whelan and Mr. Meyer,  or their  respective  designees).
     The  transactions  were  valued  at  $0.16,  $0.24  and  $0.27  per  share,
     respectively,  the fair  market  value of our  common  stock on the date of
     issuance.

     On March 11, 2003, Edward Whelan loaned us $10,000.  The corresponding note
     bears interest at a rate of 8% per annum and is due on June 3, 2006.

     On June 30, 2003, in connection  with the  conversion of $190,000 of demand
     notes to convertible notes from Edward Whelan,  our Chief Executive Officer
     and our Chairman of the board of directors, and companies which he controls
     and/or is  shareholder,  1,130,000  stock  options were issued.  The demand
     notes have been  modified  to allow the holder to convert  their notes into
     shares of our common stock at $0.25 per share.  These  convertible notes do
     not have a beneficial conversion feature.

     On June 30, 2003,  in connection  with the  conversion of $25,000 of demand
     notes to convertible  notes from each of Ethan Hokit, our President and one
     of  our  directors,   and  Atlantic  Investment  Trust,  of  which  Richard
     Tanenbaum,  one of our directors, is the trustee, 25,000 stock options were
     issued to each of such noteholders.  The demand notes have been modified to
     allow the holder to convert  their notes into shares of our common stock at
     $0.25 per share. Such notes do not have a beneficial conversion feature.

     On July 11,  2003,  we granted  100,000  shares of our  common  stock to an
     employee,  Robert Hefner,  for compensation  for past employment  services.
     These  shares were valued at $0.26 per share or $26,000,  the fair value at
     date of issuance.

     Also,  during the quarter ended  September 30, 2003, we received loans from
     related     parties;     $9,000     from     individuals     related     to
     shareholders/management.  These loans are non-interest  bearing and are due
     on demand.

     Subsequent to September 30,  2003,we  issued  227,569  shares of our common
     stock to both Mr.  Whelan and Mr. Meyer for services  performed  during the
     third quarter of 2003. The aggregate  cost of the shares issued,  which was
     expensed as accrued stock-based compensation at September 30, 2003, totaled
     $29,584.

                                       6
<PAGE>

NOTE 6 - CONVERTIBLE NOTES

     At  September  30,  2003,  we had  an  aggregate  of  $605,000  payable  in
     convertible notes. $20,000 of the convertible notes bear interest at 8% per
     annum and were due on June 30, 2002,  $35,000 of the convertible notes bear
     interest at 8% per annum through June 30, 2002 and 9%  thereafter  and were
     due on June 30, 2003, and a $10,000 convertible note bearing interest at 8%
     per annum, which was due September 30, 2003. On June 30, 2003,  $215,000 of
     notes  originally  due on or before  June 30,  2003,  and  $50,000 of notes
     originally  due September 30, 2003 were extended  until June 3, 2006.  Such
     notes bear  interest  at 8%.  Additionally,  on June 30,  2003  $240,000 of
     demand notes were converted to convertible notes due June 3, 2006. $100,000
     of such notes are non-interest bearing, $60,000 of such notes bear interest
     at 10% and $80,000 of such notes bear  interest at 8%. In  connection  with
     the  extension  of the due  dates and  conversion  of the  demand  notes to
     convertible  notes 1,305,000 stock options were issued and prepaid interest
     of $365,400 was recorded and will be amortized  over the extension  period.
     During the three months ended  September  30,  2003,  we issued  $20,000 in
     convertible notes bearing interest at 8% per annum due January 30, 2004 and
     $15,000 in convertible  notes bearing  interest at 8% per annum due June 3,
     2006. The terms of our  convertible  notes provide  generally  that, if the
     convertible notes are not in default,  the holders may convert, at any time
     and from time to time,  all or a portion of the  outstanding  balance under
     each  convertible  note  into  a  number  of  shares  (subject  to  certain
     anti-dilution  adjustments)  of our  common  stock that will allow the note
     holder to receive  common  stock having a market value equal to 150% of the
     converted  balance of the note.  For notes issued prior to May 30, 2003, if
     an event of default has occurred in respect of such convertible  notes, the
     holder may convert the outstanding balance into a number of shares (subject
     to certain  anti-dilution  adjustments)  of our common stock equal to twice
     the number of shares  the  holder  would  have  otherwise  received  if the
     convertible notes were not in default.  Among other events of default,  the
     terms of the convertible  notes require us to register under the Securities
     Act of 1933 the shares our common stock  issuable  upon  conversion  of the
     convertible  notes. The demand notes have been modified to allow the holder
     to  convert  their  notes  into  common  stock at $0.25  per  share.  These
     convertible notes do not have a beneficial conversion feature.

     We follow EITF 98-5 in accounting for  convertible  notes with  "beneficial
     conversion features" (i.e., the notes may be converted into common stock at
     the lower of a fixed rate at the commitment date or a fixed discount to the
     market  price  of the  underlying  common  stock at the  conversion  date).
     Because our convertible notes contained a beneficial  conversion feature on
     the date of issuance, we measured and recognized the intrinsic value of the
     beneficial conversion feature of the convertible notes when the convertible
     notes were  issued.  During the nine months  ended  September  30, 2003 and
     2002, interest expense of $43,000 and $225,000,  respectively (representing
     the  aggregate  proceeds to us from  convertible  notes issued  during such
     periods),   was  recognized  as  the  intrinsic  value  of  the  beneficial
     conversion  feature of the  convertible  notes that were issued during such
     periods.

NOTE 7 - SECURITIES ISSUED FOR SERVICES

     During the nine months ended  September 30, 2003, we issued an aggregate of
     4,225,000  shares of our common stock and 3,350,000 common stock options to
     various  consultants  for services  provided or to be provided.  Consulting
     expense of $972,582 was recognized in 2003 and a prepaid consulting expense
     of $405,837  was  recorded in 2003.  These  amounts  were based on the fair
     market value of the shares on the date of issuance.

                                       7
<PAGE>

NOTE 8 - PROMISSORY NOTE PAYABLE

     On March 27, 2003, we issued a promissory note for $100,000 to Romano, Ltd.
     The note  bears  interest  at 15% per annum  and is due on March 26,  2004,
     subject to the  following  contingent  payment  terms  upon our  raising or
     securing additional funding from any third-party source:

<TABLE>
<CAPTION>
               Additional Funding                                    Terms Modification
          ------------------------------ ----------------------------------------------------------------------------
<S>                                      <C>
                    $250,000             Payment of 10% of outstanding principal and accrued interest
                    $500,000             Payment of 15% of outstanding principal and accrued interest
               $1,000,000 or more        Payment of 100% of outstanding principal and accrued interest
</TABLE>


     If we fail to secure any of the  above-referenced  additional funding,  nor
     another  significant  event  such as a merger  or  acquisition  of  another
     company,  we will be required to pay $8,000 per month commencing on July 1,
     2003  until  the full  obligation  is paid or by  March  26,  2004.  We are
     currently in default of the terms of the note and are negotiating  with the
     holder  to avoid  remedies  upon  default,  including  acceleration  of the
     principal amount and interest at 30% on the unpaid balance.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

     In February 2003, a capital lease  obligation,  secured by equipment with a
     net  book  value of  $25,363,  was  accelerated  due to  non-payment.  This
     obligation is reflected in the current portion of obligations under capital
     leases in the accompanying financial statements.

     In February  2003,  we entered into a Lease  Modification  Agreement  for a
     capital lease for equipment  with a net book value of $57,183.  The term of
     the lease was extended through April 2007, with no required payment for the
     months between November 2002 and February 2003. Minimum lease payments have
     increased to $2,100  through  October 2003 and $1,980 for the  remaining 40
     months.

     We are a defendant in pending litigation regarding our former premises. The
     plaintiff  is the former  landlord,  who is seeking  damages for an alleged
     breach of the terms of several  operating  lease  agreements for office and
     warehouse  space  located  in  Colorado  Springs,  Colorado.  We  intend to
     vigorously  defend  against  such  claim  and also  intend  to  pursue  our
     counterclaims  for damages caused by the landlord's  constructive  eviction
     from the premises.

     The pending  litigation  is in its  preliminary  stages,  with a trial date
     anticipated in November 2003. The estimated  contingent  liability for this
     litigation  is not  expected  to  exceed  $75,000,  including  the costs of
     defense.

NOTE 10 - NEW ACCOUNTING PRONOUNCEMENTS

     In June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
     Retirement  Obligations."  SFAS No. 143 provides  accounting  and reporting
     guidance for legal obligations associated with the retirement of long-lived
     assets that result from the  acquisition,  construction or normal operation
     of a long-lived  asset. SFAS No. 143 requires the recording of an asset and
     a liability  equal to the present value of the estimated  costs  associated
     with the  retirement  of  long-lived  assets  where a legal or  contractual
     obligation  exists. The asset is required to be accreted each year based on
     a present value interest  rate. We implemented  this standard on January 1,
     2003.  The adoption of this standard did not have a material  effect on our
     financial statements.

NOTE 11 - SEGMENT INFORMATION

     We  operate  primarily  in a single  operating  segment,  distributing  and
     marketing resale grocery products to military commissaries.

                                       8
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

         Certain   statements   in  this  Report   constitute   "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  forward-looking  statements  involve  known and  unknown  risks,
uncertainties and other factors which may cause our actual results,  performance
or achievements to be materially different from any future results,  performance
or achievements  expressed or implied by such  forward-looking  statements.  The
words  "believe",  "expect",  "anticipate",  "intend"  and  "plan"  and  similar
expressions identify  forward-looking  statements.  Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date the statement was made. Because our common stock is considered a "penny
stock," as defined by the regulations of the Securities and Exchange Commission,
the safe harbor for  forward-looking  statements does not apply to statements by
our company.

         Our business and results of  operations  are affected by a wide variety
of factors that could materially and adversely affect us and our actual results,
including,  but not  limited to: (1) the  availability  of  additional  funds to
enable us to  successfully  pursue  our  business  plan;  (2) the  uncertainties
related to the  addition  of new  products  and  suppliers;  (3) our  ability to
maintain,  attract  and  integrate  management  personnel;  (4) our  ability  to
complete the  development of our proposed  product line in a timely manner;  (5)
our ability to effectively  market and sell our products and services to current
and new customers;  (6) our ability to negotiate and maintain suitable strategic
partnerships and corporate  relationships with suppliers and manufacturers;  (7)
the intensity of competition;  and (8) general economic conditions.  As a result
of these and other factors,  we may experience  material  fluctuations in future
operating  results on a quarterly or annual basis,  which could  materially  and
adversely affect our business, financial condition,  operating results and stock
price.

         Any forward-looking statements herein speak only as of the date hereof.
We undertake no obligation  to publicly  release the results of any revisions to
these  forward-looking  statements  that  may  be  made  to  reflect  events  or
circumstances   after  the  date  hereof  or  to  reflect  the   occurrence   of
unanticipated  events.  The following  discussion  should be read in conjunction
with the  financial  statements  and related notes  appearing  elsewhere in this
Report.

         Prior  to  November  15,  2001,  we did not  generate  any  significant
revenue,  and accumulated no significant assets, as we explored various business
opportunities.  On  November  15,  2001,  we  acquired  98.2% of the  issued and
outstanding capital stock of Military Resale Group, Inc., a Maryland corporation
("MRG-Maryland"),  in exchange for a controlling  interest in our  publicly-held
"shell"  corporation.   For  financial  reporting  purposes,   MRG-Maryland  was
considered  the  acquirer  in such  transaction.  As a  result,  our  historical
financial  statements  for any period  prior to  November  15, 2001 are those of
MRG-Maryland.

                                       9
<PAGE>

Results of Operations - Three months ended September 30, 2003 compared to three
                        months ended September 30, 2002

         Revenues.  Total revenue for the three months ended  September 30, 2003
of $1,226,941 reflected a decrease of $424,149, or approximately 25.7%, compared
to total  revenue of $1,651,090  for the three months ended  September 30, 2002.
Our  revenues  are  derived  in  either  one of two  ways.  In the  majority  of
instances,  we purchase products from  manufacturers and suppliers for resale to
the  commissaries  we service.  In such cases, we resell the  manufacturer's  or
supplier's  products to the commissaries at generally the same prices we pay for
such products, which prices generally are negotiated between the manufacturer or
supplier and the Defense  Commissary  Agency ("DeCA").  Revenue is recognized as
the gross sales amount received by us from such sales ("resale revenues"), which
includes (i) the purchase  price paid by the  commissary  plus (ii) a negotiated
storage and delivery fee paid by the manufacturer or supplier.  In the remaining
instances,  we act as an agent for the  manufacturer or supplier of the products
we sell, and earn a commission paid by the  manufacturer or supplier,  generally
in an amount equal to a percentage of the  manufacturer's  or  supplier's  gross
sales amount ("commission  revenues").  In such cases,  revenue is recognized as
the  commission we receive on the gross sales amount.  The decrease in our total
revenues was primarily due to a change in our supplier of fresh chicken products
in the third quarter of 2003 from Tyson Foods, Inc., whose products we sold on a
resale basis,  to ConAgra  Foods,  Inc.,  whose products we sell on a commission
basis.  To a lesser extent,  the decrease in our total revenues was due to lower
sales to the commissary  located at Ft. Carson,  Colorado caused by the overseas
deployment of military personnel stationed at Ft. Carson, which has historically
been our largest customer.

         Resale  revenue  for the  three  months  ended  September  30,  2003 of
$1,143,846 reflected a decrease of $404,538, or approximately 26.1%, compared to
resale revenue of $1,548,384 for the three months ended September 30, 2002. This
decrease  was  attributable  primarily  to the change in our  supplier  of fresh
chicken products and the recent military  deployment as discussed above. For the
three months ended  September 30, 2003,  approximately  7.7% of our gross profit
was derived from sales involving resale revenue compared to approximately  63.1%
for the three months ended September 30, 2002.

         Commission  revenues for the three months ended  September  30, 2003 of
$83,095  reflected a decrease of $19,611,  or approximately  19.1%,  compared to
commission  revenues of $102,706 for the three months ended  September 30, 2002.
For the three months ended September 30, 2003,  approximately 92.3% of our gross
profit was  derived  from sales  involving  commission  revenues  as compared to
approximately 36.9% for the three months ended September 30, 2002. This decrease
in commission revenues was attributable primarily to lower sales at Fort Carson,
Colorado,  offset by an increase in  commission  revenues from the change in our
supplier  of fresh  chicken  products  as  discussed  above.  This  increase  in
commission revenues as a percentage of total revenues was primarily attributable
to the cash shortage  described  above.  We cannot be certain as to whether this
trend will  continue;  however,  in the long term we are seeking to increase the
ratio of our sales of products sold on a resale basis,  rather than a commission
basis,  because we believe we can  increase our  profitability  on such sales by
taking advantage of payment  discounts  frequently  offered by the manufacturers
and suppliers of such products.  Provided we can generate  sufficient  cash from
operations  or  financing  activities,  we intend to do so by seeking to add new
products that we can offer to  commissaries  on a resale basis from our existing
manufactures  and suppliers and from others with whom we do not currently have a
working relationship.



                                       10
<PAGE>

         As indicated  above,  in the three months ended  September 30, 2003, we
added to our supplier  network the Country Pride brand of fresh chicken products
made by ConAgra  Foods,  Inc. The Country Pride lines replaced a majority of the
lines of fresh  chicken  products that were  previously  supplied to us by Tyson
Foods,  Inc. On August 1, 2003, the Country Pride lines became  available in the
commissaries  we  currently  serve.  Our  agreement  with  ConAgra is a one-year
agreement that is cancelable by ConAgra upon 30 days' written notice. Subsequent
to September 30, 2003, we added to our supplier  network the frozen food line of
Tyson Foods, Inc., one our existing suppliers.

         Management  believes our  long-term  success will be dependent in large
part on our ability to add additional product offerings to enable us to increase
our sales and  revenues.  However,  we believe  our  ability  to add  additional
product  offerings is dependent on our ability to obtain  additional  capital to
fund new business  development and increased sales and marketing efforts. We are
currently in discussions with a number of other  manufacturers  and suppliers in
an effort to reach an agreement under which we can distribute  their products to
the  military  market.  While there can be no  assurance  that we will do so, we
believe we will be successful in  negotiating  agreements  with a number of such
suppliers and manufacturers.

         To date,  all of our sales revenue has been  generated  from  customers
located in the United States.

         Cost of Goods Sold.  Cost of goods sold consists of our cost to acquire
products  from  manufacturers  and  suppliers  for  resale to  commissaries.  In
instances when we sell products on a commission basis, there is no cost of goods
sold because we act as an agent for the manufacturer or supplier and earn only a
commission on such sales. During the three months ended September 30, 2003, cost
of goods sold decreased by $236,177,  or approximately 17.2%, to $1,136,929 from
$1,373,106  for the three months ended  September  30, 2002.  This  decrease was
attributable  primarily  to the  decrease  in total  revenues  discussed  above,
particularly,  the  decrease in revenue from  products  that we sold on a resale
basis during the three months ended  September 30, 2003 as compared to the three
months ended September 30, 2002.

         Gross  Profit.  Gross profit for the three months ended  September  30,
2003 decreased by approximately  $187,972,  or approximately 67.6%,  compared to
the three months ended  September  30, 2002,  from $277,984 for the three months
ended  September  30, 2002 to $90,012 for the three months ended  September  30,
2003. This decrease was attributable primarily to the decrease in total revenues
discussed  above and,  particularly,  the  decrease in revenue  from the sale of
products on a commission basis that have no associated cost of good sold.

         Operating  Expenses.  Total operating expenses  aggregated $815,321 for
the three months ended  September 30, 2003 as compared to $749,853 for the three
months  ended  September  30,  2002,  representing  an increase  of $65,468,  or


                                       11
<PAGE>

approximately  8.7%. The increase in total operating  expenses was  attributable
primarily  to an  increase  in  stock-based  compensation  expense  of  $140,441
resulting  primarily from the issuance of shares of our common stock and options
to purchase shares of our common stock to our consultants,  which was offset, in
part, by decreased salary and payroll expenses of $53,643 and decreased  general
and  administrative  expenses  of $18,005  resulting  from our efforts to reduce
overhead.

         Interest  Expense.  Interest  expense of $25,459  for the three  months
ended September 30, 2003 reflected a decrease of $90,104 as compared to interest
expense of $115,563 for the three months ended September 30, 2002. This decrease
in interest  expense was  attributable  primarily to the decrease in convertible
notes issued having a beneficial  conversion  feature (the right to convert debt
into shares of our common  stock at a discount  to the fair market  value of our
common stock). During the three months ended September 30, 2003, one convertible
note  having a  beneficial  conversion  feature  was  issued  and we  recognized
interest  expense  of  $1,000  relating  to  a  beneficial   conversion  feature
associated with such note.

         Net Loss.  Primarily as a result of the decreased revenue and increased
operating  expenses  discussed above, we incurred a net loss of $750,632 for the
three months ended  September 30, 2003 as compared to a net loss of $587,065 for
the three months ended September 30, 2002.

Nine months ended September 30, 2003 compared to nine months ended September 30,
2002

         Revenues. Total revenue for the nine months ended September 30, 2003 of
$4,655,469 reflected a decrease of $132,419,  or approximately 2.8%, compared to
total revenue of $4,787,888 for the nine months ended  September 30, 2002.  This
decrease in total  revenues was  primarily  due to the change in our supplier of
fresh  chicken  products  and, to a lesser  extent,  the  deployment of military
personnel as discussed above.

         Resale  revenue  for  the  nine  months  ended  September  30,  2003 of
$4,290,820 reflected a decrease of $270,378,  or approximately 5.9%, compared to
resale revenue of $4,561,198 for the nine months ended  September 30, 2002. This
decrease  was  attributable  primarily to the  decreases  in total  revenues and
resale  revenues  in the  third  quarter  of 2003 as  discussed  above  and to a
short-term  cash  shortage  during the first and second  quarters  of 2003 which
prevented us from adding new products on a resale basis due the significant cash
expenditure   required.   For  the  nine  months  ended   September   30,  2003,
approximately  45.7% of our gross profit was derived from sales involving resale
revenue compared to approximately  68.4% for the nine months ended September 30,
2002.  During  the year ended  December  31,  2002,  we began  implementing  our
long-term  strategy to increase  the ratio of our sales of products we sell on a
resale basis,  rather than a commission  basis, due to the payment  discounts we
often receive from the  manufacturers and suppliers of the goods we purchase for
resale. However, due to our short-term cash shortage during the first and second
quarters of 2003, we were required to lower this ratio by increasing  the amount
of our of sales on a commission  basis,  which do not require a significant cash
expenditure.



                                       12
<PAGE>

         Commission  revenues  for the nine months ended  September  30, 2003 of
$364,649 reflected an increase of $137,959,  or approximately 60.9%, compared to
commission  revenues of $226,690 for the nine months ended  September  30, 2002.
For the nine months ended September 30, 2003,  approximately  54.3% of our gross
profit was  derived  from sales  involving  commission  revenues  as compared to
approximately  31.6%  for the  nine  months  ended  September  30,  2002.  These
increases  were  attributable  primarily  to the change in our supplier of fresh
chicken  products  discussed above and the addition of the new products we began
supplying  to  commissaries  on a  commission  basis during the first and second
quarters of 2003 due to our short-term cash shortage discussed above.

         Cost of Goods Sold.  During the nine months ended  September  30, 2003,
cost of goods sold decreased by $85,970,  or  approximately  2.1%, to $3,983,622
from  $4,069,592 for the nine months ended September 30, 2002. This decrease was
attributable  primarily to the  decreased  sales of products we sell on a resale
basis  discussed  above.  We cannot be  certain  as to  whether  this trend will
continue;  however, in the long term we are seeking to increase the ratio of our
sales on a resale basis.


         Gross Profit. Gross profit for the nine months ended September 30, 2003
decreased by approximately  $46,449, or approximately 6.5%, compared to the nine
months  ended  September  30,  2002,  from  $718,296  for the nine months  ended
September  30, 2002 to $671,847  for the nine months ended  September  30, 2003.
This  decrease was  attributable  primarily  to the  decrease in total  revenues
offset by the  increase in  commission  revenues  for this  period as  discussed
above.

         Operating Expenses.  Total operating expenses aggregated $2,250,539 for
the nine months ended  September 30, 2003 as compared to $1,682,835 for the nine
months ended  September  30,  2002,  representing  an increase of  $567,704,  or
approximately  33.7%. The increase in total operating  expenses was attributable
primarily  to an  increase  in  stock-based  compensation  expense  of  $421,900
resulting  primarily from the issuance of shares of our common stock and options
to purchase shares of our common stock to our consultants; and increased general
and administrative expenses of $155,030 resulting primarily from increased truck
rental expense and increased premiums on health workers' compensation insurance.

         Interest  Expense.  Interest  expense of  $258,755  for the nine months
ended September 30, 2003 reflected a decrease of $97,071 as compared to interest
expense of $355,826 for the nine months ended  September 30, 2002.  The decrease
in interest  expense was  attributable  primarily to the decrease in convertible
notes issued  having a  beneficial  conversion  feature.  During the nine months
ended September 30, 2003, we recognized  interest expense of $43,000 relating to
the beneficial  conversion  feature  associated  with  convertible  notes issued
during such period as compared to interest expense of $225,000 recognized during
the nine months ended September 30, 2002.

         Net Loss. Primarily as a result of the decreased revenues and increased
operating expenses discussed above, we incurred a net loss of $1,837,311 for the
nine months ended September 30, 2003 as compared to a net loss of $1,319,956 for
the nine months ended September 30, 2002.



                                       13
<PAGE>

Liquidity and Capital Resources

         At September  30, 2003,  we had a cash balance of $631.  Our  principal
source of liquidity has been borrowings. Since November 2001, we have funded our
operations primarily from borrowings of approximately  $855,000. Such borrowings
consisted of $340,000 aggregate principal amount of demand note indebtedness, of
which  $240,000  was  borrowed  from  our  affiliates,  and  $515,000  aggregate
principal  amount  of  convertible  note  indebtedness,  of which  $120,000  was
borrowed  from our  affiliates,  pursuant to the issuance of  convertible  notes
bearing  interest at either 8% ("8%  convertible  notes") or 9% ("9% convertible
notes")  per annum and having  original  maturity  dates  between  three to five
months following the date of issuance of such convertible notes.

         In April 2002,  $150,000  aggregate  principal amount of 9% convertible
notes (and $2,380 accrued interest thereon) was converted by the holders into an
aggregate  of  1,793,573  shares of our  common  stock.  The  remaining  $80,000
aggregate  principal amount of 9% convertible  notes are convertible at any time
and from time to time by the noteholders  into a maximum of 1,320,000  shares of
our common  stock  (subject  to  certain  anti-dilution  adjustments)  if the 9%
convertible  notes are not in default,  or a maximum of 2,640,000  shares of our
common  stock  (subject  to certain  anti-dilution  adjustments)  if an event of
default has occurred in respect of such notes. The $285,000 aggregate  principal
amount of 8% convertible  notes outstanding are convertible at any time and from
time to time by the noteholders into a maximum of 3,982,500 shares of our common
stock (subject to certain anti-dilution  adjustments).  In nearly all instances,
the terms of the 8% and 9%  convertible  notes require us to register  under the
Securities Act of 1933 the shares our common stock  issuable upon  conversion of
the 9%  convertible  notes not later than  September 3, 2006. In July 2002,  the
holders of $20,000  aggregate  principal amount of 8% convertible notes maturing
on September  30, 2002 denied our request to extend the maturity of their notes.
In  September  2003,  the holders of $35,000  aggregate  principal  amount of 9%
convertible notes maturing on September 30, 2003 and $10,000 aggregate principal
amount of 8% convertible notes maturing on September 30, 2003 denied our request
to extend the maturity of their notes until  September 3, 2006. The  outstanding
principal and interest on such convertible  notes maturing on September 30, 2002
and  September  30, 2003 have not yet been paid and such  convertible  notes are
currently in default.

         In June 2003,  $240,000 aggregate  principal amount of our demand notes
with various  maturity dates and $265,000  aggregate  principal amount of our 8%
convertible notes due June 30, 2003 or September 30, 2003, were extended to June
3, 2006. At the time of extension,  this debt represented  approximately  78% of
our  short-term  liabilities.  As a  result  of  the  extension,  our  remaining
short-term   liabilities  are  approximately   $174,000,  of  which  $85,000  is
convertible  to equity.  In  consideration  of their  willingness  to extend the
maturity dates of such notes, we issued such  noteholders  five-year  options to
purchase approximately 1,305,000 shares of our common stock at an exercise price
of $0.25 per share. As additional  consideration,  we granted the holders of our
demand notes who agreed to extend the maturity dates,  the right to convert,  at
any time and from time to time,  all or a  portion  of the  outstanding  balance
under such notes (including  accrued interest thereon) into shares of our common
stock  at a  conversion  price of  $0.25.  Such  notes do not have a  beneficial
conversion feature.



                                       14
<PAGE>

         The terms of $35,000  aggregate  principal amount of our 9% convertible
notes and $10,000 aggregate principal amount of our 8% convertible notes provide
generally  that, if the  convertible  notes are not in default,  the holders may
convert,  at any time and from time to time, all or a portion of the outstanding
balance under each  convertible note into a number of shares (subject to certain
anti-dilution adjustments) of our common stock that will allow the noteholder to
receive  common  stock  having a  market  value  equal to 150% of the  converted
balance of the note. To achieve this result,  the conversion price of such notes
has been initially set at $0.50;  provided,  that the closing price per share of
our common stock as reported on the OTC Bulletin Board on the date of conversion
is at least $0.75 per share. If such closing price is less than $0.75 per share,
the  conversion  price shall be  proportionately  reduced,  but in no event to a
conversion price that is less than $0.10 per share in the case of 9% convertible
notes or $0.25  per share in the case of 8%  convertible  notes,  to permit  the
noteholder  to receive  the  number of shares  discussed  above.  If an event of
default has occurred in respect of a 9% convertible note, the holder may convert
the   outstanding   balance  into  a  number  of  shares   (subject  to  certain
anti-dilution  adjustments)  of our  common  stock  equal to twice the number of
shares the holder would have otherwise  received if such 9% convertible note was
not in default.

         The terms of our remaining 8% convertible  notes are  convertible  into
shares of our  common  stock at a price of $0.25 per share  (subject  to certain
anti-dilution  adjustments).  The terms of our  remaining 9%  convertible  notes
provide generally that, if the convertible notes are not in default, the holders
may  convert,  at any time  and  from  time to  time,  all or a  portion  of the
outstanding balance under each convertible note into a number of shares (subject
to certain  anti-dilution  adjustments)  of our common stock that will allow the
noteholder  to receive  common  stock having a market value equal to 150% of the
converted  balance of the note. To achieve this result,  the conversion price of
such notes has been initially set at $0.25; provided, that the closing price per
share of our common stock as reported on the OTC  Bulletin  Board on the date of
conversion  is at least  $0.375 per share.  If such  closing  price is less than
$0.375 per share, the conversion price shall be proportionately  reduced, but in
no event to a conversion price that is less than $0.10 per share. If an event of
default has occurred in respect of a 9% convertible note, the holder may convert
the   outstanding   balance  into  a  number  of  shares   (subject  to  certain
anti-dilution  adjustments)  of our  common  stock  equal to twice the number of
shares the holder would have otherwise  received if such 9% convertible note was
not in default.

         In  February  2003,  one  of  our  capital  lease  obligations  in  the
approximate  amount of $35,000,  which is secured by  equipment  with a net book
value of $25,363,  was accelerated by the lessor due to non-payment.  Management
has contacted such lessor to negotiate alternative payment arrangements for this
obligation.  If unsuccessful,  the lessor could bring suit to collect payment or
foreclose  upon the  collateral.  Any such  litigation may hinder our ability to
raise or obtain the  capital  we require or have an adverse  impact on the terms
upon which we are able to attract or obtain such capital.



                                       15
<PAGE>

         Our current cash levels,  together with the cash flows we generate from
operating  activities,  are not  sufficient to enable us to execute our business
strategy.  As a result, we intend to seek additional capital through the sale of
up to 5,000,000  shares of our common stock. In December 2001, we filed with the
Securities  and Exchange  Commission a registration  statement  relating to such
shares.  Such registration  statement has not yet been declared  effective,  and
there can be no  assurance  that the  Securities  and Exchange  Commission  will
declare such registration  statement effective in the near future, if at all. In
the interim, we intend to fund our operations based on our cash position and the
near term cash flow generated from operations,  as well as other sales of equity
securities  or  additional  borrowings.  In the  event we are  able to  generate
aggregate net proceeds of at least $1,000,000 from such sources, we believe that
such  net  proceeds,  together  with  anticipated  revenues  from  sales  of our
products, will satisfy our capital requirements for at least the next 12 months.
However,  we would require  additional  capital to realize our strategic plan to
expand distribution  capabilities and product offerings.  These conditions raise
substantial  doubt about our ability to continue as a going concern.  Our actual
financial results may differ materially from the stated plan of operations.  Our
independent  auditors  have  indicated  in  its  report  on our  2002  financial
statements  that our recurring  losses from  operations and our  difficulties in
generating  sufficient  cash  flow to  meet  our  obligations  and  sustain  our
operations  raise  substantial  doubt  about our  ability to continue as a going
concern.  Such  qualification  may  hinder  our  ability  to raise or obtain the
capital we require or have an adverse impact on the terms upon which we are able
to attract or obtain such capital. In addition, such qualification may adversely
impact our ability to attract and maintain new customer accounts.

         Assuming that we receive  aggregate net proceeds of at least $1,000,000
from our proposed  securities  offerings  or  additional  borrowings,  we expect
capital  expenditures  to be  approximately  $100,000 during the next 12 months,
primarily for the  acquisition of an inventory  control  system.  It is expected
that our  principal  uses of cash during that period will be to provide  working
capital,  to finance capital  expenditures,  to repay indebtedness and for other
general  corporate  purposes,  including  sales and  marketing  and new business
development. The amount of spending for any particular purpose is dependent upon
the total cash available to us and the success of our offering of common stock.

         At September 30, 2003, we had liquid assets of $599,560,  consisting of
cash and accounts  receivable derived from operations,  and other current assets
of  $1,023,098,  consisting  primarily  of inventory of products for sale and/or
distribution  and  prepaid  expenses.  Long term  assets of  $188,140  consisted
primarily of warehouse equipment used in operations.

         Current  liabilities  of  $2,383,203  at September  30, 2003  consisted
primarily of $1,902,216 of accounts payable and accrued expenses.

         Our working  capital  deficit was $760,545 as of September 30, 2003 for
the reasons described above.

         During  the nine  months  ended  September  30,  2003,  we used cash of
$252,523  in  operating  activities  primarily  as a  result  of the net loss we
incurred during this period.



                                       16
<PAGE>

         During the nine months ended  September  30, 2003,  we used net cash of
$1,765 in investing activities, all of which was used for capital expenditures.

         Financing  activities,   consisting  primarily  of  proceeds  from  the
issuance of notes payable,  provided net cash of $252,847 during the nine months
ended September 30, 2003.

ITEM 3.  CONTROLS AND PROCEDURES

         (a) Based upon an evaluation  performed as of September  30, 2003,  our
  Chief Executive  Officer ("CEO") and Chief Financial Officer ("CFO") have each
  concluded that our disclosure  controls and procedures are effective to ensure
  that material information relating to our Company is made known to management,
  including  the CEO and CFO,  particularly  during the period when our periodic
  reports are being  prepared,  and that our internal  controls are effective to
  provide  reasonable  assurances  that  our  financial  condition,  results  of
  operations and cash flows are fairly presented in all material respects.

         (b)  During  the third  quarter  of 2003,  there were no changes in our
  internal controls over financial reporting that have materially  affected,  or
  are  reasonably  likely to  materially  affect,  our  internal  controls  over
  financial reporting.


PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         (a) None.

         (b) None.

         (c) In July 2003, we issued  127,272  shares of our common stock to one
of our consultants for services rendered during the second quarter of 2003. Such
shares  were  issued by us in  reliance  upon the  exemption  from  registration
provided by Section 4(2) of the Securities Act of 1933, as amended, on the basis
that such issuance did not involve a public  offering,  no  underwriter  fees or
commissions were paid by us in connection with such issuance and such person was
an `accredited  investor' as defined in Regulation D under the Securities Act of
1933, as amended.

         In July 2003, we issued 127,273 shares of our common stock to our Chief
Executive  Officer  as  compensation  for  services  rendered  during the second
quarter of 2003.  Such shares were issued by us in reliance  upon the  exemption
from  registration  provided by Section 4(2) of the  Securities  Act of 1933, as
amended,  on the basis that such issuance did not involve a public offering,  no
underwriter fees or commissions were paid by us in connection with such issuance
and such person was an  `accredited  investor' as defined in  Regulation D under
the Securities Act of 1933, as amended.



                                       17
<PAGE>

         In August 2003, we issued an aggregate of 250,000  shares of our common
stock to two  investors  in a private sale for  aggregate  net proceeds to us of
$50,000.  Such  shares were issued by us in  reliance  upon the  exemption  from
registration provided by Section 4(2) of the Securities Act of 1933, as amended,
on the  basis  that  such  issuance  did  not  involve  a  public  offering,  no
underwriter fees or commissions were paid by us in connection with such issuance
and such persons were  `accredited  investors'  as defined in Regulation D under
the Securities Act of 1933, as amended.

         (d) None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits.  The  following  exhibits  are  filed  herewith  or  are
incorporated by reference to Exhibits previously filed.

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

              31.1          Certification  of our Principal  Executive  Officer,
                            Edward T.  Whelan,  pursuant  to Section  302 of the
                            Sarbanes-Oxley Act of 2002.

              31.2          Certification  of our Principal  Financial  Officer,
                            Ethan  D.  Hokit,  pursuant  to  Section  302 of the
                            Sarbanes-Oxley Act of 2002.

              32.1          Certification  of our Principal  Executive  Officer,
                            Edward T.  Whelan,  pursuant  to Section  906 of the
                            Sarbanes-Oxley Act of 2002.

              32.2          Certification  of our Principal  Financial  Officer,
                            Ethan  D.  Hokit,  pursuant  to  Section  906 of the
                            Sarbanes-Oxley Act of 2002.

              (b) Reports on Form 8-K.

                  None.


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<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned  thereunto duly authorized,  in Colorado  Springs,
Colorado on November 25, 2003.

                                  MILITARY RESALE GROUP, INC.


                                  By: /s/ Ethan D. Hokit
                                      --------------------------------------
                                      Name: Ethan D. Hokit
                                      Title: President (Principal Accounting
                                             Officer and Principal Financial
                                             Officer)


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<PAGE>



                                  Exhibit Index


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

              31.1          Certification  of our Principal  Executive  Officer,
                            Edward T.  Whelan,  pursuant  to Section  302 of the
                            Sarbanes-Oxley Act of 2002.

              31.2          Certification  of our Principal  Financial  Officer,
                            Ethan  D.  Hokit,  pursuant  to  Section  302 of the
                            Sarbanes-Oxley Act of 2002.

              32.1          Certification  of our Principal  Executive  Officer,
                            Edward T.  Whelan,  pursuant  to Section  906 of the
                            Sarbanes-Oxley Act of 2002.

              32.2          Certification  of our Principal  Financial  Officer,
                            Ethan  D.  Hokit,  pursuant  to  Section  906 of the
                            Sarbanes-Oxley Act of 2002.




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