<PAGE>

                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 March 31, 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)

<TABLE>
<CAPTION>
<S>                                                             <C>
                        New York                                               11-2665282
    -------------------------------------------------            -------------------------------------
    (State or other jurisdiction of incorporation or             (I.R.S. Employer Identification No.)
                      organization)
</TABLE>

                              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 March 31, 2003, there were 11,975,804  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.

<S>                 <C>                                                                        <C>
PART I.              Financial Information

Item 1.              Financial Statements

                     Balance Sheets - March 31, 2003 and December 31, 2002......................     1

                     Statements of Operations - Three months ended March 31, 2003 and 2002......     2

                     Statements of Cash Flows - Three months ended March 31, 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....................................................    15

PART II.             Other Information

Item 2.              Changes in Securities and Use of Proceeds..................................    15

Item 6.              Exhibits and Reports on Form 8-K...........................................    16

Signatures           ...........................................................................    17

Certifications       ...........................................................................    18
</TABLE>


                                       i
<PAGE>


ITEM 1.  FINANCIAL INFORMATION

                           MILITARY RESALE GROUP, INC.
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                      March 31,   December 31,
                                                                                        2003          2002
                                                                                     -----------   ----------
        Assets                                                                       (Unaudited)    (Audited)
                                                                                     -----------   -----------
<S>                                                                                 <C>             <C>
Current Assets
     Cash                                                                           $     2,146    $     2,072
     Accounts receivable - trade                                                        497,805        428,037
     Inventory                                                                          218,196        227,416
     Prepaid consulting (Note 3)                                                        167,639        116,417
     Deposits                                                                            23,358         23,358
     Prepaid interest (Note 4)                                                           33,333        133,333
     Other current assets                                                                   550            618
                                                                                    -----------    -----------
       Total Current Assets                                                             943,027        931,251

Fixed Assets
     Office equipment                                                                    12,371         10,607
     Warehouse equipment                                                                159,444        159,444
     Software                                                                            16,324         16,324
                                                                                    -----------    -----------
                                                                                        188,139        186,375
     Less accumulated depreciation                                                      (91,221)       (76,229)
                                                                                    -----------    -----------
       Net Fixed Assets                                                                  96,918        110,146
                                                                                    -----------    -----------
     Total Assets                                                                     1,039,945      1,041,397
                                                                                    ===========    ===========

           Liabilities and Stockholders' Equity (Impairment)
Current Liabilities
     Accounts payable and accrued expenses                                            1,582,737      1,470,776
     Bank overdraft                                                                        --           11,068
     Other current liabilities                                                           86,814         81,726
     Current maturities of capital lease obligations                                     37,271         37,271
     Current portion of deferred rental obligation                                       11,598         21,584
     Accrued interest payable                                                            67,735         47,816
     Related party notes payable (Note 5)                                               240,000        230,000
     Convertible notes payable (Note 6)                                                 270,000        255,000
     Promissory note payable (Note 8)                                                   100,000           --
                                                                                    -----------    -----------
       Total Current Liabilities                                                      2,396,155      2,155,241
     Deferred rental obligation                                                          69,590         57,557
     Obligations under capital leases, excluding current maturities                      44,973         51,735
                                                                                    -----------    -----------
         Total Liabilities                                                            2,510,718      2,264,533

Commitments 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, 11,975,804 and         1,197          1,138
11,383,390 shares issued and outstanding in 2003 and 2002, respectively
     Additional paid-in capital                                                       2,303,689      2,050,690
     Accumulated deficit                                                             (3,775,659)    (3,274,964)
                                                                                    -----------    -----------
         Total Stockholders' Equity (Impairment)                                     (1,470,773)    (1,223,136)
                                                                                    -----------    -----------
     Total Liabilities and Stockholders' Equity (Impairment)                        $ 1,039,945    $ 1,041,397
                                                                                    ===========    ===========
See notes to the financial statements
</TABLE>


                                       1

<PAGE>


3


                           MILITARY RESALE GROUP, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                   THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                           2003          2002
                                                                     -------------   ------------
<S>                                                                  <C>              <C>
Revenues
     Resale revenue                                                 $  1,612,597    $  1,357,584
     Commission revenue                                                  146,366          59,674
                                                                    ------------    ------------
       Total Revenues                                                  1,758,963       1,417,258
                                                                    ------------    ------------
Cost of goods sold                                                     1,512,326       1,238,921
                                                                    ------------    ------------
     Gross Profit                                                        246,637         178,337
                                                                    ------------    ------------
Operating Expenses
     Stock based compensation (Note 5 and 7)                             206,369         115,065
     Salary and payroll taxes                                            117,138          90,165
     Professional fees                                                    64,034            --
     Occupancy                                                            59,356          55,262
     General and administrative                                          150,059         112,053
     Amortization/depreciation                                            14,991          10,627
                                                                    ------------    ------------
       Total Operating Expenses                                          611,947         383,172
                                                                    ------------    ------------
         Net Loss From Operations                                       (365,310)       (204,835)
                                                                    ------------    ------------
Other (Expenses)
     Interest expense                                                   (135,385)       (211,170)
     Loss on disposal of fixed assets                                       --              --
                                                                    ------------    ------------
       Total Other (Expense)                                            (135,385)       (211,170)
                                                                    ------------    ------------
         Net Loss                                                   $   (500,695)   $   (416,005)
                                                                    ------------    ------------

Loss Per Share (Note 2)
     Net Loss Per Common Share - basic and diluted                  $      (0.04)   $      (0.05)
                                                                    ============    ============
     Weighted average number of common shares outstanding - basic
       and diluted - basic                                            11,684,156       7,705,004
                                                                    ============    ============

</TABLE>


See notes to the financial statements.


                                       2

<PAGE>


                           MILITARY RESALE GROUP, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                   THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              2003         2002
                                                           ---------   -----------
<S>                                                         <C>           <C>
Cash Flows From Operating Activities
     Net Loss                                              $(500,695)   $(416,005)
     Adjustments to reconcile net loss to net cash
       used in operating activities
       Depreciation and amortization                          14,911       10,626
       Amortization of option based interest expense         100,000         --
       Stock based compensation                              153,924      115,065
       Beneficial conversion feature                          15,000         --
       Loss on disposal of assets                               --          6,380
Changes in Assets and Liabilities
       Decrease (increase) in accounts receivable            (69,768)      56,825
       Decrease (increase) in inventory                        9,220      (63,404)
       Decrease in other assets                                   68        3,479
       (Increase) in deposits                                   --         (2,812)
       Increase in accounts payable and accrued expenses     144,873      228,336
       Increase in deferred rent obligation                    2,047         --
       Increase in other liabilities                          25,007         --
                                                           ---------    ---------

         Net Cash Used In Operating Activities              (105,413)     (61,510)
                                                           ---------    ---------

Cash Flows From Investing Activities
       Purchase of fixed assets                               (1,683)      (1,912)
                                                           ---------    ---------

Cash Flows Used In Investing Activities                       (1,683)      (1,912)
                                                           ---------    ---------

Cash Flows From Financing Activities
       Bank overdraft                                        (11,068)      (1,349)
       Payments on capital lease obligations                  (6,762)        --
       Proceeds from issuance of notes                       125,000      119,352
                                                           ---------    ---------

Cash Flows Provided By Financing Activities                  107,170      118,003
                                                           ---------    ---------

Net Increase in Cash and Cash Equivalents                         74       54,581
Cash and Cash Equivalents at Beginning of Period               2,072         --
                                                           ---------    ---------

Cash and Cash Equivalents at End of Period                 $   2,146    $  54,581
                                                           =========    =========

SUPPLEMENTAL INFORMATION
     Interest Paid                                         $     466    $   6,170
                                                           =========    =========
     Income Taxes Paid                                     $    --      $    --
                                                           =========    =========
</TABLE>

See notes to the financial statements.

                                       3
<PAGE>

                           MILITARY RESALE GROUP, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>


Non-cash investing and financing activities:
                                                                     2003         2002
                                                                 ----------    ----------
<S>                                                              <C>           <C>
  Issuance of stock and options in exchange for services
  to be rendered over six months
                                                                 $  205,146    $        --
                                                                 -----------   -----------
  Issuance of common stock in payment of accrued compensation    $   32,912    $        --
                                                                 ----------   -----------
</TABLE>





See notes to the financial statements.

                                       4
<PAGE>


                           MILITARY RESALE GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS



NOTE 1 - NATURE OF ORGANIZATION

     Military Resale Group, Inc. (the Company),  organized under the laws of the
     State of New York, is a regional distributor of grocery and household items
     specializing  in  distribution  to  commissaries  of  the U.  S.  Military.
     Currently,  the Company  services  six  military  installations  located in
     Colorado, Wyoming and South Dakota.

     On October 15, 2001, the Company, formerly Bactrol Technologies, Inc. and
     Military Resale Group, Inc. ("MRG"), which was formed on October 6, 1997
     executed a Stock Purchase Agreement pursuant to which 98.2% of MRG's stock
     was effectively exchanged for a controlling interest in a publicly held
     "shell" corporation that concurrently changed its name 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 the net monetary assets of the
     Company, accompanied by a recapitalization of MRG with no goodwill or other
     intangible assets recorded.

     For financial reporting purposes, MRG is 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.

     The Company has suffered recurring losses from operations, and is in a
     working capital deficit position that raises substantial doubt about its
     ability to continue as a going concern.

     The Company's management is currently pursuing equity and/or debt financing
     in an effort to continue operations. The future success of the Company is
     likely dependent on its ability to attain additional capital to develop its
     proposed products and ultimately, upon its ability to attain future
     profitable operations. There can be no assurance that the Company will be
     successful in obtaining such financing, or that it 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-month
     period ended March 31, 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 the Registrant Company's 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 six-month agreement term. During the three months ended March 31,
     2003, the Company incurred additional prepayments of $122,222 and
     stock-based compensation expense of $71,000.


                                       5

<PAGE>




                           MILITARY RESALE GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 4 - PREPAID INTEREST

     Prepaid interest expense is recorded in connection with the issuances of
     options for the extension of one of the Company's notes payable. The
     interest expense is being amortized over the extension period of six
     months, with $100,000 charged to interest expense in the current period.

NOTE 5 - RELATED PARTY TRANSACTIONS

     In January 2003, the Company entered into a one-year business consulting
     agreement with Edward Meyer, Jr. for marketing and managerial consulting
     services, and a one-year executive compensation agreement with Edward
     Whelan. In consideration of the services to be rendered by Mr. Whelan and
     Mr. Meyer, the Company 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 the Company's common stock during each quarter. As of
     March 31, 2003, no shares of the Company's common stock had been issued for
     services rendered during the term of the agreement.

     During the three months ended March 31, 2003, the Company issued an
     aggregate of 96,207 shares of the Company's common stock to Mr. Meyer as
     consideration under the January 2002 consulting agreement for services
     rendered in the 4th quarter of 2002, and an aggregate of 96,207 shares of
     the Company's common stock to Mr. Whelan as consideration under his 2002
     executive compensation agreement for services rendered in the 4th quarter
     of 2002. The shares issued were valued at $0.19 per share, the fair market
     value on the date of issuance.

     On March 11, 2003, Edward Whelan loaned the Company $10,000. The
     corresponding note bears interest at a rate of 8% per annum and is due on
     the earlier of demand or June 30, 2003.

     Subsequent to the quarter end, the Company issued 109,259 shares of the
     Company's common stock to each of Mr. Whelan and Mr. Meyer for the first
     quarter of 2003. The aggregate value of the shares issued which were
     expensed as accrued stock based compensation at March 31, 2003 totaled
     $52,445.

NOTE 6 - CONVERTIBLE NOTES

     At March 31, 2003, the Company had an aggregate of $270,000 payable in
     convertible notes. $20,000 of the convertible notes bear interest at 8% per
     annum and are due on June 30, 2002. $70,000 of the convertible notes bear
     interest at 8% per annum prior to June 30, 2002 and 9% per annum thereafter
     and are due on June 30, 2003. $180,000 of the convertible notes bear
     interest at 8% per annum, including $75,000 due on June 30, 2003 and
     $105,000 due on July 30, 2003. The terms of the Company's 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 the Company's 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. 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 the Company's 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 the Company to register under
     the Securities Act of 1933 the shares its common stock issuable upon
     conversion of the convertible notes not later than June 30, 2003.

     The Company follows 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 the Company's convertible notes contained a
     beneficial conversion feature on the date of issuance, the Company measured
     and recognized the intrinsic value of the beneficial conversion feature of
     the convertible notes


                                       6
<PAGE>




                           MILITARY RESALE GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS


     when the convertible notes were issued.  During the periods ended March 31,
     2003 and 2002,  interest  expense of  $15,000  and  $205,000,  respectively
     (representing the aggregate  proceeds to the Company 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 quarter ended March 31, 2003, the Company issued an aggregate
     400,000 of the Company's common shares and 650,000 common stock options to
     various consultants for services provided or to be provided. Consulting
     expense of $153,924 was recognized in 2003 and a prepaid consulting expense
     of $122,222 was recorded in 2003. These amounts were based on the fair
     market value of the shares on the date of issuance.

NOTE 8 - PROMISSORY NOTE PAYABLE

     On March 27, 2003, the Company 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 the
     Company's 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 the Company fails to secure any of the above-referenced additional
     funding, nor another significant event, such as a merger or acquisition of
     another company, the Company will be required to pay $8,000 per month
     commencing on July 1, 2003 until the full obligation is paid.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

     In March 2003, the Company entered into a consulting agreements for the
     provision of marketing and other advisory services. The agreement provides
     that, as compensation for such services, the Company will issue 250,000
     shares of the Company's common stock and an option to purchase 650,000
     shares of the Company's common stock at the lower of $.50 per share or the
     price per share granted to any other advisor or employee of the Company
     during the term of the agreement. The agreement is for six months.

     In February 2003 the Company entered into an agreement with an entity to
     act as the Company's financial advisor, investment banker and placement
     agent in connection with the placement of credit facilities and securities.
     The agreement calls for an equity retainer of 200,000 shares of restricted
     common stock and $5,000 per month through August 2003, as well as the
     following:

     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, the Company entered into a lease modification agreement
     for its 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.

                                       7

<PAGE>



                           MILITARY RESALE GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS


     The Company is a defendant in pending litigation regarding its 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. The
     Company intends to vigorously defend against such claim and also intends to
     pursue its 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

     Standard Implemented
       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. The Company
       implemented this standard on January 1, 2003. The adoption of this
       standard did not have a material effect on the Company's financial
       statements.

NOTE 11 - SEGMENT INFORMATION

     The Company operates 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 signification  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 MARCH 31, 2003 COMPARED TO THREE
MONTHS ENDED MARCH 31, 2002

     REVENUES.  Total  revenue  for the three  months  ended  March 31,  2003 of
$1,758,963 reflected an increase of $341,705,  or approximately 24.1%,  compared
to total  revenue of $1,417,258  for the three months ended March 31, 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.

     Resale  revenue for the three  months  ended  March 31, 2003 of  $1,612,597
reflected an increase of $255,013,  or approximately  18.8%,  compared to resale
revenue of $1,357,584  for the three months ended March 31, 2002.  This increase
was  attributable  primarily  to the  addition  of the  new  products  we  began
supplying  to  commissaries  during  fiscal  2002,  including a line of feminine
hygiene  products  and a line of infant  feeding  products  supplied  by Playtex
Products,  Inc. that we sell on a resale basis. For the three months ended March
31,  2003,  approximately  40.7% of our gross  profit  was  derived  from  sales
involving resale revenue  compared to  approximately  66.5% for the three months
ended  March 31,  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 three  months ended March 31,  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.

     In the three  months  ended  March 31,  2003,  Playtex  Products,  Inc.,  a
supplier for whom we sell products on a resale basis,  suspended the sale of its
products to us pending our payment of an outstanding  invoice in the approximate
amount of $12,000 for products  previously  shipped to us. To date,  we have not
made such payment and all sales by Playtex remain  suspended.  We intend to make
the  outstanding  payment in the second quarter of 2003, and believe that,  upon
such payment, Playtex will resume the sale of its products to us pursuant to the
terms of our agreement.

     Commission  revenues  for the three months ended March 31, 2003 of $146,366
reflected an increase of $86,692,  or approximately 145%, compared to commission
revenues of $59,674 for the three  months  ended March 31,  2002.  For the three
months ended March 31, 2003, approximately 59.3% of our gross profit was derived
from sales involving  commission revenues


                                       10

<PAGE>


as compared to  approximately  33.5% for the three  months ended March 31, 2002.
These increases were attributable  primarily to the addition of the new products
we began  supplying  to  commissaries  during the first  quarter of fiscal 2003,
including  products  distributed  by Mid  Valley  Products,  that  we  sell on a
commission basis due to our short-term cash shortage  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 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.

     In October  2002, we added to our supplier  network the Hillshire  Farm and
Kahn's  product  groups of Sara Lee  Foods-USA  and  certain  consumer  products
distributed  by Chattem,  Inc.  Hillshire  Farms and Kahn's are product lines of
packaged meats and hams. Chattem is a manufacturer of branded consumer products,
principally  over-the-counter  healthcare products,  including Aspercreme,  Gold
Bond, Sportscreme,  Pamprin, Dexatrim, Rejuvex and Flexall. We have been advised
by Sara Lee Foods-USA,  and verified with DeCA, that sales of Hillshire Farm and
Kahn's  products in 2001 to the  commissaries we currently  service  amounted to
approximately $950,000. We have been advised by Chattem, and verified with DeCA,
that  sales  of  Chattem's  line of  products  in 2001  to the  commissaries  we
currently service amounted to approximately  $200,000.  However, there can be no
assurance that our annual sales of these  products will reach such amounts,  and
the amount of our actual sales of Hillshire Farm and Kahn's Products and Chattem
products may differ  materially  from the amounts sold by Sara Lee Foods-USA and
Chattem, respectively, in 2001.

     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 March 31, 2003, cost of
goods sold increased by $273,405,  or  approximately  22.1%,  to $1,512,326 from
$1,238,921  for the  three  months  ended  March 31,  2002.  This  increase  was
attributable  primarily


                                       11
<PAGE>


to the addition of new  products  that we sold on a resale  basis.  We cannot be
certain as to whether or not this trend will continue; however, in the long term
we are  seeking  to  increase  the  ratio of our  sales on a  resale  basis,  as
discussed above.

     GROSS  PROFIT.  Gross  profit for the three  months  ended  March 31,  2003
increased by  approximately  $91,304,  or approximately  51.2%,  compared to the
three  months  ended March 31,  2002,  from  $178,337 for the three months ended
March 31, 2002 to $246,637  for the three  months  ended  March 31,  2003.  This
increase was attributable primarily to the increase in our sale of products on a
commission basis that have no associated cost of good sold.

     OPERATING  EXPENSES.  Total operating expenses  aggregated $611,947 for the
three  months  ended March 31, 2003 as compared to $383,172 for the three months
ended March 31, 2002,  representing  an increase of $228,475,  or  approximately
59.6%. The increase in total operating  expenses was  attributable  primarily to
increased  professional fees of approximately  $64,034 resulting  primarily from
the costs of the  preparation of a registration  statement  under the Securities
Act of 1933  relating  to a proposed  offering of equity  securities;  increased
stock-based  compensation  expense  of  $91,034  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 $38,006 resulting  primarily from increased truck rental expense and
increased premiums on health workers' compensation insurance.

     INTEREST  EXPENSE.  Interest expense of $135,385 for the three months ended
March 31, 2003 reflected an decrease of $75,785 as compared to interest  expense
of $211,170 for the three months ended March 31, 2002.  The decrease in interest
expense was attributable  primarily to decreased interest expense resulting from
the recognition of the 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) of $205,000 aggregate  principal amount of convertible  promissory
notes  issued in the three  months  ended  March 31, 2002 as compared to $15,000
aggregate  principal amount of convertible  promissory notes issued in the three
months ended March 31, 2003,  offset by amortization  of  option-based  interest
expense of approximately $100,000 during the three months ended March 31, 2003.

     NET LOSS.  Primarily as a result of the  increased  operating  and interest
expenses  discussed  above,  we  incurred a net loss of  $500,695  for the three
months  ended March 31, 2003 as compared to a net loss of $416,005 for the three
months ended March 31, 2002.

Liquidity and Capital Resources

     At March 31,  2003,  we had a cash  balance of  approximately  $2,146.  Our
principal source of liquidity has been borrowings.  Since November 2001, we have
funded our operations  primarily from borrowings of approximately  $600,000.  In
the  fourth  quarter  of 2001 and the first  half of 2002,  we  issued  $240,000
aggregate principal amount of convertible  promissory notes (the "9% convertible
notes") that mature, in nearly all instances, on June 30, 2003 and bear interest
at the rate of 8% per annum prior to June 30, 2002 and 9% per annum  thereafter.
In April 2002,  $150,000 aggregate principal amount of 9% convertible notes (and
$2,380 accrued


                                       12
<PAGE>


interest  thereon)  was  converted by the holders into an aggregate of 1,793,573
shares of our common stock.  The remaining 9% convertible  notes are convertible
at any time and from time to time by the noteholders into a maximum of 1,350,000
shares of our common stock (subject to certain anti-dilution adjustments) if the
9% convertible notes are not in default, or a maximum of 2,700,000 shares of our
common  stock  (subject  to certain  anti-dilution  adjustments)  if an event of
default has occurred in respect of such notes.  The terms of the 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
June 30, 2003. In July 2002, the holders of $20,000  aggregate  principal amount
of convertible  notes maturing on June 30, 2002 denied our request to extend the
maturity  until July 30, 2003.  The  outstanding  principal and interest on such
convertible  notes have not yet been paid and, thus, such convertible  notes are
currently in default.

     The terms of our 9% convertible  notes and 8% convertible  notes (discussed
below) 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,  to permit the
noteholder  to receive  the  number of shares  discussed  above.  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.

     In the second half of 2002, we issued $165,000  aggregate  principal amount
of  convertible  promissory  notes (the "8%  convertible  notes") that mature on
either June 30,  2003 or July 30,  2003 and bear  interest at the rate of 8% per
annum.  The 8%  convertible  notes are  convertible at any time and from time to
time by the noteholders  into a maximum of 2,475,000  shares of our common stock
(subject to certain  antidilution  adjustments) if the 8% convertible  notes are
not in default, or a maximum of 4,950,000 shares of our common stock (subject to
certain  anti-dilution  adjustments)  if an event of  default  has  occurred  in
respect  of such  notes.  The terms of the 8%  convertible  notes  require us to
register  under  the  Securities  Act of 1933 the  shares  of our  common  stock
issuable  upon  conversion of the 8%  convertible  notes not later than June 30,
2003.

     In the first  quarter of 2003,  we borrowed an  aggregate  of $10,000  from
Edward T.  Whelan,  our Chief  Executive  Officer  and  Chairman of our Board of
Directors.  The loan is payable on demand and bears  interest  at the rate of 8%
annum.  The loan contains  contingent  payment terms which vary depending on the
success of our efforts to raise additional funding.

     In January and March 2003, we issued $15,000 aggregate  principal amount of
convertible  promissory  notes that mature on June 30, 2003 and bear interest at
8% per annum.  Such notes are


                                       13
<PAGE>



convertible at any time and from time to time by the noteholders  into a maximum
of  225,000  shares  of our  common  stock  (subject  to  certain  anti-dilution
adjustments)  if the  convertible  notes are not in  default,  or a  maximum  of
450,000   shares  of  our  common  stock   (subject  to  certain   anti-dilution
adjustments)  if an event of default has occurred in respect of such notes.  The
terms of such notes require us to register  under the Securities Act of 1933 the
shares of our common stock issuable upon conversion of such notes not later than
June 30, 2003.

     In March 2003, we borrowed $100,000 from a single lender.  The loan matures
on March 26, 2004 and bears interest at 15% per annum.

     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 additional borrowings.
In the event we are able to generate  sales proceeds of at least $500,000 in our
proposed offering,  we believe that the net proceeds of such sale, 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.

     Assuming  that we  receive  net  proceeds  of at  least  $500,000  from our
proposed offering,  we expect capital expenditures to be approximately  $200,000
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 March 31, 2003, we had liquid assets of $499,951, consisting of cash and
accounts  receivable  derived  from  operations,  and  other  current  assets of
$443,076,  consisting  primarily  of  inventory  of  products  for  sale  and/or
distribution  and  prepaid  expenses.  Long term  assets of  $188,139  consisted
primarily of warehouse equipment used in operations.

     Current  liabilities of $2,396,155 at March 31, 2003 consisted primarily of
$1,582,737  of accounts  payable and accrued  expenses  and  $610,000  for notes
payable, of which $240,000 was payable to our officers or our other affiliates.

     Our working  capital  deficit was  $1,453,128  as of March 31, 2003 for the
reasons described above.



                                       14

<PAGE>


     During the three months  ended March 31, 2003,  we used cash of $105,413 in
operating  activities  primarily as a result of the net loss we incurred  during
this period.

     During the three months ended March 31, 2003, we used net cash of $1,683 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 $107,170 during the three months ended March
31, 2003.


ITEM 3.  CONTROLS AND PROCEDURES

     (a) Based upon an evaluation  performed within 90 days of this Report,  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) The CEO and CFO each note that,  since the date of his evaluation until
the date of this  Report,  there have been no  significant  changes in  internal
controls or in other factors that could significantly  affect internal controls,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.



PART II.          OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     (a) None.

     (b) None.

     (c) In January and March 2003, we issued $15,000 aggregate principal amount
of convertible  promissory  notes that mature on June 30, 2003 and bear interest
at 8% per annum. Such notes are convertible at any time and from time to time by
the noteholders into a maximum of 225,000 shares of our common stock (subject to
certain anti-dilution  adjustments) if the convertible notes are not in default,
or a  maximum  of  450,000  shares  of our  common  stock  (subject  to  certain
anti-dilution  adjustments)  if an event of default  has  occurred in respect of
such notes.  The terms of such notes require us to register under the Securities
Act of 1933 the shares of our common  stock  issuable  upon  conversion  of such
notes not later than June 30,  2003.  Such notes were  issued by us in  reliance
upon the exemption from registration  provided by Section


                                       15
<PAGE>


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

    10.1        Consulting  Agreement  dated January 2, 2003 between our company
                and Edward Meyer, Jr.

    10.2        Business Consulting Agreement dated as of March 10, 2003 between
                our company and Martin Nielson (incorporated herein by reference
                to  Exhibit  4.1 to  our  Registration  Statement  on  Form  S-8
                (Registration No. 333-81258)).

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

    99.2        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. On May 2, 2003, the Company filed a Current Report
on Form 8-K providing  certifications  of its Chief Executive  Officer and Chief
Financial  Officer with respect to its Annual Report on Form 10-KSB for the year
ended  December  31,  2002 as  required by 18 U.S.C.  1350  (Section  906 of the
Sarbanes-Oxley act of 2002).



                                       16
<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 May 29, 2003.

                                   MILITARY RESALE GROUP, INC.


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



                                       17
<PAGE>


                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
                  -------------------------------------------
                           Pursuant to 18 U.S.C. 1350
                 (SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)


I, Edward T. Whelan, certify that:

1.   I have reviewed  this  quarterly  report on Form 10-QSB of Military  Resale
     Group, 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  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and 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  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent 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



                                       18
<PAGE>



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

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


                                      By:  /S/ EDWARD T. WHELAN
                                      ------------------------------
                                      Name:  Edward T. Whelan
                                      Title: Chief Executive Officer

May 29, 2003


                                       19

<PAGE>


                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                           Pursuant to 18 U.S.C. 1350
                 (SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)


I, Ethan D. Hokit, certify that:

1.   I have reviewed  this  quarterly  report on Form 10-QSB of Military  Resale
     Group, 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  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and 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  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent 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

                                       20

<PAGE>


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

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


                                               By:  /S/ ETHAN D. HOKIT
                                               ------------------------------
                                               Name:  Ethan D. Hokit
                                               Title: Chief Financial Officer

May 29, 2003



                                       21

<PAGE>


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

    10.1        Consulting  Agreement  dated January 2, 2003 between our company
                and Edward Meyer, Jr.

    10.2        Business Consulting Agreement dated as of March 10, 2003 between
                our company and Martin Nielson (incorporated herein by reference
                to  Exhibit  4.1 to  our  Registration  Statement  on  Form  S-8
                (Registration No. 333-81258)).

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

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





<PAGE>