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


                                    FORM 10-Q


[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2002

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
           For the transition period from _____________ to _____________

                         Commission file number 0-17771



                     FRANKLIN CREDIT MANAGEMENT CORPORATION
            (Exact name of Registrant as specified in its charter)


                                   Delaware
       (State or other jurisdiction of incorporation or organization)

                                  75-2243266
                         (I.R.S. Employer identification No.)


                               Six Harrison Street
                            New York, New York 10013
                                 (212) 925-8745
    (Address of principal executive offices, including zip code, and
     telephone number, including area code)




         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .



As of May 8, 2002 the issuer had 5,916,527 of shares of Common Stock, par value
$0.01 per share, outstanding.


<PAGE>


                     FRANKLIN CREDIT MANAGEMENT CORPORATION

                                    FORM 10-Q

                                 March 31, 2002

                                 C O N T E N T S


PART I. FINANCIAL INFORMATION                                            Page
                                                                         ----

Item 1.
Financial Statements


 Consolidated Balance Sheets March 31, 2002 (unaudited) and
 December 31, 2001(audited)                                               3

 Consolidated Statements of Income for the three months ended
 March 31, 2002 and March 31, 2001(unaudited)                             4

 Consolidated Statements of Stockholders' Equity for the three
 Months ended March 31, 2002 (unaudited)and December 31,2001(audited)     5

 Consolidated Statements of Cash Flows for the three months ended
 March 31, 2002 and March 31, 2001(unaudited)                             6

 Notes to consolidated Financial Statements (unaudited)                 7-11


Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations                                                  12-20


PART II.     OTHER INFORMATION

Item 1.  Legal Proceedings                                                21

Item 2.  Changes in Securities                                            21

Item 3.  Defaults Upon Senior Securities                                  21

Item 4.  Submission of Matters to a Vote of Security Holders              21

Item 5.  Other Information                                                21

Item 6.  Exhibits and Reports on Form 8-K                                 22

SIGNATURES                                                                23

<PAGE>
<TABLE>
<CAPTION>
FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2002(UNAUDITED) AND DECEMBER 31, 2001
-------------------------------------------------------------------------------
<S>                                                <C>                <C>
                                                March 31,       December 31,
                                                 2002             2001
                                              (unaudited)       (audited)

ASSETS
CASH AND CASH EQUIVALENTS                    $ 7,686,392       $ 7,784,162

RESTRICTED CASH                                  665,523           541,443

NOTES RECEIVABLE:
  Principal                                  350,124,916       331,643,076
  Purchase discount                          (22,208,545)      (22,248,344)
  Allowance for loan losses                  (39,150,158)      (33,490,456)
                                             ------------      ------------
        NET NOTES RECEIVABLE                 288,766,213       275,904,276

LOANS HELD FOR SALE                           37,602,873        28,203,047

ACCRUED INTEREST RECEIVABLE                    4,655,459         4,795,789

OTHER REAL ESTATE OWNED                        3,973,797         3,819,673

OTHER RECEIVABLES                              2,238,693         5,305,409

DEFERRED TAX ASSET                             1,567,588         1,567,588

OTHER ASSETS                                   2,139,135         1,894,052

BUILDING, FURNITURE AND FIXTURES - Net         1,127,251         1,151,171

DEFERRED FINANCING COSTS- Net                  3,413,238         3,195,891
                                            -------------    -------------

TOTAL ASSETS                                $ 353,836,162    $ 334,162,501
                                            -------------    -------------
                                            -------------    -------------

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
  Accounts payable and accrued expenses       $ 3,580,628       $ 4,230,203
  Financing agreements                          7,766,497         7,542,511
  Notes payable                               331,154,434       313,943,808
  Subordinated debentures                                            24,262
  Tax liability
   Current                                      1,579,500           225,000
   Deferred                                     1,866,318         1,866,318
                                             -------------     ------------

           TOTAL LIABILITIES                  345,947,377       327,832,102


STOCKHOLDERS' EQUITY
  Common stock, $.01 par value, 10,000,000
  authorized shares; issued and
  outstanding: 5,916,527 and 5,916,527             59,167            59,167
  Additional paid-in capital                    6,985,968         6,985,968
  Accumulated deficit                             843,650          (714,736)
                                            -------------     -------------
           TOTAL STOCKHOLDERS' EQUITY           7,888,785         6,330,399
                                            -------------     -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 353,836,162     $ 334,162,501
                                            -------------     -------------
                                            -------------     -------------

See notes to consolidated financial statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)
------------------------------------------------------------------------------
                                                Three months ended March 31,
                                                2002              2001
<S>                                             <C>               <C>
REVENUES:
 Interest income                           $ 8,530,461           $ 6,106,173
 Purchase discount earned                      964,028               945,735
 Gain on sale of notes receivable                 -                  461,664
 Gain on sale of notes originated              213,079                66,419
 Gain on sale of other real estate owned       381,117               151,275
 Rental income                                  43,408               110,987
 Other                                         539,368               322,771
                                            ----------            ----------
                                            10,671,461             8,165,024

OPERATING EXPENSES:
 Interest expense                            4,411,158             5,316,132
 Collection, general and administrative      2,749,452             2,281,149
 Provision for loan losses                     254,000               227,523
 Amortization of deferred financing costs      268,144               188,848
 Depreciation                                   75,821                39,326
                                            ----------            ----------
                                             7,758,575             8,052,978


INCOME BEFORE PROVISION FOR INCOME TAXES     2,912,886               112,046

PROVISION FOR INCOME TAXES                   1,354,500                  -

                                          ------------          ------------
NET INCOME                                 $ 1,558,386             $ 112,046
                                          ------------          ------------
                                          ------------          ------------
NET INCOME (LOSS) PER COMMON SHARE:
  Basic                                       $ 0.26                  $ 0.02

  Dilutive                                    $ 0.26                  $ 0.02

WEIGHTED AVERAGE NUMBER OF SHARES
  OUTSTANDING                               5,916,527               5,916,527


See notes to consolidated financial statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS, EQUITY
THREE MONTHS ENDED MARCH 31,2002(UNAUDITED)AND YEAR ENDED DECEMBER 31, 2001
(audited)
-------------------------------------------------------------------------------

<S>                    <C>     <C>         <C>          <C>           <C>

                                          Additional
                        Common Stock        Paid-in    Accumulated
                     ----------------
                     Shares    Amount      Capital      Deficit      Total

BALANCE, DECEMBER
31, 2000           5,916,527  $59,167   $ 6,985,968  $ (3,596,884) $ 3,448,251


  Net income                                            2,882,148    2,882,148
                   ---------  -------     ---------     ---------    ---------
BALANCE, DECEMBER
31, 2001           5,916,527   59,167     6,985,968      (714,736)   6,330,399

                   ---------  -------     ---------     ---------    ---------
  Net income                                            1,558,386    1,558,386
                                                        ---------    ---------
BALANCE, MARCH
31, 2002           5,916,527 $ 59,167   $ 6,985,968    $ 843,650   $ 7,888,785
                   ---------  -------    ----------     --------    ----------
                   ---------  -------    ----------     --------    ----------



See notes to consolidated financial statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>

FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
MARCH 31, 2002 AND MARCH 31, 2001
-------------------------------------------------------------------------------
<S>                                               <C>            <C>
                                               Three Months Ended March 31,
                                                 2002               2001

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income                                     $ 1,558,386        $ 112,046
 Adjustments to reconcile income to net
 cash used in
  Operating activities:
  Gain on sale of notes receivable                   -              (461,664)
  Gain on sale of other real estate owned        (381,117)          (151,275)
  Depreciation                                     75,821             39,326
  Amortization of deferred financing costs        268,144            188,848
  Origination of mortgage loans held forsale  (16,489,895)        (4,844,160)
  Proceeds on sale of mortgage loans            7,090,069          1,754,269
  Purchase discount earned                       (964,028)          (945,735)
  Provision for loan losses                       254,000            227,523
  Changes in assets and liabilities:
   Decrease in accrued interest receivable        140,330             92,675
   (Increase) in other receivables              3,066,716            392,186
   Increase in other assets                      (245,083)          (284,047)
   Increase in deferred tax liability           1,579,500
   (Decrease) Increase in accounts payable
    and accrued expenses                         (649,574)           223,398
   (Decrease) in notes payable, affiliates
   and stockholders                               (24,262)           (45,185)
                                               -----------        -----------
      Net cash used in operating activities    (4,720,993)         3,701,795)
                                               -----------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase)Decrease in restricted cash            (124,080)             2,329
  Purchase of notes receivable                (38,878,267)       (20,599,376)
  Principal collections on notes receivable    24,747,657         12,337,562
  Joint venture participation                      -                    -
  Acquisition and loan fees                      (437,879)          (306,544)
  Proceeds from sale of other real estate
  owned                                         1,919,201          2,459,342
  Proceeds from sale of notes receivable              -            9,234,214
  Purchase of building,furniture and fixtures     (38,021)           (75,610)
                                              ------------        -----------
Net cash used in provided by investing
   activities                                 (12,811,389)         3,051,917
                                              ------------        -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable                   48,811,012         21,077,552
 Principal payments of notes payable          (31,600,386)       (20,008,423)
 Proceeds from financing agreements             3,988,084          4,028,249
 Payments on financing agreements              (3,764,098)        (2,906,004)
 Principal payments of subordinated
 debentures                                                          (11,870)
                                              ------------        -----------
 Net cash provided by(used in)financing
    activities                                 17,434,612           2,179,504
                                              ------------        -----------
NET (DECREASE)INCREASE IN CASH                    (97,770)          1,529,626

CASH, BEGINNING OF PERIOD                       7,784,162           7,212,346
                                             ------------         -----------
CASH, END OF PERIOD                           $ 7,686,392         $ 8,741,972
                                             ------------         -----------
                                             ------------         -----------

See notes to consolidated financial statements.



</TABLE>





<PAGE>


1.    NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

      Nature of Business - Franklin Credit Management Corporation(the"Company"),
      incorporated under the laws of the State of Delaware, acquires
      performing, nonperforming, nonconforming and subperforming notes
      receivable and promissory notes from financial institutions, and mortgage
      and finance companies. The Company services and collects such notes
      receivable through enforcement of terms of original note, modification of
      original note terms and, if necessary, liquidation of the underlying
      collateral.

      In January 1997, a wholly owned subsidiary was formed, to originate or
      purchase, sub prime residential mortgage loans to individuals whose
      credit histories, income and other factors cause them to be classified as
      nonconforming borrowers.

      A summary of the Company's significant accounting policies follows.

      Basis of Consolidation - The consolidated financial statements include
      the accounts of the Company and its wholly-owned subsidiaries. All
      significant intercompany accounts and transactions have been eliminated
      in consolidation.

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

      Cash and Cash Equivalents - Cash and cash equivalents include all cash
      accounts, with the exception of restricted cash. The Company maintains
      accounts at banks, which at times may exceed federally insured limits.
      The Company has not experienced any losses from such concentrations.

      Notes Receivable and Income Recognition - The notes receivable portfolio
      consists primarily of secured real estate mortgage loans purchased from
      financial institutions, and mortgage and finance companies. Such notes
      receivable are generally performing or underperforming at the time of
      purchase and are usually purchased at a discount from the principal
      balance remaining.
      Notes receivable are stated at the amount of unpaid principal, reduced by
      purchase discount and an allowance for loan losses. The Company has the
      ability and intent to hold its notes until maturity, payoff or
      liquidation of collateral. Impaired notes are measured based on the
      present value of expected future cash flows discounted at the note's
      effective interest rate or, as a practical expedient, at the observable
      market price of the note receivable or the fair value of the collateral
      if the note is collateral dependent. A note receivable is impaired when
      it is probable the Company will be unable to collect all contractual
      principal and interest payments due in accordance with the terms of the
      note agreement.

      In general, interest on the notes receivable is calculated based on
      contractual interest rates applied to daily balances of the collectible
      principal amount outstanding using the accrual method. Accrual of
      interest on notes receivable, including impaired notes receivable, is
      discontinued when management believes, after considering economic and
      business conditions and collection efforts, that the borrowers' financial
      condition is such that collection of interest is doubtful. When interest
      accrual is discontinued, all unpaid accrued interest is reversed.
      Subsequent recognition of income occurs only to the extent payment is
      received subject to management's assessment of the collectability of the
      remaining interest and principal. A non-accrual note is restored to an
      accrual status when it is no longer delinquent and collectability of
      interest and principal is no longer in doubt and past due interest is
      recognized at that time.

      Loan purchase discount is amortized to income using the interest method
      over the period to maturity. The interest method recognizes income by
      applying the effective yield on the net investment in the loans to the
      projected cash flows of the loans. Discounts are amortized if the
      projected payments are probable of collection and the timing of such
      collections is reasonably estimable. The projection of cash flows for
      purposes of amortizing purchase loan discount is a material estimate,
      which could change significantly, in the near term. Changes in the
      projected payments are accounted for as a change in estimate and the
      periodic amortization is prospectively adjusted over the remaining life
      of the loans. Should projected payments not exceed the carrying value of
      the loan, the periodic amortization is suspended and either the loan is
      written down or an allowance for uncollectibility is recognized.

      Allowance for Loan Losses - The allowance for loan losses, a material
      estimate which could change significantly in the near-term, is initially
      established by an allocation of the purchase loan discount based on the
      management's assessment of the portion of purchase discount that
      represents uncollectable principal. Subsequently, increases to the
      allowance are made through a provision for loan losses charged to expense
      and the allowance is maintained at a level that management considers
      adequate to absorb potential losses in the loan portfolio.

      Management's judgment in determining the adequacy of the allowance is
      based on the evaluation of individual loans within the portfolios, the
      known and inherent risk characteristics and size of the note receivable
      portfolio, the assessment of current economic and real estate market
      conditions, estimates of the current value of underlying collateral, past
      loan loss experience and other relevant factors. Notes receivable,
      including impaired notes receivable, are charged against the allowance
      for loan losses when management believes that the collectability of
      principal is unlikely based on a note-by-note review. Any subsequent
      recoveries are credited to the allowance for loan losses when received.
      In connection with the determination of the allowance for loan losses,
      management obtains independent appraisals for significant properties,
      when considered necessary.

      The Company's notes receivable are collateralized by real estate located
      throughout the United States with a concentration in the Northeast.
      Accordingly, the collateral value of a substantial portion of the
      Company's real estate notes receivable and real estate acquired through
      foreclosure is susceptible to changes in market conditions.

      Management believes that the allowance for loan losses is adequate. While
      management uses available information to recognize losses on notes
      receivable, future additions to the allowance or write-downs may be
      necessary based on changes in economic conditions.

      Loans Held for Sale- The loans held for sale consists primarily of
      secured real estate first and second mortgages originated by the Company.
      Such loans held for sale are performing and are carried at lower of cost
      or market.



<PAGE>


      Other Real Estate Owned - Other real estate owned consisting of
      properties acquired through, or in lieu of, foreclosure or other
      proceedings are held for sale and are carried at the lower of cost or
      fair value less estimated costs of disposal. Any write-down to fair
      value, less cost to sell, at the time of acquisition is charged to the
      allowance for loan losses. Subsequent write-downs are charged to
      operations based upon management's continuing assessment of the fair
      value of the underlying collateral. Property is evaluated regularly to
      ensure that the recorded amount is supported by current fair values and
      valuation allowances are recorded as necessary to reduce the carrying
      amount to fair value less estimated cost to dispose. Revenue and expenses
      from the operation of other real estate owned and changes in the
      valuation allowance are included in operations. Costs relating to the
      development and improvement of the property are capitalized, subject to
      the limit of fair value of the collateral, while costs relating to
      holding the property are expensed. Gains or losses are included in
      operations upon disposal.

      Building, Furniture and Fixtures - Building, furniture and fixtures are
      recorded at cost net of accumulated depreciation. Depreciation is
      computed using the straight-line method over the estimated useful lives
      of the assets, which range from 3 to 40 years. Gains and losses on
      dispositions are recognized upon realization. Maintenance and repairs are
      expensed as incurred.

      Deferred Financing Costs - Debt financing costs, which include loan
      origination fees incurred by the Company in connection with obtaining
      financing, are deferred and are amortized over the term of the related
      loan.

      Retirement Plan - The Company has a defined contribution retirement plan
      (the "Plan") covering all full-time employees who have completed one
      month of service. Contributions to the Plan are made in the form of
      payroll deductions based on employees' pretax wages. Currently, the
      Company offers a company match of 50% of the first 3% of the employees'
      contribution.

      Income Taxes - The Company recognizes income taxes under an asset and
      liability method. This method provides for deferred income tax assets or
      liabilities based on the temporary difference between the income tax
      basis of assets and liabilities and their carrying amount in financial
      statements. Deferred tax assets and liabilities are measured using
      enacted tax rates expected to apply to taxable income in the years in
      which those temporary differences are expected to be recovered or settled.
      Deferred tax assets are reduced by a valuation allowance when management
      determines that it is more likely than not that some portion or all of
      the deferred tax assets will not be realized. Deferred tax assets and
      liabilities are adjusted for the effects of changes in tax laws and rates
      on the date of the enactment.



<PAGE>


      Fair Value of Financial Instruments - Statement of Financial Accounting
      Standards No. 107, Disclosures About Fair Value of Financial Instruments,
      requires disclosure of fair value information about financial
      instruments, whether or not recognized in the balance sheet for which it
      is practicable to estimate that value. In cases where quoted market
      prices are not available, fair values are based on estimates using
      present value or other valuation techniques. Those techniques are
      significantly affected by the assumptions used, including the discount
      rate and estimates of future cash flows. In that regard, the derived fair
      value estimates cannot be substantiated by comparison to independent
      markets and, in many cases, could not be realized in immediate settlement
      of the instruments. Statement No. 107 excludes certain financial
      instruments and all non-financial assets and liabilities from its
      disclosure requirements.  Accordingly, the aggregate fair value amounts
      do not represent the underlying value of the Company.

      The following methods and assumptions were used by the Company in
      estimating the fair value of its financial instruments:


       a. Cash, Restricted Cash, Accrued Interest Receivables, Other Receivable
          and Accrued Interest Payable - The carrying values reported in the
          balance sheet are a reasonable estimate of fair value.
       b. Notes Receivable - Fair value of the net note receivable portfolio is
          estimated by discounting the future cash flows using the interest
          method. The carrying amounts of the notes receivable approximate fair
          value.
       c. Short-Term  Borrowings - The carrying amounts of the financing
          agreements and other short-term borrowings approximate their fair
          value.
       d. Long-Term Debt - Fair value of the Company's long-term debt(including
          notes payable, subordinated debentures and notes payable, affiliate)
          is estimated using discounted cash flow analysis based on the
          Company's current incremental borrowing rates for similar types of
          borrowing arrangements. The carrying amounts reported in the balance
          sheet approximate their fair value.

      Comprehensive Income - SFAS No. 130, Reporting Comprehensive Income
      defines comprehensive income as the change in equity of a business
      enterprise during a period from transactions and other events and
      circumstances, excluding those resulting from investments by and
      distributions to stockholders. The Company had no items of other
      comprehensive income in 2001 and 2000, therefore net income was the same
      as its comprehensive income.

      Recent Pronouncements - Statement of Financial Accounting Standards(SFAS)
      No. 133, Accounting for Derivative Instruments and Hedging Activities, as
      amended, establishes accounting and reporting standards for derivative
      instruments, including certain derivative instruments embedded in other
      contracts and for hedging activities. Under SFAS 133, certain contracts
      that were not formerly considered derivatives may now meet the definition
      of a derivative. The Company adopted SFAS 133 effective January 1, 2001.
      The adoption of SFAS 133 did not have a significant impact on the
      financial position, results of operations, or cash flows of the Company.



<PAGE>


BUSINESS SEGMENTS

         The Company has two reportable operating segments: (i) portfolio asset
acquisition and resolution; and (ii) mortgage banking. The portfolio asset
acquisition and resolution segment acquires performing, nonperforming,
nonconforming and subperforming notes receivable and promissory notes from
financial institutions, mortgage and finance companies, and services and
collects such notes receivable through enforcement of terms of original note,
modification of original note terms and, if necessary, liquidation of the
underlying collateral. The mortgage-banking segment originates or purchases,
sub prime residential mortgage loans for individuals whose credit histories,
income and other factors cause them to be classified as nonconforming borrowers.

         The Company's management evaluates the performance of each segment
based on profit or loss from operations before unusual and extraordinary items
and income taxes.  The accounting policies of the segments are the same as
those described in the summary of significant accounting policies (see Note 1).

<TABLE>
<CAPTION>


MORTGAGE BANKING
                                               Three Months Ended March 31,
                                               2002                 2001
                                           (Unaudited)            (Unaudited)
<S>                                         <C>                     <C>

CONSOLIDATED REVENUE
 Portfolio asset acquisition and
 resolution assets                           $ 9,577,912           $ 7,782,278
 Mortgage banking assets                       1,093,549               382,746
                                            ------------           -----------
Consolidated Revenue                        $ 10,671,461           $ 8,165,024
                                            ------------           -----------
                                            ------------           -----------
CONSOLIDATED NET INCOME (LOSS)
 Portfolio asset acquisition and
 resolution asset                            $ 2,576,136             $ 137,991
 Mortgage banking assets                         336,751               (25,945)
                                             -----------           -----------
 Consolidated Net Income (Loss)              $ 2,912,887             $ 112,046
                                             -----------           -----------
                                             -----------           -----------
</TABLE>

<PAGE>


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

General

         Forward-Looking Statements. When used in this report, press releases
and elsewhere by the Company from time to time, the words "believes",
"anticipates", and "expects" and similar expressions are intended to identify
forward-looking statements that involve certain risks and uncertainties.
Additionally, certain statements contained in this discussion and the Form 10-Q
may be deemed forward-looking statements that involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially are the following: unanticipated changes in the U.S. economy, the
rate of inflation business conditions, interest rates, the level of growth in
the finance and housing markets, the availability for purchase of additional
loans and the quality of such additional loans, the status of relations between
the Company and its Senior Debt Lender, the status of relations between the
Company and its sources for loan purchases, unanticipated difficulties in
collections under loans in the Company's portfolio, prepayments of notes in the
Company's portfolio and other risks detailed from time to time in the Company's
SEC reports. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date thereof. The
Company undertakes no obligation to release publicly the results on any events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

Critical Accounting Policies
The following management's discussion and analysis of financial condition and
results of operations is based on the amounts reported in the Company's
consolidated financial statements. These financial statements are prepared in
accordance with accounting principles generally accepted in the United States
of America. In preparing the financial statements, management is required to
make various judgments, estimates and assumptions that affect the reported
amounts. Changes in these estimates and assumptions could have a material
effect on the Company's financial statements. The following is a summary of the
Company's accounting policies that are the most affected by management
judgments, estimates and assumptions:

Notes Receivable-The Company purchases real estate mortgage loans to be held as
long-term investments. Loan purchase discounts are established at the
acquisition date. Management must periodically evaluate each of the purchase
discounts to determine whether the projection of cash flows for purposes of
amortizing the purchase loan discount has changed significantly. Changes in the
projected payments are accounted for as a change in estimate and the periodic
amortization is prospectively adjusted over the remaining life of the loans.
Should projected payments not exceed the carrying value of the loan, the
periodic amortization is suspended and either the loan is written down or an
allowance for uncollectibility is recognized. The allowance for loan losses, a
material estimate which could change significantly in the near-term, is
initially established by an allocation of the purchase loan discount based on
the management's assessment of the portion of purchase discount that represents
uncollectable principal. Subsequently, increases to the allowance are made
through a provision for loan losses charged to expense. Given the nature of the
Company's loan portfolio and the underlying real estate collateral significant
judgment is required in determining periodic amortization of purchase discount,
and allowance for loan losses. The allowance is maintained at a level that
management considers adequate to absorb potential losses in the loan portfolio.

         Loans, Other Real Estate Owned and Acquisitions. During the three
months ended March 31, 2002, the Company purchased loans with an aggregate face
value of $46.3 million for an aggregate purchase price of $37.9 million or 84%,
compared with the purchase during the three months ended March 31, 2001 of
$24.3 million at an aggregate purchase price of $20.6 million or 85% of
aggregate face value. The purchases during the three months ended March 31,
2002 included,eleven bulk portfolios consisting primarily of first and second
mortgages, with an aggregate face value of $36.4 million at an aggregate
purchase price of $30 million or 82% of the face value, and 281 loans in 40
flow purchase transactions consisting primarily of first and second mortgages
with an aggregate face value of $9.9 million at an aggregate purchase price of
$8.8 million or 89% of face value. Acquisition of these portfolios was fully
funded through Senior Debt in the amount equal to the purchase price plus a 1%
loan origination fee.

         The Company believes these acquisitions will result in increases in
the level of interest income and purchase discount income during future periods.
Payment streams are generated once the loans are incorporated into the
Company's loan tracking system.

         Management intends to continue to expand the Company's earning asset
base through the acquisition of additional portfolios including performing
first and second mortgages at a positive interest rate spread based upon the
Company's cost of funds. The Company believes that its current infrastructure
is adequate to service additional loans without any material increases in
collection, general and administrative expenses excluding personnel expenses.
There can be no assurance the Company will be able to acquire any additional
loans on favorable terms or at all.


Single-Family Residential Lending. In January 1997, the Company formed a wholly
owned subsidiary, Tribeca Lending Corp. ("Tribeca"), to originate primarily
subprime residential mortgage loans made to individuals whose credit histories,
income and other factors cause them to be classified as non-conforming
borrowers. Management believes that lower credit quality borrowers present an
opportunity for the Company to earn superior returns for the risks assumed.
Tribeca provides first and second mortgages that are originated on a retail
basis through marketing efforts that include utilization of the FCMC database.
Tribeca is currently licensed as a mortgage banker in Alabama, California,
Colorado, Connecticut, District of Columbia, Florida, Georgia, Kentucky,
Illinois, Maryland, Massachusetts, Michigan, Missouri, Mississippi, New York,
New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia, Washington State, and West Virginia and
is a Department of Housing and Urban Development FHA Title I and Title II
approved lender. Tribeca originated loans are typically expected to be sold in
the secondary market through whole-loan, servicing-released sales. Tribeca
anticipates holding certain of its mortgages in its portfolio when it believes
that the return from holding the mortgage, on a risk-adjusted basis, outweighs
the return from selling the mortgage in the secondary market.

         During the three months ending March 31, 2002, Tribeca originated 132
loans with an aggregate principal amount of $16,489,895 compared to 61 loans
with an aggregate principal of $4,844,160 during the three months ending March
31, 2001. During the three months ending March 31, 2002, Tribeca had net income
of $349,834 as compared to $25,945 during the three months ending March 31,
2001. This increase in income reflected increased loan originations and loan
sales during the three months ending March 31, 2002, which generated additional
fees and gain on sale income, as compared to the three months ending March 31,
2001. As of March 31, 2002, Tribeca had approximately $37.6 million face value
of loans held for sale. Revenues and expenses related to such loans, other than
periodic interest payments, and fee income are expected to be realized upon
sale of such loans.

Cost of Funds. As of March 31, 2002, the Company had Senior Debt outstanding
under several loans with an aggregate principal balance of $331 million.
Additionally the Company has financing agreements, which had an outstanding
balance of $7.8 at March 31, 2002.

The majority of the loans purchased by the Company bear interest at a fixed
rate, while the Senior Debt incurred to acquire such loans bears interest at a
variable rate. Consequently, changes in market interest rate conditions have
caused direct corresponding changes in interest expense. On December 31, 2001,
the Company and its Senior Debt Lender agreed that the interest rate for Senior
Debt incurred, will be based on the Federal Home Loan Bank of Cincinnati (FHLB)
thirty (30) day advance rate plus an additional spread of 3.25%. Under the
amendment approximately $61million of Senior Debt incurred prior to March 1,
2000 will continue to accrue interest at a rate equal to the prime rate plus a
margin of between 0% and 1.75%.

The Company believes that this new agreement will provide additional
acquisition opportunities and ongoing competitiveness in the market. The
weighted average interest rate on borrowed funds for the Senior Debt based on
the balances as of March 31, 2002 and March 31, 2001 was 5.30% and 8.82%,
respectively.

Inflation. The impact of inflation on the Company's operations during the three
months ending March 31, 2002, and 2001 was immaterial.




<PAGE>


RESULTS OF OPERATIONS

The following table sets forth information derived from the Company's
Consolidated Statements of Income expressed as a percentage of total revenues:

<TABLE>
<CAPTION>

THREE MONTHS ENDED MARCH 31,
-------------------------------------------------------------------------------
<S>                                                  <C>               <C>

                                                    2002               2001
                                                (Unaudited)        (Unaudited)
REVENUES:
 Interest income                                   79.9%          $    74.8%
 Purchase discount earned                           9.0%               11.6%
 Gain on sale of notes receivable                    -                  5.7%
 Gain on sale of notes originated                   2.0%                0.8%
 Gain on sale of other real estate owned            3.6%                1.9%
 Rental income                                      0.4%                1.4%
 Other                                              5.1%                4.0%
                                               ------------        ------------
                                                  100.0%              100.0%
                                               ------------        ------------

OPERATING EXPENSES:
 Interest expense                                  41.3%               65.1%
 Collection, general and administrative            25.8%               27.9%
 Provision for loan losses                          2.4%                2.8%
 Amortization of deferred financing costs           2.5%                2.3%
 Depreciation                                       0.7%                0.5%
                                                ------------       -----------
                                                   72.7%               98.6%

                                                ------------       ------------
INCOME BEFORE PROVISION FOR INCOME TAXES           27.3%                1.4%
                                                ------------       ------------

PROVISION FOR INCOME TAXES                         12.7%                 -
                                                ------------       ------------
NET INCOME                                         14.6%                1.4%
                                                ------------       ------------

</TABLE>







Results of Operations

The Three Months Ending March 31, 2002 Compared to the Three Months Ending
March 31, 2001.

         Total revenue, comprised of interest income, purchase discount earned,
gains recognized on the sale of notes receivable, gain on sale of notes
originated, gain on sale of Other Real Estate Owned ("OREO"), rental income and
other income, increased by $2,506,437 or 31%, to $10,671,461 during the three
months ending March 31, 2002 from $8,165,024 during the three months ending
March 31, 2001.

         Interest income increased by $2,424,288 or 40%, to $8,530,461 during
the three months ending March 31, 2002 from $6,106,173 during the three month
ending March 31, 2001. The Company recognizes interest income on notes included
in its portfolio based upon three factors: (i) interest on performing notes,
(ii) interest received with settlement payments on non-performing notes and
(iii) the balance of settlements in excess of the carried face value. This
increase resulted primarily from $206 million in high yielding performing notes
acquired by the Company between April 2001 and March 31, 2002, which was only
partially offset by collections, prepayments, and loan sales.

         Purchase discount earned increased by $18,293 or 2%, to $964,028
during the three months ending March 31, 2002 from $945,735 during the three
months ending March 31, 2001. This increase reflected the increase in the size
of the portfolio. Purchase discount increased at a lower rate than the growth
in the portfolio due to the maturation of the portfolio, and the purchase of
performing assets for yield spread as opposed to purchase discount.

           The Company did not consummate any bulk sales of loans during the
three months ending March 31, 2002 as compared to sales of $10 million of loans
during the three months ending March 31, 2001, for a gain of $461,664.

         Gain on sale of loans originated increased by $146,660 or 221% to
$213,079 during the three months ending March 31, 2002, from $66,419 during the
three months ending March 31, 2001. This increase reflected an increase in the
number of Tribeca loans originated and sold during the three months ending
March 31, 2002, as compared to the three months ending March 31, 2001. Tribeca
originated 132 and 61 loans during the three months ending March 31, 2002 and
March 31, 2001.

         Gain on sale of OREO increased by $229,842 or 152% to $381,117 during
the three months ending March 31, 2002 from $151,275 during the three months
ending March 31, 2001. Gain on sale of REO increased due to the sale of rental
OREO properties whose market value increased to a value greater than the net
present value of rental cash flows. The Company sold 24 and 26 OREO properties
during the three months ending March 31, 2002 and March 31, 2001, respectively.

          Rental income decreased by $67,579 or 61% to $43,408 during the three
months ending March 31, 2002, as compared to $110,987 during the three months
ending March 31, 2001. This decrease reflected a decrease in the number of
properties rented due to the sale of certain OREO properties where the gain on
sale was greater than the net present value of the rental income. The Company
had sixteen and thirty-seven rental properties at March 31, 2002, and March 31,
2001 respectively.

         Other income increased by $216,597 or 67%, to $539,368 during the
three months ending March 31, 2002 from $322,771 during the three months ending
March 31, 2001. The increase was due primarily to increases in prepayment
penalties due to an increase in prepayments during the three months ending
March 31, 2002, late charges resulting primarily from the growth in the size of
the portfolio and increased loan fees due to an increase in origination volume.

         Total operating expenses decreased by $294,403 or 4% to $7,758,575
during the three months ending March 31, 2002, from $8,052,978 during the three
months ending March 31, 2001. Total operating expenses includes interest
expense, collection, general and administrative expenses, provisions for loan
losses, amortization of deferred financing cost and depreciation expense.

         Interest expense decreased by $904,974 or 17% to $4,411,158 during the
three months ending March 31, 2002, from $5,316,132 during the three months
ending March 31, 2001, as a result of decreases in the Company's cost of funds.
Total debt increased by $103 million or 44%, to $338 million as of March 31,
2002 as compared with $235 million as of March 31, 2001. Total debt includes
Senior Debt, debentures, financing agreements and loans from affiliates.

         Collection, general and administrative expenses increased by $468,303
or 21% to $2,749,452 during the three months ending March 31, 2002 from
$2,281,149 during the three months ending March 31, 2001. Collection, general
and administrative expense consists primarily of personnel expense, OREO
related expense, litigation expense, and miscellaneous collection expense.

           Personnel expenses increased by $396,349 or 35% to $1,528,177 during
the three months ending March 31, 2002 from $1,131,828 during the three months
ending March 31, 2001. This increase resulted largely from bonus accruals,
retention of additional Tribeca salesmen, and staff upgrades. All other
collection expenses increased by $71,954 or 6% during the three months ending
March 31, 2002 to $1,221,274 from $1,149,321 during the three months ending
March 31, 2001. This increase resulted primarily from increased office expenses
associated with the growth in size of the portfolio, additional rent associated
with new office space, and increased expenses for travel and promotion. These
increases were partially offset by decreases in REO related expenses due to a
reduction in REO inventory.

         Provisions for loan losses increased by $26,477 or 11.63% to $254,000
during the three months ending March 31, 2002 from $227,523 during the three
months ending March 31, 2001. This increase was primarily due to reserve
increases in specific portfolios, where there is no longer purchase discount
available to increase reserves. Provisions for loan losses are incurred as soon
as the valuation of the asset diminishes and there is no unamortized discount
remaining associated with that asset.

         Amortization of deferred financing costs increased by $79,296 or 42%,
to $268,144 during the three months ending March 31, 2002 from $188,848 during
the three months ending March 31, 2001. This increase resulted primarily from
increased collections due to the growth in size of the portfolio and
prepayments. On March 31, 2002 and March 31, 2001, deferred financing costs, as
a percentage of Senior Debt outstanding was 1.03% and 1.06%, respectively.

         Depreciation expense increased $36,495 or 93%, to $75,821 during the
three months ending March 31, 2002, from $39,326 during the three months ending
March 31, 2001. This increase resulted from the purchase of office equipment.

         The Company operating income increased by $1,446,340 to $1,558,386
during the three months ending March 31, 2002 for the reasons set forth above.

         During the three months ending March 31, 2002 the Company had a
provision for income taxes of $1,354,500.


Liquidity and Capital Resources

 General. During the three months ending March 31, 2002, the Company purchased
725 loans with an aggregate face value of $46.3 million at an aggregate
purchase price of $37.9 million or 84% of the face value. During the three
months ending March 31, 2001 the Company purchased 810 loans with an aggregate
face value of $20.9 million at an aggregate purchase price of $17.7 million or
85% of aggregate face value. The Company's portfolio acquisitions were ahead of
expectations during the three months ending March 31, 2002. This increase
reflected the Company's enhanced marketing efforts, which generated increased
market penetration.

         The Company's portfolio of notes receivable at March 31, 2002, had a
face value of $350 million and included net notes receivable of approximately
$289 million. The Company's portfolio of notes receivable at March 31, 2001,
had a face value of $252 million and included net notes receivable of
approximately $205 million. Net notes receivable are stated at the amount of
unpaid principal, reduced by purchase discount, and allowance for loan losses.
The Company has the ability and intent to hold its notes until maturity, payoff
or liquidation of collateral or where economically advantageous, sale.

         The Company's portfolio of loans held for sale which includes
mortgages originated by Tribeca and held for sale at March 31, 2002 had a face
value of $37.6 million as compared to $ 11.6 million at March 31, 2001. Loans
held for sales are stated at the amount of unpaid principal, reduced by net
deferred cost and fees. The Company has the ability to hold its loans held for
sale until maturity, payoff or liquidation of collateral or where economically
advantageous, sale.

         During the three months ending March 31, 2002, the Company used cash
inthe amount of $4,720,993 in its operating activities primarily for interest
expense, overhead and for the foreclosure and improvement of OREO. The Company
used $12,811,389 in its investing activities, which primarily reflected the use
of $38,878,267 million for the purchase of notes receivable partially offset by
principal collections on its notes receivable and proceeds from the sale of
OREO. The amount of cash used in operating and investing activities was offset
by $17,434,612 of net cash provided by financing activities. The above
activities resulted in a net decrease in cash at March 31, 2002 over December
31, 2001 of $97,770.

         In the ordinary course of its business, the Company accelerates and
forecloses upon real estate securing non-performing notes receivable included
in its portfolio. As a result of such foreclosures at March 31, 2002 and 2001,
the Company held OREO recorded on the financial statements at $3.9 million and
$5.4 million, respectively. OREO is recorded on the financial statements of the
Company at the lower of cost or net realizable value. The Company estimates,
based on third party appraisals and broker price opinions, that the OREO
inventory held at March 31, 2002, in the aggregate, had a net realizable value
(market value less estimated commissions and legal expenses associated with the
disposition of the asset) of approximately $4.2 million based on market
analyses of the individual properties less the estimated closing costs. There
can be no assurance, however, that such estimate is substantially correct or
that an amount approximating such amount would actually be realized upon
liquidation of such OREO. The Company generally holds OREO as rental property
or sells such OREO in the ordinary course of business when it is economically
beneficial to do so.



Cash Flow From Operating and Investing Activities

         Substantially all of the assets of the Company are invested in its
portfolios of notes receivable, loans held and OREO. Primary sources of the
Company's cash flow for operating and investing activities are collections on
notes receivable and gain on sale of notes and OREO properties.

         At March 31, 2002, the Company had unrestricted cash, cash equivalents
and marketable securities of $7.7 million. A portion of the Company's available
funds may be applied to fund acquisitions of companies or assets of companies
in complementary or related fields. Although the Company from time to time
engagesin discussions and negotiations, it currently has no agreements with
respect to any particular acquisition.




Cash Flow From Financing Activities

         Senior Debt.  As of March 31, 2002, the Company owed an aggregate of
$331 million to the Senior Debt Lender.

The Senior Debt is collateralized by first liens on the respective loan
portfolios for the purchase of which the debt was incurred and is guaranteed by
the Company. The monthly payments on the Senior Debt have been, and the Company
intends for such payments to continue to be, met by the collections from the
respective loan portfolios. The loan agreements for the Senior Debt call for
minimum interest and principal payments each month and accelerated payments
based upon the collection of the notes receivable securing the debt during the
preceding month. The Senior Debt accrues interest based on the Federal Home
Loan Bank of Cincinnati (FHLB) thirty-day advance rate plus an additional
spread of 3.25%. The accelerated payment provisions are generally of two types:
the first requires that all collections from notes receivable, other than a
fixed monthly allowance for servicing operations, be applied to reduce the
Senior Debt, and the second requires a weekly additional principal reduction
from cash collected before scheduled principal and interest payments have been
made. As a result of the accelerated payment provisions, the Company is
repaying the amounts due on the Senior Debt at a rate faster than the
contractual scheduled payments. While the Senior Debt remains outstanding,
these accelerated payment provisions may limit the cash flow that is available
to the Company.

         In December 2001, the Company negotiated with its Senior Debt Lender a
modification to provisions of the Senior Debt, pursuant to which the Senior
Debt Lender has provided the Company with a cash advance of $1,345,000 per
month for the year. Management believes that this modification may reduce
irregular periods of cash flow shortages arising from operations. Management
believes that sufficient cash flow from the collection of notes receivable will
be available to repay the Company's secured obligations and that sufficient
additional cash
flows will exist, through collections of notes receivable, the bulk sale of
performing loan portfolios, sales and rental of OREO, continued modifications
to the secured debt credit agreements or additional borrowing, to repay the
current liabilities arising from operations and to repay the long term
indebtedness of the Company.

         Certain Senior Debt credit agreements required establishment of
restricted cash accounts, funded by an initial deposit at the loan closing and
additional deposits based upon monthly collections up to a specified dollar
limit. The Company is no longer required to maintain these restricted accounts
but has continued to under the prior agreement. The Company typically uses
these funds to place deposits on loan portfolio bids. The restricted cash is
maintained in an interest bearing account, with the Company's Senior Debt
Lender. The aggregate balance of restricted cash in such accounts was $665,523
on March 31, 2002 and $541,443 on December 31, 2001. The increase in restricted
cash at March 31, 2002 was due to cash deposits placed on portfolio bids, which
funds were returned to the restricted account by the Senior Debt Lender once
funding took place.

<PAGE>

         Total Senior Debt availability was approximately $500 million at March
31, 2002, of which approximately $331 million had been drawn down as of such
date. As a result, the Company has approximately $169 million available to
purchase additional portfolios of notes receivable and OREO.

         In December 2001, the Company's Senior Debt agreement was amended to
provide that the interest rate on new Senior Debt incurred to finance portfolio
acquisitions will be based on the Federal Home Loan Bank of Cincinnati (FHLB)
thirty-day advance rate plus an additional spread of 3.25%. Under the new
agreement the Company's new cost of funds is 5.30% as of March 31, 2002,
compared to 8.82% at March 31, 2001.

           The Company's Senior debt Lender has provided Tribeca with a
warehouse financing agreement of $7 million. This line of credit accrues
interest at prime rate plus 2%. At March 31, 2002, Tribeca had drawn down $6.8
million on the line.




         Financing Agreements. The Company has a financing agreement with the
Senior Debt Lender permitting it to borrow a maximum of approximately
$1,500,000 at a rate equal to such lender's prime rate plus two percent per
annum. Principal repayment of the lines is due six months from the date of each
cash advance and interest is payable monthly. The total amounts outstanding
under the financing agreements as of March 31, 2002 and December 31, 2001, were
$826,606 and $647,791, respectively. Advances made under the financing
agreement were used to satisfy senior lien positions and fund capital
improvements in connection with foreclosures of certain real estate loans
financed by the Company. Management believes the ultimate sale of these
properties will satisfy the related outstanding financing agreements and
accrued interest, as well as surpass the collectible value of the original
secured notes receivable. Management has reached an agreement in principal with
its Senior Debt Lender to increase the availability under this credit facility
to cover additional properties foreclosed upon by the Company, which the
Company may be required to hold as rental property to maximize its return. The
Company uses when available, OREO sales proceeds to pay down financing
agreements to help reduce interest expense.

         Additionally, the Company has opened a financing agreement with a
bank. The agreement provides the Company with the ability to borrow a maximum
of $150,000 at a rate equal to the bank's prime rate plus one percent per
annum. As of March 31, 2002 and December 31, 2001 $116,289 and $118,239
respectively, were outstanding on the financing agreement.



<PAGE>








                            Part II Other Information

Item 1. Legal Proceedings
              None.
Item 2.  Changes in Securities
              None
Item 3.  Defaults Upon Senior Securities
              None
Item 4.  Submission of Maters to a Vote of Security Holders
              None
Item 5.  Other Information
              None
Item 6.  Exhibits and Reports on Form 8-K


<PAGE>









                                     PART IV


(a)                                             EXHIBIT TABLE
Exhibit No.   Description
  3(a)        Restated  Certificate  of  Incorporation.  Previously  filed
              with, and incorporated  herein by reference to, the Company's
              10-KSB, filed with the Commission on December 31, 1994.

   (b)        Bylaws of the Company.  Previously filed with, and  incorporated
              herein by reference to, the Company's Registration Statement on
              Form S-4,  No. 33-81948, filed with the Commission on November
              24, 1994.

 10(i)        Promissory Note between Thomas J. Axon and the Company dated
              December 31,1998. Previously filed with, and incorporated herein
              by reference to, the Company's 10-KSB, filed with the Commission
              on April 14, 1999.

 10(j)        Promissory Note between Steve Lefkowitz, board member, and the
              Company dated March 31,1999. Previously filed with, and
              incorporated herein by reference to, the Company's 10-KSB,filed
              with the Commission on March 30, 2000.

 10(k)        Loan Purchase Agreement dated March 31,1999 between the Company
              and Steve Lefkowitz. Previously filed with, and incorporated
              herein by reference to, the Company's 10-KSB, filed with the
              Commission on March 30, 2000.

 10(l)        Employment Agreement dated July 17, 2000 between the Company and
              Seth Cohen. Previously filed with, and incorporated herein by
              reference to, the Company's 10-KSB, filed with the Commission on
              March 31, 2001.

 11           Earnings per Share. Filed herewith.







<PAGE>





                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

May 8, 2002

                        FRANKLIN CREDIT MANAGEMENT CORPORATION



                                                  By:     THOMAS J. AXON
                                                      ----------------------
                                                          Thomas J. Axon
                                                          Chairman of the Board


         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.


Signature                Title                                  Date

SETH COHEN               Chief Executive Officer                 May 14, 2002
---------------                                                 -------------
Seth Cohen
(Principal executive officer)


JOSEPH CAIAZZO           Senior Vice President,Chief Operating    May 14, 2002
--------------                                                    ------------
Joseph Caiazzo           Officer, Secretary and Director
(Secretary)


KIMBERLEY SHAW           Vice President, Finance                  May 14, 2002
--------------                                                   -------------
Kimberley Shaw
(Principal accounting officer)



<PAGE>


Exhibit 11.

Computation of earnings per share first quarter 2002



                                      No. of Shares     Weight

        06/30/01 Common stock           5,916,527
                                     --------------
                                                         25%         1,479,132
                                        5,916,527


        09/30/01 Common stock           5,916,527
                                     ---------------
                                                         25%         1,479,132
                                        5,916,527
                                                                    -----------

        12/31/01 Common stock
                                        5,916,527
                                      --------------
                                                         25%         1,479,132
                                        5,916,527
                                                                     ----------

        03/31/02 Common stock           5,916,527
                                      --------------     25%         1,479,132
                                        5,916,527
                                                                   ------------

                                        23,666,108

             Weighted average number of shares                        5,916,527

Earnings per Common share:
          Net Income                    $1,558,386                     $   .26





<PAGE>


Exhibit 11.

Computation of earnings per share first quarter 2001.


                                       No. of Shares   Weight

         6/30/00 Common stock
                                       5,916,527
                                     -------------
                                                         25%         1,479,132
                                       5,916,527


         9/30/00 Common stock          5,916,527
                                    ---------------
                                                         25%         1,479,132
                                       5,916,527


        12/31/00 Common stock          5,916,527
                                    --------------
                                                          25%         1,479,132
                                       5,916,527


         3/31/01 Common stock          5,916,527
                                    --------------
                                                          25%         1,479,132
                                       5,916,527


                                      23,666,108

        Weighted average number of shares                            5,916,527

Earnings per Common share:
      Net Loss                         $112,046                      $   0.02




<PAGE>