UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2001

[ ] 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 000-21673

Agility Capital, Inc.

(Exact name of registrant as specified in its charter)

Texas 75-2487218

(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

1512 West 35th Street Cut-Off, Suite 310 78731

(Address of principal executive offices) (Zip Code)

(512) 472-3600

Registrant's 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 Securities 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 ______ No __X___

As of June 30, 2001 there were 5,962,561 shares of the registrant's Common
Stock, no par value, and 1,073,500 shares of registrant's 15% Preferred Stock,
no par value, outstanding

Table of Contents

PART I- FINANCIAL INFORMATION............................................................................1

ITEM 1. Financial Statements..........................................................................1
ITEM 2. Management's Discussion And Analysis Of Financial Condition And Results of Operations.........8

PART II-OTHER INFORMATION...............................................................................16

ITEM 1. Legal Proceedings............................................................................16
ITEM 2. Changes in Securities and Use of Proceeds....................................................16
ITEM 3. Defaults Upon Senior Securities..............................................................16
ITEM 4. Submission of Matters to a Vote of Security Holders..........................................16
ITEM 5. Other Information............................................................................16
ITEM 6. Exhibits and Reports on Form 8-K.............................................................17

SIGNATURES..............................................................................................18

PART I- FINANCIAL INFORMATION

ITEM 1. Financial Statements

AGILITY CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

September 30, June 30,
2000 2001
(Unaudited)
--------------------- ---------------------

ASSETS

Cash and cash equivalents $ 7,050,088 $ 4,175,239
Investments 100,000 500,000
Note receivable 500,000
Other assets 125,000 193,497
----------- -----------
Total assets $ 7,275,088 $ 5,368,736
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:

Payables and accrued liabilities $ 667,660 $ 463,385
----------- -----------
Total liabilities $ 667,660 $ 463,385
Commitments and Contingencies (note 9)
Shareholders' equity:

Preferred stock, no par value; 5,000,000 shares authorized; 1,073,500
shares of 15% Series A cumulative preferred stock, $10 liquidation
preference, issued and outstanding (Dividends in arrears of
$4,025,627 at June 30, 2001) 10,341,000 10,341,000
Common stock, no par value; 25,000,000 shares authorized; 5,962,561
shares issued and outstanding 1,000 1,000
Capital in excess of stated capital 7,563,566 7,563,566
Due from shareholders (10,592) (10,592)
Accumulated deficit (11,287,546) (12,989,623)
----------- -----------
Total shareholders' equity 6,607,428 4,905,351
----------- -----------
Total liabilities and shareholders' equity $7,275,088 $ 5,368,736
=========== ===========

The accompanying notes are an integral part of the consolidated financial
statements

AGILITY CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended June 30, Nine Months Ended June 30,
2000 2001 2000 2001

Revenues:
Interest income $ 97,588 $64,334 $ 148,078 $ 252,685
(Loss) on sale of finance contracts - - (179,430) -
Servicing income - - 334,213 -
Gain on litigation settlement 22,583,122 22,583,122
Other income (8,339) 26 234,457 119,852
-----------------------------------------------------------------------
Total revenues 22,672,371 64,360 23,120,440 372,537

Expenses:
General and administrative 5,152,718 433,313 7,779,133 1,241,914
Salaries and benefits 1,147,746 232,862 2,266,094 789,308
Interest expense 480,490 - 1,408,512 -
Provision for credit loss - - (26,997) -
Impairment of retained interest in
securitizations - - 4,235,272 -
Other operating expenses 176,784 24,830 814,824 43,392
-----------------------------------------------------------------------
Total expenses 6,957,738 691,005 16,476,838 2,074,614
-----------------------------------------------------------------------
Income (loss) before income taxes 15,714,633 (626,645) 6,643,602 (1,702,077)
Income taxes - - - -
-----------------------------------------------------------------------
Net income (loss) 15,714,633 (626,645) 6,643,602 (1,702,077)

Income attributable to preferred shareholders 402,563 402,563 1,207,689 1,207,689
-----------------------------------------------------------------------
Net income (loss) attributable to common
shareholders $15,312,070 $ (1,029,208) $ 5,435,913 $(2,909,766)
=======================================================================

Weighted average number of common shares:

Basic and diluted 6,381,311 5,962,561 6,481,493 5,962,561

Income (loss) per common share -
Basic and diluted $ 2.40 $ (0.17) $ 0.84 $ (0.49)

The accompanying notes are an integral part of the consolidated financial
statements

AGILITY CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine months Ended June 30,
2000 2001

OPERATING ACTIVITIES:

Net Income (loss) $6,643,602 $ (1,702,077)
Adjustments to reconcile income (loss) to net cash from operating activities
Amortization of debt issuance costs and discounts 458,290
Provision for credit loss (26,997)
Provision for market impairment of finance contracts 318,240
Depreciation and amortization 981,581
Impairment of retained interests in securitizations 4,235,272
Changes in operating assets and liabilities
Retained interest in securitizations 1,487,857
Due from affiliates 204,325 (37,154)
Other assets 1,353,772 (31,343)
Payables and accrued liabilities 1,156,371 (204,275)
------------------------------------------
CASH PROVIDED (USED) BY OPERATIONS 16,812,313 (1,974,849)
------------------------------------------

INVESTING ACTIVITIES:

Proceeds from disposal of collateral 88,053

Note receivable funded (500,000)
Purchase of investments (400,000)

------------------------------------------
CASH PROVIDED (USED) BY INVESTING 88,053 (900,000)
------------------------------------------

FINANCING ACTIVITIES:

Payments on notes payable (3,000,000)
Repurchase of preferred stock (515,000)
Purchase of common stock (200,000)
------------------------------------------
CASH USED BY FINANCING (3,715,000)

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

INCREASE (DECREASE) IN CASH 13,185,366 (2,874,849)
BEGINNING CASH BALANCE 1,102,317 7,050,088
------------------------------------------
ENDING CASH BALANCE $ 14,287,683 $ 4,175,239
==========================================

The accompanying notes are an integral part of the consolidated financial
statements

AGILITY CAPITAL, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)

1. Basis of Presentation

The consolidated financial statements of Agility Capital, Inc. and
subsidiaries (the "Company") formerly AutoBond Acceptance Corporation, included
herein are unaudited and have been prepared in accordance with generally
accepted accounting principles ("GAAP") for interim financial reporting and
Securities and Exchange Commission ("SEC") regulations. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with GAAP have been condensed or omitted pursuant to regulations. In
the opinion of management, the financial statements reflect all adjustments
(consisting only of a normal and recurring nature) which are necessary to
present fairly the financial position, results of operations, changes in
shareholders' equity and cash flows for the interim periods. Results for interim
periods are not necessarily indicative of the results for a full year. For
further information, refer to the audited financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the period
ended September 30, 2000 (SEC File Number 000-21673). Certain data from the
prior periods have been reclassified to conform to the 2001 presentation.

2. New business plan

In July 2000, the Board of Directors of the Company approved changing
the Company's name to Agility Capital, Inc. ("Agility Capital") from AutoBond
Acceptance Corporation and the adoption of a new business plan. The Company has
begun doing business as Agility Capital. As Agility Capital, the Company will
pursue revenues by acting as an advisor to, and investor in, new economy
ventures through the establishment of one or more investment funds. The
Company's new business plan calls for the Company to invest in promising new,
privately held companies, located in the Southwestern and Eastern United States
technology "hotbeds", operating in the Internet, software, communications,
electronics, and new media industries.

3. Investments.

In August 2000 and April 2001, the Company made investments totaling
$200,000 in an emerging company as part of its new business plan. In October
2000, the Company invested $75,000 in an investment company and has committed an
additional $425,000 to this company over the next 4 years. In February, March
and June 2001, the Company made investments totaling $225,000 in another
emerging company. The Company records its investments at fair value. The fair
value of investments is determined based upon the Company's valuation policy.

Under the valuation policy of the Company, unrestricted securities are
valued at the average closing price for publicly held securities for the last
three days of the month. Restricted securities, including securities of
publicly-owned companies which are subject to restrictions on resale, are valued
at fair value as determined by the Board of Directors. Fair value is considered
to be the amount which the Corporation may reasonably expect to receive for
portfolio securities if such securities were sold on the valuation date.
Valuations as of any particular date, however, are not necessarily indicative of
amounts which may ultimately be realized as a result of future sales or other
dispositions of securities. Among the factors considered by the Board of
Directors in determining the fair value of restricted securities are the
financial condition and operating results, projected operations, and other
analytical data relating to the investment. Also considered are the market
prices for unrestricted securities of the same class (if applicable) and other
matters which may have an impact on the value of the portfolio company.

4. Note receivable

In October 2000, the Company purchased at par a $500,000 convertible
note bearing interest at 8% from an emerging company . The note is to be
converted at the option of the Company into shares of securities being offered
at the time of a Qualifying Financing. A Qualifying Financing is defined as a
private financing resulting in proceeds before expenses of $5,000,000 or more to
the emerging company. The number of shares shall be computed by dividing (i) the
principal amount of the note together with accrued interest on such principal
amount as of the date of conversion by (ii) the lower of (x) $4.00 per common
equivalent share or (y) the price per share of the securities issued in such
Qualifying Financing discounted by 35% of such price.

The note is due and payable upon the earliest to occur of the
following:

(a) the second anniversary of the date issued; or

(b) upon sale by the note issuer of all or substantially all of its
assets; or

(d) upon any merger involving the note issuer in which the note issuer
is not the resulting or surviving entity.

5. Other assets

The company entered into an agreement with Institutional Equity
Corporation (IEC) to assist the Company with the placement of its proposed
private offering. The Company paid a retainer of $125,000 to IEC upon signing
the agreement. In the event that the private offering is not consummated, IEC
will be reimbursed only for its actual out of pocket expenses, not to exceed
$50,000.

The Company accrued interest on its note receivable of $28,822 and on
its interest bearing cash accounts of $2,521, which has been earned but not paid
as of June 30, 2001.

A short-term advance of $37,154 was made to an affiliate in late June
2001. It was repaid in early July 2001.

6. Earnings per Share

Shares of Common Stock used in computing basic and diluted earnings per
share ("EPS") are based on the weighted average shares of Common Stock
outstanding in each period. Basic EPS is calculated by dividing net income by
the average number of outstanding shares of Common Stock during the period.
Diluted EPS is calculated by adjusting the average number of outstanding shares
of Common Stock assuming conversion of all potentially dilutive stock options
and warrants under the treasury stock method. Shares are required to be issued
at a price equal to or exceeding the fair value on the date granted. Excluded
from the computation of diluted earnings per share for the nine month periods
ended June 30, 2001 and 2000 are options and warrants to acquire 914,137 and
601,637 shares, respectively, of Common Stock as their effects would be
anti-dilutive.

7. Income taxes

Management has reduced the deferred tax asset by a valuation allowance
due to uncertainty of realizing certain tax loss carry-forwards and other
deferred tax assets. The increase in net deferred tax assets during the nine
month period ended June 30, 2001 was offset by a corresponding increase in the
valuation allowance. Accordingly no tax benefit was recognized for the net loss.

8. Stockholders' Equity

Preferred Stock

As dividends on the 15% Preferred Stock are in arrears for at least two
quarterly dividend periods, holders of the Preferred Stock have exercised their
right to call a special meeting of the Preferred Stockholders for the purpose of
electing two directors to serve on the Company's Board of Directors until such
dividend arrearage is eliminated. Such meeting was held on October 1, 1999;
however, because a quorum of Preferred Stockholders did not attend or provide
proxies for the meeting, no additional directors were elected. At the annual
meeting of shareholders held in March 2001, the Preferred Stockholders were
again given the opportunity to elect two additional directors, but a quorum was
not achieved. Accordingly, the common stockholders elected two additional
directors on behalf of the Preferred Stockholders. In addition, certain changes
that could materially affect the holders of Preferred Stock, such as a merger of
the Company, cannot be made without the affirmative vote of the holders of
two-thirds of the shares of Preferred Stock, voting as a separate class. The
Preferred Stock ranks senior to the common stock with respect to the payment of
dividends and amounts upon liquidation, dissolution or winding up. In the event
of liquidation, dissolution or winding up of the Company, the amount required to
satisfy the Preferred Stockholders is $14.8 million at June 30, 2001 which
includes dividends in arrears of $4 million.

Stock Option Plan

The Company adopted the Agility Capital, Inc. 2001 Stock Option Plan at
the March 6, 2001 shareholder's meeting. The plan is intended to advance the
interests of the Company and its stockholders and subsidiaries by attracting,
retaining and motivating the performance of selected directors, officers and
employees of the Company of high caliber and potential upon whose judgement,
initiative and effort the Company is largely dependent for the successful
conduct of its business, and to encourage and enable such directors, officers
and employees to acquire and retain a proprietary interest in the Company by
ownership of its common stock. Subject to adjustment, the maximum number of
shares of Common Stock which may be issued and sold under the plan in the
aggregate shall be 1,100,000 shares. Options are required to be issued at a
price equal to or exceeding the fair value of shares on the date granted. The
Company has agreed to issue options for 600,000 shares to its president as part
of the plan.

9. Commitments and Contingencies

In 1998, the Company initiated suit in state court in Houston, Texas
against Progressive Northern Insurance Co. arising out of insurance policies
issued by Progressive affiliates to the Company. The policies provided
deficiency balance coverage and physical damage coverage on automobile loans
acquired by the Company and sold into certain securitizations. Progressive
contended that there was a cumulative limit on claims under the Deficiency
Balance Policy of 88% of the total premiums paid on that Policy, which was
contrary to the Company's position. On this point, the Company's position was
confirmed by the court. Progressive also contended that it had the right to
cancel the Policies, without any refund of the fully-paid premiums, at any time
pursuant to 30 days' notice and in fact did so in March 1998. The Company and
the securitization trustees disputed this termination as contrary to the terms
and understandings reached with Progressive and relied upon by the parties in
interest, including the securitization market. This issue was submitted by the
court to the jury. After a three week trial in January 2000, the Company failed
to win a verdict against Progressive. The Company filed a motion to set aside
the verdict based on various legal issues and the court denied this motion and
entered a take nothing judgment against the Company. The Company is currently
appealing this verdict.

reliance upon alleged representations made by both the Company and Tejas that
the financing the Company had in place with Dynex Capital, Inc. was "secure".
Plaintiff alleged violations of the Texas Securities Act, fraud, negligent
misrepresentation, civil conspiracy and violations of the Texas Business and
Commerce Code. Plaintiff had previously filed a similar suit in Federal Court
against the Company which was dismissed. The Company and the Plaintiff settled
the dispute through a settlement agreement signed on January 11, 2001.

In August 2000, the trustee for the Company's securitizations in 1995
and 1996 made demand, on behalf of the certificate holders, on the Company that
it repurchase approximately $4.5 million in defaulted loans for which the
trustee claimed Interstate Insurance was refusing to pay claims. The trustee
claimed such refusal constituted a breach of representation by the Company
regarding the insurance coverage on the finance contracts. The Company has
vigorously disputed the trustee's claim and expects that any liability for
unpaid claims will be posited with the insurer. The Company is currently in
negotiations with the trustee, the investors and the insurance company to
resolve the situation.

The Company has made a capital commitment of $500,000 to an investment
fund that co-invests in private venture-stage companies with whom the principals
of the fund have business or professional relationships. $75,000 of the
commitment was paid in October 2000. The remainder of the commitment is due when
called over the next four years.

The Company is the plaintiff or the defendant in several legal
proceedings that its management considers to be the normal kinds of actions to
which an enterprise of its size and nature might be subject, and are not
material to the Company's overall business or financial condition, results of
operations or cash flows.

10. New accounting pronouncements

The Company adopted the provisions of Statement of Financial Accounting
Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and
Hedging Activities", as amended by SFAS Nos. 137 and 138, and as interpreted by
the Financial Accounting Standards Board ("FASB") and the Derivatives
Implementation Group through "Statement 133 Implementation Issues", as of
October 1, 2000. The Company has not engaged in any derivative instruments or
any embedded derivative instruments that require bifurcation. The Company has
not engaged in hedging activities.

In July 2001, the FASB issued Statement of Financial Accounting
Standards No. 141 ("SFAS 141"), "Business Combinations" and Statement of
Financial Accounting Standards No.142 ("SFAS 142"), "Goodwill and Other
Intangible Assets." SFAS 141 requires the purchase method of accounting for
business combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. SFAS No. 142 requires companies to cease amortizing
goodwill that existed at June 30, 2001 and establishes a new method of testing
goodwill for impairment on an annual basis or on an interim basis if an event
occurs or circumstances change that would reduce the fair value of a reporting
unit below its carrying value. The Company does not believe that the adoptions
of SFAS 141 and SFAS 142 will have a significant impact on its financial
statements.

ITEM 2. Management's Discussion And Analysis Of Financial Condition And Results
of Operations

The following analysis of the financial condition and results of
operations of the Company should be read in conjunction with the Company's
Consolidated Financial Statements and Notes thereto and the other financial data
included herein. Certain of the financial information set forth below has been
rounded in order to simplify its presentation. However, the ratios and
percentages set forth below are calculated using the detailed financial
information contained in the Financial Statements and the Notes thereto, and the
financial data included elsewhere in this Form 10-Q. For further information,
refer to the audited consolidated financial statements and footnotes thereto
included in the Company's Form 10-K for the period ended September 30, 2000 (SEC
File Number 000-21673).

On June 9, 2000, the litigation between Dynex Capital, Inc. ("Dynex")
and the Company was settled, with Dynex paying $20 million to the Company and
agreeing to the cancellation of $3 million of notes issued by the Company.
Through June 30, 2001, the Company has applied proceeds from the Dynex
settlement to the retirement of indebtedness, the payment of fees and expenses
related to the litigation, salaries and compensation expenses, corporate
expenses and funding certain investments related to the Company's establishment
of a private investment fund, as more fully discussed below. The Company reached
agreement with Fleet/Bank Boston, the holder of the Company's remaining
long-term debt, and a final payment of $6,500,000 was made to Bank Boston on
July 27, 2000.

The Company has moved its headquarters in Austin Texas to 1512 West
35th Street Cutoff and is also maintaining an office at Agility Capital Inc., 2
Soundview, Stamford, Connecticut 06830. The Company currently has 7 employees.
In July 2000, the Board of Directors of the Company approved changing the
Company's name to Agility Capital, Inc. ("Agility Capital") and the adoption of
a new business plan. As Agility Capital, the Company will pursue revenues by
acting as an advisor to, and investor in, new economy ventures through the
establishment of one or more investment funds. In connection with this strategy,
the Company has hired Thomas Blinten as the new President of the Company. Mr.
Blinten has been a director of the Company since 1996 and has 18 years
experience in investment banking, with recent experience in starting, financing,
and managing Internet-related businesses.

The Company is in the process of raising, pursuant to a private
placement, a $100,000,000 venture capital investment fund with a projected
10-year term, to be called the Agility Capital Fund, LLC (the "Fund"). The Fund
will sell and issue membership interests to accredited and institutional
investors. The Company will invest in such interests through an investment of
its cash balances and conveyance of the Company's current investments and will
also serve as the managing member and the initial advisor to the Fund. The Fund
will invest in early stage, privately held companies operating in the e-commerce
business services/internet, information technology and services, new media,
enterprise and application software, and communications industries. On a select
basis, later stage or public companies in other industries may also be
considered.

The Fund's business model is to invest in companies that can benefit
from the collective operating and financial experience of the Fund's managers
and its advisors. The management and advisory team's business and industry
experience and professional relationships will be relevant to the industries
targeted and will be used to help the Fund achieve significant and timely
venture capital rates of returns.

In addition to providing growth capital to a selected group of
companies, the Fund's managers will provide these companies ("Portfolio
Companies") with access to a network of contacts to help them anticipate and
address challenges when they arise and help accelerate their path to
profitability. The Fund can also provide Portfolio Companies with access to
technology strategy and software development resources via its proposed
relationship with a

technological consulting and development firm, as well as management recruiting
services through the Fund's proposed association with an executive recruitment
firm. Portfolio Companies will be provided with access to marketing,
advertising, and communication expertise to help them develop marketing
strategies to build brand awareness in the digital marketplace through the
Fund's association with a founder and former President of one of the largest
advertising and communications agencies in the US. Access to significant debt
and equity funding resources to help further portfolio company growth will be
facilitated through the Fund's management team's extensive contacts in the
financial community. Additionally, Portfolio Companies will have access to state
of the art business, technology and consumer market intelligence through the
Fund's association with a leading provider of business technology research,
consumer and market intelligence and decision making tools.

The Company's management is using its best efforts to raise the capital
necessary to establish the Fund as a viable venture. The Company has engaged a
securities broker/dealer to serve as placement agent, assembled an initial
advisory board and engaged the services of two consultants. However, market
conditions for private equity funds are challenging, competitive and volatile.
Accordingly, there can be no assurance that the Company will be successful in
establishing the Fund. If the Fund cannot be established within a reasonable
timeframe, the Company's capital resources would eventually be strained and the
Company could be unable to monetize the investments currently made in
anticipation of their conveyance to the Fund.

In order to accomplish the establishment of the Fund on terms
acceptable to investors in the Fund, it may be necessary to amend certain of the
proposed terms of the Fund. In particular, the size of the Fund may be reduced,
the Company may be precluded from selling certain investments to the Fund, the
amount of the management fee or 20% carry payable to the Company may be reduced
or delayed, and/or the Company may be required to assume a greater share of
placement agency fees. Such modifications could have an adverse effect on the
profitability of the Fund for the Company.

The success of the Fund will primarily depend upon the efforts of
individuals designated by the Company, in its capacity as Fund Manager, to
manage the Fund's investments. The Company expects that the attraction and
continued retention of qualified individuals will require compensating these
individuals through the utilization of substantially all of the management fees
received by Company, as well as the reallocation to such individuals of a
portion of the Company's 20% share of the Fund's net profits. Therefore, even if
the Fund is successfully established, there can be no assurance as to the
ultimate revenues available for the Company's shareholders.

REVENUES

The Company's current source of revenues consists of investment income
on net proceeds from its settlement with Dynex Capital, Inc. Prior to ceasing
its specialty finance business the Company's revenue consisted of three
components: interest income, gain on sale of finance contracts and servicing fee
income.

Gain on Sale of Finance Contracts. For transfers of financial assets
that result in the recognition of a sale, the newly created assets obtained and
liabilities incurred by the transferor as a part of a transfer of financial
assets are initially measured at fair value. An impairment review of the
retained interest in securitizations was performed periodically by calculating
the net present value of the expected future excess spread cash flows after
giving effect to changes in assumptions due to market and economic changes and
the performance of the loan pool to date. Impairment is determined on a
disaggregated basis consistent with the risk characteristics of the underlying
finance contracts as well as the performance of the pool to date. To the extent
that the Company deems the asset to be permanently impaired, the Company would
record a charge against earnings and write down the asset accordingly. The
Company recorded a charge to

income of $4,235,272 during the nine months ended June 30, 2000 as a result of
the impairment review of its retained interests in securitizations.

Servicing Fee Income. The Company earned substantially all of its
servicing fee income on the contracts it serviced on behalf of securitization
trusts. Servicing fee income consisted of: (i) contractual administrative and
servicing fees received through securitizations, and (ii) fee income earned as
servicer for such items as late charges and documentation fees, which are earned
whether or not a securitization has occurred. The Company completed the transfer
of all of its servicing activities to third party servicers by October 1999.

The Company's source of revenues for the nine months ended June 30,
2001 consists of interest and dividends on its cash, investments and note
receivable.

RESULTS OF OPERATIONS

Due to the Company's cessation of its specialty finance business in
1999, period-to-period comparisons of operating results will not be meaningful,
and results of operations from prior and current periods may not be indicative
of future results. The following discussion and analysis should be read in
conjunction with the Company's Consolidated Financial Statements and the Notes
thereto.

Three Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2000

Net Loss

In the three months ended June 30, 2001, net income decreased
$16,341,278 to a net loss of $626,645 from net income of $15,714,633 for the
three months ended June 30, 2000. The Company recorded a gain on litigation
settlement of $22,583,122 during the three months ended June 30, 2000. Current
income is generated from the settlement proceeds.

Total Revenues

Total revenues decreased $22,608,011 to $64,360 for the three months
ended June 30, 2001 from $22,672,371 for the three months ended June 30, 2000.

Interest Income. Interest income decreased $33,254 to $64,334 from $97,588.
Interest in 2001 was generated from interest earned on the invested proceeds
from the Dynex settlement, and its note receivable.

Gain on Litigation Settlement. The Company recorded a gain on
litigation settlement of $22,583,122 for the three months ended June 30, 2000.
There were no litigation settlements for the three months ended June 30, 2001.

Total Expenses

Total expenses of the Company decreased $6,266,733 to $691,005 for the
three months ended June 30, 2001 from $6,957,738 for the three months ended June
30, 2000. The Company has relocated to smaller and less expensive offices and
has reduced the associated overhead of communications, insurance, and equipment
costs. There is no legal expense related to litigation with Dynex. The Company
has retired its interest bearing debt.

General and Administrative Expenses. General and administrative
expenses decreased $4,719,405 to $433,313 for the three months ended June 30,
2001 from $5,152,718 for the three months ended June 30, 2000. During the three
months ended June 30, 2000 the Company incurred professional fees associated
with litigation with both Progressive Insurance and Dynex Capital, Inc. During
the three months ended June 30, 2001, the Company's general and administrative
expenses were primarily professional expenses including corporate counsel fees,
Progressive litigation fees, and fees and expenses related to the pursuit of the
Company's new business plan.

Salaries and Benefits. Salaries and benefits decreased $914,884 to
$232,862 for the three months ended June 30, 2001 from $1,147,746 for the three
months ended June 30, 2000. The Company had paid bonuses to employees for their
efforts related to securing a cash settlement from Dynex in June 2000. The
Company had 4 employees during the quarter ended June 30, 2000. There were 6
employees as of June 30, 2001.

Interest Expense. There was no interest expense incurred for the three
months ended June 30, 2001. There was $480,490 of interest expense for the three
months ended June 30, 2000. The decrease was the result of the extinguishment of
all interest bearing debt.

Other Operating Expenses. Other operating expenses (consisting
principally of servicer fees, credit bureau reports, communications and
insurance) decreased $151,954 to $24,830 for the three months ended June 30,
2001 from $176,784 for the three months ended June 30, 2000 because the Company
no longer services loans, the elimination of a substantial portion of the
Company's communication system and the decreased need for insurance.

Nine Months Ended June 30, 2001 Compared to Nine Months Ended June 30, 2000

Net Loss

In the nine months ended June 30, 2001, net income decreased $8,345,679
to a net loss of $1,702,077 from net income of $6,643,602 for the nine months
ended June 30, 2000. The decrease in net income resulted primarily because
revenue was generated only from funds on deposit or invested in 2001. The
Company's expenses were reduced due to the completion of its litigation with
Dynex and the cessation of its prior business of acquiring and servicing finance
contracts during the nine months ended June 30, 2000.

Total Revenues

Total revenues decreased $22,747,903 to $372,537 for the nine months
ended June 30, 2001 from $23,120,440 for the nine months ended June 30, 2000. In
June 2000 the company settled its litigation claim with Dynex. The Company's
revenue for the nine months ended June 30, 2001 is derived from that settlement,
insurance settlement proceeds on auto finance contracts, dividends, and
collections on receivables previously written off.

Interest Income. Interest income increased $104,607 to $252,685 from
$148,078. Interest in 2001 was generated from interest earned on the invested
proceeds from the Dynex settlement and from interest accrued from its note
receivable.

Loss on Sale of Finance Contracts. The Company's remaining finance
contract portfolio was completely liquidated during the nine months ended June
30, 2000 reflecting whole loans sales at a loss. No finance contracts were sold
in the 2001 period.

Servicing Fee Income. The Company earned no servicing fees for the nine
months ended June 30, 2001. The Company transferred all servicing
responsibilities to third parties during 1999. Servicing fee income for the nine
months ended June 30, 2000 was $334,213.

Other Income. For the nine months ended June 30, 2001 and 2000 other
income was $119,852 and $234,457 respectively, and consisted primarily of
insurance settlement proceeds on auto finance contracts and dividends. Actual
collections on receivables exceeded the estimated collectible amount by $104,817
for the nine months ended June 30, 2001.

Total Expenses

Total expenses of the Company decreased $14,402,224 to $2,074,614 for
the nine months ended June 30, 2001 from $16,476,838 for the nine months ended
June 30, 2000, due to the Company writing down its retained interests in
securitizations by $4,235,272 in 2000, winding down its specialty finance
operations, terminating employees and focusing on mitigating its losses caused
by the cessation of funding by Dynex.

General and Administrative Expenses. General and administrative
expenses decreased $6,537,219 to $1,241,914 for the nine months ended June 30,
2001 from $7,779,133 for the nine months ended June 30, 2000. During the nine
months ended June 30, 2000 the Company incurred professional fees associated
with litigation with both Progressive Insurance and Dynex Capital, Inc. During
the nine months ended June 30, 2001, the Company's general and administrative
expenses were primarily professional expenses including accounting fees,
corporate counsel fees, Progressive litigation fees, and expenses related to the
pursuit of the Company's new business plan.

Salaries and Benefits. Salaries and benefits decreased $1,476,786 to
$789,308 for the nine months ended June 30, 2001 from $2,266,094 because of the
head count reduction caused by the cessation of the Company's specialty finance
operations during 2000. The Company had 27 employees during the nine months
ended June 30, 2000. There were 6 employees as of June 30, 2001.

Interest Expense. There was no interest expense for the nine months
ended June 30, 2001. There was $1,408,512 interest expense for the nine months
ended June 30, 2000. The decrease was the result of the extinguishment of all
interest bearing debt.

Provision for Credit Loss. There was no provision for credit losses for
the nine months ended June 30, 2001. The Company owned no finance contracts or
other receivable that was doubtful of collection. Actual collections on finance
contracts exceeded the estimated provision by $26,997 for the nine months ended
June 30, 2000.

Impairment of Retained Interest in Securitizations. The Company
periodically reviewed the fair value of its retained interest in
securitizations. The Company recorded a charge against earnings for impairment
of these assets of $4,235,272 for the nine months ended June 30, 2000. This
impairment reflected the revaluation of expected future cash flows to the
Company from these securitizations. The revaluation of the retained interests to
zero as of the end of the period ended June 30, 2000 reflects the uncertainty
regarding the receipt of any future cash flows from those securitizations as to
which the Company still maintains a retained interest.

Other Operating Expenses. Other operating expenses (consisting
principally of servicer fees, credit bureau reports, communications and
insurance) decreased $771,432 to $43,392 for the nine months ended June 30, 2001
from $814,824 for the nine months ended June 30, 2000 because the Company no
longer services loans, the elimination of a substantial portion of the Company's
communication system and the decreased need for insurance.

FINANCIAL CONDITION

Cash and cash equivalents. Cash and cash equivalents decreased
$2,874,849 at June 30, 2001 from $7,050,088 at September 30, 2000. The decrease
in cash and cash equivalents was the result of an operating loss of $1,702,077,
venture investments in two companies of $400,000, purchase of a note receivable
of $500,000 and a reduction in the Company's payables.

Investments. The following table sets forth the investments made by the
company:

September 30, 2000 June 30, 2001
------------------ -------------

Yehti Corporation 100,000 200,000
Access Ventures 75,000
Modelwire 225,000
------------------- --------------
Total $ 100,000 $500,000
=================== ==============

Note Receivable. In October 2000, the Company purchased at par a
$500,000 8% convertible note from Modelwire, Inc.

Other Assets. Other assets consists of deferred private placement
costs, accrued interest earned and a short term advance to an affiliate. Other
assets increased $68,497 to $193,497 at June 30, 2001 from $125,000 at September
30, 2000. The increase resulted from the accrual of interest earned on the note
receivable and cash equivalents, and an advance to an affiliate that was repaid
in July 2001.

Accounts Payable and Accrued Liabilities. Accounts payable and accrued
liabilities decreased $204,275 to $463,385 at June 30, 2001 from $667,660 at
September 30, 2000. The Company is reducing its debt. Accounts payables and
accrued liabilities consists primarily of lease obligations.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2001, the Company had just under $4.2 million in cash
and no long-term indebtedness. Management believes the Company has sufficient
liquidity to meet its obligations (primarily employee/consultant fees and
expenses, rent and professional expenses) and to make selected investments
through 2001. Management hopes to generate additional liquidity and revenues
through the establishment of the Agility Capital Fund in the following ways: (i)
the sale to the Fund (at cost) of certain investments made by the Company on
behalf of the Fund, (ii) a management fee of up to 2.5% per annum of committed
funds, (iii) the pro rata share of realized investment gains on the Company's
investment in the Fund (expected to be 1% of the size of the Fund, or a maximum
of $1,000,000), and (iv) additional fees of up to 20% of the realized gains on
Fund investments (less amounts utilized for compensation arrangements for the
officers of the Fund Manager). There can be no assurance that the Fund will be
established or managed in a manner in which those revenue goals are met.

Cash Flows. Significant cash flows related to the Company's operating
activities include the use of cash to pay salaries, professional consultant
fees, and reduction of trade accounts payable. Net cash used by operating
activities totaled $1,974,849 during the nine months ended June 30, 2001.

Significant cash flows used by investing activities consisted of the
purchase of investments for $400,000 and the funding of a note receivable for
$500,000.

There were no cash flows from financing activities during the nine
months ended June 30, 2001.

Equity Offerings. In February 1998, the Company completed the
underwritten public offering of 1,125,000 shares of its 15% Series A Cumulative
Preferred Stock (the "Preferred Stock"), with a liquidation preference of $10
per share. The price to the public was $10 per share, with net proceeds to the
Company of approximately $10,386,000. Such net proceeds have been utilized for
working capital purposes, including the funding of finance contracts. Dividends
on the Preferred Stock are cumulative and payable quarterly on the last day of
March, June, September and December of each year, commencing on June 30, 1998,
at the rate of 15% per annum. After three years from the date of issuance, the
Company may, at its option, redeem one-sixth of the Preferred Stock each year,
in cash at the liquidation price per share (plus accrued and unpaid dividends),
or, if in Common Stock, that number of shares equal to $10 per share of
Preferred Stock to be redeemed, divided by 85% of the average closing sale price
per share for the Common Stock for the 5 trading days prior to the redemption
date. The Preferred Stock is not redeemable at the option of the holder and has
no stated maturity.

As dividends on the Preferred Stock are in arrears for at least two
quarterly dividend periods, holders of the Preferred Stock have exercised their
right to call a special meeting of the Preferred Stock holders for the purpose
of electing two additional directors to serve on the Company's Board of
Directors until such dividend arrearage is eliminated. Such meeting was held on
October 1, 1999; however, because a quorum of preferred shareholders did not
attend or provide proxies for the meeting, no additional directors were elected.
At the annual meeting of shareholders held in March 2001, the Preferred
Stockholders were again given the opportunity to elect two additional directors,
but a quorum was not achieved. Accordingly, the common stockholders elected two
additional directors that have been designated by the board as representing the
Preferred Stockholders. In addition, certain changes that could materially
affect the holders of Preferred Stock, such as a merger of the Company, cannot
be made without the affirmative vote of the holders of two-thirds of the shares
of Preferred Stock, voting as a separate class. The Preferred Stock ranks senior
to the Common Stock with respect to the payment of dividends and amounts upon
liquidation, dissolution or winding up. During the years 1999 and 2000, no
dividends have been paid on the Preferred Stock and the Company at June 30, 2001
is $4,025,627 in arrears in dividend payments.

IMPACT OF INFLATION AND CHANGING PRICES

Since the Company does not originate finance contracts and has no debt,
the Company does not believe that inflation directly has a material adverse
effect on its financial condition or results of operations. Inflation can
adversely affect the Company's operating expenses, such as rent and employee
expenses, and can also positively affect investment income.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

The Company adopted the provisions of SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", as amended by SFAS Nos. 137 and
138, and as interpreted by the FASB and the Derivatives Implementation Group
through "Statement 133 Implementation Issues", as of October 1, 2000. The
Company has not engaged in any derivative instruments or any embedded derivative
instruments that require bifurcation. The Company has not engaged in hedging
activities.

In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141 ("SFAS 141"), "Business
Combinations" and Statement of Financial Accounting Standards No. 142 ("SFAS
142"), "Goodwill and Other Intangible Assets." SFAS 141 requires the purchase
method of accounting for business combinations initiated after June 30, 2001 and
eliminates the pooling-of-interests method. SFAS No. 142 requires companies to
cease amortizing goodwill that existed at June 30, 2001 and establishes a new
method of testing goodwill for impairment on an annual basis or on an interim
basis if an event occurs or circumstances change that would reduce the fair
value of a reporting unit below its carrying value. The Company does not believe
that the adoption of SFAS 141 and SFAS 142 will have a significant impact on its
financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk generally represents the risk of loss that may result from
the potential change in the value of a financial instrument as a result of
fluctuations in interest and currency exchange rates and in equity and commodity
prices. Market risk is inherent to both derivative and non-derivative financial
instruments. The Company's market risk management procedures include all market
risk sensitive financial instruments. The Company has no derivative financial
instruments, exposure to currency exchange rates nor commodity risk exposure.

The Company's fixed rate debt was paid off through settlement
agreements with Dynex on June 9, 2000 and with Bank Boston on July 27, 2000. The
Company's new business plan does not contemplate the incurrence by the Company
of additional material long-term indebtedness.

FORWARD LOOKING STATEMENTS

The statements contained in this document that are not historical facts
are forward looking statements. Actual results may differ from those projected
in the forward looking statements. These forward looking statements involve
risks and uncertainties, including but not limited to the following risks and
uncertainties: changes in the performance of the financial markets, in the
demand for and market acceptance of the Company's services, and in general
economic conditions, including interest rates, presence of competitors with
greater financial resources and the impact of competitive products and pricing;
the effect of the Company's policies; the ability of the Company to find
adequate funding sources, the ability of the Company to raise a venture capital
fund, and the ability of the Company to find suitable investments for the
venture capital fund that provide an ongoing revenue stream to the Company.
Investors also are directed to other risks discussed in documents filed by the
Company with the SEC.

PART II-OTHER INFORMATION

ITEM 1. Legal Proceedings

In the course of its previous business as a specialty finance company,
the Company from time to time has been made a party to litigation involving
consumer-law claims. These claims typically allege improprieties on the part of
the originating dealer and name the Company and/or its assignees as subsequent
holders of the finance contracts. To date, none of these actions have been
certified as eligible for class-action status.

The Company and Tejas Securities Group, the lead underwriter of the
sale in February 1998 of the Company's 15% Series A Cumulative Preferred Stock,
was sued by a former holder of the Preferred Stock. Plaintiff claimed that he
purchased the Preferred Stock from Tejas in reliance upon alleged
representations made by both the Company and Tejas that the financing the
Company had in place with Dynex Capital, Inc. was "secure". Plaintiff alleged
violations of the Texas Securities Act, fraud, negligent misrepresentation,
civil conspiracy and violations of the Texas Business and Commerce Code.
Plaintiff had previously filed a similar suit in Federal Court against the
Company which was dismissed. The Company and the Plaintiff settled the dispute
through a settlement agreement signed on January 11, 2001.

ITEM 2. Changes in Securities and Use of Proceeds

None

ITEM 3. Defaults Upon Senior Securities

None

ITEM 4. Submission of Matters to a Vote of Security Holders

None

ITEM 5. Other Information

None

ITEM 6. Exhibits and Reports on Form 8-K

EXHIBIT NO.. DESCRIPTION OF EXHIBIT
- ------------ -----------------------------------------------------------------

3.1 (1). . . Restated Articles of Incorporation of the Company
3.2 (1). . . Amended and restated Bylaws of the Company
4.1 (1). . . Specimen Common Stock Certificate
10.1 (1) . . Employment Agreement effective as of May 1, 1996 between William
O. Winsauer and the Company
10.2 (2) . . 2001 Stock Option Plan
21.1 (3) . . Subsidiaries of the Company
27.1 . . . . Financial Data Schedule

(1) Incorporated by reference from the Company's Registration Statement on Form
S-1 (Registration No.333-05359).

(2) Incorporated by reference from the Company's quarterly report on form 10Q
for the period ended March 31, 2001.

(3) Incorporated by reference to the Company's annual report on form 10-K for
the period ended September 30, 2000

Reports on Form 8 K

None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on August 14, 2001.

AGILITY CAPITAL, INC.

By: /s/ WILLIAM O. WINSAUER
------------------------------------------

William O. Winsauer, Chairman of the Board
and Chief Executive Officer

By: /s/ A. Dale Henry
-----------------------------------------

A. Dale Henry, Chief Financial Officer
and Principal Accounting Officer