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


                                FORM 10-QSB


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

     For the quarter ended July 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: 333-30520

                    ULTIMATE SPORTS ENTERTAINMENT, INC.
            (Exact name of Registrant as specified in charter)

DELAWARE                                95-0262961
State or other jurisdiction of          I.R.S. Employer I.D. No.
incorporation or organization

1100 GLENDON AVENUE, SUITE 1000, LOS ANGELES, CA       90024
(Address of principal executive offices)               (Zip Code)

Issuer's telephone number, including area code:  (310) 829-9590

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

State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date:  At September 18, 2002,
there were 10,650,000 shares of the Registrant's Common Stock outstanding.

<PAGE>

                                  PART I
                           FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

               ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                                      ASSETS
<TABLE>
<CAPTION>
                                                      July 31,      January 31,
                                                        2002            2002
                                                    ------------    ------------
<S>                                                 <C>             <C>
CURRENT ASSETS:
   Cash and cash equivalents                        $        530    $       -
   Accounts receivable                                    33,343             972
   Inventory, net                                        117,866          10,875
                                                     -----------     -----------
     Total Current Assets                                151,739          11,847
                                                     -----------     -----------
PROPERTY AND EQUIPMENT, net                                8,867          11,113
                                                     -----------     -----------
OTHER ASSETS:
   Deposits                                                1,050           1,050
   License agreements, net                                25,458          79,039
                                                     -----------     -----------
     Total Other Assets                                   26,508          80,089
                                                     -----------     -----------
                                                    $    187,114    $    103,049
                                                     ===========     ===========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Bank overdraft                                   $     16,610    $     11,756
   Accounts payable - trade                              515,280         538,870
   Accounts payable - related party                      234,753         186,251
   Accrued liabilities                                   767,260         532,905
   Notes payable                                         520,000         435,000
   Notes payable - related party                         805,346         800,288
   Customer deposits                                     225,284          65,293
                                                     -----------     -----------
     Total Current Liabilities                         3,084,533       2,570,363
                                                     -----------     -----------
STOCKHOLDERS' EQUITY (DEFICIT):
   Common stock, $.001 par value, 50,000,000
     shares authorized, 10,650,000 and
     10,070,000 shares issued and
     outstanding, respectively                            10,650          10,070
   Additional paid-in capital                          1,771,257       1,696,466
   Retained (deficit)                                 (4,633,147)     (4,127,671)
                                                     -----------     -----------
                                                      (2,851,240)     (2,421,135)
   Less:  80,000 shares of treasury stock, at cost       (46,179)        (46,179)
                                                     -----------     -----------
     Total Stockholders' Equity (Deficit)             (2,897,419)     (2,467,314)
                                                     -----------     -----------
                                                    $    187,114    $    103,049
                                                     ===========     ===========
</TABLE>
NOTE:  The balance sheet at January 31, 2002 was taken from the audited
       financial statements at that date and condensed.

         The accompanying notes are an integral part of these unaudited
                  condensed consolidated financial statements.

                                       2

<PAGE>
                       ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

                    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                               For the Three                 For the Six
                                               Months Ended                  Months Ended
                                                 July 31,                      July 31,
                                         -------------------------     -------------------------
                                            2002          2001            2002          2001
                                         -----------   -----------     -----------   -----------
<S>                                      <C>           <C>             <C>           <C>
SALES, net of returns and allowances     $   205,447   $    75,048     $   252,773   $   126,077

COST OF GOODS SOLD                           132,915        48,647         155,437       105,459
                                          ----------    ----------      ----------    ----------
GROSS PROFIT (LOSS)                           72,532        26,401          97,336        20,618
                                          ----------    ----------      ----------    ----------
OPERATING EXPENSES:
   Bad debt                                     -           46,179            -           46,179
   General and administrative                248,310       236,668         400,256       425,506
                                          ----------    ----------      ----------    ----------
     Total Operating Expenses                248,310       282,847         400,256       471,685
                                          ----------    ----------      ----------    ----------
LOSS FROM OPERATIONS                        (175,778)     (256,446)       (302,920)     (451,067)
                                          ----------    ----------      ----------    ----------
OTHER INCOME (EXPENSE):
   Interest and other income                    -            2,468            -            3,020
   Interest and other expense                 31,663      (353,864)       (202,556)     (390,942)
                                          ----------    ----------      ----------    ----------
     Total Other Income (Expense)             31,663      (351,396)       (202,556)     (387,922)
                                          ----------    ----------      ----------    ----------
LOSS BEFORE INCOME TAXES                    (144,115)     (607,842)       (505,476)     (838,989)

CURRENT TAX EXPENSE                             -             -               -             -

DEFERRED TAX EXPENSE                            -             -               -             -
                                          ----------    ----------      ----------    ----------
NET LOSS                                 $  (144,115)  $  (607,842)    $  (505,476)  $  (838,989)
                                          ==========    ==========      ==========    ==========

LOSS PER COMMOM SHARE                    $      (.01)  $      (.08)    $      (.05)  $      (.11)
                                          ==========    ==========      ==========    ==========
</TABLE>
                 The accompanying notes are an integral part of these unaudited
                          condensed consolidated financial statements.

                                               3

<PAGE>

               ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                             For the Six
                                                             Months Ended
                                                               July 31,
                                                     -----------------------------
                                                         2002            2001
                                                     -------------   -------------
<S>                                                  <C>             <C>
Cash Flows Provided by Operating Activities:
  Net loss                                           $   (505,476)   $   (838,989)
  Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation and amortization expense                  54,994          40,480
    Default penalty expense                                40,000         291,875
    Non-cash expense                                       75,371            -
    Bad debt expense                                         -             44,579
    Changes in assets and liabilities:
      (Increase) in accounts receivable, net              (32,371)        (38,262)
      (Increase) in accrued interest receivable              -             (1,105)
      (Increase) in inventory                            (106,991)        (16,433)
      Increase in accounts payable                         68,643         140,578
      Increase in accounts payable - related party         48,502            -
      Increase in accrued liabilities                     194,355         224,065
      Increase in customer deposits                       159,991          65,459
                                                      -----------     -----------
          Net Cash (Used) by Operating Activities          (2,982)        (87,753)
                                                      -----------     -----------
Cash Flows Provided by Investing Activities:
  Payments on license agreements                          (91,400)        (50,000)
                                                      -----------     -----------
          Net Cash (Used) by Investing Activities         (91,400)        (50,000)
                                                      -----------     -----------
Cash Flows Provided by Financing Activities:
  Increase in bank overdraft                                4,854           6,523
  Proceeds from notes payable - related party                -             35,000
  Payments on notes payable - related party               (19,942)           -
  Proceeds from notes payable                             140,000         100,000
  Payments on notes payable                               (30,000)           -
  Payments on capital lease obligations                      -             (3,770)
                                                      -----------     -----------
          Net Cash Provided by Financing Activities        94,912         137,753
                                                      -----------     -----------
Net Increase in Cash and Cash Equivalents                     530            -

Cash and Cash Equivalents at Beginning of Period             -               -
                                                      -----------     -----------
Cash and Cash Equivalents at End of Period           $        530    $       -
                                                      ===========     ===========

Supplemental Disclosures of Cash Flow Information:

  Cash paid during the period for:
    Interest                                         $      4,392    $     17,500
    Income taxes                                     $       -       $       -
</TABLE>
                                   [Continued]

                                        4

<PAGE>

              ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  [Continued]

Supplemental Disclosures of Non-Cash Investing and Financing Activities:

  For the six months ended July 31, 2002:
     The Company recorded $40,000 of estimated default penalties associated
     with a note payable.

     The Company issued 580,000 shares of common stock valued at $40,600,
     or $.07 per share.  The shares were issued as incentives for issuance
     of notes payable.

     The Company granted options to purchase 785,000 shares of common stock as
     incentives to notes payable holders and for consulting services.  The
     options were valued at $34,771.

     A shareholder/director of the Company was assigned a $25,000 note payable
     by the previous holder of a note.

  For the six months ended July 31, 2001:
     The Company recorded $291,875 of estimated default penalties associated
     with a note payable.



        The accompanying notes are an integral part of these unaudited
                 condensed consolidated financial statements.

                                      5

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Business and Basis of Presentation - Ultimate Sports Entertainment,
     Inc. [Parent] was originally incorporated under the laws of the State
     of Utah on August 24, 1981, under the name "Edge Investment Company."
     On October 13, 1983, the Company changed its name to "American
     Surgical Laser, Inc."  The Company changed its domicile to Delaware by
     merging into a Delaware corporation formed for this purpose.  The
     merger was effective on April 12, 1985.  The Delaware Corporation was
     incorporated on January 21, 1985, under the name "American Surgical
     Laser-Del, Inc."  The Company changed its name to "Eclipse Imports,
     Inc." on June 10, 1997.  On March 12, 1999, the Company changed its
     name to "Neurochemical Research International, Corp."  The effective
     date of the name change to "Ultimate Sports Entertainment, Inc." was
     April 7, 1999.

     The Company was initially formed for the purpose of investing in and
     managing real property and in late 1983 entered the laser medical
     research and development field.  The development activity continued
     until 1986 when the project was discontinued because of a lack of
     funds and a conflict in management.  The Company is currently engaged
     in the manufacturing and marketing of comic books through its wholly-
     owned subsidiary.  The Company's principal markets are geographically
     disbursed throughout the United States.

     AllStar Arena Entertainment [Subsidiary] (a California Corporation
     incorporated June 26, 1996, formerly Lobito Publishing Group, Inc.),
     is engaged in the manufacturing and marketing of Comic Books.

     Unaudited Condensed Financial Statements - The accompanying financial
     statements have been prepared by the Company without audit.  In the
     opinion of management, all adjustments (which include only normal
     recurring adjustments) necessary to present fairly the financial
     position, results of operations and cash flows at July 31, 2002 and
     2001 and for the periods then ended have been made.

     Certain information and footnote disclosures normally included in
     financial statements prepared in accordance with generally accepted
     accounting principles in the United States of America have been
     condensed or omitted.  It is suggested that these condensed financial
     statements be read in conjunction with the financial statements and
     notes thereto included in the Company's January 31, 2002 audited
     financial statements.  The results of operations for the periods ended
     July 31, 2002 and 2001 are not necessarily indicative of the operating
     results for the full year.

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

     Cash and Cash Equivalents - For purposes of the financial statements,
     the Company considers all highly liquid debt investments purchased
     with a maturity of three months or less to be cash equivalents.

     Inventories - Inventories are stated at the lower of cost or market
     value using the first-in, first-out method [See Note 4].

                                     6

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]

     Property and Equipment - Property and equipment are stated at cost.
     Expenditures for repairs and maintenance are charged to operating
     expense as incurred.  Expenditures for additions and betterments that
     extend the useful lives of property and equipment are capitalized upon
     being placed in service.  When assets are sold or otherwise disposed
     of, the cost and related accumulated depreciation or amortization are
     removed from the accounts and any resulting gain or loss is included
     in operations.

     Depreciation - Depreciation of equipment is computed using the
     straight-line method over the estimated useful lives of the assets.
     Leasehold improvements are amortized over the lease period or the
     estimated useful life of the improvements, whichever is less, which
     range from five to seven years.

     Income Taxes - The Company accounts for income taxes in accordance
     with Statement of Financial Accounting Standards No. 109, "Accounting
     for Income Taxes."  This statement requires an asset and liability
     approach for accounting for income taxes [See Note 8].

     Loss Per Share - Statement of Financial Accounting Standards (SFAS)
     No. 128 "Earnings Per Share," requires the Company to present basic
     (loss) per share and dilutive earnings (loss) per share when the
     effect is dilutive.  The computation of loss per share is based on the
     weighted average number of shares outstanding during the period
     presented. [See Note 9].

     Revenue Recognition - Revenue is recognized when the product is
     shipped.

     Advertising Costs - Costs incurred in connection with advertising of
     the Company's products are expensed as incurred.

     Recently Enacted Accounting Standards - Statement of Financial
     Accounting Standards ("SFAS") No. 141, "Business Combinations", SFAS
     No. 142, "Goodwill and Other Intangible Assets", SFAS No. 143,
     "Accounting for Asset Retirement Obligations", SFAS No. 144,
     "Accounting for the Impairment or Disposal of Long-Lived Assets", SFAS
     No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
     of FASB Statement No. 13, and Technical Corrections", and SFAS No. 146
     "Accounting for Costs Associated with Exit or Disposal Activities"
     were recently issued.  SFAS No. 141, 142, 143, 144, 145 and 146 have
     no current applicability to the Company or their effect on the
     financial statements would not have been significant.

     Accounting 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 effect the reported amounts of assets and
     liabilities, the disclosures of contingent assets and liabilities at
     the date of the financial statements, and the reported amounts of
     revenues and expenses during the reporting period.  Actual results
     could differ from those estimated by management.

     Restatement - The financial statements for periods prior to July 31,
     2002 have been restated to be consistent with the headings and
     classifications used in the July 31, 2002 financial statements.

                                     7

<PAGE>

             ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - PROPERTY AND EQUIPMENT

     The following is a summary of property and equipment - at cost, less
     accumulated depreciation and amortization as of:

                                                  July 31,      January 31,
                                                    2002           2002
                                                 ----------     ----------
     Office equipment                           $    24,113    $    24,113
          Less: accumulated depreciation            (15,246)       (13,000)
                                                 ----------     ----------
          Office equipment, net                 $     8,867    $    11,113
                                                 ==========     ==========

     Depreciation and amortization expense for the six months ended
     July 31, 2002 and 2001 amounted to $2,246 and $2,264, respectively.

NOTE 3 - LICENSE AGREEMENTS

     The Company has entered into four license agreements in total:  Major
     League Baseball Properties (MLBP), Major League Baseball Players
     Association (MLBPA), National Football League Properties (NFL), and
     National Football League Quarterback Club (NFLQC), for the use of
     their names and likeness in the comic books produced by the Company.
     The following is a summary at:

                                                  July 31,      January 31,
                                                    2002           2002
                                                 ----------     ----------
     License agreements                         $   105,496    $   105,496
          Less accumulated amortization             (80,038)       (26,457)
                                                 ----------     ----------
          License agreements, net               $    25,458    $    79,039
                                                 ==========     ==========

     The Company's license agreement with The National Hockey League
     Players Association (NHLPA) expired in June 2001 and was not renewed.
     The Company has also agreed with MLBP to place an advertisement with
     "Little League Magazine" each year, which is not to exceed $45,000 in
     cost.

     The license agreements have expiration dates ranging from August 2002
     through December 2002.

     Amortization expense for the six months ended July 31, 2002 and 2001,
     was $52,748 and $38,216, respectively.

                                     8

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - INVENTORY

     Inventory consists of the following at:
                                                  July 31,      January 31,
                                                    2002           2002
                                                 ----------     ----------
     Finished goods                             $   127,504    $   127,504
     Books in development                           111,491          4,500
     Less allowance for slow moving inventory      (121,129)      (121,129)
                                                 ----------     ----------
          Inventory, net                        $   117,866    $    10,875
                                                 ==========     ==========
NOTE 5 - ACCRUED LIABILITIES

     The Company had accrued liabilities as follows at:

                                                  July 31,      January 31,
                                                    2002           2002
                                                 ----------     ----------
     Unpaid compensation                        $   362,693    $   272,693
     Payroll taxes                                   60,010         51,026
     Accrued interest                               234,557        139,186
     Accrued note payable default penalty           110,000         70,000
                                                 ----------     ----------
          Accrued liabilities                   $   767,260    $   532,905
                                                 ==========     ==========

NOTE 6 - NOTES PAYABLE

     The following is a summary of notes payable to unrelated parties as of
     July 31:
                                                                      2002
                                                                    ---------
     20% unsecured convertible demand notes payable originally
     due June 20, 2001 extended until January 20, 2002 for the
     right to convert to stock at $.25 per share, the conversion
     feature was subsequently cancelled and the note extended to
     February 28, 2003 through the issuance of options to
     purchase 425,000 shares, the notes are personally guaranteed
     by the Company's president and a director/shareholder.        $  160,000

     20% unsecured demand notes payable due June 20, 2001.  This
     note was extended until January 15, 2002.  Subsequently
     extended to November 20, 2002 through the issuance of 60,000
     common shares, personally guaranteed by a director/shareholder
     who has also pledged 25,000 shares of stock he holds in the
     Company as collateral on the note.                                25,000

                                     9

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - NOTES PAYABLE [Continued]

     20% unsecured demand note payable due June 20, 2001.  The note
     was extended until January 15, 2002.  Subsequently extended to
     December 20, 2002, through the issuance of 40,000 common
     shares.  Personally guaranteed by a director/shareholder who
     has also pledged 25,000 shares of stock he holds in the
     Company as collateral on the note.                                25,000

     20% unsecured demand note for $100,000 to an un-related party
     originally due June 20, 2001.  The note was renegotiated in
     July 2001, wherein the Company received an additional $100,000,
     made the note convertible into common stock at $.25 per share,
     and made the note due July 15, 2002.  Personally guaranteed by
     a director/shareholder who has also pledged 100,000 shares of
     stock he holds in the Company as collateral on the note.         200,000

     February 2002, the Company received proceeds of $100,000 in
     exchange for a 20% note payable due upon demand.  Partially
     repaid.                                                           76,000

     March 2002, the Company received proceeds of $25,000 in
     exchange for a 20% note payable due upon demand.                  25,000

     March 2002, the Company received proceeds of $15,000 in
     exchange for a 20% note payable due upon demand.
     Partially repaid.                                                  9,000
                                                                    ---------
                                                                   $  520,000
                                       Less current portion:         (520,000)
                                                                    ---------
                                       Long-term portion:          $     -
                                                                    =========

     For the six months ended July 31, 2002 and 2001, the Company recorded
     interest expense for these notes payable in the amount of $49,808 and
     $89,442, respectively.  At July 31, 2002, $130,254 of the accrued
     interest balance were related to these notes.

NOTE 7 - NOTES PAYABLE - RELATED PARTIES

     The following is a summary of notes payable to related parties as of
     July 31:
                                                                      2002
                                                                    ---------
     20% unsecured note to a shareholder/director due
     October 25, 2001.  Subsequently extended to February 28,
     2003 through the issuance of 25,000 common shares.            $   25,719

     20% unsecured convertible demand note to an individual
     related to a shareholder/director.  Convertible at $.20
     per share.  The conversion feature was subsequently
     cancelled through the issuance of options to purchase
     10,000 common shares.                                              4,627

     20% unsecured demand notes payable due June 20, 2001.
     This note was extended until January 15, 2002.  Subsequently
     extended to November 20, 2002 through the issuance of
     30,000 common shares.                                             25,000


                                     10

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - NOTES PAYABLE - RELATED PARTIES [Continued]

     12% unsecured note to a shareholder due August 31, 2002
     (See below).                                                     750,000
                                                                    ---------
                                                                   $  805,346
                                       Less current portion:         (805,346)
                                                                    ---------
                                       Long-term portion:          $     -
                                                                    =========

     For the six months ended July 31, 2002 and 2001, the Company has
     expensed $49,956 and $54,333, respectively, in interest expense.

     In August 2001, the Company refinanced the $600,000 note payable and
     related accrued interest of $150,000 through the issuance of a
     $750,000 12% note payable.  The Company also issued 2,500,000 shares of
     common stock, valued at $.21 per share, to settle $525,000 in default
     penalties.  The 12% note payable matures August 31, 2002.  The note
     calls for balloon interest payments of $50,000 on or before December 1,
     2001, March 1, 2002, and June 1, 2002.  The Company has agreed to
     issue 1,000,000 shares of common stock to the note holder as a penalty
     if the Company does not make the scheduled interest payments within
     thirty days of receiving written notice of default.  The Company did
     not make the December 1, 2001, March 1, 2002, and June 1, 2002
     payments.  At July 31, 2002 and January 31, 2002, a total of 1,000,000
     shares of common stock has been accrued.  At July 31, 2002 and January 31,
     2002, respectively, the Company has accrued interest payable of $86,671
     and $41,671 on this note.

     During April 2001, the Company issued a $35,000 20% unsecured note
     payable to a shareholder of the Company.  The note and related accrued
     interest is due October 25, 2001.  At July 31, 2002 and January 31,
     2002, respectively, the Company has accrued interest payable of
     $16,814 and $5,581.

     During December 2001, the Company issued a $35,000 20% unsecured note
     payable to a relative of a shareholder of the Company.  The note and
     related accrued interest is due upon demand.  At July 31, 2002, the
     Company has repaid $30,372, leaving a balance of $4,628 with accrued
     interest payable of $818.

                                     11

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - INCOME TAXES

     The Company accounts for income taxes in accordance with Statement of
     Financial Accounting Standards No. 109 "Accounting for Income Taxes".
     SFAS No. 109 requires the Company to provide a net deferred tax
     asset/liability equal to the expected future tax benefit/expense of
     temporary reporting differences between book and tax accounting
     methods and any available operating loss or tax credit carryforwards.
     The Company has available at July 31, 2002, unused operating loss
     carryforwards of approximately $4,288,000 which may be applied against
     future taxable income and which expire in various years through 2022.

     The amount of and ultimate realization of the benefits from the
     deferred tax assets for income tax purposes is dependent, in part,
     upon the tax laws in effect, the future earnings of the Company, and
     other future events, the effects of which cannot be determined.
     Because of the uncertainty surrounding the realization of the deferred
     tax assets, the Company has established a valuation allowance equal to
     the tax effect of the deferred tax assets, therefore, no deferred tax
     asset has been recognized.  The net deferred tax asset is approximately
     $1,900,000 and $1,628,000 as of July 31, 2002 and January 31, 2002,
     respectively, with an offsetting valuation allowance of the same
     amount resulting in a change in the valuation allowance of
     approximately $272,000 during the six months ended July 31, 2002.

NOTE 9 - LOSS PER SHARE

     The following data show the amounts used in computing loss per share
     and the effect on income and the weighted average number of shares of
     potential dilutive common stock for the periods presented.
<TABLE>
<CAPTION>
                                              For the Three              For the Six
                                              Months Ended               Months Ended
                                                July 31,                   July 31,
                                         -----------------------    -----------------------
                                            2002         2001          2002         2001
                                         ----------   ----------    ----------   ----------
<S>                                     <C>          <C>           <C>          <C>
     Loss from continuing operations
       available to common shareholders
       (numerator)                      $  (144,115) $  (607,842)  $  (505,476) $  (838,989)
                                         ----------   ----------    ----------   ----------
     Weighted average number of common
       shares outstanding used
       basic loss per share
       (denominator)                     10,643,696    7,470,000    10,361,602    7,470,000
                                         ----------   ----------    ----------   ----------
     Weighted average number of common
       shares and potential dilutive
       common shares outstanding
       used in diluted loss per share
       (denominator)                        N/A          N/A           N/A          N/A
                                         ----------   ----------    ----------   ----------
</TABLE>
                                     12

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - LOSS PER SHARE [Continued]

     Diluted loss per share was not presented, as the affect is anti-
     dilutive.

     At July 31, 2002, the Company had options to purchase 8,513,500 shares
     of common stock at prices ranging from $.04 to $4.00 per share that
     were not included in the computation of diluted earnings per share
     because their effect was anti-dilutive.

NOTE 10 - CAPITAL STOCK

     Common Stock - The Company has authorized 50,000,000 shares of common
     stock, $.001 par value.  At July 31, 2002, the Company had 10,650,000
     shares issued and outstanding.

     During the six months ended July 31, 2002, the Company issued 580,000
     shares of common stock as incentives for note payable holders to
     extend the terms of the notes payable.  The value of these shares were
     $40,600, or $.07 per share.

     Public Offering of Common Stock - The Company had proposed to make a
     public offering of 3,600,000 shares of common stock at a price of $.50
     per share.  The Company filed a registration statement with the United
     States Securities and Exchange Commission on Form SB-2 under the
     Securities Act of 1933.  The Company was unsuccessful in completing the
     offering.  The period for the offering expired during April 2001.  The
     Company does not plan at this time to extend or pursue this offering
     further.

     Stock Options - A summary of the status of the options outstanding
     under the Company's stock option plans and employment agreements at
     July 31, 2002 is presented below:
<TABLE>
<CAPTION>
                                   Options Outstanding                       Options Exercisable
                    -------------------------------------------------   ------------------------------
       Range of                   Weighted-Average   Weighted Average                 Weighted-Average
       Exercise       Number         Remaining           Exercise         Number          Exercise
        Prices      Outstanding   Contractual Life        Price         Exercisable        Price
     ------------   -----------   ----------------   ----------------   -----------   ----------------
<C>                 <C>           <C>                <C>                <C>           <C>
     $        .04      150,000        2.75 yrs           $   .04           150,000        $   .04
              .07      635,000        4.75 yrs               .07           635,000            .07
             .125       50,000        4.50 yrs              .125            50,000           .125
        .35 - .39    1,250,000        2.75 yrs               .36         1,250,000            .36
        .50 - .75    1,377,500        3.75 yrs               .68         1,377,500            .68
      1.00 - 1.25    1,050,000        4.75 yrs              1.19         1,050,000           1.19
             2.00    2,000,000        4.75 yrs              2.00         2,000,000           2.00
     $       4.00    2,000,000        4.75 yrs           $  4.00         2,000,000        $  4.00
                     ---------                                           ---------
                     8,513,500                                           8,513,500
</TABLE>
     During the six months ended July 31, 2002, the Company granted options
     to purchase 785,000 shares of common stock at prices ranging from $.04
     to $.07 per share.  The options were granted as incentives for note
     payable holders and consultants.  The fair value of $34,771 was
     expensed as consulting and interest expense.

                                     13

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - CAPITAL STOCK [Continued]

     Treasury Stock - On May 3, 2000, a complaint was filed in the United
     States District Court, Central District of California, by Joseph
     Yukich, naming the Company and the Company's president as defendants.
     The complaint sought damages and injunctive relief for alleged
     copyright infringement in connection with certain comic books.
     Mr. Yukich claimed to be a one-third owner of the copyrights for the
     comic books in question.  In January 2002, the Company settled the
     lawsuit with Mr. Yukich.  The settlement agreement included the Company
     forgiving a note receivable and accrued interest totaling $46,179 from
     Mr. Yukich and the Company receiving 80,000 shares of the Company's
     common stock, which is recorded as treasury stock.  The Company has
     used the carrying amount of the note receivable and accrued interest
     as the value assigned to the treasury stock.

NOTE 11 - RELATED PARTY TRANSACTIONS

     Notes Payable to Shareholders - During August 2001, the Company
     renegotiated a $600,000 note payable to a shareholder, which was in
     default, along with accrued interest payable of $150,000, into a new
     note payable of $750,000 at interest rates of 12% per annum. [See
     Note 7]

     Note Payable Guarantee - A director/shareholder of the Company has
     personally guaranteed the payment of $435,000 in notes payable and has
     pledged personal holdings of 175,000 shares of the Company's common
     stock as collateral for $275,000 in notes payable of the Company.  The
     President of the Company has personally guaranteed the payment of
     $160,000 in notes payable.

     Rental agreement - The Company has verbally agreed to rent office
     space from a director/shareholder for $4,500 per month.  For the six
     months ended July 31, 2002 and 2001, the Company expensed $27,000 and
     $0, respectively, in rental expense related to this agreement.

NOTE 12 - GOING CONCERN

     The accompanying financial statements have been prepared assuming that
     the Company will continue as a going concern.  However, the Company has
     incurred significant losses in recent years, has current liabilities
     in excess of current assets and has a stockholders' deficit.  These
     factors raise substantial doubt about the ability of the Company to
     continue as a going concern.  In this regard Management is proposing to
     raise any necessary additional funds not provided by operations
     through loans and/or through additional sales of its common stock.
     Management believes that it can improve operations, refinance debt,
     convert debt to equity, and reduce expenses.

     Management believes that a combination of these efforts will be
     necessary to continue operations.  The financial statements do not
     include any adjustments relating to the recoverability and
     classification of recorded asset amounts or the amounts and
     classification of liabilities that might be necessary should the
     Company be unable to obtain additional financing, establish profitable
     operations or realize its plans.

                                     14

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - COMMITMENTS AND CONTINGENCIES

     Litigation - The Company is involved in various litigation as part of
     its normal business operations.  In management's opinion, the ultimate
     resolution of these cases will not have a material adverse effect on
     the Company's financial position.

     Promotion agreement - In November 2001, the Company entered into an
     agreement with a company for promotion services.  The Company has
     agreed to pay $5,000 per month for the twelve month term ending in
     November 2002.  The Company also granted options to purchase 50,000
     shares of common stock at $.125 per share.  The Company expensed $5,000
     related to the option as promotion expense.  After eight months, either
     party may cancel the remainder of the contract upon a written 30-day
     notice to the other party.  The Company has agreed to pay commissions
     from sales directly generated from the promotion company as follows:
     7.5% on the first $1,000,000 and 8.5% thereafter.

     Employment agreement - In January 2002, the Company entered into an
     employment agreement with its president.  The agreement is for two
     years, terminating on December 31, 2004 at a rate of $180,000 per
     year.  The Company also agreed to grant options to purchase 3,500,000
     shares of common stock which vested immediately and have varying
     exercise prices from $.35 to $4.00 per share.  The Company has also
     agreed to provide $1,000 per month for automobile expenses.

     Consulting agreement - In January 2002, the Company entered into a
     consulting agreement with a shareholder/director.  The agreement is for
     two years, terminating on December 31, 2002 at a rate of $8,000 per
     month.  The Company also agreed to grant options to purchase 3,500,000
     shares of common stock which vested immediately and have varying
     exercise prices from $.35 to $4.00 per share.  The Company has also
     agreed to provide $1,000 per month for automobile expenses.

     Sales agreements - The Company had entered into several sales
     agreements to deliver promotional units at various dates from June
     2001 through August 2002.  At July 31, 2002, the Company had received
     $225,284 in advance payments from several professional sports teams
     and which is reflected on the face of the financial statements as
     "Customer deposits."

     Leases - In December 1998, the Company entered into a leasing
     agreement for computer equipment.  The agreement was for $313 per month
     for thirty-six months, ending in December 2001.  The agreement has a
     purchase price of 15% of the financed amount upon completion of the
     thirty-six months.  If the Company does not make the balloon payment
     and does not return the equipment, the Company shall continue making
     payments on a month to month basis.  The Company is currently making
     month to month payments.

     Rental agreement - The Company has verbally agreed to rent office
     space from a director/shareholder for $4,500 per month.  For the six
     months ended July 31, 2002, the Company expensed $27,000 in rental
     expense related to this agreement.

                                     15

<PAGE>

            ULTIMATE SPORTS ENTERTAINMENT, INC. AND SUBSIDIARY

      NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - CONCENTRATIONS

     Sales - For the six months ended July 31, 2002, the Company's sales
     came primarily from comic book promotions with professional sports
     teams.  The following schedule details significant customers which had
     sales in excess of 10% of the Company's total sales.  The loss of any
     of these customers could have a major impact on the financial
     condition of the Company.

     Customer          Sales          % of Sales
     --------        ---------        ----------
        A            $  92,000            37
        B            $  56,666            23
        C            $  45,315            18
        D            $  37,650            15

     The Company maintains license agreements with professional sport
     organizations for the use of their names and likeness in the comic
     books produced by the Company.  Should the Company not maintain these
     license agreements, the Company's ability to generate revenue could be
     severely impaired.

NOTE 15 - SUBSEQUENT EVENTS

     The Company subsequently went into default on a note payable, which
     was due August 31, 2002.  Accordingly, the Company may be obligated to
     issue 1,000,000 shares of common stock to cure default penalties under
     the terms of the note payable.  The Company failed to make interest
     payments at three dates and has failed to repay the note at the due
     date of August 31, 2002. (See Note 7)


                                     16

<PAGE>

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

OVERVIEW

     Ultimate Sports Entertainment, Inc. is a Los Angeles based
entertainment company that creates, develops, and publishes
action/adventure/fantasy stories featuring well-known athletes/celebrities
in collectible comic book form using first-rate artists and writers. We
have taken an extremely marketable commodity, the superstar
athlete/celebrity, and created a brand new licensing, marketing, and
premium sponsorship entity.

     Our titles include famous athletes such as:  Barry Bonds; Mark McGwire;
Ichiro; Sammy Sosa; Cal Ripken Jr.; Derek Jeter; Alex Rodriguez; Roger
Clemens; Mike Piazza; Ken Griffey, Jr.; Troy Aikman; Dan Marino; Brett
Favre; Peyton Manning; John Elway; Terrell Davis; and many others.

CRITICAL ACCOUNTING POLICIES

     The discussion and analysis of our financial condition and results of
operations are based upon our unaudited condensed consolidated financial
statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America.  The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amount of assets and liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities at the date of our financial statements.  Actual results may
differ from these estimates under different assumptions or conditions.

     Critical accounting policies are defined as those that are reflective
of significant judgments and uncertainties, and potentially result in
materially different results under different assumptions and conditions. We
believe that there are no critical accounting policies which would have a
material impact on our financial presentation.

SIX MONTHS ENDED JULY 31, 2002, COMPARED TO SIX MONTHS ENDED JULY 31, 2001

     A summary of operating results for the six months ended July 31, 2002
and 2001 is as follows:

                                      2002                2001
                                            % of                % of
                                  Amount    Sales     Amount    Sales
                                ---------   -----   ---------   -----
     Sales                      $ 252,773           $ 126,077
     Cost of goods sold           155,437    61%      105,459    84%
                                 --------            --------
     Gross profit                  97,336    39%       20,618    16%

     General & administrative     400,256   158%      425,506   337%

                                     17

<PAGE>

     Bad debt                        --      0%        46,179    37%

     Total operating expenses     400,256   158%      471,685   374%

     Other expenses              (202,556) (80)%     (387,922) (308)%
                                 --------            --------
     Net loss                   $(505,476) (200)%   $(838,989) (665)%
                                 ========            ========

                                   2002                2001
                                 --------            --------
     Loss per share:             $ (0.05)            $ (0.11)


     Revenues.  Our sales revenue is derived from both in-stadium and retail
promotions with professional sports teams, as well as sales through the
Internet and direct phone orders.  In-stadium and retail team promotions
account for a substantial majority of these revenues.  To date in-stadium
and retail promotions have been exclusively with Major League Baseball
teams.  We generate agreements with the teams for a definitive amount of
units that will be distributed at a particular game that is based on a per
unit price.  Total sales increased substantially at 100%, or $126,696, for
the six months ended July 31, 2002, as compared to the same period in the
prior year (the "comparable prior year period").  This increase is based
primarily on a shift from direct retail sales of our comic books by which
we marketed our comic books last year to the use of our comic books this
year in promotion activities with the teams which has resulted in greater
sales volume.  We anticipate that sales will increase during third quarter,
although we are unable to predict the percentage of continued growth.  We
estimate that sales during fourth quarter will be largely dependent upon
our success in introducing and implementing our promotion activities with
teams in the National Basketball Association.  We are unable to predict
what, if any, success we will have in implementing our promotional plans
with the NBA teams.

     Cost of Goods Sold.  The cost of goods sold is based on the following:
editorial (including writing, inking, coloring, lettering), printing,
shipping of our product, and the amortization of our licensing agreements.
Although, the cost of goods sold increased 47%, or $49,978, for the six
months ended July 31, 2002, the revenues nearly doubled.  The cost of goods
sold as a percentage of revenue decreased 23%, from 84% for the comparable
prior year period to 61% for the six months ended July 31, 2002.  We have
streamlined the creative process and recycled certain non-specific elements
in order to reduce costs on the editorial end.  Producing more product has
allowed us to print in greater quantities, which in turn has enabled us to
obtain better pricing from our printer.  Management is confident that we
have reduced costs to the current level and will be able to maintain this
level of cost of goods sold in the future.

     General and Administrative.  General and administrative expenses
decreased 6%, or $25,250, for the six months ended July 31, 2002, as
compared to the comparable prior year period.  We anticipate that this
level of expenses will remain constant in the future.

                                     18

<PAGE>

     Bad Debt.  Bad debt expenses decreased 100%, or $46,179, for the six
months ended July 31, 2002, as compared to the comparable prior year
period.  This bad debt expense had been incurred in connection with a
promissory note issued to us by Joseph Yukich.  The obligation to repay the
note was satisfied through a negotiated settlement with Mr. Yukich by which
he returned 80,000 shares of stock previously issued to him by us and we
cancelled the debt.

     Other Income and Expenses.  Total other income and expenses decreased
48%, or $185,366, for the six months ended July 31, 2002, as compared to the
comparable prior year period.

LIQUIDITY AND CAPITAL RESOURCES

     As discussed below, we continue to suffer from a lack of available
cash to meet our continuing operating requirements.  At July 31, 2002, we
had a working capital deficit of ($2,932,794).  We continue to operate
using funds received for promotional events and deposits for future events.
We also continue to accrue the salary payable to our president and the
consulting fees due Mr. Burke, one of our directors.  We have been
unsuccessful in raising significant capital to satisfy all of our operating
requirements and we continue to renegotiate payment plans with many of our
vendors.  We continue to benefit from our lenders, venders, and consultants
extending credit or services for equity in our Company.  We are still
actively pursuing additional financing which in an optimal scenario would
come from a strategic source.

     During the period ended July 31, 2002 we completed our first out-of-
stadium promotion with the Arizona Diamondbacks and IHOP Restaurants.  In
addition, during the period ended July 31, 2002, we began the in-stadium
promotional event to launch our Seattle Mariners product to be sold at
McDonald's in Washington State.  We believe these two events mark a
significant expansion of our business into larger distribution and
potentially more profitable methods of distribution.

     Operating activities used $2,982 of cash for the six months ended July
31, 2002, as compared to operating activities using $87,753 of cash for the
comparable prior year period.  We continue to accrue expenses rather than
being able to satisfy these obligations as they are incurred, although the
amount of expenses accrued during the current period was reduced in many
cases.  Our increase in inventory for the six month period ended July 31,
2002, as compared to the comparable prior year period, was substantially
attributable to comic books which were produced in July 2002 for promotions
immediately after the end of this six month period.  Also, with the shift
from direct retail sales during last year to promotion activities this
year, the amount of customer deposits has significantly increased.

     Investing activities used $91,400 of cash for the six months ended
July 31, 2002, as compared to $50,000 for the comparable prior year period.
The increase in the cash used for investing activities for the six months
ended July 31, 2002, was attributable to increased payments on various
license agreements.

     Financing activities provided $94,912 in cash for the six months ended
July 31, 2002, as compared to financing activities providing $137,753 for
the comparable prior year period.  The

                                     19

<PAGE>

decrease in cash provided by financing activities was primarily attributable
to increased payments on note payables.

     Management anticipates the future quarter ending October 31, 2002,
will have increased sales from the quarter ending July 31, 2002, and
increased sales for the nine months ending October 31, 2002, as compared to
nine months ended October 31, 2001.  Within the present third quarter, we
have, as of September 15, 2002, completed three in-stadium promotions and
the out-of-stadium retail promotion with the McDonald's/Mariners in
Washington State.

FORWARD LOOKING STATEMENTS:

     This report contains statements that plan for or anticipate the
future.  Forward-looking statements include statements about the future of
the comic book or super action hero industry, statements about our future
business plans and strategies, and most other statements that are not
historical in nature.  In this report forward-looking statements are
generally identified by the words "anticipate," "plan," "believe,"
"expect," "estimate," and the like.  Although we believe that any forward-
looking statements we make in this report are reasonable, because forward-
looking statements involve future risks and uncertainties, there are
factors that could cause actual results to differ materially from those
expressed or implied.  For example, a few of the uncertainties that could
affect the accuracy of forward-looking statements, besides the specific
factors identified in the other sections of this report, include the
following:

     *    protracted league labor negotiations, strikes, or lock-outs;
     *    reduction in attendance at sporting events because of perceived
          or actual terrorist attacks;
     *    changes in our business strategies; and
     *    a decline in consumer interest in professional sports and/or
          athletes.

     In light of the significant uncertainties inherent in the forward-
looking statements made in this report, particularly in view of our early
stage of operations, the inclusion of this information should not be
regarded as a representation by us or any other person that our objectives
and plans will be achieved.

     The Private Securities Litigation Reform Act of 1995, which provides a
"safe harbor" for similar statements by existing public companies, does not
apply to our company.

                                  PART II
                             OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     We have a significant number of accounts payable to several of our
venders and persons who have loaned operating funds to us.  Most, if not
all, of these have threatened litigation if we are unable to make
arrangements for payment of these past due amounts.  To our knowledge, none
of these persons has instituted legal proceedings against us as of the
filing date of this report.  We are attempting to make arrangements for
installment or delayed payments of the

                                     20

<PAGE>

amounts due, but there is no assurance that we can successfully negotiate
delays in payments.  It is unlikely that we would have a valid defense
against such actions, and the enforcement of any judgments obtained by such
persons to collect these debts could have a material detrimental effect on
our business.

     John Gerard loaned $200,000 to us for operating capital, repayment of
which was due on or before July 15, 2002.  We were unable to repay any of
this amount on the due date.  He also loaned $25,000 to us which was due on
demand.  He has made demand for such repayment of these funds.  He has
notified us in writing that he will not renew these debts and that if they
are not paid by the maturity date, he will request his attorney to
immediately proceed with all necessary legal action against us and the
guarantors.  The promissory note for $200,000 was guaranteed by Mr. Burke,
one of our directors.  Mr. Gerard has orally agreed with us not to proceed
with legal action for at least forty-five days to allow us an opportunity
to either pay the note or renegotiate the terms.  If legal action is
commenced, it is unlikely that we would have a valid defense against any
action by Mr. Gerard to collect the debts, and the enforcement of any
judgment obtained by Mr. Gerard could have a material detrimental effect on
our business.

ITEM 2.  CHANGES IN SECURITIES

     During the quarter ended July 31, 2002, the following securities were
sold by us without registering the securities under the Securities Act:

     *    In June 2002 we issued 415,000 shares to three persons as
          consideration for loans in the principal amount of $134,000.  We
          also issued 165,000 shares to four persons for the extension of
          loans in the original principal amount of $110,000.  Management
          believes that each of the lenders was either an accredited
          investor as defined in Rule 501(a) of Regulation D under the
          Securities Act or was a sophisticated investor.  The shares were
          issued without registration under the Securities Act by reason of
          the exemption from registration afforded by the provisions of
          Section 4(2) of the Securities Act as a transaction by an issuer
          not involving any public offering and/or Section 4(6) of the
          Securities Act as an issuance solely to one or more accredited
          investors.  Each of the certificates bore a restrictive legend as
          to the investment nature of the transaction.  The transactions
          were not entered into as a result of or subsequent to any
          advertisement, article, notice, or other communication published
          in any newspaper, magazine, or similar media or broadcast on
          television or radio, or presented at any seminar or meeting.  We
          afforded each lender the opportunity to ask questions of our
          management and to receive answers concerning the terms and
          conditions of the transaction.  No underwriting discounts or
          commissions were paid in connection with such issuances.

     *    In June 2002 we granted options to four persons to purchase
          35,000 shares as consideration for loans in the principal amount
          of $65,000.  We also granted options to a single person to
          purchase 425,000 shares for the extension of a loan in the
          original principal amount of $160,000.  The options are
          immediately exercisable at $0.07 per share and expire on June 1,
          2005.  Management believes that each of the lenders was either an
          accredited investor as defined in Rule 501(a) of Regulation D
          under the Securities Act or was a sophisticated investor.  The
          options were granted without

                                     21

<PAGE>

          registration under the Securities Act by reason of the exemption
          from registration afforded by the provisions of Section 4(2) of
          the Securities Act as a transaction by an issuer not involving
          any public offering and/or Section 4(6) of the Securities Act as
          an issuance solely to one or more accredited investors.  The
          transactions were not entered into as a result of or subsequent
          to any advertisement, article, notice, or other communication
          published in any newspaper, magazine, or similar media or
          broadcast on television or radio, or presented at any seminar or
          meeting.  We afforded each lender the opportunity to ask questions
          of our management and to receive answers concerning the terms and
          conditions of the transaction.  No underwriting discounts or
          commissions were paid in connection with such grants.

     *    During the second quarter ended July 31, 2002, we granted options
          to four consultants to purchase 175,000 shares.  The options were
          granted under our 2000 Stock Option Plan.  Of the total options
          granted, 25,000 are exercisable at $0.07 per share and 150,000
          are exercisable at $0.04 per share.  All of the options are
          immediately exercisable and expire on June 1, 2005.  The options
          were granted without registration afforded by the provisions of
          Rule 701 promulgated by the Securities and Exchange Commission.
          No underwriting discounts or commissions were paid in connection
          with such grant.

     *    In June 2002 we granted options to IDPR to purchase 100,000
          shares.  The options were granted as consideration for
          entertainment public relations services performed by IDPR.  The
          options are immediately exercisable at $0.07 per share and expire
          on June 1, 2005.  The options were granted without registration
          under the Securities Act by reason of the exemption from
          registration afforded by the provisions of Section 4(2) of the
          Securities Act as a transaction by an issuer not involving any
          public offering.  The transaction was not entered into as a
          result of or subsequent to any advertisement, article, notice, or
          other communication published in any newspaper, magazine, or
          similar media or broadcast on television or radio, or presented
          at any seminar or meeting.  We afforded IDPR the opportunity to
          ask questions of our management and to receive answers concerning
          the terms and conditions of the transaction.  No underwriting
          discounts or commissions were paid in connection with such
          issuance.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     During the quarter ended July 31, 2002, we were delinquent in the
payment of interest and/or principal on each of the promissory notes set
forth below.  As reported in our prior quarterly report on Form 10-QSB for
the quarter ended April 30, 2002, in June 2002 we negotiated oral
extensions of each of the notes, except the notes due Mr. Gerard and The
Orbiter Fund Limited, both of which notes are past due.  The following
table sets forth the extended due dates of the notes.  Each of the notes
bears interest at 20% per annum.  A portion of the interest is payable
monthly commencing one month from the date of the note.  No principal
payments have been made on any note.  The following table sets forth for
each promissory note the amount of principal and interest accrued or due as
of September 9, 2002, the approximate date of filing of this report:

                                     22

<PAGE>

                           Date       Due Date    Principal   Interest
Name                      of Note     of Loan      Amount     Amount
----                      --------    --------    ---------   --------
JLB Equities               3/10/00     2/28/03      $75,000    $35,938
JLB Equities                4/5/00     2/28/03      $35,000    $16,273
JLB Equities               4/13/00     2/28/03      $25,000    $11,514
JLB Equities               5/17/00     2/28/03      $25,000    $11,048
Martin Burke               6/27/00     2/28/03      $25,000    $10,486
David Rosenberg           11/21/00    11/20/02      $25,000     $8,473
John Gerard                7/15/01     7/15/02     $200,000    $30,249
Seewack Family Trust      12/29/00    12/20/02      $25,000     $7,952
Martin Burke               4/27/01     2/28/03      $25,719     $6,328
The Orbiter Fund Ltd.      8/13/01     8/31/02     $750,000    $86,671
                                                  ---------    -------
     TOTAL                                       $1,210,719   $224,938
                                                  =========    =======

     The note payable to The Orbiter Fund Ltd. required interest payments
of $50,000 each on December 1, 2001, March 1, 2002, and June 1, 2002, and
matured on August 31, 2002.  Neither the interest nor the principal
payments have been made.  The note provides that if any principal or
interest payment is not made within thirty days following written notice
from the lender, we would be obligated to issue 1,000,000 shares to The
Orbiter Fund to cure the default.  We have not received such notification
from the lender; however, if such notice were given, we would be required
to issue 1,000,000 shares to cure the defaults.

     In addition to the notes listed in the above table, we have borrowed
funds and agreed to repay these loans upon demand by the lending party.  No
promissory notes have been issued to these parties.  During the first
quarter ended April 30, 2002, each of the lenders set forth below made
demand for the repayment of his or her loan.  None of the loans has been
repaid in whole or in part.  The following table sets forth the principal
amount loaned and the amount of interest due as of September 9, 2002:

                         Date       Principal     Interest
     Name               of Loan      Amount        Amount
     ----               -------     ---------     --------
     John Gerard        3/19/02      $25,000       $1,875
     Rob Deutschman      4/1/02       $9,000         $600
                                      ------        -----
          TOTAL                      $34,000       $2,475
                                      ======        =====

     We also have outstanding a note payable to Larry Fleischman in the
original principal amount of $100,000.  With prior payments, the total
principal amount due on or before October 31, 2002, is $76,000.

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<PAGE>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits. The following exhibit is filed with this report:

          99.1 Written Statement of Chief Executive Officer and Chief
Financial Officer with respect to compliance with Section 13(a) or 15(d) of
the Securities Exchange Act of 1934.

     (b)  Reports on Form 8-K:  During the quarter ended July 31, 2002, no
reports on Form 8-K were filed.

                                SIGNATURES

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

                                 Ultimate Sports Entertainment, Inc.


Date:  September 18, 2002        By: /s/ Frederick R. Licht
                                     Frederick R. Licht, President, Principal
                                     Accounting Officer, and Chief Financial
                                     Officer


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<PAGE>

                              CERTIFICATIONS

I, Frederick R. Licht, certify that:

     1.    I have reviewed this quarterly report on Form 10-QSB of Ultimate
Sports Entertainment, Inc.

     2.   Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report.

     3.   Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this
quarterly report.

                                   /s/ Frederick R. Licht
                                   Frederick R. Licht, President and Chief
                                   Financial Officer


EXPLANATORY NOTE REGARDING CERTIFICATIONS: Representations 4, 5, and 6 of
the Certifications as set forth in Form 10-QSB have been omitted,
consistent with the Transition Provisions of SEC Exchange Act Release No.
34-46427, because the period covered by this quarterly report ended before
the Effective Date of Rules 13a-14 and 15d-14.


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