================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C.  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, 2002
                                       OR

[ ]  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:  1-8645

                              MEGO FINANCIAL CORP.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                   NEW YORK                         13-5629885
        (STATE OR OTHER JURISDICTION OF        (I. R. S.  EMPLOYER
         INCORPORATION OR ORGANIZATION)         IDENTIFICATION NO.)


                   4310 PARADISE ROAD, LAS VEGAS, NEVADA 89109
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                 (702) 737-3700
              (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 [X]     No  [  ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     As  of June 30, 2002, there were 6,009,310 shares of Common Stock, $.01 par
value  per  share,  of  the  Registrant  outstanding.
================================================================================
<PAGE>


                      MEGO FINANCIAL CORP. AND SUBSIDIARIES


                                      INDEX



                                                                        Page
                                                                        -----
PART  I      FINANCIAL  INFORMATION  (unaudited)

Item  1.     Condensed  Financial  Statements

             Condensed Consolidated Balance Sheets at June 30, 2002 and
             December 31, 2001                                             1

             Condensed Consolidated Statements of Operations for the
             Three and Six Months Ended June 30, 2002 and May 31, 2001     2

             Condensed Consolidated Statements of Cash Flows for the
             Six Months Ended June 30, 2002 and May 31, 2001               3

             Notes to Condensed Consolidated Financial Statements          5

Item 2.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                    13

Item 3.      Quantitative and Qualitative Disclosures About Market Risk   23

PART  II     OTHER  INFORMATION

Item  1.     Legal  Proceedings                                           24

Item  2.     Changes  in  Securities                                      24

Item  3.     Defaults  Upon  Senior  Securities                           24

Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders  24

Item  5.     Other  Information                                           24

Item  6.     Exhibits  and  Reports  on  Form  8-K                        24

Signatures                                                                26

                                        i
<PAGE>
PART I                    FINANCIAL INFORMATION

ITEM 1.                    CONDENSED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                            MEGO FINANCIAL CORP. AND SUBSIDIARIES
                                            CONDENSED CONSOLIDATED BALANCE SHEETS
                                                   (thousands of dollars)
                                                         (unaudited)

ASSETS                                                                                   JUNE 30, 2002    DECEMBER 31, 2001
                                                                                        ---------------  -------------------
<S>                                                                                             <C>              <C>
Cash and cash equivalents                                                               $        1,550   $            1,271
Restricted cash                                                                                  7,551                6,708
Notes receivable, net of allowance of $13,407 and $14,557
  at June 30, 2002 and December 31, 2001, respectively                                         114,469              109,347
Retained interests in receivables sold                                                           2,948                3,688
Vacation ownerships held for resale                                                             19,784               17,865
Land and improvements inventory                                                                  2,540                2,757
Assets available for sale                                                                        3,382                3,468
Property and equipment, net                                                                      9,678                9,690
Deferred financing costs, net                                                                    1,953                2,071
Deferred selling costs                                                                           3,901                5,422
Other assets                                                                                    13,580               15,409
Assets related to discontinued operations                                                            -               15,156
                                                                                        ---------------  -------------------

          TOTAL ASSETS                                                                  $      181,336   $          192,852
                                                                                        ===============  ===================


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Notes and contracts payable                                                           $      126,884   $          131,530
  Accounts payable                                                                               3,858                1,873
  Accrued liabilities                                                                           16,322               12,274
  Interest rate swap liabilities                                                                 3,630                2,251
  Deferred income                                                                                2,790                2,097
  Reserve for notes receivable sold with recourse                                                2,757                3,560
  Customer deposits                                                                              1,804                2,831
  Deferred income taxes                                                                              -                1,289
  Liabilities related to discontinued operations                                                     -                9,545
                                                                                        ---------------  -------------------

          Total liabilities before subordinated debt                                           158,045              167,250
                                                                                        ---------------  -------------------

Subordinated debt                                                                                    -                4,211

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $.01 par value (authorizedshares, none                                            -                    -
    issued and outstanding)
  Common stock, $.01 par value (authorizedshares;  6,013,400 shares
    issued and outstanding at June 30, 2002 and 3,500,557 shares at December 31, 2001)              60                   35
  Additional paid-in capital                                                                    20,992               13,068
  Retained earnings                                                                              4,635                9,773
  Accumulated other comprehensive loss                                                          (2,396)              (1,485)
                                                                                        ---------------  -------------------

          Total stockholders' equity                                                            23,291               21,391
                                                                                        ---------------  -------------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $      181,336   $          192,852
                                                                                        ===============  ===================

</TABLE>
                                        1
<PAGE>
                      MEGO FINANCIAL CORP. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
                (thousands of dollars, except per share amounts)
                                   (unaudited)
<TABLE>
<CAPTION>


                                                           THREE MONTHS ENDED        SIX MONTHS ENDED
                                                       -------------------------  -----------------------
                                                         JUNE 30,      MAY 31,     JUNE 30,      MAY 31,
                                                           2002         2001         2002         2001
                                                        -----------  -----------  -----------  -----------
<S>                                                         <C>          <C>          <C>          <C>
REVENUES                                                              (Restated)                (Restated)
  Vacation ownership sales                              $    8,428   $   17,331   $   17,585   $   30,958
  Land sales                                                 6,639        6,418       12,963       11,740
  Interest income                                            4,173        3,965        8,207        7,515
  Financial income                                             134          844          326        1,694
  Loss on sale of investments and other assets                  (9)         (19)           (9)        (19)
  Other                                                      1,042        1,127        2,162        2,059
                                                        -----------  -----------  -----------  -----------
          Total revenues                                    20,407       29,666       41,234       53,947
                                                        -----------  -----------  -----------  -----------

COSTS AND EXPENSES
  Direct cost of:
    Vacation ownership sales                                 1,341        3,069        2,821        5,524
    Land sales                                                 844          964        1,928        1,741
  Interest expense                                           3,016        3,006        6,186        6,054
  Marketing and sales                                        9,589       13,260       18,435       24,317
  General and administrative                                 6,874        4,920       11,424        9,329
  Provision for cancellations                                1,882        3,118        3,224        4,874
  Depreciation                                                 661          333        1,095          684
  Restructuring charges                                          -            -        2,480            -
                                                        -----------  -----------  -----------  -----------
          Total costs and expenses                          24,207       28,670       47,593       52,523
                                                        -----------  -----------  -----------  -----------


(LOSS) INCOME FROM CONTINUING OPERATIONS                    (3,800)         996       (6,359)       1,424
   BEFORE INCOME TAX BENEFIT

INCOME TAX BENEFIT                                             (67)        (121)        (854)        (112)
                                                        -----------  -----------  -----------  -----------


(LOSS) INCOME FROM CONTINUING OPERATIONS                    (3,733)       1,072       (5,505)       1,536

Discontinued operations
  Income (loss) from discontinued operations                   324          (90)         556          (55)

  Income tax expense                                          (130)          31         (189)           -
                                                        -----------  -----------  -----------  -----------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX         194          (59)         367          (36)

NET (LOSS) INCOME APPLICABLE TO COMMON STOCK            $   (3,539)  $    1,013   $   (5,138)  $    1,500
                                                        ===========  ===========  ===========  ===========

NET (LOSS) INCOME PER COMMON SHARE
  Basic and diluted:
    From continuing operations                          $    (0.67)  $     0.31   $    (1.12)  $     0.44
    From discontinued operations                              0.03        (0.02)        0.07        (0.01)
                                                        -----------  -----------  -----------  -----------
     Net (loss) income                                  $    (0.64)  $     0.29   $    (1.05)  $     0.43
                                                        ===========  ===========  ===========  ===========

    Weighted-average number of common shares             5,533,987    3,500,557    4,899,888    3,500,557
                                                        ===========  ===========  ===========  ===========

</TABLE>
                                        2
<PAGE>

                      MEGO FINANCIAL CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                (thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>


                                                                                          SIX MONTHS ENDED
                                                                                         -------------------
                                                                                         JUNE 30,    MAY 31,
                                                                                           2002       2001
                                                                                         ---------  ---------
<S>                                                                                         <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net (loss) income                                                                      $ (5,138)  $  1,500
                                                                                         ---------  ---------
  Adjustments to reconcile net (loss) income to net cash used in operating activities:
    Charges to allowance for cancellations                                                 (2,127)    (4,571)
    Provision for cancellations                                                             3,224      4,874
    Gain on sale of business                                                                 (542)         -
    Cost of vacation ownership interest and land sales                                      4,749      7,265
    Depreciation                                                                            1,095        684
    Repayments on notes receivable                                                         14,801     24,459
    Additions to notes receivable                                                         (21,823)   (42,426)
    Purchase of land and vacation ownership interests                                      (6,451)    (4,794)
  Changes in operating assets and liabilities:
    Restricted cash                                                                          (843)    (2,245)
    Retained interests in receivables sold                                                    740       (522)
    Deferred financing costs                                                                  118       (123)
    Deferred selling costs                                                                  1,521       (435)
    Other assets                                                                            1,829      2,432
    Accounts payable                                                                        1,985        (61)
    Accrues liabilities                                                                     4,048     (2,058)
    Interest rate swap liability                                                              468        348
    Deferred Income                                                                           693      1,477
    Customer deposits                                                                      (1,027)        49
    Deferred income taxes                                                                  (1,289)      (293)
    Assets related to discontinued operations                                                 414         26
    Liabilities related to discontinued operations                                             25        115
                                                                                         ---------  ---------
          Net cash provided by (used in) operating activities                              (3,530)   (14,299)

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                                                         (997)      (434)
  Proceeds from the disposition of business                                                 5,714          -
                                                                                         ---------  ---------
          Net cash provided by (used in) investing activities                               4,717       (434)


CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from borrowings                                                                 20,581     37,020
  Reduction of debt                                                                       (25,227)   (21,641)
  Payments on subordinated debt                                                            (4,211)       (75)
  Proceeds from issuance of common stock                                                    7,949          -
                                                                                         ---------  ---------
          Net cash provided by (used in) financing activities                                (908)    15,304

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                          279        571

CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD                                               1,271         15
                                                                                         ---------  ---------

CASH AND CASH EQUIVALENTS END OF PERIOD                                                  $  1,550   $    586
                                                                                         =========  =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

  Cash paid during the period for interest,
    net of amounts capitalized                                                           $  6,453   $  5,969

</TABLE>
                                        3
<PAGE>

Cautionary  Notice  Regarding  Forward-Looking  Statements

     The  following  Management's Discussion and Analysis of Financial Condition
and  Results  of  Operations  contains  certain  forward-looking  statements and
information  relating to the Company that are based on the beliefs of management
as  well  as  assumptions  made  by  and  information  currently  available  to
management.  Such  forward-looking  statements  include, without limitation, the
Company's  expectations  and  estimates as to the Company's business operations,
including the introduction of new vacation ownership and land sales programs and
future  financial performance, including growth in revenues, net income and cash
flows.  In  addition,  included  herein  the  words  "anticipates,"  "believes,"
"estimates,"  "expects,"  "plans,"  "intends"  and  similar expressions, as they
relate  to  the  Company  or  its  management,  are  intended  to  identify
forward-looking  statements.  Such  statements  reflect the current views of the
Company's  management  with  respect to future events and are subject to certain
risks,  uncertainties  and  assumptions.

     The  economic  downturn in the tourism industry following the September 11,
2001  terrorist  attacks  had  an adverse impact on the operating results of the
Company's  first  fiscal quarter, which impact has continued through the current
quarter.  While  management  believes this event will not have a material effect
on  the  operations in the future, there can be no assurance that the travel and
tourism  industry  will  return to its pre-September 11 levels.  The Company has
customers  who both fly and drive to the various resort locations. At this time,
there  can  be no assurance that the economic downturn, a decrease in travel and
anxiety  about  possible  terrorist attacks and the current economic uncertainly
within  the  travel  industry  will  not  extend  to  future  periods.

     In  addition,  the  Company  specifically  advises readers that the factors
listed  under  the  caption "Liquidity and Capital Resources" could cause actual
results  to  differ  materially  from  those  expressed  in  any forward-looking
statement.  Should  one  or more of these risks or uncertainties materialize, or
should  underlying  assumptions  prove  incorrect,  actual  results  may  vary
materially  from  those  described herein as anticipated, believed, estimated or
expected.

     The  following  discussion  and analysis should be read in conjunction with
the  Company's  Form  10-KT  for the transition period from September 1, 2001 to
December  31, 2001, the Form 10-Q for the quarterly period ended March 31, 2002,
the  other public filings of the Company including all 8-K's and S-3 filings and
the  Condensed  Consolidated  Financial Statements, including the notes thereto,
contained  elsewhere  herein.

                                        4
<PAGE>


                      MEGO FINANCIAL CORP. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2002
                                   (unaudited)
1.     Basis  of  Presentation

     The  accompanying  condensed  consolidated financial statements present the
results of operations, financial position and cash flows of Mego Financial Corp.
(the  "Company"  or  "LESR").

     The  accompanying condensed consolidated financial statements have not been
audited.  We  have  condensed  or  omitted  certain  information  and  footnote
disclosures  normally  included  in financial statements presented in accordance
with  accounting  principles  generally  accepted  in the United States.  In the
opinion  of  management,  the  financial  information  furnished herein reflects
adjustments  of  normal  recurring accruals necessary for a fair presentation of
the  results  for  the  interim  periods.  The  condensed consolidated financial
statements  should  be  read  in  conjunction  with  the  consolidated financial
statements  and  notes  to those financial statements included in our transition
report on Form 10-KT for the transition period September 1, 2001 to December 31,
2001.  The  results of operations for the six months ended June 30, 2002 are not
necessarily  indicative  of  the  results  to  be  expected  for the year ending
December  31,  2002.

     In February 2002, the Company changed its fiscal year end from August 31 to
December  31.  Accordingly,  the  financial  information  for  the three and six
months  ended  June  30,  2002  is  based on the Company's new fiscal year.  The
information  presented  for the three and six months ended May 31, 2001 is based
on  the Company's old fiscal year and is considered to be comparable to the June
30,  2002  information  for  purposes  of  this  quarterly  report.

     Organization

     The  Company  is a developer and operator of vacation ownership resorts. It
provides  consumer  financing to purchasers of its vacation ownership intervals.
Vacation  ownership  sales  and  operations  are performed through Mego's wholly
owned subsidiary, Leisure Homes Corporation ("LHC"), formerly known as Preferred
Equities Corporation. LHC also develops and sells parcels of raw land to be used
primarily  as  sites  for  second  and/or  vacation homes, and provides consumer
financing  to  the  purchasers  of  the  land parcels. By providing financing to
virtually  all  of  its  customers,  LHC originates consumer receivables that it
hypothecates,  sells  and  services.

     LHC  acquires, develops and markets vacation ownership interests in resorts
located  in popular high volume vacation destinations such as Steamboat Springs,
Colorado  (two  resort locations); Indian Shores and Orlando, Florida; Honolulu,
Hawaii;  Las  Vegas  and  Reno,  Nevada  and Brigantine, New Jersey (adjacent to
Atlantic  City,  New  Jersey).

       LHC,  through  its  wholly-owned  subsidiary, Leisure Resorts Corporation
("LRC"),  manages  eight  vacation  ownership properties and receives management

                                        5
<PAGE>

income  in  connection therewith.  Leisure Services Corporation ("LSC"), another
wholly owned subsidiary of LHC, provides travel services to the leisure vacation
ownership  marketplace  and  customer  service to the Company's existing owners.

     The  Company  has  incorporated  Leisure Industries Corporation of America,
Inc.  in  Delaware  and proposes, subject to stockholder approval, to merge into
that  company  and  thus change its name and corporate domicile from New York to
Delaware.

     Principles  of  Consolidation

     The condensed consolidated financial statements include the accounts of the
Company  and all of its wholly-owned subsidiaries. All significant inter-company
balances  and  transactions  are  eliminated.

     Use  of  Estimates

     The  preparation  of  financial  statements  in  conformity with accounting
principles  generally  accepted in the United States requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  as of the date of the financial statements, the reported amounts of
sales and expenses during the reporting period and the disclosures of contingent
liabilities.  Accordingly,  actual  results  could  differ from those estimates.

     Earnings  (Loss)  Per  Common  Share

     Basic  earnings  (loss) per common share is computed by dividing net income
(loss) available to common stockholders by the weighted average number of common
shares  outstanding  during the period. Diluted earnings (loss) per common share
is  computed  in  the  same  manner as basic earnings (loss) per share, but also
gives effect to all dilutive stock options and warrants using the treasury stock
method.

     As  of  June  30,  2002  and  December 31, 2001, options to purchase 48,570
shares  of common stock at $6.00 per share were outstanding. As of June 30, 2002
warrants  to  purchase  1,121,020  shares of common stock at prices ranging from
$3.00  to  $6.00 per share were outstanding. These options and warrants were not
included  in  the  computation of diluted earnings per share because the Company
generated a loss from operations. The options, which expire on September 2, 2002
through  September  22,  2008  and  the warrants, which expire on April 20, 2003
through  June  25,  2005,  were  still  outstanding  at  June  30,  2002.

                                        6
<PAGE>

     Sales  of  Notes  Receivable  and  Related  Retained  Interest

     When  the Company sells notes receivable, it retains a residual interest in
the future cash flows from the portfolio sold and usually retains the associated
servicing rights. The sales are generally subject to limited recourse provisions
as  provided  in  the  respective notes receivable sales agreements. Under these
agreements,  the  Company  is generally obligated to replace or repurchase notes
receivable  that  become  60  to  90 days delinquent or are otherwise subject to
replacement  or  repurchase  in  either  cash  or receivables. Reserve for notes
receivable  sold  with  recourse  represents  the Company's estimate of the fair
value  of  future  credit  losses to be incurred in connection with the recourse
provisions of the sales agreements and is shown separately as a liability in the
Company's  condensed  consolidated  balance  sheets.

     Gain  or  loss  on  sale of the receivables depends in part on the previous
carrying  amount  of the notes receivable sold, allocated between the notes sold
and  the  retained  interest  based  on their relative fair value at the date of
transfer.  To obtain fair values on the retained interests (both at the point of
the  related receivable sale and periodically thereafter), the Company generally
estimates  fair  value  based on the present value of future expected cash flows
estimated  using  management's  best  estimates of the key assumptions - default
rates,  rates  of prepayment, loss severity and discount rates commensurate with
the  risks  involved.

     The  Company's  retained  interests in receivables sold are carried at fair
value  as  either  derivatives  or  available-for-sale  investments.  Unrealized
holding  gains  or losses on the retained interests in notes receivable sold are
included  in  earnings  for  those  transactions structured so that the Company,
through  its  retained  interest,  receives  fixed interest amounts and pays the
buyer variable amounts based on a floating interest rate index, as the resulting
financial  interest meets the definition of a derivative in accordance with SFAS
No.  133.  Unrealized  holding  gains,  if  any,  on retained interests in notes
receivable  sold not meeting the definition of a derivative would be included in
shareholders'  equity,  net  of  income  taxes.  Declines  in fair value in such
retained  interests  below  amortized  cost  caused  by changes in the amount or
timing  of  cash  flows  to  be  received  are  reflected  in  earnings.

    Reclassifications

     Certain  prior  period  amounts  have  been  reclassified to conform to the
current  period  presentation.


                                        7
<PAGE>

2.     New  Accounting  Standards

     The  Accounting  Standards  Executive  Committee  ("AcSEC") of the American
Institute  of  Certified Public Accountants ("AICPA") began a project to address
the  accounting  for  timeshare  transactions in 1997.  The proposed guidance is
currently  in  the  drafting  stage  of  the  promulgation process and no formal
exposure  draft  has  been  issued  to date; therefore, the Company is unable to
assess  the  possible impact of this proposed guidance.  Currently, it is likely
that a final pronouncement on timeshare transactions will not be effective until
the  Company's  fiscal  year  2004.

     In  June  2001,  the  Financial  Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standard  ("SFAS")  No.  141,  "Business
Combinations,"  and  SFAS No. 142, "Accounting for Goodwill and Other Intangible
Assets."  SFAS  No. 141 eliminated the use of the pooling-of-interests method of
accounting  for  business  combinations  initiated  after  June  30, 2001 and is
effective  for  any  business  combination  accounted for by the purchase method
completed  after  June  30,  2001.  Under the new rules, goodwill and intangible
assets  deemed  to have indefinite lives will no longer be amortized but will be
subject  to  annual  impairment tests in accordance with SFAS No. 142. Effective
for fiscal years beginning after December 15, 2001, other intangible assets will
continue to be amortized over their useful lives. The provisions of SFAS 141 and
142  were adopted by the Company effective January 1, 2002. The adoption of SFAS
141  and  142  did not have any impact on the results of operations or financial
position  of  the  Company.

     The FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations"
in  August  2001.  This  statement is effective for fiscal years beginning after
December  15, 2003. This new statement is not expected to have any impact on the
results  of  operations  or  financial  position  of  the  Company.

     In  December  2001,  the  FASB  issued  SFAS  No.  144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" that is applicable to the Company's
fiscal  2002  financial  statements.  The  FASB's  new rules on asset impairment
supersede  FASB  Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets  and  for  Long-Lived  Assets  to  Be  Disposed Of," and provide a single
accounting  model for the disposition of long-lived assets. In the first quarter
of  2002,  the  Company  adopted  SFAS  No. 144, which resulted in the financial
statement  presentation of Central Nevada Utilities Corporation ("CNUC") and its
operating  results  as  discontinued  operations  (See  Note  4  below).

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44,  and  62,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  For most companies, SFAS No. 145 will require gains and losses on
extinguishments  of  debt  to  be  classified  as income or loss from continuing
operations  rather than as extraordinary items as previously required under SFAS
No.  4.  Extraordinary treatment will be required for certain extinguishments as
provided in Accounting Principles Board Opinion No. 30. SFAS No. 145 also amends
SFAS  No.  13 to require certain modifications to capital leases be treated as a
sale-leaseback  and  modifies  the  accounting  for sub-leases when the original
lessee remains a secondary obligor (or guarantor). SFAS No. 145 is effective for
transactions  occurring  after  May  15,  2002,  and  is  not expected to have a
material  impact  on  the  results  of  operations  or financial position of the
Company.

                                        8
<PAGE>

     FASB  Statement 146, "Accounting for Costs Associated with Exit or Disposal
Activities,"  addresses  financial accounting and reporting for costs associated
with  exit  or disposal activities and nullifies EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (including  Certain Costs Incurred in a Restructuring)." The principal
difference  between  Statement  146  and  Issue  94-3 relates to Statement 146's
requirements  for  recognition of a liability for a cost associated with an exit
or  disposal  activity.  Statement  146  requires  that  a  liability for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred. Under Issue 94-3, a liability for an exit cost as generally defined in
Issue 94-3 was recognized at the date of an entity's commitment to an exit plan.
A  fundamental  conclusion  reached  by  the  FASB  in this Statement is that an
entity's  commitment  to  a  plan, by itself, does not create an obligation that
meets  the  definition  of a liability. Therefore, this Statement eliminates the
definition  and  requirements  for recognition of exit costs in Issue 94-3. This
Statement  also  establishes  that  fair  value  is  the  objective  for initial
measurement of the liability. The provisions of this statement are effective for
exit  or  disposal activities that are initiated after December 31, 2002, and is
not expected to have a material impact on the results of operations or financial
position  of  the  Company.

3.     Interest  Rate  Swaps

     To  manage  its  exposure to interest rate risk in August 2000, the Company
entered  into  an  interest  rate  swap  agreement with a notional amount of $25
million  that  expires in August 2005.  The Company entered into another similar
interest rate swap agreement in August 2001 for a notional amount of $20 million
that  expires  in  August 2006.  The swaps convert the floating interest rate on
certain  of  the  Company's long-term debt obligation into fixed interest rates.
At  June  30,  2002,  and  December  31,  2001,  the fair value of the swaps was
approximately  $3.6  million  and  $2.3  million,  respectively.  Management has
determined  these  agreements are not required based on the economic climate and
its  future  operations.  Management intends to seek ways to terminate or reduce
the  obligations  of  these  agreements  in  the  future.  Such  termination  or
elimination  could  have  a  negative effect on the Company's operating results.

4.  Discontinued  Operations

     On  October  2,  2001,  CNUC  entered into an agreement with Utilities Inc.
providing  for  the  acquisition  by  Utilities Inc. of substantially all of the
assets  of  CNUC  for  $5.5  million  (Asset Sale).  Utilities Inc. deposited in
escrow  $500,000  of  the  purchase  price  to  assure  its  performance  of the
agreement.  The  transaction  was  subject  to the approval of the Nevada Public
Utilities  Commission.  The transaction was approved on April 9, 2002.  On April
11,  2002, the sale was consummated by the Company.  As a result the Company has
recognized  a  gain on sale of approximately $542,000.  The net proceeds of $5.2
million  was  used  to  repay the Subordinated Debt and accrued interest and the
at-risk  payment.  At  December  31,  2001  significant  assets  included  in
discontinued  operations  consisted  of  cash  of  $429,000,  restricted cash of
$927,000,  property  and  equipment,  net,  of  approximately $12.0 million.  At

                                        9
<PAGE>

December  31,  2001  significant  liabilities  included  in  liabilities  from
discontinued  operations  consisted of accrued liabilities of approximately $9.4
million, and deferred revenue of $185,000. Discontinued operations for the three
months  ended  June  30,  2002  included and May 31, 2001 revenues of $6,000 and
$357,000. Discontinued operations for the six months ended June 30, 2002 and May
31,  2001  included  revenues  of  $453,000  and  $745,000.

5.   Inventory

     Vacation ownership inventory consist of the following (in thousands)

                                                       June 31,  December 31,
                                                         2002       2001
                                                      ---------- ------------

     Vacation ownership interests                      $17,790     $13,771

     Vacation ownership interests in development         1,994       4,094
                                                      ---------- ------------
                                                       $19,784     $17,865

6.   Comprehensive  Income

     Total  comprehensive  loss  was approximately $4.7 million and $6.0 million
for  the  three  and six months ended June 30, 2002.  Total comprehensive income
was  approximately  $796,000  and $1.2 million for the three and six months
ended  May  31, 2001.  In both 2002 and 2001 periods, the difference between net
income (loss) and total comprehensive income (loss) was due to unrealized losses
on  interest  rate  swaps.

7.   Commitments  and  Contingencies

     Litigation  -  On  August  27, 1998, an action was filed in Nevada District
Court,  County of Clark, No. A 392585, by Robert and Jocelyne Henry, husband and
wife,  individually  and on behalf of all others similarly situated against LHC,
LHC's  previously  wholly-owned  subsidiary, CNUC, and certain other defendants.
The  plaintiffs'  complaint  asked for class action relief claiming that LHC and
CNUC  were  guilty  of  collecting  certain  betterment  fees  and not providing
associated  sewer  and  water  lines.

     The  court  determined  that  plaintiffs  had  not  properly  pursued their
administrative  remedies with the Nevada Public Utilities Commission ("PUC") and
dismissed  plaintiffs' complaint, as amended, without prejudice. Notwithstanding
their  appeal  of the dismissal, plaintiffs also filed for administrative relief
with  the PUC. On November 17, 1999, the PUC found that CNUC, the only defendant
over which the PUC has jurisdiction, was not in violation of any duties owed the
plaintiffs  or  otherwise in violation of CNUC's approved tariffs. Subsequent to
the  PUC's  decision,  plaintiffs  voluntarily dismissed their appeal. On May 4,
2000,  plaintiffs  re-filed their complaint in Nevada District Court, naming all
of  the  above  parties  with  the  exception  of  CNUC.

     The  May  4, 2000 complaint is virtually identical to the amended complaint
referred  to  above and asserts six claims for relief against defendants: breach
of  deed  restrictions,  two  claims  for breach of contract, unjust enrichment,
consumer fraud in violation of NRS 41.600 and violation of NRS 119.220, with all
claims  arising  out of the alleged failure to provide water and sewer utilities
to purchasers of land in the subdivisions commonly known as Calvada Valley North
and  Calvada  Meadows  located  in  Nye  County,  Nevada.

     On  September  8,  2000,  the Company filed a motion to dismiss each of the
claims  made in the complaint. The Court denied the Company's motion in an order
entered  on  December  19,  2000.

                                       10
<PAGE>

     Plaintiffs  then filed a motion to certify class, which defendants opposed.
On  September  5,  2001, the Court refused to certify a class for the claims of:
breach of contract, unjust enrichment, consumer fraud in violation of NRS 41.600
and  violation of NRS 119.220. Accordingly, the defendants are no longer subject
to  class  claims for monetary damages. The defendants' only potential liability
is  for  the  construction  of  water and sewer facilities. In July of 2002, the
defendants  filed  a  motion for Summary Judgment on which the court has not yet
ruled.  The  case  is scheduled for a jury trial on August 13, 2002. The Company
does  not  believe  that  any likely outcome of this case will have a materially
adverse  effect  on  the Company's financial condition or results of operations.

     At  various  times  in  the general course of business, the Company and LHC
have  each  been  named  in  other  lawsuits.  The  Company believes that it has
meritorious defenses to these lawsuits and that resolution of these matters will
not  have  a  material  adverse  effect on its financial condition or results of
operations.

     In June 2002, the Company entered into an agreement to lease certain office
space,  including  furniture,  fixtures  and equipment located at 2280 Corporate
Circle,  Building 9,  Henderson,  Nevada, for a period of three years. The lease
provides  for  monthly base rent of approximately $96,000 during the first year;
$99,000  during  the  second  year,  and  102,000  during  the  third  year.

     In  July  2002, the Company entered into an agreement to lease office space
located  at 2285 Corporate Circle, Henderson, Nevada, for a period of ten years.
The Company is required to post a Letter of Credit of $150,000 and to advance an
amount of approximately $300,000 for leasehold improvements. The Company expects
to  commence  occupancy  on or before November 1, 2002. The lease provides for a
monthly  base  rent of approximately $365,000 with adjustments applied annually.

8.     Restructuring  Costs  and  Other  Charges

     In  January  2002,  the  Company's  Board  of Directors approved a business
restructuring.  Among  other  things,  this  restructuring included: approval of
seven  terminations  at senior management levels; relocation of corporate office
facilities  from 1500 E. Tropicana Avenue and 4310 Paradise Road to newer office
facilities  in  closer  proximity  to one another; discontinuance of the license
agreement  with  Cendant Corporation whereby the Company licensed the use of the
name  "Ramada  Vacation Suites" in its vacation ownership and resort operations;
and  approval  of  change  in  the  name  of  the resort facilities from "Ramada
Vacation  Suites"  to  "Leisure  Resorts."

     During  the  quarter  ended  March  31,  2002,  the  Company  recorded  a
non-recurring charge of approximately $2.5 million. Included in this total were:
severance  benefits  associated  with  former  senior management and officers of
approximately  $1.9  million;  future  rental  expense to be incurred on vacated
office  space  of $311,000; and non-cash charges associated with the termination
of the Cendant license agreement in the amount of $308,000. As of June 30, 2002,
the  Company  has paid in cash approximately $1.2 million and expects to pay the
remainder by the end of December 2002. The Company has incurred and continues to
incur  substantial  non-recurring  costs  in  eliminating the Ramada signage and
brand  identification  at  all  of  its  resorts  and  within  its  operations.
Restructuring  charges,  in certain cases, are based on estimates and subject to
change;  however,  the Company does not believe revisions to the above estimates
will  be  material.

9.     Promissory  Notes

     During  the quarter ended June 30, 2002, the Company issued $2.9 million in
promissory  notes.  Generally,  the  notes provide for interest at eight percent

                                       11
<PAGE>

and  are payable one year from the date of issuance.  The Company has the option
to  settle  these  obligations, in whole or in part, without penalty or premium,
with common stock of the Company or cash.  If the obligation is settled with the
Company's  common  stock, the holders will receive one warrant for each share of
common  stock.  The  number  of  shares  of  common  stock issued to satisfy the
obligation  will  be based on the amount of debt an accrued interest outstanding
in  relation  to  market  value  of  the common stock on the date it is settled.
These  warrants  entitle  the  holder  to  purchase one share of common stock at
purchase  prices ranging from $3.00 to $6.00.  The warrants generally expire one
year  from  the  date  of  issuance.

10.     Common  Stock

     During  the quarter ended June 30, 2002, the Company sold approximately 1.2
million  shares  of  its  common  stock  for  net proceeds of approximately $8.0
million.  Included with each of these sales, the purchasers received one warrant
for  each share of common stock purchased.  These warrants entitle the holder to
purchase  one  share  of  common  stock at purchase prices ranging from $4.00 to
$6.00.  The  warrants  expire  one  year  from  the  date of issuance. Under the
agreements,  the Company has the right to demand exercise, at its discretion, if
the  Company's  common stock trades at $7.00 or more for ten consecutive trading
days  at  any  time  during  the  term  of  the  warrants.

11.     Income  Taxes

     Deferred  income  tax  assets  and  liabilities  are  determined based upon
differences  between  the financial statement and income tax bases of assets and
liabilities  using  enacted  tax  rates  in  effect  for  the  year in which the
differences  are  expected to reverse. The realization of deferred tax assets is
based  on historical tax positions and expectations about future taxable income.
Valuation  allowances  are  recorded  related  to  deferred  tax assets if their
realization  does  not  meet  the  "more  likely than not" criteria of SFAS 109,
"Accounting  for  Income  Taxes."

    The  provision  for  income  taxes  as  reported  is  different from the tax
provision  computed  by  applying  the statutory federal rate of 34 percent. The
differences  are  as  follows:
<TABLE>
<CAPTION>
<S>  <C>
                                                    Three Months Ended       Six Months Ended
                                                   ----------------------  ---------------------
                                                      June 30,   May 31,    June 30,     May 31,
                                                        2002      2001        2002        2001
                                                   ------------ ---------  ----------- ---------

(Loss) income before income taxes                  $ (3,539)    $  1,013   $  (5,138)   $  1,500
                                                   ============ =========  =========== =========

Tax at the statutory federal rate                  $ (1,203)    $    344   $  (1,747)   $    510

(Decrease) Increase in income taxes resulting from
   Changes in certain income tax liability reserves                 (268)      2,601        (398)
   Changes in certain income tax asset reserves       1,270            -           -           -
                                                   ------------ ---------  ----------- ---------
Income tax benefits                                $     67      $     76    $   854    $    112

</TABLE>
12.     Restatement  -  Three  Months  Ended  November  30,  2000

     Certain  amounts have been restated for the three months ended May 31, 2001
in connection with adjustment of net gain on sale of two buildings in accordance
with  SFAS  No.  98,  "Accounting  for  Leases",  Sale  - Leaseback Transactions
Involving  Real  Estate.  To  restate  the  three months ended May 31, 2001, the
Company  recorded  $24,744  gain on sale of investments and other assets, net of
tax  $12,746.  This  resulted  in  net income applicable to common stock of $1.0
million  and  earnings  per  share of $0.29 from net income applicable to common
stock  of  $981,000  and  earnings  per  share  of  $0.28.

13.     Subsequent  Events

     In  July  2002,  the  Company completed a $4.0 million private placement to
various  accounts  managed  by  Ashford  Capital Management in the form of a 7.5
percent  convertible  debenture  due in 2006.  At any time, upon written notice,
the  Company  may  convert  all  or any portion of the outstanding principal and
interest  of  the  debenture  into  shares  of common stock at a price of $5 per
share.  According  to  the  terms  of the placement, the investors also received
200,000  warrants.  These  warrants  entitle the holder to purchase one share of
the Company's common stock at $3.00.  The warrants expire one year from the date
of  issuance.

     The Company entered into an agreement to acquire 2,209 lots in Arizona from
Atlantic Development Corporation in an effort to add to its land inventory.  The
agreement  was  subject  to  the  completion of registration which is currently
in process.

                                       12
<PAGE>

     The  Company  entered  into  a sales and marketing agreement with La Quinta
Partners  to sell and market a new fractional vacation experience at PGA West in
Palm  Springs,  California.  Pursuant  to  the  agreement,  the Company advanced
$300,000.  The  closing  of the agreement is subject to an acceptable appraisal,
which  has  not  been completed but is expected to be completed during the third
quarter.

     The  Company  entered  into  a Letter of Intent to acquire Raintree Resorts
International  subject  to  due diligence and future negotiations. In accordance
with  the  provisions  of  the  Letter  of Intent, the Company later amended the
Letter  of Intent to consider the acquisition of only three Raintree properties.
These  properties  were  the  Cimarron  Golf Resort in Palm Springs, California,
Whiski  Jack  in  British  Columbia  and Teton Club in Jackson Hole, Wyoming. In
accordance with the business plan of the Company, the negotiations with Raintree
and  the  Board  of  Directors'  review  of  the  due  diligence, management was
authorized  by  it Board of Directors to purchase the Cimarron Golf Club in Palm
Springs,  California.  The  Board voted not to pursue the purchase of either the
Teton  Club  or  Whiski  Jack from Raintree. While no assurance can be made that
this  transaction  will  be  consummated,  the  Company  is  in  the  process of
completing  the  final  acquisition  documents.

     The  Company  entered  into a Letter of Intent to acquire the Cimarron Golf
Club  in  Palm  Springs,  California,  from  OB  Sports  for a purchase price of
$10,800,000.  This  transaction  is subject to the closing of the acquisition of
the  Cimarron  Golf  Resort discussed above. While no assurance can be made that
this  transaction  will  be  consummated,  the  Company  is  in  the  process of
completing  the  final  acquisition  documents  and  said  transaction  has been
approved  by  its  Board  of  Directors  at  its  August,  2002,  meeting.

     On August 12, 2002, the Company entered into a Letter of Intent to purchase
all  of  the  assets  of  FareQuest,  Inc.  FareQuest  is an application service
provider which searches the websites of major airlines, major regional airlines,
and  all  major aggregator websites to find the lowest airfares on the Internet.
Using  a  universal  booking  interface  it  searches,  compares,  books,  and
communicates  passenger  profile information to websites. FareQuest then returns
and  stores  the  booking  information within the application for future use and
reporting.  Over  90  travel  agencies  with  an aggregate $15 billion in annual
travel  sales  have  agreed  to  utilize  FareQuest  for  the procurement of web
inventory  for  corporate  clients  to  date.

Issues Affecting Liquidity

   LHC  is  required  to  comply  with  certain  financial  and  non-financial
covenants  under  these  lines  of credit agreements.  Among other things, these
agreements  require LHC to meet certain minimum tangible net worth requirements,
maintain certain liabilities to tangible net worth ratios,  maintain marketing
and  sales  and general and administrative expenses, as defined, relative to net
processed  sales for each rolling 12-month period below a certain percentage and
maintain  certain interest coverage ratios for each rolling 12 month period. The
maximum  percentage  related  to  costs  and expenses referred to above has been
exceeded  in  the  last  seven  quarters.  This  does not constitute an Event of
Default  as  defined under this loan agreement, or this line of credit; however,
it  gives  the  lender the option to suspend advances to LHC. The lender has not
elected  to exercise this option, but has continued to make regular advances and
has verbally informed LHC that it intends to continue such advances. The maximum
loan-to-value ratio referred to above was exceeded in the last five quarters. As
a  result,  the  Lender  has the right to declare an Event of Default as defined
under  this loan agreement, or this line of credit. Default of the loan-to-value
ratio,  under  this  line,  can  only  cause the lender to cease advances to the
Company.  The  Company  has  agreed with the Lender that it will, as part of its
financial  restructuring,  (1)  not  request additional advances pursuant to the
terms  of  the  line of credit; (2) effect a payment of the complete line on the
earlier  of  the completion of the Company's financial restructuring or December
31, 2002; and (3) maintain an agreement to loan-to-value ratio with the existing
line.  As  of  July  31,  2002,  the  Company  was  out  of  compliance with the
loan-to-value  ratios  by  approximately  $6,000,000. While the Company believes
that  the  financial  restructuring  initiated  by  management  will  result  in
repayment  or  satisfactory  restructuring of this indebtedness, there can be no
assurance  such financial restructuring will be completed to the satisfaction of
the  lender.

     The  interest  coverage  requirement  referred  to  above has been exceeded
according to the terms of two lines of credit. As a result, the lenders have the
right  to  declare  an  Event  of  Default  as  defined  under these agreements.
Generally,  default of the interest coverage ration, under these lines, can only
cause  the  lenders to cease advances to the Company and make the obligation due
and  payable upon expiration of the required notice period. These covenants have
been,  from  time  to  time,  exceeded  in  the  past  with  the various lenders
forbearing from exercising any of these remedies. Management expects, but cannot
assure  this  practice  to  continue.


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

General

     The  business  of  the Company is marketing, financing and sale of vacation
ownership interests, retail lots and land parcels; servicing receivables related
to  the  purchase money financing of vacation ownership and land sales; managing
vacation  ownership  resorts;  providing  sales  and marketing services to other
vacation  ownership  resort  owners or owners of leisure properties and managing
travel  services  focused  on  the  leisure consumer.  LHC provides financing to
purchasers  of  its  vacation  ownership  interests and land.  This financing is
generally  evidenced  by  notes  secured by deeds of trust and mortgages.  These
notes  receivable are payable over a period up to twelve years and bear interest
at  rates  ranging  from  12.5  percent  to 15.5 percent.  Revenue from sales of

                                       13
<PAGE>
vacation  ownership  interests  and  land  is  recognized  after  the  requisite
rescission  period  has  expired  and  at such time as the purchaser has paid at
least  10  percent  of  the  sales price for vacation ownership interests and 20
percent  of  the  sales price for land parcels.  Land sales typically meet these
requirements  within  three  to  ten  months  of  closing  and sales of vacation
ownership  interests typically meet these requirements at the time of sale.  The
sale  price  is  recorded  as revenue and the allocated cost related to such net
revenue  is  recorded as expense in the period that revenue is recognized.  When
revenue  related  to  land  sales  is recognized, the portion of the sales price
attributable  to  uncompleted  required  improvements,  if  any,  is  deferred.

     Notes  receivable  with  payment delinquencies of 90 days or more have been
considered  in  determining the allowance for cancellations. Cancellations occur
when  the  note  receivable  is  determined to be uncollectable, and the related
collateral,  if any, has been recovered or is in the process of being recovered.
Cancellation  of  a  note receivable in the quarter the related sales revenue is
recognized  is  accounted for as a reversal of the revenue with an adjustment to
gross  sales.  Cancellation  of  a note receivable subsequent to the quarter the
revenue  was  recognized  is  charged  to  the  allowance  for  cancellations.

     The  Company  generally  sells  its notes receivable at par value. When the
Company  sells  notes  receivable,  it retains certain participation in the cash
flows  of  the  notes  receivable  sold  and  generally  retains  the associated
servicing rights. The sales are generally subject to limited recourse provisions
as  provided  in  the  respective notes receivable sales agreements. Under these
agreements, the Company is generally obligated to replace or repurchase accounts
that  become 60 to 90 days delinquent or are otherwise subject to replacement or
repurchase in either cash or receivables. Reserve for notes receivable sold with
recourse  represents  the  Company's  estimate  of  losses  to  be  incurred  in
connection  with  the  recourse  provisions of the sales agreements and is shown
separately  as  a  liability  in  the  Company's  Balance  Sheet.

     Gain on sale of receivables depends in part on the previous carrying amount
of  the  financial assets involved in the transfer, allocated between the assets
sold  and  the retained interests based on their relative fair value at the date
of  the  transfer.  To obtain fair values on the retained interests (both at the
point  of  the related receivable sale and periodically thereafter), the Company
generally  estimates  fair  value  based on the present value of future expected
cash  flows  estimated  using  management's  best  estimates  of  certain  key
assumptions  including;  default  dates, rates of prepayment, loss reserve rates
and  discount  rates  commensurate  with  the  risks  involved.

     The  Company's  retained  interests in receivables sold are carried at fair
value  as  either  derivatives  or  available-for-sale  investments.  Unrealized
holding  gains  or losses on the retained interests are included in earnings for
those  transactions  structured  so  that  the  Company,  through  its  retained
interests,  receives  fixed interest amounts and pays the buyer variable amounts
based  on  a  floating rate index, as the resulting financial interest meets the
definition  of  a derivative in accordance with Statement of Financial Standards
No.  133  "Accounting  for  Derivative  Instruments  and  Hedging  Activities."
Unrealized  holding gains, if any, on retained interests in receivables sold not
meeting  the  definition  of  a  derivative  would  be included in shareholders'
equity,  net of income taxes. Losses in such retained interests are reflected in
earnings.
                                       14
<PAGE>
     Provision  for  cancellations  relating  to notes receivable is recorded as
expense  in  amounts  sufficient to maintain the allowance at a level considered
adequate  to provide for anticipated losses resulting from customers' failure to
fulfill their obligations under the terms of their notes receivable. LHC records
provision  for  cancellations  at  the  time  revenue  is  recognized,  based on
historical  experience  and  current economic factors. The related allowance for
cancellations  represents  LHC's  estimate  of  the  amount of the future credit
losses  to be incurred over the lives of the notes receivable. The allowance for
cancellations  is  adjusted  for  actual  cancellations  experienced,  including
cancellations  related to previously sold notes receivable which were reacquired
pursuant  to  the  recourse obligations discussed herein. Such allowance is also
reduced  to  establish  the  separate liability for reserve for notes receivable
sold with recourse. LHC's judgment in determining the adequacy of this allowance
is  based  upon  a  periodic  review of its portfolio of notes receivable. These
reviews  take  into  consideration  changes  in  the  nature  and  level  of the
portfolio,  historical cancellation experience, current economic conditions that
may  affect  the  purchasers'  ability  to  pay,  changes  in collateral values,
estimated  value  of  inventory  that  may  be  reacquired and overall portfolio
quality.  Changes  in  the allowance as a result of such reviews are included in
the  provision  for  cancellations.

     Fees  for  servicing  notes  receivable  originated  by  LHC  and sold with
servicing  rights retained are generally based on a stipulated percentage of the
outstanding  principal  balance of such notes receivable and are recognized when
earned.  Costs  to service notes receivable are recorded to expense as incurred.
Interest  earned  on  notes  receivable sold, less amounts paid to investors, is
reported  as  financial  income.  Retained  interests  in  receivables  sold are
amortized  systematically  to  reduce  notes  receivable  servicing income to an
amount  representing  normal  servicing  income  and the present value discount.
Late  charges  and  other  miscellaneous  income  are recognized when collected.
Interest  income  represents  the  interest  received  on  loans  held  in LHC's
portfolio,  the  accretion  of  the  discount  on  the  retained  interests  in
receivables  sold  and  interest  on  cash  funds.

     Total costs and expenses consist primarily of marketing and sales expenses,
general and administrative expenses, direct costs of sales of vacation ownership
interests and land, depreciation and interest expense. Marketing and sales costs
directly  attributable  to  unrecognized  sales  are  accounted  for as deferred
selling  costs  until  such  time  as  the  sale  is  recognized.

     Land  sales  as  of  June  30, 2002, exclude $12.7 million of sales not yet
recognized  under generally accepted accounting principles because the requisite
payment  amounts have not yet been received or the respective rescission periods
have not yet expired.  Of the $12.7 million unrecognized land sales, the Company
estimates  that  it  will  ultimately recognize $10.8 million of revenues, which
would  be  reduced  by  a  related  provision for cancellations of $1.6 million,
estimated  deferred  selling  costs  of  $3.0  million and cost of sales of $1.7
million,  for  an  estimated  net  profit  of  $4.5  million.

Results  of  Operations

Three  Months  Ended  June  30, 2002 Compared to Three Months Ended May 31, 2001

                                       15
<PAGE>

     Total  revenues  for  the Company decreased 31.2 percent or $9.3 million to
$20.8  million  during  the  three months ended June 30, 2002 from $29.7 million
during  the three months ended May 31, 2001.  The net decrease was primarily due
to:  (1)  a  lack  of  land  inventory; (2) a lack of certain vacation ownership
resort  inventory;  (3) initiation of planned changes in the Company's sales and
marketing practices; (4) the reorganization of the Company's management team and
operations  and  (5)  the  financial restructuring.  The result of these primary
corporate  changes  was  a  net  decrease  of $8.7 million in vacation ownership
interest and land sales from $23.8 million during the three months ended May 31,
2001  to  $15.1  million  during  the  three  months  ended June 30, 2002, and a
decrease  of $710,000 in financial income to $134,000 for the three months ended
June  30,  2002 from $844,000 for the three months ended May 31, 2001.  This was
partially offset by an increase of $208,000 in interest income from $4.0 million
for  the  three  months  ended May 31, 2001 to $4.2 million for the three months
ended  June  30,  2002.

     Gross  sales  of  vacation  ownership  interests  decreased to $8.4 million
during  the three months ended June 30, 2002 from $17.3 million during the three
months  ended  May  31,  2001,  a  decrease  of  51.4 percent. The provision for
cancellations  increased  to  15  percent  of  gross sales of vacation ownership
interest  for  the  three  months  ended June 30, 2002 from 13.3 percent for the
three months ended May 31, 2001, primarily due to a downward adjustment based on
the  results  of the customary quarterly review of the allowance adequacy during
the  three months ended June 31, 2002. This adjustment was based on the economic
slow  down  since  May  2001.

     Gross sales of land increased to $6.6 million during the three months ended
June  30,  2002  from $6.4 million during the three months ended May 31, 2001, a
increase  of 3.4 percent. The provision for cancellations represented 15 percent
and  8  percent, respectively, of gross sales of land for the three months ended
June  30,  2002  and  May  31,  2001.

     Interest  income  increased  to  $4.2 million during the three months ended
June  30,  2002  from  $4.0  million for the three months ended May 31, 2001, an
increase  of  five  percent,  primarily  due  to an increase in notes receivable
during  the  period and a change in the Company's collection policies instituted
during  the quarter. Financial income decreased to $134,000 for the three months
ended  June  30,  2002  from $844,000 for the three months ended May 31, 2001, a
decrease of 84.1 percent. The decrease is directly related to an increase in the
obligation  to  replace delinquent accounts. This increase reduces the principal
balance  on  the  sold  portfolio  which in turn reduces the amount of financial
income  the  Company  would  record  from  the sold portfolio. This decrease was
partially  offset  by  an increase in the spread on those sold portfolios with a
variable,  pass-through  interest  rate.  The  interest rate decreased 150 basis
points  in  the current quarter from 8.5 percent to 7.0 percent, which typically
would  increase  the  amount  of  financial  income the Company would recognize.

                                       16
<PAGE>

     Total costs and expenses for the Company decreased to $24.2 million for the
three  months  ended June 30, 2002 from $28.7 million for the three months ended
May  31, 2001, a decrease of $4.5 million or 15.6 percent. The decrease resulted
primarily  from  the  net  effect  of  a  decrease  in  direct costs of vacation
ownership  interest  sales to $1.3 million from $3.1 million, a decrease of 56.3
percent,  and  a  decrease  to  $9.6 million from $13.3 million in marketing and
sales  expense,  a  decrease  of 27.7 percent. As there are significant variable
cost  elements  in  marketing  and  sales, the percentage of marketing and sales
expenses to gross sales generally remain relatively constant in periods of lower
sales.  Within the context of changes in the tourism industry resulting from the
September  11,  2001  terrorist attacks and its attendant economic downturn, the
Company  believes  that  the  decline in sales volume is directly related to its
lack of inventory during the period, its change in sales and marketing practices
and  its  financial  restructuring,  but  is unable to quantify the sales volume
decline  that  is  directly  attributable  to  such  events.

     A  pretax  loss  of $3.5 million was recorded during the three months ended
June  30, 2002 compared to pretax income of $1.0 million earned during the three
months  ended  May  31,  2001.

     Income  tax benefit of  $67,000  was recorded for the three month period
ended  June 30, 2002, compared to an income tax benefit of $76,000 recorded for
the  three  month  period ended May 31, 2001. The income tax calculation for the
period ended May 31, 2001 was reduced due to the use of net operating loss carry
forwards, which were previously fully reserved and were used to offset income on
a  consolidated  basis.  Income taxes are recorded based on an ongoing review of
related  facts  and  circumstances.

     Net  loss  applicable  to  common stock amounted to $3.6 million during the
three  month  period  ended  June  30, 2002 compared to net income applicable to
common  stock  of $1.0 million during the three month period ended May 31, 2001,
primarily  due  to  the  foregoing.

Six  Months  Ended  June  30,  2002  Compared  to  Six Months Ended May 31, 2001

     Total revenues for the Company decreased 23.6 percent, or $12.7 million, to
$41.7  million  during  the  six  months  ended June 30, 2002 from $53.9 million
during  the  six months ended May 31, 2001.  The decrease was primarily due to a
decrease  in vacation ownership and land sales from $42.7 million during the six
months  ended May 31, 2001 to $30.5 million during the six months ended June 30,
2002,  (vacation  ownership  sales  decreased  by  $13.4  million and land sales
increased  by  $1.2  million),  an  increase  in interest income to $8.2 million
during  the  six  months  ended  June 30, 2002, from $7.5 million during the six
months ended May 31, 2001, and a gain on sale of other assets of $486,000 during
the six months ended June 30, 2002.  The decrease in vacation ownership and land
sales  was primarily due to: (1) a lack of land inventory; (2) a lack of certain
vacation  ownership  resort  inventory;  (3) a change in the sales and marketing
practices;  (4)  the  reorganization  of  the  Company's  management  team  and
operations  and  (5)  the  financial  restructuring.

     The Company previously purchased a vacation ownership complex consisting of
several  buildings  in  Orlando,  Florida.  The  portions  of  the  complex that
required  renovation  were  renovated  and  converted into inventory in April of
2002.  The  remaining  portions  of  the  complex  requiring  renovation will be
converted  into  inventory  upon  their  completion.

                                       17
<PAGE>

     The  Company  has experienced a lack of two-bedroom resort inventory during
the  period  and,  while  management  is  taking  steps to acquire and build new
two-bedroom  inventory,  it anticipates having this deficiency for the remainder
of  the  fiscal  year. There can be no assurance that Management will be able to
complete  the  acquisition  or  development  of  this  type  of  inventory.

     The  Company  has  also had a limited land inventory that directly affected
the  operations  during  the  current  quarter.  Management  has  entered  into
agreements  to  acquire  sufficient inventory in the future.  Management expects
the  land  inventory  to  be  available  for sale in the fourth quarter of 2002.
Gross  sales  of  vacation ownership interests decreased to $17.6 million during
the  six  months  ended  June  30, 2002 from $30.9 million during the six months
ended May 31, 2001, a decrease of 43.2 percent.  The provision for cancellations
increased  to  15 percent of gross sales of vacation ownership interests for the
six  months  ended June 30, 2002 from 13.25 percent for the six months ended May
31,  2001,  primarily  due  to a downward adjustment based on the results of the
customary  quarterly  review  of  the allowance adequacy during the three months
ended  June 31, 2002.  This adjustment was based on the economic slow down since
May  2001.

     Gross  sales of land increased to $13.0 million during the six months ended
June  30,  2002  from $11.7 million during the six months ended May 31, 2001, an
increase  of  10.4  percent.  The  provision  for  cancellations increased to 15
percent  of  gross  land  sales  for  the  six months ended June 30, 2002 from 8
percent  for  the  six  months  ended  May 31, 2001, primarily due to a downward
adjustment  based  on  the  results  of  the  customary  quarterly review of the
allowance  adequacy  during  the six months ended June 30, 2002. This adjustment
was  based  on  the  economic  slow  down  since  May  2001.

     Interest income increased to $8.2 million for the six months ended June 30,
2002 from $7.5 million for the six months ended May 31, 2001, an increase of 9.2
percent,  primarily  due  to  increased notes receivable for the current period.
Financial  income  decreased  to $326,000 for the six months ended June 30, 2002
from  $1.7  million  for  the  six months ended May 31, 2001, a decrease of 80.7
percent.  The  decrease  is directly related to an increase in the obligation to
replace  delinquent accounts. This increase reduces the principal balance on the
sold  portfolio which in turn reduces the amount of financial income the Company
would  record  from the sold portfolio. This decrease was partially offset by an
increase  in  the  spread  on  those sold portfolios with variable, pass-through
interest  rates.  The  interest  rate  decreased 150 basis points in the current
quarter  from  8.5  percent  to  7.0 percent, which typically would increase the
amount  of  financial  income  the  Company  would  recognize.

                                       18
<PAGE>

     Total costs and expenses for the Company decreased to $47.6 million for the
six  months  ended June 30, 2002 from $52.6 million for the six months ended May
31,  2001,  a  decrease  of  $5.0 million or 9.5 percent.  The decrease resulted
primarily  from  a  decrease in direct costs of vacation ownership sales to $2.8
million  from  $5.5 million, a decrease of 48.9 percent; a decrease in marketing
and  sales  expenses  to  $18.7  million  from $24.3 million, a decrease of $5.9
million or 24.2 percent; and, an increase in general and administrative expenses
to $10.5 million from $8.6 million, an increase of $1.9 million or 22.4 percent.
The  decrease  in  direct  costs  of vacation ownership sales is attributable to
lower  net  vacation  ownership  sales during the six months ended June 30, 2002
compared  to  the six month period ended May 31, 2001.  As a percentage of gross
sales  of  vacation  ownership  interests and land, marketing and sales expenses
related thereto increased to 60.3 percent for the six months ended June 30, 2002
from  57.0  percent  for  the  six  months  ended May 31, 2001.  The increase in
marketing  and  sales  expense  is  due  primarily  to the initiation of planned
changes  in  the  sales  and marketing department, new sales offices and general
increases related to a competitive sales environment.   Sales prices of vacation
ownership  interests are typically lower than those of land, while selling costs
per  sale,  other  than  commissions,  are  approximately the same in amount for
vacation  ownership  interests  and  land;  accordingly,  the  Company generally
realizes  lower  profit  margins from sales of vacation ownership interests than
from  sales  of  land.  The  increase  in general and administrative expenses is
primarily  due  to: an increase in payroll, professional fees, and insurance; an
increase  in  supplies,  rent,  and  property  taxes;  the inclusion of the rent
expense  related  to the sale and leaseback of the two office buildings in 2001,
the  expense  for  which  was  formerly  reported  in  Interest and Depreciation
expense;  an  increase  in recording and filing fees and escrow costs related to
the  increased  land  sales  volume; and, reserves for the Company's guaranty of
office  and  equipment  leases  related  to  a  previously  affiliated  company.

     Pre-tax  loss  of  $6.9 million was earned during the six months ended June
30,  2002 compared to pre-tax income of $1.3 million during the six months ended
May  31,  2001.

     An  income  tax  benefit  of $884,000 was recorded for the six months ended
June  30, 2002 compared to an income tax benefit of $112,000 recorded during the
six  months  ended May 31, 2001. The income tax calculation for the period ended
May  31,  2001  was reduced due to the use of net operating loss carry forwards,
which  were  previously  fully  reserved  and  were  used  to offset income on a
consolidated  basis.  Income  taxes are recorded, and the liability is adjusted,
based  on  an  ongoing  review  of  related  facts  and  circumstances.

     Net  loss applicable to common stock was $5.1 million during the six months
ended  June  30,  2002 compared to net income applicable to common stock of $1.4
million  during  the  six  months  ended  May  31,  2001,  primarily  due to the
foregoing.

Liquidity  and  Capital  Resources

     The following discussion relates to our financial position at June 30, 2002
and  the  results  of our operations for the period then ended.  In January 2002
the  Company's  new  management  adopted  a  business plan of reorganization and
restructuring  contemplating,  among  other things, the substantial expansion of
our  vacation  resort business, and the initiation and acquisition of businesses
that  expand the core business into a travel and leisure entity.  (See "Business
-  Recent Events" in Form 10-KT for the transition period from September 1, 2001

                                       19
<PAGE>

to  December  31,  2001  for a discussion of the elements of our business plan.)
This  change  in  our  business  model,  as  well as the risks and uncertainties
inherent  in  our  historical  business,  are  expected  to cause our results of
operations  and  the components thereof to change materially in the future.   In
addition,  we  will  require  substantial additional capital in the near term to
implement  certain elements of our business plan, including the acquisition of a
property  from  Raintree  as  well as other acquisitions and business expansion.
There  is  no assurance that we will be able to raise the necessary capital in a
timely manner and on terms acceptable to us.  Any failure to raise the necessary
capital  may have a material adverse effect on our current operations and future
financial  results.

     At  June  30,  2002,  commitments existed for material capital expenditures
consisting  of  the  following:

     158 Ida Street, Las Vegas, Nevada
     $1.3 million

     At June 30, 2002, LHC had arrangements, as amended for subsequent agreement
revisions,  with  institutional  lenders  for  the  financing  of receivables in
connection  with  sales  of  vacation  ownership  interests  and  land  and  the
acquisition  of  vacation ownership properties and land, which provide for lines
of  credit  of  up  to  an aggregate of $167.0 million. Such lines of credit are
secured by vacation ownership, land receivables and mortgages. At June 30, 2002,
an  aggregate  of  $112.0 million was outstanding under such lines of credit and
$55.0  million  was  available  for  borrowing  (subject  to the availability of
qualified  collateral). Under the terms of these lines of credit, LHC may borrow
65  percent  to 90 percent of the balances of the pledged vacation ownership and
land  receivables.  LHC is required to comply with certain covenants under these
agreements  which,  among  other  things,  require  LHC  to meet certain minimum
tangible  net  worth  requirements.  The  most  stringent  of  such requirements
provides  that  LHC  maintains a minimum tangible net worth of $27.5 million. At
June  30,  2002, LHC's tangible net worth was $36.0 million. Summarized lines of
credit  information  and  accompanying  notes  relating to these lines of credit
outstanding  at  June  30,  2002,  consist  of  the  following:

(thousands of dollars)
<TABLE>
<CAPTION>

                 OUTSTANDING    MAXIMUM        REVOLVING
LENDER          JUNE 30, 2002   AMOUNTS   EXPIRATION DATE (A)   MATURITY DATE (A)      INTEREST RATE
--------------  --------------  --------  -------------------  -------------------  --------------------
<S>                <C>             <C>       <C>                  <C>                  <C>
Finova          $       54,008  $ 65,000  December 31, 2002    1/28/02-12/31/02     Prime +  2.0 - 2.25%
Textron                 25,208    35,000  December 1, 2002     12/31/02- 12/31/05   Prime +  2.0 - 3.00%
GE Capital              25,489    40,000  April 30, 2003       March 30, 2006       LIBOR + 4.0-4.25%
HSBC                       145         -  Inactive             February 6, 2006     Prime + 1.0%
Capital Source           7,398    27,000  9/11/03- 3/11/05     August 11, 2005      Prime + 2.5%
                             -         -
                --------------  --------
                $      112,248  $167,000
                ==============  ========

</TABLE>

(a)  As  it  has  typically  done  in the past, management expects to extend the
     Revolving  Expiration  Date  and  Maturity  Date on similar terms. When the
     Revolving Expiration Date expires as shown, the loans convert to term loans
     with  maturities  as  stated  or  extended.

     LHC  is  required  to  comply  with  certain  financial  and  non-financial
covenants  under  lines  of credit agreements.  Among other things, these

                                       20
<PAGE>

agreements  require LHC to meet certain minimum tangible net worth requirements,
maintain certain liabilities to tangible net worth ratios,  maintain marketing
and  sales  and general and administrative expenses, as defined, relative to net
processed  sales for each rolling 12-month period below a certain percentage and
maintain  certain interest coverage ratios for each rolling 12 month period. The
maximum  percentage  related  to  costs  and expenses referred to above has been
exceeded  in  the  last  seven  quarters.  This  does not constitute an Event of
Default  as  defined under this loan agreement, or this line of credit; however,
it  gives  the  lender the option to suspend advances to LHC. The lender has not
elected  to exercise this option, but has continued to make regular advances and
has verbally informed LHC that it intends to continue such advances. The maximum
loan-to-value ratio referred to above was exceeded in the last five quarters. As
a  result,  the  Lender  has the right to declare an Event of Default as defined
under  this loan agreement, or this line of credit. Default of the loan-to-value
ratio,  under  this  line,  can  only  cause the lender to cease advances to the
Company.  The  Company  has  agreed with the Lender that it will, as part of its
financial  restructuring,  (1)  not  request additional advances pursuant to the
terms  of  the  line of credit; (2) effect a payment of the complete line on the
earlier  of  the completion of the Company's financial restructuring or December
31, 2002; and (3) maintain an agreement to loan-to-value ratio with the existing
line.  As  of  July  31,  2002,  the  Company  was  out  of  compliance with the
loan-to-value  ratios  by  approximately  $6,000,000. While the Company believes
that  the  financial  restructuring  initiated  by  management  will  result  in
repayment  or  satisfactory  restructuring of this indebtedness, there can be no
assurance  such financial restructuring will be completed to the satisfaction of
the  lender.  The  interest  coverage  requirement  referred  to  above has been
exceeded according to the terms of two lines of credit. As a result, the lenders
have the right to declare an Event of Default as defined under these agreements.
Generally,  default of the interest coverage ration, under these lines, can only
cause  the  lenders to cease advances to the Company and make the obligation due
and  payable upon expiration of the required notice period. These covenants have
been,  from  time  to  time,  exceeded  in  the  past  with  the various lenders
forbearing from exercising any of these remedies. Management expects, but cannot
assure  this  practice  to  continue.

Scheduled  maturities  of  the  Company's  notes  and  contracts  payable are as
follows:

Years  Ending  December  31,      (thousands  of  dollars)
----------------------------
                      2002           $   8,619
                      2003               6,089
                      2004              14,058
                      2005              15,757
                      2006              28,995
                      Thereafter        58,012
                                    ----------
                                     $ 131,530
                                    ==========

     The  components of the Company's debt, including lines of credit consist of
the  following:

                                       21
<PAGE>
<TABLE>
<CAPTION>
<S>  <C>

         (thousands of dollars)                          June 30,     December 31,
                                                           2002          2001
                                                        ------------  -------------
     Notes collateralized by receivables                 $  102,273    $   106,599
     Mortgages collateralized by real estate properties      14,454         14,781
     Installment contracts and other notes payable            7,295         10,150
     Investor notes                                           2,862              -
                                                        ------------  -------------
                 Total                                   $  126,884    $   131,530
                                                        ============  =============

</TABLE>

     A schedule of the cash shortfall arising from recognized and unrecognized
sales for the periods indicated is set forth below:

<TABLE>
<CAPTION>


                                            Six Months Ended
            (thousands of dollars)          June 30,    May 31,
                                            ---------------------
                                               2002      2001
                                             --------  --------
<S>                                             <C>       <C>
Marketing and selling expenses attributable
  to recognized and unrecognized sales       $17,877   $23,907
Less:  Down payments                          (4,833)   (6,305)
                                             --------  --------
Cash shortfall                               $13,044   $17,602
                                             ========  ========
</TABLE>


     The  Company  sells  notes  receivable  subject  to  recourse provisions as
contained  in each agreement.  At June 30, 2002, total sold notes receivable was
$47.0  million.  The  Company  is obligated under these agreements to replace or
repurchase accounts that become over 90 days delinquent or are otherwise subject
to  replacement  or  repurchase  in  either cash or receivables generally at the
option  of the purchaser.  The repurchase provisions provide for substitution of
receivables  as  recourse  for  $38.5  million of sold notes receivable and cash
payments  for  repurchases  relating to $3.3 million of sold notes receivable at
June 30, 2002.  The discounted amounts of the recourse obligations on such notes
receivable  were $4.2 million and $3.6 million at June 30, 2002 and December 31,
2001,  respectively.  LHC  continually  reviews  the adequacy of this liability.
These  reviews  take  into  consideration changes in the nature and level of the
portfolio, current and future economic conditions which may affect the obligors'
ability  to pay, changes in collateral values, estimated value of inventory that
may  be  reacquired  and  overall  portfolio  quality.

                                       22
<PAGE>
     Financial  Condition

     The  Company  provides allowance for cancellations in amounts which, in the
Company's  judgment,  will be adequate to absorb losses on notes receivable that
may become uncollectible.  The Company's judgment in determining the adequacy of
this  allowance is based on its continual review of its portfolio which utilizes
historical  experience  and  current  economic factors.  These reviews take into
consideration  changes  in  the  nature  and  level of the portfolio, historical
rates,  collateral  values,  current  and  future  economic conditions which may
affect  the  obligors'  ability  to pay, collateral values and overall portfolio
quality.

     Changes  in the aggregate of the allowance for cancellations, including the
reserve  for  notes  receivable sold with recourse for the six months ended June
30,  2002  consisted  of  the  following:


                   (thousands of dollars)

             Balance at December 31, 2001                            $ 14,557
                Provision for cancellations                             3,224
                Amounts charged to allowance for cancellations, net    (4,374)
                                                                     ----------
                                                                       13,407
                Reserve for notes sold with recourse                        -
                                                                     -----------
            Allowance for cancellations                              $ 13,407
                                                                     ===========

     June  30,  2002  Compared  to  December 31, 2001  Cash and cash equivalents
including  increased  to  $9.1  million  at  June  30, 2002 from $1.7 million at
December  31,  2001.  Notes  receivable,  net,  increased  4.7 percent to $114.5
million  at  June  30,  2002 from $109.3 million at December 31, 2001.  Land and
improvements  inventory  and vacation ownership interest held for sale increased
to  $22.3  million  at  June  30,  2002 from $20.6 million at December 31, 2001.

<TABLE>
<CAPTION>
         (thousands of dollars)            June 30, December 31,
                                             2002     2001
                                            -------  -------
<S>                                           <C>      <C>
Vacation ownership interests                $17,790  $13,771
Vacation ownership interest in development    1,994    4,094
                                            -------  -------

Total                                       $19,784  $17,865
                                            =======  =======
</TABLE>
     Notes and contracts payable decreased 3.5 percent to $126.9 million at June
30,  2002  from  $131.5  million  at  December  31,  2001.  Stockholders' equity
increased  14  percent  to  $24.4 million at June 30, 2002 from $21.4 million at
December  31,  2001.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     There  was  no  material  change for the quarter ended June 30, 2002 in the
information  about the Company's "Quantitative and Qualitative Disclosures About
Market  Risk"  as  disclosed  in  its  Transition  Report  on Form 10-KT for the
transition  period  from  September  1,  2001  to  December  31,  2001.

                                       23
<PAGE>

PART  II   OTHER  INFORMATION

Item  1.  Legal  Proceedings

     See  note  7  commitments  and  contingencies  for  discussion  of  legal
proceedings.

Item  2.  Changes  in  Securities

     During the three months ended June 30, 2002, the Company sold approximately
1.2 million additional shares of common stock for proceeds of approximately $8.0
million. Included with each of these shares, the purchasers received one warrant
for  each share of common stock purchased.  These warrants entitle the holder to
purchase  one  share  of  common  stock at purchase prices ranging from $4.00 to
$6.00.  The  warrants  expire  one  year  from  the  date of issuance. Under the
subscription  agreements,  the  Company has the right to demand exercise, at its
discretion,  if  the  Company's  common  stock  trades  at $7.00 or more for ten
consecutive  trading  days  at  any  time  during  the  term  of  the  warrants.

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

          (a)  Exhibits
<TABLE>
<CAPTION>
<S>   <C>

10.246  -  Lease between Corporate Ctr. IV, LLC, as Landlord, and Mego Financial
           Corp  as  Tenant  in 2285 Corporate Circle, Henderson Nevada, dated May __,
           2002.

10.247  -  Lease between Corporate Ctr. IV, LLC, as Landlord, and Mego Financial
           Corp  as  Tenant  in  2280 Corporate Circle, Henderson Nevada, dated May__,
           2002.

10.248  -  Amendment  to  Guarantee  and  Subordination  Agreement  between Mego
           Financial  Corp.  and  Finova  Capital  Corporation  dated  May  24,  2002.

10.249 -   Tenth Amendment to Forbearance Agreement and Amendment No. 15 to Second
           Amended  and  Restated  and  Consolidated Loan and Security Agreement among
           Finova  Capital  Corporation, Leisure Homes Corporation, and Mego Financial
           Corp.  dated  May  24,  2002.

10.250  -  Amendment  No. 5 to Promissory Note (Biloxi Property) between Leisure
           Homes  Corporation  and  Finova  Capital  Corporation,  dated May 24, 2002.

10.251  -  Amendment  number  1 to Employment Contract for Jon Joseph dated May 23,
           2002.

10.252  -  Certification  by  Floyd  W.  Kephart,  CEO


                                       24
<PAGE>

10.253  -  Certification  by  Robert  S.  Understein,  CFO

10.254  -  Certification  by  Chris  D.  Whetman,  CAO

</TABLE>
(b)     Reports  on  Form  8-K

        None.



                                       25
<PAGE>
                                    SIGNATURE

     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.


                                MEGO  FINANCIAL  CORP.

                                By:  /s/  Robert  S.  Understein
                                Robert  S.  Understein
                                Chief  Financial  Officer

Date:     August  13,  2002




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