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UNITED STATES



SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB


(Mark One)


|      |                                                                                     
|----- | ------------------------------------------------------------------------------------
|[ X ] | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

For the fiscal year ending December 31, 2001

OR

| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
               EXCHANGE ACT OF 1934



Commission file number 000-27487



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SAN DIEGO SOCCER DEVELOPMENT CORPORATION (Name of small business issuer in its charter)


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|                                                                              |  |                                           
|----------------------------------------------------------------------------- |  | ------------------------------------------
|                                                                              |  |                                           
|Nevada                                                                        |  | 88-0350156                                
|(State or other jurisdiction of
      incorporation or organization)          |  | (I.R.S. Employer
      Identification No.)
|                                                                              |  |                                           
|3803 Mission Blvd. Suite 290         
                   92109               
|(Address of principal executive offices)     
            Zip Code           
|                                                                              |  |                                           
|Registrant's telephone
      number, including area code:      (858) 488-7775
|                                                                              |  |                                           
|                                                                              | 
|Securities to be registered under Section 12(g) of
        the Act:          
|Common Stock, $0.001par value
        (Title of Class)                       

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

Check if there is no disclosure of delinquent filers in response to Item 405
  of Regulation S-B contained in this form, and no disclosure will be contained,
  to the best of registrants knowledge, in definitive proxy or information
  statements incorporated by reference in Part III of this Form 10-KSB or any
  amendment to this Form 10-KSB. [ ]

The aggregate market value of the voting stock held by non affiliates computed
  by reference to the price at which the stock was sold, or the average bid and
  asked prices of such stock as of December 4, 2002 was $564,811, based on the
  last sale price of $0.03 as reported by the Pink Sheets.

The Registrant had 21,721,952 shares of common stock, $0.001 value, outstanding
  as of December 4, 2002.





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SAN DIEGO SOCCER DEVELOPMENT CORPORATION


TABLE OF CONTENTS


PAGE NUMBER PART IITEM 1.
      
      BUSINESS
      3BACKGROUND
      3THE COMPANY
      3BUSINESS PLAN AND COMPANY
        STRATEGY
      4PRODUCTS AND SERVICES
      4MARKET STRATEGIES
      4COMPETITION
      5REGULATIONS
      5EMPLOYEES
      5INTELLECTUAL PROPERTY
      5ITEM 2.
      
      DESCRIPTION
        OF PROPERTY
      5ITEM 3.
      
      LEGAL PROCEEDINGS
      6ITEM 4.
      
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY
        HOLDERS
      6ITEM 5.
      
      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS
      7MARKET INFORMATION
      7HOLDERS
      7DIVIDENDS
      7ITEM 6.
      
      MANAGEMENT'S DISCUSSION
        AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
      8ITEM 7.
      
      FINANCIAL STATEMENTS
      10ITEM 8.
      
      CHANGES IN AND DISAGREEMENTS
        WITH ACCOUNTANTS
      10PART IIIITEM 9.
      
      DIRECTORS AND EXECUTIVE
        OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A)
        OF THE EXCHANGE ACT
      11ITEM 10.
      
      EXECUTIVE COMPENSATION
      12REMUNERATION PAID TO EXECUTIVES
      12REMUNERATION PAID TO DIRECTORS
      13EMPLOYMENT AGREEMENTS
      13EMPLOYEE BENEFITS
      13ITEM 11.
      
      SECURITY OWNERSHIP OF CERTAIN
        BENEFICIAL OWNERS AND MANAGEMENT
      14ITEM 12.
      
      CERTAIN RELATIONSHIPS AND
        RELATED TRANSACTIONS
      14ITEM 13.
      
      EXHIBITS AND REPORTS ON
        FORM 8-K
      15SIGNATURES
      16        ii


PART I ITEM 1. BUSINESS Forward Looking Statements  Certain matters discussed in this report on Form 10-KSB are "forward-looking
    statements" intended to qualify for the safe harbors from liability established
    by the Private Securities Litigation Reform Act of 1995. These forward-looking
    statements can generally be identified as such because the context of the
    statement will include words such as the Company "believes," "anticipates,"
    "expects," "estimates" or words of similar meaning. Similarly,
    statements that describe the Company's future plans, objectives or goals are
    also forward-looking statements. Such forward-looking statements are subject
    to certain risks and uncertainties which are described in close proximity
    to such statements and which could cause actual results to differ materially
    from those anticipated as of the date of this report. Shareholders, potential
    investors and other readers are urged to consider these factors in evaluating
    the forward-looking statements and are cautioned not to place undue reliance
    on such forward-looking statements. The forward-looking statements included
    herein are only made as of the date of this report and the Company undertakes
    no obligation to publicly update such forward-looking statements to reflect
    subsequent events or circumstances. General San Diego Soccer Development Corporation (formerlly Roller Coaster, Inc.),
    ("the Company") was incorporated on December 12, 1995, under the
    laws of the state of Nevada under the name Roller Coaster, Inc. The Company
    engaged in no operations prior to February 10, 2000. On February 10, 2000,
    the Company issued 5,284,369 shares of its previously un-issued common stock
    to the shareholders of San Diego Soccer Development Corporation, a California
    company (SDSDC) in exchange for all of the issued and outstanding shares of
    SDSDC. SDSDC was founded in 1997 to develop, own, and run a professional soccer
    team in San Diego, California, with the ultimate goal of becoming a Major
    League Soccer franchise. In November 1997, the SDSDC purchased the San Diego
    Flash, an "A" League soccer franchise in the United Soccer Leagues
    for a combination of cash and common stock then valued at $150,000. In December
    1999, the SDSDC acquired a Division 3 soccer franchise, the Riverside Elite,
    for cash of $30,000. The San Diego Flash played three seasons, through 2000,
    and the Riverside Elite played the 2000 season. At the conclusion of the 2000
    season, the Company ceased its soccer operations and withdrew its teams from
    competition owing to the high costs associated with operations relative to
    the revenues being generated. In 2001, ownership of the Riverside Elite team
    was forfeited back to the league, while the San Diego Flash continues to operate
    as an amateur team though it is no longer affiliated with the United Soccer
    Leagues. Following the cessation of the soccer operations, the Company was inactive
    during most of calendar 2001. In November 2001, management resumed operations
    under a new operating strategy and began doing business as Soccer Development
    of America. In 2002, the Company commenced development of a monthly soccer
    publication, "90:00 Minutes", which earns revenues through advertising,
    subscriptions and newsstand sales. The Company published the premier issue
    of "90:00 Minutes" in July 2002 and the first monthly issue followed
    in September 2002. The Company's business current strategy incorporates the continued development
    of the "90:00 Minutes" publication to expand the subscription and
    distribution base while building up advertising revenues. Management also
    anticipates introducing e-commerce and the wholesale of soccer-related equipment,
    supplies and paraphernalia in the short term. The Company's working capital on December 31, 2001 was negative $ 2,010,894.
    (See "Management's Discussion and Analysis of Results of Operations and
    Financial Condition" herein). In December 1999, the Board of Directors of SDSDC unanimously agreed to
    a merger with Rollercoaster, Inc., a Nevada publicly-traded corporation with
    no operations or tangible assets. The merger was approved by a vote of shareholders
    on February 7, 2000. As a result of the merger, SDSDC became the successor
    issuer to Rollercoaster, Inc. for reporting purposes under the Securities
    Exchange Act of 1934. The Articles of Incorporation of Rollercoaster, Inc.
    were subsequently amended to change its name to San Diego Soccer Development
    Corporation. Prior to the merger, the Company had outstanding 5,284,369 shares
    of common stock. Following the merger, the Company had 7,784,369 shares outstanding.
    The merger is subject to the possible rescission by the shareholders of either
    company since the transaction was not properly disclosed at the time of the
    vote. The Company's principal executive offices are located at 3803 Mission Blvd.,
    Suite 290, San Diego, California and its telephone number is (858)488-7775. 3    Company Strategy  The Company's current business operations consists the production, distribution,
    marketing and revenue generation from our soccer related magazine "90:00
    Minutes." The Company has published three issues of "90:00 Minutes"
    commencing with the premier issue in July 2002, followed by the commencement
    of monthly publications in September, October and December 2002. During the
    next twelve months, management will focus the Company's resources on expanding
    circulation of "90:00 Minutes" and increasing advertising revenues.  Simultaneous with increasing the presence of "90:00 Minutes", the
    Company will introduce an interactive website which incorporates additional
    information, photos, video clips, etc., along with e-commerce capability.
    The Company expects to offer a variety of soccer merchandise including equipment,
    supplies, and team paraphernalia though both e-commerce and catalogue sales
    outlets. The Company is in negotiations with several manufacturers and distributors
    to obtain licenses and drop-ship arrangements. Initially, the Company's primary
    equipment supplier will be Locust Sports, a Canadian based company, from which
    it has obtained an exclusive distribution arrangement. As of December 4, 2002,
    the Company had not yet commenced its wholesaling operations. The Company's long-term strategy is to become the first full-service soccer
    provider in the market. In addition to the magazine circulation and soccer
    merchandise sales, management expects to gradually incorporate additional
    services into the product mix including reactivating the San Diego Flash to
    the professional level, establishing soccer camps and clinics with professional
    team tie-ins, and building and managing soccer-specific stadiums. Marketing The Company currently derives revenue from the sales of the "90:00
    Minutes" magazine and sales of advertising in the magazine. Subscription
    sales are derived primarily through a telemarketing campaign and through existing
    contacts in the soccer industry. The Company is presently negotiating to secure
    nationwide newsstand distribution, which should serve to increase subscriptions
    as overall circulation increases. "90:00 Minutes" is priced to be
    competitive with other glossy sports magazines. Advertising sales are primarily generated from direct contact with various
    companies that have shown a prior interest in the soccer and sport industry.
    The Company also uses public relations campaigns and trade shows to generate
    interest from potential advertisers. Sales of the magazine, as well as advertising, are presently limited to
    the domestic market as part of our goal to develop U.S. interest in the game
    of soccer and to control costs. The magazine's content is focused on the US
    professional teams while including coverage of international competition and
    regional international leagues. The Company expects to broaden its circulation
    and appeal to the international marketplace in late 2003 by including more
    regional coverage and developing a Spanish language edition. 4   Competition With soccer still emerging in the United States, there is limited competition
    from other soccer-specific magazines. The primary competitor of "90:00
    Minutes" is Soccer America, a weekly publication with a circulation of
    125,000. Soccer America includes limited professional coverage and virtually
    no international league coverage, instead devoting time to youth and college
    programs. "90:00 Minutes", by contrast, is devoted almost entirely
    to coverage of professional soccer, both domestic and international. Since
    it is more narrowly focused, the coverage provided by "90:00 Minutes"
    is more in depth. In addition to Soccer America, there are other, smaller regional magazines/newspapers
    focusing on local soccer programs. There is also some competition from European
    magazines that are imported and generally carried in specialty retail stores.
    As for nationwide general circulation of soccer magazines at the newsstand,
    offering both variety of content and quality, the competition is more limited. Competition for merchandise sales is greater, with equipment sales from existing
    uniform manufacturers such as Nike, Adidas, Reebok and Kappa being the major
    source of sales. Physical equipment, such as goals and soccer balls, are generally
    sold by manufacturers through a chain of local sales managers. Distribution
    or equipment also exists through direct mail catalogs and smaller, mostly
    web-based distributors. There is not a general, all-inclusive marketplace,
    either in print or web format, to purchase equipment, supplies, team merchandise
    and general paraphernalia, on the scale and price level being contemplated
    by the Company.   Government Regulation The Company does not operate in an industry subject to government regulation.
    The annual cost for complying with government regulations is negligible Employees The Company presently employs one person, its Chief Executive Officer. All
    other relationships are in the form of independent contractors and consultants. Insurance The Company does not presently have a commercial general liability insurance
    policy. Although there have been no successful claims against the Company,
    there is no assurance that the Company will prevail against any future claim.
    Successful claims could have a serious adverse effect upon the Company's financial
    condition and its future viability. The Company will again seek to obtain
    general liability and product liability insurance at such time when its operations
    dictate. The Company does not maintain auto insurance coverage or workman's compensation
    coverage. At such time as the Company resumes hiring employees and/or obtains
    corporate automobiles, insurance coverage will be obtained in amounts deemed
    adequate. The Company does not carry director and officer liability insurance, but
    does have indemnification agreements covering its officers and directors. Intellectual Property The Company holds two trademarks on the names "San Diego Flash"
    and "90:00 Minutes." ITEM 2. DESCRIPTION OF PROPERTY The Company owns no real property. The Company leases approximately 1,000
    square feet of office space in San Diego, California, on a month to month
    basis at a rate of $900 per month.  5   ITEM 3. LEGAL PROCEEDINGS The Company is not currently subject to any legal proceeding, threatened
    or pending. Further, the Company is not aware of any contemplated action or
    proceeding by any governmental authority to which Company is a participant. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of our shareholders during the fourth
    quarter of its fiscal year ended December 31, 2001.      6    PART II  ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
    MATTERS Market Information The Company's Common Stock has been traded on the Pink Sheets since under
    the symbol "SDSD." The following table sets forth the trading history
    of the Common Stock on the Pink Sheets for each quarter of the last two fiscal
    years and the interim period ended September 30, 2002, as reported by Dow
    Jones Interactive. The quotations reflect inter-dealer prices, without retail
    mark-up, markdown or commission and may not represent actual transactions. Quarter Ending Quarterly High Quarterly Low Quarterly Close


|Quarter Endings | Quarterly High | Quarterly Low | Quarterly Close
|--------------- | -------------- | ------------- | ---------------
|3/31/2000       | 3.50           | 1.046875      | 1.50           
|6/30/2000       | 1.875          | 0.25          | 1.00           
|9/29/2000       | 1.00           | 0.25          | 1.25           
|12/29/2000      | 0.040625       | 0.0625        | 0.09375        
|3/30/2001       | 0.296875       | 0.03125       | 0.09375        
|6/29/2001       | 0.125          | 0.015625      | 0.015625       
|9/28/2001       | 0.015625       | 0             | 0.015625       
|12/31/2001      | 0.296875       | 0.015625      | 0.046875       
|3/29/2002       | 0.234375       | 0.0625        | 0.1875         
|6/28/2002       | 0.234375       | 0.078125      | 0.171875       
|9/30/2002       | 0.20           | 0.02          | 0.05           















Holders of record

As of September 30, 2002, there were approximately 860 holders of record of
  the Company's common stock.

Dividends

The Company has never paid a cash dividend on its common stock. Payment of
  dividends is at the discretion of the Board of Directors. The Board of Directors
  plans to retain earnings, if any, for operations and does not intend to pay
  dividends in the foreseeable future.

Recent Sales of Unregistered Securities
  Except as otherwise noted, the securities described in this Item 5 were issued
  pursuant to the exemption from registration provided by Section 4(2) of the
  Securities Act of 1933. Each such issuance was made pursuant to individual contracts
  which are discrete from one another and are made only with persons who were
  sophisticated in such transactions and who had knowledge of and access to sufficient
  information about the Company to make an informed investment decision. Among
  the information provided was the fact that the securities issued were restricted
  securities.

No commissions were paid in connection with the transactions described below
  unless specifically noted.

During the year ended December 31, 2000, the Company issued 54,000 shares
  of its common stock for cash at $1.00 per share, and an additional 86,913 shares
  for services at $1.00 per share.

During the year ended December 31, 2000, the Company issued 210,750 shares
  of restricted common stock on the conversion of promissory notes, and an additional
  2,000 shares of restricted common stock on the conversion of warrants. At December
  31, 2001, the Company had convertible promissory notes outstanding which were
  convertible into 273,716 shares of common stock.

7

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In February 2000, the Company issued 4,775,519 shares of its previously unissued
  common stock as consideration for all of the issued and outstanding shares of
  common stock of San Diego Soccer Development Corporation ("SDSDC")
  in a reverse merger transaction. As a result of this transaction, SDSDC became
  the successor issuer for reporting purposes to the Securities Exchange Commission.

On March 6, 2000, the Company issued 1,250,000 shares of restricted common
  stock, valued at $1.00 per share, to secure an line of credit with one of the
  Company's shareholders. In the event of default, the Lender may terminate the
  Agreement, declare the outstanding balance to be due and payable, and convert
  the balance into common restricted shares of the Company. The new shares to
  be issued would be the number necessary for the Lender to have a cumulative
  ownership position of 53% of the then issued and outstanding shares plus all
  unexecuted options and warrants. The Company is in default on its credit lines
  that were due on December 31, 2000. The holders have not taken any legal action
  against the Company as permitted in the agreement.

The Company had the following common stock option transactions during the year
  ended December 31, 2001:



Shares
      
      Weighted Average Exercise Price
      
      
      Life of Options OutstandingOptions outstanding at January 1, 2001
      
      1,245,300
      $
      0.17
      
      
      3.42 yearsOptions granted
      
      -
      $
      -
      
      
      -Options exercised
      
      -
      
      -
      
      
      -Options forfeited or expired
      
      -
      
      -
      
      
      -Options outstanding at December 31, 2001
      
      1,245,300
      $
      0.17
      
      
      3.42 yearsOptions price range at end of year:
      
      $0.05 through $1.25Excercisable at end of year
      
      1,245,300  Commencing September 14, 2002, the Company began issuing subordinated
    convertible debentures. The debentures bear interest at 10%, mature six months
    from the date of issuance, and are convertible into restricted common stock
    at a discount to market of 50% from the closing bid price on the date of conversion.
    Through September 30, 2002, a total of $37,500 had been raised under these
    terms and no debentures had been converted. The aggregate amount of subordinated
    convertible debentures being offered is $200,000. ITEM 6. MANAGEMENT'S DISCUSSION
    AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Company's
    financial statements and the notes thereto and the other financial information
    appearing elsewhere in this document. In addition to historical information,
    the following discussion and other parts of this document contain forward-looking
    information that involves risks and uncertainties. Actual results could differ
    materially from those anticipated by such forward-looking information due
    to a number of factors beyond the Company's control. 
    Year Ended December 31, 2001 Compared to Year Ended December 31, 2000  8   Net Revenues Net revenues decreased from $311,492 for the year ended December 31, 2000
    to $18,460 for the year ended December 31, 2001. This decrease resulted primarily
    from the Company's ceasing operating its soccer franchises subsequent to December
    31, 2000. In December 2000, the Company's interest in the Riverside Elite
    was forfeit and returned to the league. The San Diego Flash was converted
    into an amateur team in early 2001. As a result, future revenues from ticket
    sales and corporate sponsorships are not expected to be significant until
    such time as the Company resumes participation in soccer at the professional
    level. Operating Expenses Operating expenses during the year ended December 31, 2001 decreased $3,063,866
    over the year ended December 31, 2000, from $3,407,003 to $343,137, respectively.
    The decrease results from the elimination of all soccer-related franchise
    expenses in early 2001, such as game and player expense and promotional expenses.
    In addition, there was $1,250,000 recorded as a loan underwriting fee in fiscal
    2000 resulting from 1,250,000 shares of common stock, valued at $1.00 per
    share, issued to secure an line of credit with one of the Company's shareholders.
    General and administrative expenses decreased $708,644 from $971,415 in 2000
    to $262,711 in 2001. This reduction resulted from the Company being essentially
    inactive during most of 2001.Other Income and Expense Other expense was $84,455 for the year ended December 31, 2001, compared
    to $144,293 for the year ended December 31, 2000. Included in other expenses
    during fiscal 2001 and 2000 were interest expenses of $156,859 and $115,275,
    respectively. The increase in interest expense resulted from an increase the
    total debt burden during 2001. During the year ended December 31, 2001, the
    Company also recorded other income of $72,000 resulting from the forgiveness
    of certain trade payables. Net Loss As a result of the above mentioned factors, the Company incurred a loss
    of $409,132 for the year ended December 31, 2001, compared to a loss of $3,239,804
    for the prior year, a decrease of $2,830,672. As stated above, the decrease
    in loss is primarily attributed the cessation of operations during early 2001.
    Operations did not resume until November 2001, at which time operations were
    limited to general and administrative expenses associated with developing
    a revised business strategy. Liquidity and Capital Resources As of December 31, 2001, the Company had negative working capital of $2,010,894
    and $74 cash on hand. Since inception, the Company has recorded an accumulated
    deficit of $7,055,901. Following the cessation of the soccer operations, the
    Company was inactive during most of calendar 2001. As a result, there is substantial
    doubt about the Company's ability to continue as a going concern. In November
    2001, management resumed operations under a new operating strategy and began
    doing business as Soccer Development of America. In 2002, the Company commenced
    development of a monthly soccer publication, "90:00 Minutes", which
    earns revenues through advertising, subscriptions and newsstand sales. The
    Company published the premier issue of "90:00 Minutes" in July 2002
    and the first monthly issue followed in September 2002. There is no assurance
    that advertising revenues, subscriptions and newsstand sales will provide
    adequate working capital to fund ongoing operations and meet current obligations.
    Further, the magazine and publishing industry is highly competitive. So, while
    direct competition from soccer-related publications is limited, there remains
    intense competition for limited advertising dollars. In the event the Company
    is unable to attract adequate advertisers and/or sell enough magazines to
    cover the costs of operations, there is substantial doubt about the Company's
    ability to continue as a going concern. The Company does not anticipate any
    cash expenditures for capital equipment or material contracts over the next
    twelve months. The sole acquisition contemplated, the acquisition of Golo
    Lotto, is expected to be consummated through the issuance of restricted common
    stock (See Note 11 in Note to Accompanying Financial Statements).  9  From the recommencement of business operations in November 2001 through September
    30, 2002, the Company sustained operations through the sale of common stock
    in private placement transactions and through the issuance of subordinated
    convertible debentures. During this period, the Company raised $324,000 through
    the issuance of 6,470,500 shares of common stock at a price of $0.05 per share.
    The stock issued is restricted under Rule 144 of the Securities Act of 1933.
    Commencing September 14, 2002, the Company began issuing subordinated convertible
    debentures. The debentures bear interest at 10%, mature six months from the
    date of issuance, and are convertible into restricted common stock at a discount
    to market of 50% from the closing bid price on the date of conversion. Through
    September 30, 2002, a total of $37,500 had been raised under these terms and
    no debentures had been converted. The aggregate amount of subordinated convertible
    debentures being offered is $200,000. There is no guarantee that our cash
    requirements will not exceed the proceeds from the offering, even assuming
    that the entire offering is sold. In the event additional capital is required,
    we may need to sell additional securities in future offerings, either private
    or public, or to obtain additional financing from other sources. There can
    be no assurance that we will be able to obtain such additional funds if required
    either at the time the funds are needed or on terms favorable to us. If additional
    funds are not available, the Company may cease to operate as a going concern. ITEM 7. FINANCIAL STATEMENTS Our financial statements appear beginning at page F-1. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS None.     10


PART III



ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE
  REGISTRANT

Our directors and executive officers and their ages as of September 30, 2002,
  are as follows:



|NAME                     | AGE | POSITION                                        | 
|------------------------ | --- | ----------------------------------------------- | 
|Yan K. Skwara            | 37  | Chief Executive Officer, President and Director | 
|                         |     |                                                 | 
|Charles Cibulka          | 47  | Director                                        | 
|                         |     |                                                 | 
|Lonn Paul                | 32  | Secretary, Director                             | 
|                         |     |                                                 | 
|Bill Hodson              | 36  | Director                                        | 
|                         |     |                                                 | 
|Christian B. Hershberger | 34  | Director                                        | 
|                         |     |                                                 | 

The following is a brief description of the background of our directors and
  executive officers.

Background Information

Yan K. Skwara, has been President and a Director of the Company since its inception;
  he was elected CEO of the Company in September 1998. For the past five years,
  Mr. Skwara has been employed with the company, Mr. Skwara is currently employed
  full-time with the Company and brings his prior experience in the investment
  banking world to the Company. Mr. Skwara has significant experience in management,
  product support and overall knowledge in the investor relations arena. Mr. Skwara
  also maintains a significant background in the soccer industry. He is a student
  of the game and has been actively playing the game for 20 years and began his
  professional career in soccer at age nineteen where he signed his first professional
  contract with a club in Germany. Prior to playing overseas, Mr. Skwara studied
  and played at California State University of Los Angeles. He played in Germany
  for two years before coming back to the states to finish his career in Los Angeles.
  After a professional career, Mr. Skwara acquired his Soccer "D" Coaching
  License and also was founder and partner of a semi-pro franchise in Dallas,
  Texas in 1994.

Charles Cibulka, is currently a member of the board of Directors for the Company.
  Previously, Chuck Cibulka's background in the game of soccer is significant
  in that he has been a fan of the game for the past five years and has significant
  industry background of the game of soccer. Chuck Cibulka has worked for the
  Company from 1998 up to present in the capacity of a consultant in Investor
  Relations arena. From 1979 through 1994, Mr. Cibulka worked in the brokerage
  industry in the capacity of account executive and consultant.

Lonn Paul, has served as a Director of the Company since May 10, 2002. He serves
  also as corporate secretary. Previously, Lonn Paul's back ground in the game
  of soccer is significant in that he has been both a player, coach and manager
  of different youth and adult soccer teams in San Diego County. Lonn Paul also
  served on the board of directors for the Mesa Soccer Association in 1994 through
  1997. Going back to 1987 through 1990, Lonn Paul worked in the restaurant industry
  for Rubios, McDonalds, Burger King in the capacity of manager for these restaurant
  chains.

Bill Hodson, has served on the Company's Board of Directors since April 2002.
  He is currently also the Director of Client Services, a non-executive position,
  at Livewire Corporate Communications, Inc., which has been retained by the Company
  to provide support to its marketing and distribution strategies for "90:00
  Minutes". Mr. Hodson is a creative and multi-faceted sales professional,
  with over ten years of successful sales, marketing and advertising experience.
  Prior to going to work for Livewire, Mr. Hodson worked with eFront Media, Inc.
  in Irvine, California, where he was Director of Marketing. In that position,
  he developed account management plans, including sales strategies, market share
  objectives and financial projections, managed multiple budget relating to marketing
  and advertising activities, coordinated with management the development and
  implementation of all corporate policies and procedures, as well as sales and
  marketing plans, provided leadership and direction to the sales force, spearheaded
  business development activities and organized focus groups to tune the company's
  product positioning. Mr. Hodson was a business consultant with his own company,
  Hodson Marketing, in Orange, California from 1998 to 2000 before it was sold
  to eFront Media in 2000. During the time, he introduced a new media company
  comprised of three primary properties - Ball-Striker Weekly, Ball-Striker TV
  and Equipment Promotion. He was the managing editor for Avid Golfer Magazine,
  a bi-monthly golf publication distributed to golf courses and retailers throughout
  Southern California. He also formulated and implemented marketing introduction
  plans for multiple beverage products sold to national retailers for Lighthouse
  Food and Beverage. Mr. Hodson was a Sales Manager for Winn Grips, Inc. from
  1996 to 1998, where he built a national sales team and assisted in international
  channel development, increasing sales from $16,000 to $3.8 million in less than
  two years. Mr. Hodson holds a degree in Business Studies from Fullerton College,
  Fullerton, California, and has been published in the Orange County Metropolitan,
  Las Vegas Review Journal, Los Angeles Times, USA Today, and the Wall Street
  Journal, among others.



11

---



Christian B. Hershberger, has been a member of the Company's Board of Directors
  since January 2002, when he was appointed to fill one of two newly created positions.
  He was formerly the Vice President of Business Development of Soccermall.net,
  now Affiliated Sports Management Corp. ("ASMC"), a position he held
  until October 2002. ASMC currently develops software for the sports industry
  with a primary focus on soccer. In his capacity as V.P. of Business Development,
  a position he has held since April 4, 2002, Mr. Hershberger acted as the direct
  contact with retailers, sports camps, tournament administrators and coaches
  from coast to coast. Prior to going to work with ASMC, Mr. Hershberger worked
  as a stock broker and investment banker for over four years, and spent another
  two years running his own business as a consultant for structuring debt and
  creative cash flow solutions for small and medium-sized companies. He currently
  acts as the head business consultant for the Texas Spurs organization, which
  is a club completing in the Premier Development League of the United Soccer
  League. He holds a level "D" coaching license, and is working to obtain
  his national "C" license rating during the next year. He has been
  a veteran of the game for over 25 years, and has been coaching competitively
  for over five years.

Meetings

During the year ended December 31, 2001, the Board of Directors met on two
  occasions. Each incumbent Director attended at least 75% of the total number
  of meetings of the Board of Directors.

Compensation Of Directors

We have no standard arrangement pursuant to which our Directors are compensated
  or services provided as a Director.



ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth the annual and long-term
  compensation for services in all capacities for the years ended December 31,
  2001 and 2000 paid to Yan K. Skwara, our current Chief Executive Officer. No
  other executive officers received compensation exceeding $100,000 during the
  year ended December 31, 2001.

|                           
|---------------------------
|Summary Compensation Table 
|                           
|                           
|                           
|                           
|                           
|Name and Principal Position
|                           
|Yan K. Skwara              
|Chief Executive Officer    
|                           
|                           

(1) Mr. Skwara became Chief Executive Officer effective as of December 20, 2001.

(2) Represents imputed salary which was written off to contributed capital
  as Mr. Skwara elected not to receive payment for these services.

12

---



The following table sets forth certain information concerning the number of
  individual grants of stock options made during the year ended December 31, 2001
  to each of the named executive officers:

Aggregated Option Grants In Last Fiscal Year


|Name          |  | Number of Securities Underlying Options
        Granted |  | % of Total Options Grated to Employees in Fiscal Year |  | Exercise Price |  | Expiration Date | 
|------------- |  | ------------------------------------------------------- |  | ----------------------------------------------------- |  | -------------- |  | --------------- | 
|              |  |                                                         |  |                                                       |  |                |  |                 | 
|Yan K. Skwara |  | --                                                      |  | --                                                    |  | --             |  | --              | 
|              |  |                                                         |  |                                                       |  |                |  |                 | 
|Total         |  | --                                                      |  | --                                                    |  |                |  |                 | 
|              |  |                                                         |  |                                                       |  |                |  |                 | 



The following table sets forth certain information concerning the number and
  value of securities underlying exercisable and unexercisable stock options as
  of the year ended December 31, 2001 for named officers of the Company.



Aggregated Option
  Exercises In Last Fiscal Year And Fiscal Year-End Option Values



|Name          |  | Number of Shares Acquired on Exercise |  | Value Realized |  | Number of Securities Underlying Unexercised
        Options at 
        December 31, 2001 Exercisable/Unexercisable |  | Value of Unexercised In-The-Money Options
        at December 31, 2001 Exercisable/Unexercisable (1) | 
|------------- |  | ------------------------------------- |  | -------------- |  | ------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- | 
|              |  |                                       |  |                |  |                                                                                                                     |  |                                                                                                      | 
|Yan K. Skwara |  | --                                    |  | --             |  | Exercisable    150,000                                                                                              |  | Exercisable    $0.00                                                                                 | 
|              |  |                                       |  |                |  | Unexercisable     --                                                                                                |  | Unexercisable     --                                                                                 | 
|              |  |                                       |  |                |  |                                                                                                                     |  |                                                                                                      | 
|              |  |                                       |  |                |  |                                                                                                                     |  |                                                                                                      | 





##### 

##### 

##### 

##### 

(1) The value of unexercised in-the-money options at fiscal year
  end is calculated using the last sale price of $0.05 per share as of December
  28, 2001 , the last trading day of 2001, as reported on the OTC Bulletin Board.

Employment Agreements

The Company does not currently have any employment agreements in
  place.

Indemnification

As permitted by the provisions of the General Corporation Law of
  the State of Nevada, the Company has the power to indemnify any person who was
  or is a party or is threatened to be made a party to any threatened, pending
  or completed action, suit or proceeding, whether civil, criminal, administrative
  or investigative, by reason of the fact that the person is or was a director,
  officer, employee or agent of the corporation if such officer or director acted
  in good faith and in a manner reasonably believed to be in or not opposed to
  the best interest of the Company. Any such person may be indemnified against
  expenses, including attorneys fees, judgments, fines and settlements in
  defense of any action, suit or proceeding. The Company does not maintain directors
  and officers liability insurance.

Compliance With Section 16(a) of the Securities Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires directors
  and executive officers, and persons who own more than 10% of a registered class
  of our equity securities to file with the Securities and Exchange commission
  initial reports of ownership and reports of changes in ownership of Common Stock
  and other of our equity securities. Officers, directors and greater than 10%
  shareholders are required by SEC regulations to furnish the Company with copies
  of all Section 16(a) forms they file.

13

---



The Company is not aware of any instances since January 1, 2001,
  where an executive officer, director or owner of more than ten percent of the
  outstanding shares of our common stock failed to comply with reporting requirements
  of Section 16(a) of the Securities Exchange Act of 1934 other than:



ITEM 11. SECURITY OWNERSHIP OF CERTAIN
  BENEFICIAL OWNERS AND MANAGEMENT

The following table provides information as September 30, 2002 concerning
  the beneficial ownership of the Companys common stock by (i) each director,
  (ii) each named executive officer, (iii) each shareholder known by the Company
  to be the beneficial owner of more than 10% of its outstanding Common Stock,
  and (iv) the directors and officers as a group. Except as otherwise indicated,
  the persons named in the table have sole voting and investing power with respect
  to all shares of Common Stock owned by them.



|Title of Class                |  | Name and Address of Beneficial Owner                                                            |  | Amount of Nature of Beneficial Ownership |  | Percent of Class
|----------------------------- |  | ----------------------------------------------------------------------------------------------- |  | ---------------------------------------- |  | ----------------
|$0.001 par value common stock |  | Yan K. Skwara, CEO
        3803 Mission Blvd. Suite 290
        San Diego, CA 92109             |  | 2,644,906 shares (1)                     |  | 15.5%           
|                              |  |                                                                                                 |  |                                          |  |                 
|$0.001 par value common stock |  | Chuck Cibulka
      3803 Mission Blvd. Suite 290
      San Diego, CA 92109                      |  | 100,000 shares                           |  | <1%             
|                              |  |                                                                                                 |  |                                          |  |                 
|$0.001 par value common stock |  | Lonn Paul, Director
      3803 Mission Blvd. Suite 290
      San Diego, CA 92109                |  | 50,000 shares                            |  | <1%             
|                              |  |                                                                                                 |  |                                          |  |                 
|$0.001 par value common stock |  | Bill Hodson, Director
      3803 Mission Blvd. Suite 290
      San Diego, CA 92109              |  | 50,000 shares                            |  | <1%             
|                              |  |                                                                                                 |  |                                          |  |                 
|$0.001 par value common stock |  | Christian B. Hershberger, Director
      3803 Mission Blvd. Suite 290
      San Diego, CA 92109 |  | 50,000 shares                            |  | <1%             
|                              |  |                                                                                                 |  |                                          |  |                 
|$0.001 par value common stock |  | Officers and Directors as a group                                                               |  | 2,894,906 shares                         |  | 17%             
|                              |  |                                                                                                 |  |                                          |  |                 

(1) Includes 2,071,428 shares held by Mr. Skwara and fully vested
  options to purchase 150,000 shares of common stock held by Mr. Skwara.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We believe that all prior related party transactions have been entered
  into upon terms no less favorable to us than those that could be obtained from
  unaffiliated third parties. Our reasonable belief of fair value is based upon
  proximate similar transactions with third parties or attempts to obtain the
  consideration from third parties. All ongoing and future transactions with such
  persons, including any loans or compensation to such persons, will be approved
  by a majority of disinterested members of the Board of Directors.

On March 6, 2000, the Company entered into a Credit Line Loan Agreement
  with one of its shareholders. The advances bear interest at 10% per annum and
  the unpaid principal and interest was due on December 31, 2000. In order to
  secure the line of credit, the Company paid an underwriting fee to the lender
  in the form of 1,250,000 restricted shares of common stock (see Managements
  Discussion and Analysis, above). At December 31, 2001, the principal balance
  on this Credit Line was $694,612, and with accrued interest, $815,419. In connection
  with the Agreement, the Company also agreed to reconstitute its Board of Directors
  by allowing the Lender to nominate 3 of the 5 directors, and to allow the Lender
  to approve certain budgets and significant expenditures, and to receive monthly
  financial statements from the Company. In addition, the agreement stipulates
  that the Lender will provide certain accounting and senior management overview
  services and public company reporting oversight in exchange for one percent
  (1%) of the Companys gross revenues. In the event of default, the Lender
  may terminate the Agreement, declare the outstanding balance to be due and payable,
  and convert the balance into common restricted shares of the Company. The new
  shares to be issued would be the number necessary for the Lender to have a cumulative
  ownership position of 53% of the then issued and outstanding shares plus all
  unexecuted options and warrants. The Company is in default on its credit lines
  that were due on December 31, 2000. The holders have not taken any legal action
  against the Company as permitted in the agreement, nor have they elected to
  nominate directors as also permitted.

14

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During 1999, certain officers of the Company formed another company
  to acquire and operate a Las Vegas soccer franchise. The Company received advances
  from that company that accrued interest at 10%. At December 31, 2000, the balance
  on the Companys note to the Las Vegas franchise, totaling $27,989, was
  forgiven in full. Because this note was due to a related party, the forgiveness
  is classified as contributed capital in the financial statements. 
  During the year ended December 31, 2000, the Company received cash advances
  totaling $21,531 from a company whose president and CEO is a director of the
  Company. Interest on this note accrues at 10.0% per annum, and the balance is
  due on demand. At December 31, 2001, the balance on this note was $64,593.

Further, the Company borrowed an additional $9,987 during the 2000
  fiscal year from a company with common directors. Interest on this note accrues
  at 10.0%, and the balance is due on demand. At December 31, 2000, the balance
  on this note was $9,987.



ITEM 13. EXHIBITS AND REPORTS ON FORM
  8-K

(a)(1)(2) Financial Statements. See index to financial statements
  and supporting schedules.

(a)(3) Exhibits.

The following exhibits are filed as part of this statement:

The exhibits listed below are required by Item 601 of Regulation
  S-B. Each management contract or compensatory plan or arrangement required to
  be filed as an exhibit to this Form 10-KSB has been identified.

|Exhibit No. | Description                                                                                                                             | Location                                                                                                                                 
|----------- | --------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                         |                                                                                                                                          
|3.1         | Articles of Incorporation                                                                                                               | Incorporated by reference to corresponding Exhibit previously
      filed as an Exhibit to Registrant's Form 10-SB filed October 29, 1999
|            |                                                                                                                                         |                                                                                                                                          
|3.2         | By-Laws                                                                                                                                 | Incorporated by reference to corresponding Exhibit previously
      filed as an Exhibit to Registrant's Form 10-SB filed October 29, 1999
|            |                                                                                                                                         |                                                                                                                                          
|4.1         | Form of Common Stock Certificate                                                                                                        | Filed herewith                                                                                                                           
|            |                                                                                                                                         |                                                                                                                                          
|99.1        | CEO Certification Pursuant to 18 USC, Section 1350, as Adopted
      Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith                                                                                                                           
|            |                                                                                                                                         |                                                                                                                                          
|99.2        | CFO Certification Pursuant to 18 USC, Section 1350, as Adopted
      Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith                                                                                                                           



(b) Reports on Form 8-K

None

15

---

SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
  Act of 1934, the registrant has duly caused this report to be signed on its
  behalf by the undersigned, thereto duly authorized.

SAN DIEGO SOCCER DEVELOPMENT CORPORATION

By: /s/ Yan Skwara
  Yan K. Skwara, Chief Executive Officer 
  Date: January 8, 2003



Pursuant to the requirements of the Securities Exchange Act of 1934,
  this report has been signed below by the following persons on behalf of the
  registrant and in the capacities and on the dates indicated.



|SIGNATURE                                               |  | TITLE                                           |  | DATE           
|------------------------------------------------------- |  | ----------------------------------------------- |  | ---------------
|                                                        |  |                                                 |  |                
|/s/ Yan K. Skwara
      Yan K. Skwara                   |  | President, Chief Executive Officer and Director |  | January 8, 2003
|                                                        |  |                                                 |  |                
|/s/ Charles Cibulka
      Charles Cibulka               |  | Director                                        |  | January 8, 2003
|                                                        |  |                                                 |  |                
|/s/ Lonn Paul
      Lonn Paul                           |  | Director                                        |  | January 8, 2003
|                                                        |  |                                                 |  |                
|/s/ Bill Hodson
      Bill Hodson                       |  | Director                                        |  | January 8, 2003
|                                                        |  |                                                 |  |                
|/s/ Christian Herschberger
      Christian Herschberger |  | Director                                        |  | January 8, 2003

16

---



Exhibit 99.1

Certification Pursuant to
  18 USC, Section 1350, as Adopted Pursuant to
  Sections 302 and 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of San Diego Soccer Development Corporation,
  dba Soccer Development of America (the "Company") on Form 10-KSB for
  the year ended December 31, 2001 (the "Report"), as filed with the
  Securities and Exchange Commission on the date hereof, I, Yan Skwara, Chief
  Executive Officer of the Company, certify to the best of my knowledge, pursuant
  to 18 USC 1350, as adopted pursuant to §302 and promulgated as 18 USC 1350
  pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. I have reviewed this annual report on Form 10-KSB of San Diego Soccer Development
  Corporation, a Nevada corporation (the "registrant");

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

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

4. The registrant's other certifying officers and I are responsible for establishing
  and maintaining disclosure controls and procedures (as defined in Exchange Act
  Rules 13a-14 and 15d-14) for the registrant and we have:

> a) designed such disclosure controls and procedures to ensure that material
>     information relating to the registrant, including its consolidated subsidiaries,
>     is made known to us by others within those entities, particularly during the
>     period in which this quarterly report is being prepared;
>   b) evaluated the effectiveness of the registrant's disclosure controls and
>     procedures as of a date within 90 days prior to the filing date of this annual
>     report (the "Evaluation Date"); and
>   c) presented in this annual report our conclusions about the effectiveness
>     of the disclosure controls and procedures based on our evaluation as of the
>     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
  our most recent evaluation, to the registrant's auditors and the audit committee
  of registrant's board of directors (or persons performing the equivalent function):

> a) all significant deficiencies in the design or operation of internal controls
>     which could adversely affect the registrant's ability to record, process,
>     summarize and report financial data and have identified for the registrant's
>     auditors any material weaknesses in internal controls; and
>   b) any fraud, whether or not material, that involves management or other
>     employees who have a significant role in the registrant's internal controls;
>     and

6. The registrant's other certifying officers and I have indicated in this
  report whether or not there were significant changes in internal controls or
  in other factors that could significantly affect internal controls subsequent
  to the date of our most recent evaluation, including any corrective actions
  with regard to significant deficiencies and material weaknesses.
  7. The Company's Annual Report on Form 10-KSB for the year ended December 31,
  2001, and to which this Certification is attached (the "Periodic Report"),
  fully complies with the requirements of section 13(a) or section 15(d) of the
  Securities Exchange Act of 1934, as amended, and the information contained in
  the Periodic Report fairly presents, in all material respects, the financial
  condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of this
  8th day of January, 2003.

> 

By: /s/ Yan Skwara 
  Yan Skwara
  Chief Executive Officer
  Dated: January 8, 2003

17

---

Exhibit 99.2

Certification Pursuant to
  18 USC, Section 1350, as Adopted Pursuant to
  Sections 302 and 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of San Diego Soccer Development Corporation,
  dba Soccer Development of America (the "Company") on Form 10-KSB for
  the year ended December 31, 2001 (the "Report"), as filed with the
  Securities and Exchange Commission on the date hereof, I, Yan Skwara, Chief
  Financial Officer of the Company, certify to the best of my knowledge, pursuant
  to 18 USC 1350, as adopted pursuant to §302 and promulgated as 18 USC 1350
  pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1. I have reviewed this annual report on Form 10-KSB of San Diego Soccer Development
  Corporation, a Nevada corporation (the "registrant");

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

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

4. The registrant's other certifying officers and I are responsible for establishing
  and maintaining disclosure controls and procedures (as defined in Exchange Act
  Rules 13a-14 and 15d-14) for the registrant and we have:

> a) designed such disclosure controls and procedures to ensure that material
>     information relating to the registrant, including its consolidated subsidiaries,
>     is made known to us by others within those entities, particularly during the
>     period in which this annual report is being prepared;
>   b) evaluated the effectiveness of the registrant's disclosure controls and
>     procedures as of a date within 90 days prior to the filing date of this annual
>     report (the "Evaluation Date"); and
>   c) presented in this annual report our conclusions about the effectiveness
>     of the disclosure controls and procedures based on our evaluation as of the
>     Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
  our most recent evaluation, to the registrant's auditors and the audit committee
  of registrant's board of directors (or persons performing the equivalent function):

> a) all significant deficiencies in the design or operation of internal controls
>     which could adversely affect the registrant's ability to record, process,
>     summarize and report financial data and have identified for the registrant's
>     auditors any material weaknesses in internal controls; and
>   b) any fraud, whether or not material, that involves management or other
>     employees who have a significant role in the registrant's internal controls;
>     and

6. The registrant's other certifying officers and I have indicated in this
  report whether or not there were significant changes in internal controls or
  in other factors that could significantly affect internal controls subsequent
  to the date of our most recent evaluation, including any corrective actions
  with regard to significant deficiencies and material weaknesses.
  7. The Company's Annual Report on Form 10-KSB for the year ended December 31,
  2001, and to which this Certification is attached (the "Periodic Report"),
  fully complies with the requirements of section 13(a) or section 15(d) of the
  Securities Exchange Act of 1934, as amended, and the information contained in
  the Periodic Report fairly presents, in all material respects, the financial
  condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of this
  8th day of January, 2003.

> 

By: /s/Yan Skwara
  Yan Skwara
  Chief Financial Officer
  Dated: January 8, 2003

18

---









SAN DIEGO SOCCER DEVELOPMENT CORPORATION

FINANCIAL STATEMENTS

December 31, 2001















F-1

---



CONTENTS



|Independent Auditors' Report        | F-3 
|----------------------------------- | ----
|                                    |     
|Balance Sheet                       | F-4 
|                                    |     
|Statements of Operations            | F-5 
|                                    |     
|Statements of Stockholders' Deficit | F-6 
|                                    |     
|Statements of Cash Flows            | F-8 
|                                    |     
|Notes to the Financial Statements   | F-10



F-2

---

INDEPENDENT AUDITORS' REPORT



To the Board of Directors
  San Diego Soccer Development Corporation
  San Diego, California

We have audited the accompanying balance sheet of San Diego Soccer Development
  Corporation as of December 31, 2001, and the related statements of operations,
  stockholders' equity (deficit) and cash flows for the years ended December 31,
  2001 and 2000. These financial statements are the responsibility of the Company's
  management. Our responsibility is to express an opinion on these financial statements
  based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
  in the United States of America. Those standards require that we plan and perform
  the audit to obtain reasonable assurance about whether the financial statements
  are free of material misstatement. An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements.
  An audit also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial statement
  presentation. We believe that our audits provide a reasonable basis for our
  opinion.

In our opinion, the financial statements referred to above present fairly,
  in all material respects, the financial position of San Diego Soccer Development
  Corporation as of December 31, 2001 and the results of its operations and its
  cash flows for the years ended December 31, 2001 and 2000, in conformity with
  accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company
  will continue as a going concern. As discussed in Note 9 to the financial statements,
  the Company has incurred significant losses which have resulted in an accumulated
  deficit, raising substantial doubt about its ability to continue as a going
  concern. Management's plans in regard to these matters are also described in
  Note 9. The financial statements do not include any adjustments that might result
  from the outcome of this uncertainty.

HJ Associates & Consultants, LLP
  Salt Lake City, Utah
  December 7, 2002



F-3

---




SAN DIEGO SOCCER DEVELOPMENT CORPORATION
  BALANCE SHEET
 December 31, 2001CURRENT ASSETSCash
        $
        74Total Current Assets
        
        74PROPERTY AND EQUIPMENT (Net) (Notes 1 and 2)
        
        16,982OTHER ASSETSSoccer Franchise, net (Note 3)
        
        -Total Other Assets
        
        -TOTAL ASSETS
        $
        17,056CURRENT LIABILITIESAccounts Payable
        $
        265,259Accrued Expenses
        
        30,615Accrued payroll and payroll taxes
        
        364,762Note payable-related party (Note 4)
        
        74,580Credit line payable - related party (Note 4)
        
        694,612Convertible promissory notes (Note 6)
        
        273,716Notes Payable (Note 5)
        
        79,646Accrued interest payable
        
        227,778Total Current Liabilities
        
        2,010,968Total Liabilities
        
        2,010,968STOCKHOLDERS' DEFICITCommon stock: 50,000,000 shares authorized of $0.001 par
          value, 9,828,154 shares issued and outstanding
        
        9,828Additional paid-in capital
        
        5,040,267Common stock subscribed
        
        12,000Treasury Stock
        
        (106)Accumulated deficit
        
        (7,055,901)Total Stockholders' Deficit
        
        (1,993,912)TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
        $
        17,056
  The accompanying notes are an integral part of these financial statements. F-4   SAN DIEGO SOCCER DEVELOPMENT CORPORATION


STATEMENTS OF OPERATIONS


For the Years Ended 
          December 31, 2001
      
      For the Years Ended 
        December 31, 2000REVENUESTicket sales
      $
      13,560
      
      $
      72,843Corporate sponsorships
      
      2,500
      
      
      219,787Other revenue
      
      2,400
      
      
      18,862Total Revenues
      
      18,460
      
      
      311,492EXPENSESGeneral and administrative
      
      262,771
      
      
      971,415Bad debt expense
      
      -
      
      
      25,715Game and player expenses
      
      71,826
      
      
      676,418Advertising and promotion
      
      3,060
      
      
      340,327Loan underwriting
      
      -
      
      
      1,250,000Depreciation and amortization
      
      5,408
      
      
      143,128Total Expenses
      
      343,137
      
      
      3,407,003Loss From Operations
      
      (324,677)
      
      
      (3,095,511)OTHER INCOME (EXPENSE)Gain on forgiveness of debt
      
      72,307
      
      
      -Interest Income
      
      97
      
      
      982Loss on abandonment of fixed assets
      
      -
      
      
      (30,000)Interest expense
      
      (156,859)
      
      
      (115,275)Total Other Income (Expense)
      
      (84,455)
      
      
      (144,293)NET LOSS
      $
      (409,132)
      
      $
      (3,239,804)BASIC LOSS PER SHARE
      $
      (0.04)
      
      $
      (0.37)WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
      $
      9,401,533
      
      $
      8,747,541


The Accompanying notes are an integral part of
  these financial statements.


F-5

---

##### 



SAN DIEGO SOCCER DEVELOPMENT CORPORATION
          Statements of Stockholders DeficitCommon StockShares
      
      
      Amount
      
      
      Additional Paid-In Capital
      
      
      Stock Subscribed
      
      
      Stock Subscriptions Receivable
      
      Treasury Stock
      
      
      Accumulated DeficitBalance, December 31, 1999
      
      5,284,369
      
      $
      5,284
      
      $
      2,936,377
      
      $
      12,000
      
      $
      (48,000 )
      $
      -
      
      
      (3,406,965 )Common stock issued for cash
      
      54,000
      
      
      54
      
      
      53,946
      
      
      -
      
      
      -
      
      -
      
      
      -Recapitalization of SDSDC
      
      2,500,000
      
      
      2,500
      
      
      (2,500)
      
      
      -
      
      
      -
      
      -
      
      
      -Common stock issued in conversion of promissory notes
      
      210,750
      
      
      211
      
      
      210,539
      
      
      -
      
      
      -
      
      -
      
      
      -Common stock issued for services
      
      86,913
      
      
      87
      
      
      86,826
      
      
      -
      
      
      -
      
      -
      
      
      -Common stock issued for 
        loan underwriting fee
      
      1,250,000
      
      
      1,250
      
      
      1,248,750
      
      
      -
      
      
      -
      
      -
      
      
      -Common stock issued in conversion of warrants
      
      2,000
      
      
      2
      
      
      1,998
      
      
      -
      
      
      -
      
      -
      
      
      -Stock options issued
      
      -
      
      
      -
      
      
      131,160
      
      
      -
      
      
      -
      
      -
      
      
      -Receipt of stock subscription receivable
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      47,000
      
      -
      
      
      -Subscription receivable written-off
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      1,000
      
      -
      
      
      -Contributed capital
      
      -
      
      
      -
      
      
      75,989
      
      
      -
      
      
      -
      
      -
      
      
      -Net loss for the year ended
        December 31, 2000
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      -
      
      
      (3,239,804 )Balance, December 31, 2000
      
      9,388,032
      
      $
      9,388
      
      $
      4,743,085
      
      $
      12,000
      
      $
      -
      $
      -
      
      
      (6,646,769)The accompanying notes are an integral part of these financial statements.
          F-6Common StockShares
      
      
      Amount
      
      
      Additional Paid-In Capital
      
      
      Stock Subscribed
      
      
      Stock Subscriptions Receivable
      
      Treasury Stock
      
      
      Accumulated DeficitBalance, December 31, 2000
      
      9,388,032
      
      $
      9,388
      
      $
      4,743,085
      
      $
      12,000
      
      $
      -
      $
      -
      
      
      (6,646,769)Common stock issued for cash
      
      290,000
      
      
      290
      
      
      14,210
      
      
      -
      
      
      -
      
      -
      
      
      -Common stock issued in conversion of promissory notes
      
      150,122
      
      
      150
      
      
      149,972
      
      
      -
      
      
      -
      
      -
      
      
      -Treasury stock purchased
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      (106)
      
      
      -Contributed capital
      
      -
      
      
      -
      
      
      133,000
      
      
      -
      
      
      -
      
      
      
      
      -Net loss for the year ended
        December 31, 2001
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      -
      
      
      (409,132 )Balance, December 31, 2001
      
      9,828,154
      
      $
      9,828
      
      $
      5,040,267
      
      $
      12,000
      
      $
      -
      $
      (106)
      
      
      (7,055,901) The accompanying notes are an integral part of these financial statements. F-7   SAN DIEGO SOCCER DEVELOPMENT CORPORATION
          Statements of Cash FlowsFor the Years Ended
      
      For the Years EndedDecember 31, 2001
      
      December 31, 2000CASH FLOWS FROM OPERATING ACTIVITIESNet Loss
      
      $
      (490,132)
      $
      (3,239,804 )Adjustments to reconcile net loss to net cash used by operating activities:Depreciation and amortization
      
      
      5,480
      
      143,128Loss on abandonment of fixed assets
      
      
      -
      
      30,000Stock issued for loan underwriting fee
      
      
      -
      
      1,250,000Bad debt expense
      
      
      -
      
      25,715Contributed capital for services rendered
      
      
      133,000
      
      -Stock issued for services
      
      
      -
      
      86,913Stock options issued for services
      
      
      -
      
      131,160Stock issued in conversion of warrants
      
      
      -
      
      2,000Write-off of subscription receivable
      
      
      -
      
      1,000Changes in operating assets and liabilities:Decrease in deposits
      
      
      1,350
      
      -Increase (decrease) in accounts payable
      
      
      (49,736)
      
      222,231Decrease in deferred revenue
      
      
      (1,238)
      
      (31,252 )Increase in accrued expenses
      
      
      169,317
      
      207,222Net Cash Used by Operating Activities
      
      
      (150,959)
      
      (1,171,687)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of fixed assets
      
      
      -
      
      (9,685 )Net Cash Used by Investing Activities
      
      
      -
      
      (9,685 )CASH FLOWS FROM FINANCING ACTIVITIESCommon stock issued for cash
      
      
      14,500
      
      54,000Receipt of subscriptions receivable
      
      
      -
      
      47,000Contributed capital
      
      
      -
      
      48,000Cash received from notes payable and notes payable, related
      
      
      72,944
      
      100,018Convertible promissory notes proceeds
      
      
      52,600
      
      119,750Proceeds from credit lines and credit lines  related
      
      
      -
      
      853,774Payment on debt instruments
      
      
      (29,684)
      
      (50,644 )Purchase of treasury stock
      
      
      (106)
      
      -Net Cash Provided by Financing Activities
      
      
      110,254
      
      1,171,898NET DECREASE IN CASH
      
      
      (40,705)
      
      (9,474 )CASH AT BEGINNING OF PERIOD
      
      
      40,779
      
      50,253CASH AT END OF PERIOD
      
      $
      74
      $
      40,779 The accompanying notes are an integral part of these financial statements. F-8   SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Statements of Cash Flows(Continued) For the Years Ended
      
      For the Years EndedDecember 31, 2001
      
      December 31, 2000SUPPLEMENTAL CASH FLOW INFORMATIONCASH PAID FOR:Interest
      
      $
      -
      $
      63,474Income taxes
      
      
      -
      
      -NON-CASH INVESTING FINANCING ACTIVITIESCommon stock issued for conversion of promissory
        notes
      
      $
      130,100
      $
      210,750Common stock issued for settlement of accrued liabilities
      
      $
      20,022
      $
      1,250,000Contributed capital for services rendered
      
      $
      133,000
      $
      -  The accompanying notes are an integral part of these financial statements. F-9    SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Organization San Diego Soccer Development Corporation (formerly Roller Coaster,
    Inc.), ("the Company") was incorporated on December 12, 1995, under
    the laws of the state of Nevada under the name Roller Coaster, Inc. The Company
    engaged in no operations prior to February 10, 2000. On February 10, 2000, the Company issued 5,284,369 shares of
    its previously un-issued common stock to the shareholders of San Diego Soccer
    Development Corporation, a California company (SDSDC) in exchange for all
    of the issued and outstanding shares of SDSDC. Immediately following the acquisition
    of SDSDC, the Company changed its name to San Diego Soccer Development Corporation,
    and changed its state of domicile from California to Nevada. At the time of acquisition of SDSDC, the Company was completely
    inactive, with no operations, assets, or liabilities. Additionally, the exchange
    of the Company's common stock for the common stock of SDSDC resulted in the
    former shareholders of SDSDC obtaining control of the Company. Accordingly,
    SDSDC is the treated as the continuing entity for legal purposes, and the
    Company being the continuing entity for accounting purposes. The transaction
    was accounted for as a recapitalization of SDSDC, with no adjustment to the
    basis of SDSDC's assets acquired or liabilities assumed. SDSDC was incorporated on August 22, 1997 in the state of California,
    and has subsequently been engaged in the management and marketing of professional
    soccer teams, and the majority of the Company's revenues were generated from
    corporate sponsorships and ticket sales. b. Accounting Methods The Company's financial statements are prepared using the accrual
    method of accounting. The Company has elected a December 31 year-end. c. Basic Loss Per Share The computation of basic loss per share of common stock is
    based on the weighted average number of share outstanding during the period. For the Years Ended 
          December 31,2001
      
      2000Loss (numerator)
      
      $
      (409,132)
      $
      (3,239,804)Shares (denominator)
      
      
      9,401,533
      
      8,747,541Per share amount
      
      
      $
      (0.04)
      $
      (0.37)       The Company's outstanding stock purchase warrants and options have been excluded
    from the basic net loss per share calculation as they are antidilutive.  F-10  SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000  NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) d. Property and Equipment Property and equipment is recorded at cost. Major additions
    and improvement are capitalized. The cost and related accumulated depreciation
    of equipment retired or sold are removed from the accounts and any differences
    between the undepreciated amount and the proceeds from the sale are recorded
    as gain or loss on sale of equipment. Depreciation is computed using the straight-line
    method over the estimated useful life of the assets. e. Income Taxes Deferred taxes are provided on a liability method whereby deferred
    tax assets are recognized for deductible temporary differences and operating
    loss and tax credit carryforwards and deferred tax liabilities are recognized
    for taxable temporary differences. Temporary differences are the differences
    between the reported amounts of assets and liabilities and their tax bases.
    Deferred tax assets are reduced by a valuation allowance when, in the opinion
    of management, it is more likely that not that some portion or all of the
    deferred tax assets will not be realized. Deferred tax assets and liabilities
    are adjusted for the effects of changes in tax laws and rates on the date
    of enactment. Net deferred tax liabilities consist of the following components
    as of December 31, 2001 and 2000: 2001
        
        2000Deferred tax liabilities
        
        $
        -
        $
        --
        
        -Deferred tax assets:NOL Carryover
        
        
        $
        2,004,400
        $
        1,896,804$
        2,004,400
        $
        1,896,804
  The deferred tax amounts mentioned above have been classified
    on the accompanying balance sheets as of December 31, 2001 and 2000 as follows: 2001
        
        2000Income tax benefit at statutory rate
        
        $
        2,004,400
        $
        1,896,804Valuation allowance
        
        
        (2,004,400)
        
        (1,896,804)$
        -
        $
        -
  The provision for income taxes charged to operations for the
    years ended December 31, 2001 and 2000 consist of the following: 2001
        
        2000Income tax benefit at statutory rate
        
        $
        800
        $
        800Change in valuation allowance
        
        
        (800)
        
        (800)$
        -
        $
        -
  At December 31, 2001, the Company had net operating loss carryforwards
    of approximately $5,139,700 that may be offset against future taxable income
    from the year 2002 through 2022. No tax benefit has been reported in the December
    31, 2001 financial statements since the potential tax benefit is offset by
    a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform
    Act of 1986, net operating loss carryforwards for Federal income tax reporting
    purposes are subject to annual limitations. Should a change in ownership occur,
    net operating loss carryforwards may be limited as to use in future years. F-11  SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) f. Estimates The preparation of financial statements in conformity with
    generally accepted accounting principles requires management to make estimates
    and assumptions that affect the reported amounts of assets and liabilities
    and disclosure of contingent assets and liabilities at the date of the financial
    statements and the reported amounts of revenues and expenses during the reporting
    period. Actual results could differ from those estimates. g. Advertising and Promotion The Company follows the policy of charging the costs of advertising
    and promotion to expense as incurred. Advertising and promotion expense for
    the years ended December 31, 2001 and 2000 totaled $3,060 and $340,327, respectively. h. Revenue and Expense Recognition Revenue from ticket sales is recognized at the time the Company's
    corresponding home soccer game is played. Accordingly, advance ticket sales
    for the next season are recorded as deferred revenues and recognized on a
    pro-rata basis during the applicable season. Revenue from advertising and
    promotion is also recognized on a pro-rata basis during the season. Administrative,
    general, advertising and promotional expenses are charged to operations as
    incurred. i. Stock Options The Company has granted options to purchase common stock to
    various parties as consideration for various services rendered to the Company.
    Under the Statement of Financial Accounting Standards No. 123, Accounting
    for Stock-Based Compensation ("SFAS 123"), the Company is recognizing
    the compensation cost using the estimated fair value method. Under the fair
    value method, total compensation cost is the estimated fair value of the stock
    options at the grant date, less any amount paid by the employee for the stock
    options. F-12    SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) j. Change in Accounting Principle The Company has adopted the provisions of FASB Statement No.
    138 "Accounting for Certain Derivative Instruments and Hedging Activities,
    (an amendment of FASB Statement No.133.)" Because the Company had adopted
    the provisions of FASB Statement No. 133, prior to June 15, 2000, this statement
    is effective for al fiscal quarters beginning after June 15, 2000. The adoption
    of this principle had no material effect on the Company's financial statements. The Company has adopted the provisions of FASB Statement No.
    140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments
    of Liabilities (a replacement of FASB Statement No. 125.)" This statement
    provides accounting and reporting standard for transfers and servicing of
    financial assets and extinguishments of liabilities. Those standards are based
    on consistent application of a financial-components approach that focuses
    on control. Under that approach, the transfer of financial assets, the Company
    recognized the financial and servicing assets it controls and the liabilities
    it has incurred, derecognizes financial assets when control has been surrendered,
    and derecognizes liabilities when extinguished. This statement provides consistent
    standards for distinguishing transfers of financial assets that are sales
    from transfers that are secured borrowings. This statement is effective for
    transfers and servicing of financial assets and extinguishments of liabilities
    occurring after March 31, 2001. This statement is effective for recognition
    and reclassification of collateral and for disclosures relating to securitization
    transactions and collateral for fiscal years ending after December 15, 2000.
    The adoption of this principle had no material effect on the Company's financial
    statements. The Company has adopted the provisions of FIN 44 "Accounting
    for Certain Transactions Involving Stock Compensation (an interpretation of
    APB Opinion No. 25.)" This interpretation is effective July 1, 2000.
    FIN 44 clarifies the application of Opinion No. 25 for only certain issues.
    It does not address any issues related to the application of the fair value
    method in Statement No. 123. Among other issues, FIN 44 clarifies the definition
    of employee for purposes of applying Opinion 25, the criteria for determining
    whether a plan qualifies as a noncompensatory plan, the accounting consequence
    of various modifications to the terms of a previously fixed stock option or
    award, and accounting for an exchange of stock compensation awards in a business
    combination. The adoption of this principle had no material effect on the
    Company's financial statements. k. Pronouncements Issued Not Yet Adopted In July, 2001, the Financial Accounting Standards Board issued
    two statements - Statement 141, Business Combinations, and Statement 142,
    Goodwill and Other Intangible Assets, which will potentially impact the Company's
    accounting for its reported goodwill and other intangible assets.  F-13   SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) k. Pronouncements Issued Not Yet Adopted (Continued)  Statement 141:
 Eliminates the pooling method for accounting for business
        combinations.
    Requires that intangible assets that meet certain criteria
        be reported separately from goodwill.
    Requires negative goodwill arising from a business combination
        to be recorded as an extraordinary gain. Statement 142:
 Eliminates the amortization of goodwill and other intangibles
        that are determined to have an indefinite life.
    Requires, at a minimum, annual impairment tests for goodwill
        and other intangible assets that are determined to have an indefinite
        life. Upon adoption of these Statements, the Company is required
      to:
 Re-evaluate goodwill and other intangible assets that
        arose from business combinations entered into before July 1, 2001. If
        the recorded other intangibles assets do not meet the criteria for recognition,
        they should be reclassified to goodwill. Similarly, if there are other
        intangible assets that meet the criteria for recognition but were not
        separately recorded from goodwill, they should be reclassified from goodwill.
    Reassess the useful lives of intangible assets and adjust
        the remaining amortization periods accordingly.
    Write-off any remaining negative goodwill. The Company has not yet completed its full assessment of the
      effects of these new pronouncements on its financial statements and so is
      uncertain as to the impact. The standards generally are required to be implemented
      by the Company in its 2002 financial statements.
  F-14


SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) k. Pronouncements Issued Not Yet Adopted (Continued) SFAS No. 143 -- On August 16, 2001, the FASB issued SFAS No.
    143, "Accounting for Asset Retirement Obligations," which is effective
    for fiscal years beginning after June 15, 2002. This pronouncement requires
    that obligations associated with the retirement of tangible long-lived assets
    be recorded as liabilities when those obligations are incurred, with the amount
    of the liability initially measured at fair value. Upon initially recognizing
    a liability for an accrued retirement obligation, an entity must capitalize
    the cost by recognizing an increase in the carrying amount of the related
    long-lived asset. Over time, the liability is accreted to its present value,
    and the capitalized cost is depreciated over the useful life of the related
    asset. Upon settlement of the liability, the entity either settles the obligation
    for its recorded amount or incurs a gain or loss upon settlement. While the
    Company has not completed the process of determining the effect of this new
    accounting pronouncement on its financial statements, the Company currently
    expects that the effect of SFAS No. 143 on the Company's financial statements,
    when it becomes effective, will not be significant. SFAS No. 144 -- On October 3, 2001, the Financial Accounting
    Standards Board issued SFAS No. 144, "Accounting for the Impairment or
    Disposal of Long-Lived Assets," which is effective for financial statements
    issued for fiscal years beginning after December 15, 2001 and, generally,
    its provisions are to be applied prospectively. SFAS 144 supersedes SFAS Statement
    No. 121 ("FAS 121"), Accounting for the Impairment of Long-Lived
    Assets and for Long-Lived Assets to Be Disposed Of. SFAS 144 applies to all
    long-lived assets (including discontinued operations) and consequently amends
    Accounting Principles Board Opinion No. 30 ("APB 30"), "Reporting
    Results of Operations Reporting the Effects of Disposal of a Segment of a
    Business." SFAS 144 develops one accounting model (based on the model
    in SFAS 121) for long- lived assets that are to be disposed of by sale, and
    addresses the principal implementation issues. SFAS 144 requires that long-lived
    assets that are to be disposed of by sale be measured at the lower of book
    value or fair value less cost to sell. This requirement eliminates APB 30's
    requirement that discontinued operations be measured at net realizable value
    or that entities include under discontinued operations in the financial statements
    amounts for operating losses that have not yet occurred. Additionally, SFAS
    144 expands the scope of discontinued operations to include all components
    of an entity with operations that (1) can be distinguished from the rest of
    the entity and (2) will be eliminated from the ongoing operations of the entity
    in a disposal transaction. The Company currently expects that the effect of
    SFAS No. 144 on the Company's financial statements, when it becomes effective,
    will not be significant. F-15   SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) k. Pronouncements Issued Not Yet Adopted (Continued) SFAS No. 145 -- On April 30, 2002, the Financial Accounting
    Standards Board (FASB) issued FASB Statement No. 145 (SFAS 145), "Rescission
    of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13,
    and Technical Corrections." SFAS 145 rescinds both FASB Statement No.
    4 (SFAS 4)," Reporting Gains and Losses from Extinguishment of Debt,"
    and the amendment to SFAS 4, FASB Statement No. 64 (SFAS 64), "Extinguishments
    of Debt Made to Satisfy Sinking-Fund Requirements." Through this rescission,
    SFAS 145 eliminates the requirement (in both SFAS 4 and SFAS 64) that gains
    and losses from the extinguishment of debt be aggregated and, if material,
    classified as an extraordinary item, net of the related income tax effect.
    However, an entity is not prohibited from classifying such gains and losses
    as extraordinary items, so long as it meets the criteria in paragraph 20 of
    Accounting Principles Board Opinion No. 30, Reporting the Results of Operations
    Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
    Unusual and Infrequently Occurring Events and Transactions. Further, SFAS
    145 amends paragraph 14(a) of FASB Statement No. 13, "Accounting for
    Leases", to eliminate an inconsistency between the accounting for sale-leaseback
    transactions and certain lease modifications that have economic effects that
    are similar to sale-leaseback transactions. The amendment requires that a
    lease modification (1) results in recognition of the gain or loss in the 9
    financial statements, (2) is subject to FASB Statement No. 66, "Accounting
    for Sales of Real Estate," if the leased asset is real estate (including
    integral equipment), and (3) is subject (in its entirety) to the sale-leaseback
    rules of FASB Statement No. 98, "Accounting for Leases: Sale-Leaseback
    Transactions Involving Real Estate," Sales-Type Leases of Real Estate,
    Definition of the Lease Term, and Initial Direct Costs of Direct Financing
    Leases. Generally, FAS 145 is effective for transactions occurring after May
    15, 2002. The Company does not expect that the adoption of SFAS 145 will have
    a material effect on its financial performance or results of operations. SFAS No. 146 -- In June 2002, the FASB issued SFAS No. 146,
    "Accounting for Exit or Disposal Activities" ("SFAS 146").
    SFAS 146 addresses significant issues regarding the recognition, measurement,
    and reporting of costs that are associated with exit and disposal activities,
    including restructuring activities that are currently accounted for under
    EITF 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 scope of SFAS 146 also includes costs related
    to terminating a contract that is not a capital lease and termination benefits
    that employees who are involuntarily terminated receive under the terms of
    a one-time benefit arrangement that is not an ongoing benefit arrangement
    or an individual deferred-compensation contract. SFAS 146 will be effective
    for exit or disposal activities that are initiated after December 31, 2002
    and early application is encouraged. The provisions of EITF No. 94-3 shall
    continue to apply for an exit activity initiated under an exit plan that met
    the criteria of EITF No. 94-3 prior to the adoption of SFAS 146. The effect
    on adoption of SFAS 146 will change on a prospective basis the timing of when
    the restructuring charges are recorded from a commitment date approach to
    when the liability is incurred. The Company does not expect that the adoption
    of SFAS 146 will have a material effect on its financial performance or results
    of operations. F-16    SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) l. Equity Securities Equity securities issued for services rendered have been accounted
    for at the fair market value of the securities on the date of issuance.


NOTE 2 - PROPERTY AND EQUIPMENT Property and equipment consists of the following:  December 31, 2001Soccer Equipment
        $
        6,000Promotional equipment
        
        9,685Computers and software
        
        17,71633,401Accumulated depreciation
        
        (16,419)Net property and equipment
        $
        16,982
  During the years ended December 31, 2001 and 2000, the Company
    recorded depreciation expense of $5,480 and $6,328, respectively. NOTE 3 - SOCCER FRANCHISES During 1997, the Company purchased a soccer franchise to operate
    the San Diego Flash in San Diego, California. The Company paid cash of $62,000
    and common stock valued at $88,000 for the franchise and the value of the
    stock portion was determined based on the cash price of a 1998 A-League franchise.
    The franchise was originally valued at $150,000. The San Diego franchise was
    fully-amortized during the 2000 fiscal year, due to the fact that the team
    ceased participation in its corresponding soccer league in early 2001. During
    the years ended December 31, 2001 and 2000, the Company recorded amortization
    expense of $-0- and $136,800, respectively. During 1999, the Company purchased a D-3 Pro League franchise
    for $30,000. During the year ended December 31, 2000, the franchise was forfeited
    back to its corresponding league, and the Company recorded loss of $30,000.  December 31, 2001Soccer Franchises
        $
        150,000Accumulated amortization
        
        (150,000)Net Soccer Franchises
        
        -
  F-17  SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000  NOTE 4 - RELATED PARTY TRANSACTIONS a. Credit Lines Payable The Company entered into a Credit Line Loan Agreement with one
    of its shareholders effective March 6, 2000. The Agreement provides the Company
    with a line of credit for approved expenditures. The advances bear interest
    at 10% per annum and the unpaid principal and interest is due on December
    31, 2000. In addition, in order to secure the line of credit, the Company
    paid an underwriting fee to the lender in the form of 1,250,000 restricted
    shares of common stock valued at $1,250,000. At December 31, 2001, the principal
    balance on this Credit Line was $694,612, and with accrued interest, totaled
    $815,419. In connection with the agreement, the Company also agreed to
    reconstitute its Board of Directors by allowing the Lender to nominate 3 of
    the 5 directors, and to allow the Lender to approve budgets and significant
    expenditures, and to receive monthly financial statements from the Company.
    In addition, the agreement stipulates that the Lender will provide certain
    accounting and senior management overview services and public company reporting
    oversight in exchange for one percent (1%) of the Company's gross revenues. In the event of default, the Lender may terminate the agreement,
    declare the outstanding balance to be due and payable, and convert that balance
    into common restricted shares of the Company. The new shares to be issued
    would be the number necessary for the Lender to have a cumulative ownership
    position of 53% of the then issued and outstanding shares plus all unexecuted
    options and warrants. At December 31, 2001, the Company is in default on its credit
    lines that were due on December 31, 2000. The holders have not taken any legal
    action against the Company as permitted in the agreement. b. Loans from Related Parties During 1999, certain officers of the Company formed another
    company to acquire and operate a Las Vegas soccer franchise. The Company received
    advances from that company that accrued interest at 10%. At December 31, 2000,
    the balance on the Company's note to the Las Vegas franchise, totaling $27,989,
    was forgiven in full. Because this note was due to a related party, the forgiveness
    is classified as contributed capital in the financial statements. During the year ended December 31, 2000, the Company received
    cash advances totaling $21,531 from a company whose president and CEO is a
    director of the Company. Interest on this note accrues at 10.0% per annum,
    and the balance is due on demand. At December 31, 2001, the balance on this
    note is $64,593 Further, the Company borrowed an additional $9,987 during the
    2000 fiscal year from a company with common directors. Interest on this note
    accrues at 10.0%, and the balance is due on demand. At December 31, 2001,
    the balance on this note was $9,987.
    The total of loans from related parties at December 31, 2001 was $74,580.
    The loans were for general operating expenses and are expected to be paid
    back when the Company has adequate cash flow from operations.   F-18   NOTE 5 - NOTES PAYABLE Notes payable consisted of the following: December 31, 2001Note payable to an unaffiliated company, interest
          at 10% per annum, principal and interest due December 31, 2000, unsecured.
        $
        42,500Note payable to an unaffiliated
          company, interest at 11% per annum, principal and interest due on December
          31, 2000, unsecured.
        
        25,000Note payable to an
          individual, interest at 10% per annum, principal and interest due on
          demand, unsecured.
        
        12,146Total Notes Payable
        
        79,646Less: Current Portion
        
        (79,646)Long-Term Notes Payable
        $
        -The aggregate principal maturities of notes
          payable are as follows:Year Ended December 31,
        
        Amount2001
        
        79,6462002
        
        -2003
        
        -2004
        
        -2005 and thereafter
        
        -Total
        $
        79,646
  At December 31, 2001, the Company was in default on its two
    notes that were due on December 31, 2000. The note holders have not taken
    any legal action against the Company as permitted in the agreements. F-19   SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 6 - CONVERTIBLE PROMISSORY NOTES In order to obtain "bridge" funds while a public
    offering is being prepared, the Company issued convertible notes with a face
    amount totaling $733,950 during 1999, $119,750 during 2000, and $52,600 during
    2001. The notes bear interest at 8% per annum and are convertible into common
    stock at $1.00 per share at the option of the holder. The 1999 notes matured
    on December 31, 1999. During 1999, the note holders converted $404,850 of
    convertible notes into 404,850 shares of common stock. During 2000, the note
    holders converted an additional $210,750 and the Company made cash payments
    totaling $27,884. A total of $25,000 in promissory notes was re-negotiated,
    and is no longer convertible into common stock. During 2001, the note holders
    converted $5,100 and the Company made cash payments totaling $8,900. At December
    31, 2001, the total principal balance of the Company's convertible promissory
    notes totaled $273,716, with an additional $90,163 in accrued interest. This
    total of $273,716 in principal was in default as of December 31, 2001. The
    convertible promissory notes did not have a beneficial conversion feature
    associated with them. NOTE 7 - LINE OF CREDIT PAYABLE The Company entered into a separate Credit Line Loan Agreement
    with an unrelated individual effective June 1, 2000. The agreement provides
    for a line of credit of up to $125,000 for approved expenditures. The advances
    bear interest at 10% per annum and the unpaid principal and interest is due
    on December 31, 2000. During 2001, the balance including accrued interest
    was converted into shares of common stock. The balance outstanding at December
    31, 2001 including all accrued interest was $-0-. NOTE 8 - STOCKHOLDERS' DEFICIT a. Common Stock In 2000, the Company issued 54,000 shares of its common stock
    for cash at $1.00 per share, and an additional 86,913 shares for services
    at $1.00 per share. Further, 210,750 shares were issued in conversion of promissory
    notes, and an additional 2,000 shares issued in conversion of warrants. 1,250,000
    shares were also issued in lieu of a loan-underwriting fee. Additionally,
    the Company issued 4,775,519 shares of its previously unissued common stock
    as consideration for all of the issued and outstanding common stock of SDSDC. In 2001, the Company issued 290,000 shares of its common stock
    for cash at $0.05 per share, and an additional 150,122 shares if its common
    stock were issued in conversion of promissory notes. At December 31, 2001,
    the Company had a total of 9,828,154 shares of its common stock issued and
    outstanding. During 2001, the Company recognized a salary expense of $133,000
    for the president's compensation for the year. This expense has been offset
    to additional paid-in capital because the president does not expect to be
    paid for these services. F-20   SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 8 - STOCKHOLDERS' DEFICIT (Continued) b. Warrants Warrants for 183,320 shares were issued along with the Company's
    initial private placement offering. Warrants for 87,400 shares were exercised
    in total through, leaving 97,720 outstanding at December 31, 2000. All of
    these warrants expired in 2001. c. Convertible Promissory Notes At December 31, 2001, the Company had convertible promissory
    notes outstanding which were convertible into 273,716 shares of common stock
    (see Note 6). d. Stock Options The Company had the following common stock option transactions
    during the year ended December 31, 2001:   Shares
        
        Weighted Average Exercise Price
        
        
        Life of Options OutstandingOptions outstanding at January 1, 2001
        
        1,245,300
        
        $ 0.17
        
        
        3.42 yearsOptions granted
        
        -
        
        -Options exercised
        
        -
        
        -
        
        
        -Options forfeited or expired
        
        -
        
        -
        
        
        -Options outstanding at December 31, 2001
        
        1,245,300
        
        $ 0.17
        
        
        3.42Options price range at end of year:
        
        $0.05 through $1.25Excercisable at end of year
        
        1,245,300
   NOTE 9 - GOING CONCERN As reported in the financial statements, the Company has an
    accumulated deficit of approximately $7,056,000 at December 31, 2001 and has
    incurred a significant loss from operations for the year then ended. In addition,
    the Company was in default on certain of its promissory notes on December
    31, 2000. The Company's shareholders' deficit was $1,993,912 and its current
    liabilities exceeded its current assets by $2,010,894. F-21   SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 9 - GOING CONCERN (Continued) These factors create uncertainty about the Company's ability
    to continue as a going concern. The ability of the Company to continue as
    a going concern is dependent on the Company obtaining adequate capital to
    fund operating losses until it becomes profitable. If the Company is unable
    to obtain adequate capital it could be forced to cease operations. In order to continue as a going concern and achieve a profitable
    level of operations, the Company will require, among other things, additional
    capital resources. Management's plans to obtain such resources for the Company
    include (1) raising additional capital through sale of common stock; (2) continuing
    the practice of issuing stock options as consideration for certain employee
    and marketing services; (3) converting promissory notes into common stock;
    (4) changing the focus of the Company away from professional soccer competition
    toward other soccer-related markets such as equipment sales, soccer camps
    and a soccer publications. Management cannot provide any assurances that the
    Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is
    dependent upon its ability to successfully accomplish the plans described
    in the preceding paragraph and eventually secure other sources of financing
    and attain profitable operations. The accompanying financial statements do
    not include any adjustments that might be necessary if the Company is unable
    to continue as a going concern. NOTE 10 - COMMITTMENTS AND CONTINGENCIES At December 31, 2000, the Company had elected to discontinue
    its office lease in San Diego, California. At year-end the Company was indebted
    to its lessor in the amount of $2,764, which was settled in full in the 2001
    fiscal year. During 2001, the Company entered into an office lease at a new
    location in San Diego, which is renewable on a "month to month"
    basis. NOTE 11 - SUBSEQUENT EVENTS Convertible Promissory Notes Subsequent to December 31, 2001, the Company made cash payments
    of $5,150 and certain convertible promissory noteholders converted $2,000
    of debt into 2,000 shares of the Company's common stock. Convertible Debentures Commencing September 14, 2002, the Company began issuing subordinated
    convertible debentures. The debentures bear interest at 10%, mature six months
    from the date of issuance, and are convertible into restricted common stock
    at a discount to market of 50% from the closing bid price on the date of conversion.
    Through December 2, 2002, a total of $136,500 had been raised under these
    terms and $7,000 of these debentures had been converted. The aggregate amount
    of subordinated convertible debentures being offered is $200,000. F-22       SAN DIEGO SOCCER DEVELOPMENT CORPORATION
    Notes to the Financial Statements
    December 31, 2001 and 2000 NOTE 11 - SUBSEQUENT EVENTS (Continued) Related Party Transaction Subsequent to December 31, 2001, the Company borrowed an additional
    $600 from related parties with the notes bearing interest at 10% per annum
    and are payable on demand. The Company has also made cash payments of $64,994. Common Stock Subsequent to December 31, 2001, the Company issued 6,180,500
    shares of its common stock for cash at $0.05 per share. The stock issued is
    restricted under Rule 144 of the Securities Act of 1933. The Company also
    issued 452,000 shares of its common stock upon the conversion of debentures
    and promissory notes totaling $9,000. Also subsequent to December 31, 2001, the Company issued 2,500,000
    shares of its common stock to its directors and advisory board as compensation
    for services valued at $0.05 per share. The Company also issued 2,175,000
    shares of its common stock to various individuals as compensation for consulting,
    legal, and public relation services valued at $0.05 per share. And the Company
    issued 32,500 shares of its common stock for the exercise of options at $0.05
    per share for a total of $1,625. During September 2002, the Company granted
    75,000 options to purchase its common stock at an exercise price of $0.25
    per share for production services performed. Letter of Intent On October 29, 2002, the Company announced it had signed a
    letter of intent to acquire 51% of the assets of Golo Lotto, an on-line Internet
    gaming website that allows wagering on various sporting events around the
    world. The purchase price, which is still the subject of negotiation, will
    be paid through the issuance of restricted common stock.  F-23