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


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
   (X)       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                  For the fiscal year ending December 31, 2002

                                       OR

   (  )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                  For the transition period from _____ to _____

                          Commission file number 1-4719

                             THE DELTONA CORPORATION
             (Exact name of registrant as specified in its charter)

                DELAWARE                              59-0997584
     (State or other jurisdiction of              (I.R.S. Employer
      incorporation or organization)           Identification Number)

        8014 SW 135th Street Road
               Ocala, FL                                34473
  (Address of principal executive offices)           (Zip Code)

        Registrant's telephone number, including area code (352) 307-8100

           Securities registered pursuant to Section 12(g) of the Act:

                           COMMON STOCK, $1 PAR VALUE
                                (Title of Class)

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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not 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-K or any  amendments  to
this Form 10-K. [ ]

     State the aggregate market value of the voting stock held by non-affiliates
of the Registrant:  $1,142,910  (based upon the sales price at which shares were
sold on February 14, 2003 ($0.35 per share)  multiplied by the 3,265,458  shares
of stock owned by  non-affiliates,  excluding  voting  stock held by  directors,
executive  officers and beneficial  owners of more than 10% of the  Registrant's
voting stock ; however,  this does not  constitute  an  admission  that any such
holder is an "affiliate" for any purpose.)

     Indicate the number of shares  outstanding of the  Registrant's  classes of
common stock, as of the latest  practicable  date:  13,544,277  shares of common
stock,  $1 par value, as of February 14, 2003,  excluding  12,228 shares held in
treasury.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE
 ------------------------------------------------------------------------------




<PAGE>



                             THE DELTONA CORPORATION

                                      INDEX

Form 10-K                                                                  Page
 Item No.               Section Heading in Attached Material              Number
---------               ------------------------------------              ------

PART I
  Items 1 and 2 ......  Business..................................          1
                          General.................................          1
                          Forward Looking Statements..............          1
                          Recent Developments.....................          2
                          Real Estate.............................          2
                          Other Businesses........................          7
                          Employees...............................          8
                          Competition.............................          8
                          Regulation..............................          8

  Item 3 .............  Legal Proceedings.........................         11

PART II
  Item 4 .............  Submission of Matters to a Vote of
                         Security Holders.........................         12
  Item 5 .............  Price Range of Common Stock and Dividends.         13
  Item 6 .............  Selected Consolidated Financial
                         Information .............................         14
  Item 7 .............  Management's Discussion and Analysis of
                         Financial Condition and Results of
                         Operations...............................         15
  Item 7A.............  Disclosures and Market Risk...............         21
  Item 8 .............  Index to Consolidated Financial Statements
                         and Supplemental Data ...................         23
  Item 9 .............  Independent Public Accountants............         42

PART III
  Item 10.............  Directors and Executive Officers of the
                         Registrant...............................         43
  Item 11.............  Executive Compensation....................         46
  Item 12.............  Security Ownership of Certain Beneficial
                         Owners and Management....................         48
  Item 13.............  Certain Relationships and Related
                         Transactions.............................         50

PART IV
  Item 14 ............  Exhibits, Financial Statement Schedules
                         and Reports on Form 8-K .................         52


<PAGE>



ITEMS 1 AND 2
                                    BUSINESS

General

     The  Company  was  founded  in  1962  and  is  principally  engaged  in the
development and sale of Florida real estate,  through the development of planned
communities on land acquired for that purpose.  The Company offers single-family
lots and multi-family and commercial tracts for sale, in communities designed by
the Company.  The Company is the  developer  of eleven  planned  communities  in
Florida, including TimberWalk, which is located in the western portion of Marion
Oaks.  Of  those  eleven  planned  communities,  two are in  various  stages  of
development.   The  Company  plans,  designs  and  develops  roads,   waterways,
recreational  amenities,  grading and drainage systems within these communities.
Since  1962,  the  Company  has  sold  over  157,000   single-family   lots  and
multi-family  and  commercial  tracts in its  communities,  in  addition to over
13,000 single-family homes and over 4,300 multi-family housing units.

     The   Company's   land   holdings  in  Florida   include  an  inventory  of
approximately  16,000 unsold platted  single-family  and  multi-family  lots and
commercial tracts.  (Platting is the process of recording, in the public records
of the county where the land is located,  a map or survey  delineating the legal
boundaries of the lots and tracts.) See "Real Estate: Land".

     The  Company  also  operates  other  businesses  related to its real estate
activities,  such as a  title  insurance  company  and a real  estate  brokerage
company.  In addition,  the Company has designed and constructed  country clubs,
golf courses and other recreational  amenities at its communities,  and operated
such amenities until their conveyance or sale.

     Historically,  the Company had designed,  constructed and operated  utility
systems  for the  distribution  of water and LP gas and for the  collection  and
treatment of sewage, primarily at the Company's communities. However, on June 6,
1989, Topeka Group  Incorporated  ("Topeka"),  a subsidiary of Minnesota Power &
Light Company ("MPL"), exchanged the Company's Preferred Stock which it acquired
in November,  1985 for the Company's utility  subsidiaries.  The Company entered
into a Developer  Agreement  for each of its  communities,  which  provides  the
policies for water and sewer  utility  services to the Company and the Company's
customers.

     Unless the context otherwise requires, the term Affiliate and Related Party
as used in the document  shall have the  meanings  given by the  Securities  and
Exchange Commission Regulation S-X and other appropriate rules,  regulations and
authoritative  sources.  As described herein, such relationships are significant
to the Company and have been disclosed herein, to the extent appropriate.

     The Company is  incorporated  in Delaware and has its  principal  office at
8014 SW 135th  Street  Road,  Ocala,  Florida  34473.  Its  telephone  number is
(352)307-8100.  The Company or Deltona,  as used  herein,  refers to The Deltona
Corporation  and,  unless the  context  otherwise  indicates,  its  wholly-owned
subsidiaries.

Forward Looking Statements

     This  annual  report on Form 10-K of The Deltona  Corporation  for the year
ended December 31, 2002 contains certain  forward-looking  statements within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby.  To the extent that such statements
are  not   recitations   of  historical   fact,   such   statements   constitute
forward-looking   statements   which,   by   definition,   involve   risks   and
uncertainties. In particular,  statements under Items 1 and 2, Business, Item 5,
Price Range of Common Stock and Dividends,  and Item 7, Management's  Discussion
and  Analysis  of  Financial   Condition  and  Results  of  Operation,   contain
forward-looking  statements.  Where, in any forward- looking statement,  Deltona
expresses  an  expectation  or belief  as to  future  results  or  events,  such
expectation or belief is expressed in good faith and believed to have reasonable
basis, but there can be no assurance that the statement of expectation or belief
will result or be achieved or accomplished.

     All of the above  estimates  are based on the current  expectations  of our
management  team,  which  may  change  in the  future  due to a large  number of
potential events, including unanticipated future developments.


                                        1

<PAGE>



     The following factors are factors that could cause actual results or events
to differ materially from those  anticipated,  and include,  but are not limited
to: the  availability  of operating  capital,  general  economic,  financial and
business  conditions;   competition  for  customers  in  the  single-family  and
multi-family  home  market;  the  costs  of  construction;  and  changes  in and
compliance with governmental regulations.

Recent Developments

     In 2002, the Company filed a Form 13E(3) and a preliminary  proxy statement
related to a proposed going private  transaction.  These documents are currently
being  reviewed by the SEC staff.  On December 13, 2001,  the Board of Directors
approved a 1 for  500,000  reverse  split of the  Company's  common  stock and a
related amendment to the Company's Articles of Incorporation reducing the number
of authorized  shares to 30. Both actions are subject to  stockholder  approval.
Based upon the number of shares of common stock held by each  stockholder  as of
February 14, 2003,  the effect of the reverse split will be to reduce the number
of the Company's stockholders to two stockholders: Selex International,  B.V., a
Netherlands  corporation  ("Selex")  and Yasawa  Holdings,  N.V., a  Netherlands
Antilles  corporation  ("Yasawa").  The date of the meeting of  stockholders  to
consider both matters will be determined  upon the  conclusion of the review and
subsequent  amendments to the  disclosures  in preliminary  proxy  statement and
Form13E(3) filings.

     On March 7, 2003,  the Company  closed on an agreement that resulted in the
termination of its repurchase  obligation on contracts  receivable  sold in 1990
and 1992. The termination of this recourse obligation covering  approximately $1
million of contracts receivable, substantially all of which were non-performing,
will  result in a  one-time  gain on  termination  of a recourse  obligation  of
approximately  $870,000 and a reduction in the liability for  "Obligation  under
recourse  provisions".  This one-time gain will be reported in the first quarter
of 2003. In terminating the obligation,  the Company acquired over 200 contracts
receivable,  substantially  all of which  are  non-performing,  each of which is
collateralized  by an improved vacant  residential lot, and over 150 lots, which
were added to the Company's land inventory.  As a part of this transaction,  the
Company received lots that are being conveyed to Citony Development  Corporation
pursuant to a 1992  purchase  agreement,  which  conveyed  all of the  Company's
property in the Citrus Springs subdivision,  including any lots reacquired under
this transaction. The aggregate costs incurred of approximately $195,000 will be
assigned to the acquired assets based on a basket-purchase method of allocation.

     If the  termination of the repurchase  obligation had occurred prior to the
earliest reported year, the impact of the transaction on the reported Results of
Operations  in 2002,  2001 and 2000 would have been to increase  the  "Estimated
uncollectible  sales expense" and to decrease net income or increase net loss in
each of the years by $80,000,  $260,000 and  $260,000,  respectively.  Set forth
below is the Summary Pro forma results, as if the transaction  occurred prior to
the earliest reported year:

            Pro Forma Results                   Years ended December 31,
                                             2002         2001          2000
                                            --------    --------      --------
Revenues, as reported                       $ 10,682    $ 14,569      $ 10,082
Costs and expenses, as reported               12,275      14,217        11,124
Pro forma - increase in expenses                  81         260           260
                                            --------    --------      --------
Pro forma Net income (loss)                 $ (1,674)   $     92      $ (1,302)
                                            ========    ========      ========
Pro forma income (loss) per share           $   (.12)   $    .01      $   (.10)
Weighted average common shares outstanding  13,544,277  13,544,277    13,544,277


     The pro forma results are provided for illustration only of the transaction
described  above.  The pro forma results should not be considered  indicative of
future results of operations.

Real Estate

     Since its  inception in 1962,  the Company is primarily  involved  with the
development and marketing of planned communities in Florida. The following table
sets forth certain  information about these communities and other land assets of
the  Company  as of  December  31,  2002.  For a detailed  description  of these
communities,  see  "Existing  Communities"  and  "Other  Properties".


                                       2

<PAGE>



<TABLE>
<CAPTION>
                              Existing Communities

                                                                    Platted                 Unsold Platted
                           Acreage    Initial            Estimated  Lots & Tracts            Lots & Tracts
                           In         Acquisition Year   Current    in Masterplan  Unimproved           Improved
                           Masterplan Year        Opened Population     (a)         (a) (b)             (a) (b)
                           ---------- ----        ------ ---------- -------------  ----------           ---------
<S>                        <C>        <C>         <C>    <C>        <C>            <C>                  <C>

* Deltona Lakes ..........  17,203    1962         1962    77,730     34,964           --                   1
* Marco Island(c) ........   7,844    1964         1965    45,140      8,657           --                   --
* Spring Hill(d) .........  17,240    1966         1967    81,930     32,909           --                   7
* Citrus Springs(e)  .....  15,954    1969         1970     7,360     33,783           --                  11(h)
* St. Augustine Shores....   1,985    1969         1970     7,890      3,130           --                   -(h)
  Sunny Hills (g).........  17,743    1968         1971     1,440     26,251         12,537               700
* Pine Ridge .............   9,994    1969         1972     4,580      4,833           --                   2
  Marion Oaks(e)(f)  .....  14,644    1969         1973     9,560     27,537          1,967(f)          1,246(f)(h)
* Seminole Woods .........   1,554    1969         1979       560        262           --                  --

  There is no unplatted acreage in any community

Joint Venture Community:

* Tierra Verde ...........     666    1976         1977     5,610      1,036           --                  --
                               ---    ----         ----     -----      -----         ------             -----

        Total ............ 104,827                        242,210    173,362         14,504             1,967
                           =======                        =======    =======         ======             =====


                                Other Properties

                                      Initial
                                      Acquisition
                                      Year                 Acres
Other Land Assets:
Other land adjacent to
 existing communities(h)..            Various              92
                                                           --

             Total.....                                    92
                                                           ==
 <FN>
---------------
 *             Development completed.

(a)  Excluded from these lots and tracts are  approximately  101 improved and 90
     unimproved  lots and tracts that are  required  for  drainage and cannot be
     sold, and  approximately  172 improved and 339  unimproved  lots and tracts
     that have  been  removed  from sale for  encumbrances  or  additional  site
     development,  which can only be sold when these issues are  resolved.  Also
     excluded are amenities  consisting of 2  administration  facility  sites, 2
     recreational  facility sites and 1 unimproved golf course sites, as well as
     approximately   259  tracts  reserved  for  community  usage  such  as  for
     greenbelts, buffer areas, church and school sites.

(b)  "Unimproved Unsold Platted Lots & Tracts" and "Improved Unsold Platted Lots
     & Tracts",  when added to lots and tracts  sold,  as described in "Existing
     Communities",  may not  equal  "Platted  Lots & Tracts in  Masterplan"  for
     various reasons, such as the subdivision of tracts into two or more parcels
     for sale to different purchasers.

(c)  Excludes permit denial areas; reflects seasonal population.

(d)  Includes the South Hernando U.S. # 19 Commerce Center.

(e)  Excludes 83 Citrus  Springs and 63 Marion  Oaks  improved  lots deeded to a
     purchaser of the Company's contracts receivable as exchange inventory to be
     available  for  customers  who  pre-pay  their   contracts   prior  to  the
     installation  of water service lines within one mile of their  homesite and
     who wish to commence  immediate  construction.  Unused exchanged  inventory
     will be  reconveyed  to the Company  when all  purchased  receivables  have
     matured and are paid in full.

(f)  Includes TimberWalk

(g)  Excludes  3,637 acres of unplatted  natural  preserve in Washington  County
     restricted  for  recreational,  open  space/park use which can only be sold
     subject to the underlying land use restrictions.

(h)  Not included are 570 improved lots deeded to a collateral trustee on behalf
     of a purchaser of the Company's contract receivables so they may be sold by
     the Company to create additional  receivables for the Company's replacement
     obligation. These lots are comprised of 482 lots in Citrus Springs, 87 lots
     in Marion Oaks and 1 lot in St. Augustine Shores.
</FN>

</TABLE>

                                        3

<PAGE>



  Land

     In  selecting  sites for its  communities,  the  Company  examined  various
demographic and economic factors,  the regulatory  climate,  the availability of
governmental services and medical,  educational and commercial  facilities,  and
estimated  development  costs.  Its communities are accessible to major highways
and Florida's major  metropolitan  areas and are near at least one large body of
water that can be used for  recreational  purposes.  Other  criteria used by the
Company  in site  selection  are the  suitability  of the  land for  natural  or
engineered drainage and the availability of a sufficient supply of potable water
to support the community's anticipated population.

     The master plans of the Company's communities have been designed to provide
for amenities  such as golf courses,  greenbelt  areas,  parks and  recreational
areas, as well as for the basic infrastructure,  such as roads and water, and in
selected  development  areas,  sewer  lines.  Sites are set  aside for  shopping
centers,  schools, houses of worship, medical centers and public facilities such
as libraries and fire stations.

     In its major planned communities, the Company offers for sale lot and house
"packages" situated on paved streets.  In other areas of these communities,  the
Company historically has sold single-family lots and multi-family and commercial
tracts on an  installment  basis.  Prior to 1991,  the  Company  sold such land,
subject to a future development obligation, accepting down payments as low as 5%
of the sales price,  with the balance  payable over periods ranging from 2 to 15
years,  depending on the payment plan selected.  When the applicable  rescission
period had expired and the Company had  received at least 10% of the  contracted
sales price, a substantial portion of the revenue and related profit on the sale
was recognized, with the remaining revenue and profit deferred and recognized as
land improvements, such as street paving, occurred.

     Due to various  factors,  since 1986,  the Company had  utilized a deed and
mortgage  format  for  effecting  certain  sales in its  communities.  Beginning
September 29, 1990, the Company changed its method of recognizing  land sales by
recording the sale of lots,  subject to a future development  obligation,  under
the deposit method; since January 1, 1991, no sale has been recognized until the
Company  receives at least 20% of the contracted  sales price;  and beginning in
the fourth quarter of 1991, the Company  limited the sale of lots to those which
front on a paved  street  and are ready for  immediate  building.  See Note 1 to
Consolidated Financial Statements.

     A portion of the  contract  purchase  price is  discounted  and  treated as
interest  income to be amortized over the life of the contract.  Interest income
is also earned in accordance  with the interest  rate stated in the  installment
land sales  contract  or  promissory  note.  The  Company  further  provides  an
allowance for contract  cancellations based on the historical  experience of the
Company for such cancellations.

     Substantially  all of the Company's  single-family lot and multi-family and
commercial tract sales have been made on an installment basis. See "Management's
Discussion and Analysis of Financial  Condition and Results of  Operations"  and
Note 2 to Consolidated Financial Statements.

Housing

     Historically, the Company has been involved in the design, construction and
marketing  of  single-family  homes and  multi-family  housing,  including  both
condominium apartment complexes and a vacation ownership  (timesharing) project.
Since  commencing  operations,  the Company has constructed and sold over 13,000
single-family   homes  and  over  4,300   multi-family   housing  units  in  its
communities,  with much of the actual construction  performed by subcontractors.
Revenues,  as well as related costs and expenses,  from  single-family  home and
vacation ownership sales are recorded at the time of closing.

     Single-Family Housing

     The Company's homes are designed to fit the needs and wants of a variety of
housing  customers:  models  range from 1,692  square feet to 2,895 square feet.
From the  smallest  home to the  largest,  these  homes  feature 2 car  garages,
cathedral  ceilings  over the main living  areas,  ceramic  tile  foyers,  plant
shelves,  large  fully  equipped  kitchens  (most with  breakfast  nooks or good
morning rooms),  fully enclosed laundry centers,  impressive  master suites with
walk-in closets and

                                        4
<PAGE>



large bedrooms. Model centers are open at Marion Oaks and in Sunny Hills. Houses
are sold with the lot  included in the sales  price;  however,  the Company also
offers  a  "build  on your  own  lot"  program  for  those  purchasers  who have
previously acquired a lot. The FeatherNest Housing Village in Marion Oaks, where
the  lot is  included  in the  price  of the  home,  is  owned  by  Conquistador
Development  Corporation  and  marketed by the Company.  Housing  sales are made
within the local market and through the Company's  independent  dealer  network.
See "Management's  Discussion and Analysis of Financial Condition and Results of
Operations".

The Company is directing a greater portion of its marketing  efforts to the sale
of lots with homes or lots with  compulsory  building  obligations to offset the
negative cash effects of installment land sales, where the purchase price of the
lot is paid over several years and there is no commitment to build.

     Multi-Family Housing

     The Company has designed,  constructed and sold more than 4,300 condominium
apartment  units at its  communities  in  buildings  ranging  from  garden-style
apartment  complexes  to luxury  high-rise  towers.  Every  condominium  complex
constructed  by the  Company  includes  at least one pool and patio  area;  many
feature tennis courts and other recreational amenities.

     The Company's limited inventory of multi-family  housing is at its vacation
ownership complex, The Surf Club, located on the Gulf of Mexico at Marco Island.
The bulk of its inventory at The Surf Club was sold prior to 1990.

  Marketing

     The  Company  has  historically  sold land and  housing on a  national  and
international basis through independent dealers in the United States, Canada and
overseas, as well as through Company-affiliated  salespeople. For the year ended
December 31, 2002,  sales by independent  dealers in the United States accounted
for substantially all new land sales contracts.

     Existing Communities

     Deltona Lakes

     Deltona  Lakes is located 26 miles  northeast of Orlando,  with its popular
tourist  attractions  of Disney  World and Sea  World,  and is  bordered  on the
northwest by Interstate 4. Opened in 1962,  Deltona Lakes is now an incorporated
city with a population of approximately  77,700. Over 30,000 lots and tracts and
over  4,500  single  and  multi-family  housing  units  have  been  sold at this
community.

     Recreational  amenities constructed by the Company include tennis courts, a
golf course and  country  club  (which  were sold in 1983),  and a  recreational
complex on the shores of Lake Monroe.  A 133-room motel,  an industrial  park, a
medical complex,  several shopping centers,  numerous houses of worship,  a fire
station, a public library and schools are located in the community.  The Company
has completed development of this community.

     Marco Island

     The Company's resort community of Marco Island is located 104 miles west of
Miami and approximately 17 miles south of Naples,  Florida.  Over 8,500 lots and
tracts and over 4,200 single and  multi-family  housing  units have been sold in
this  community.  More than 45,500 persons  reside at Marco Island,  including a
population  which more than triples during the winter season.  It is the largest
of Florida's Ten Thousand  Islands and is known for its  recreational  amenities
which,  in addition to its 3 1/2 mile white sand beach,  sport fishing,  sailing
and shelling,  include golf, tennis, swimming and other recreational activities.
The island  community has several major  shopping  centers,  banks and savings &
loan associations, and medical and professional centers.


                                        5

<PAGE>



     Since the community's  opening in January,  1965, the Company has built and
operated a yacht club and marina,  the Marco  Beach  Hotel & Villas,  and a golf
course and  country  club,  all of which have been sold.  The  Company  has also
constructed  and sold over  3,300  condominium  units on the island and The Surf
Club, a 44 unit vacation ownership  complex.  In 1990, the Company completed the
sale of substantially all of its remaining  vacation ownership weeks at The Surf
Club.

     Spring Hill

     Spring  Hill,  with an  estimated  population  of over 81,900 is located 45
miles north of Tampa-St.  Petersburg. Over 32,000 lots and tracts and over 4,000
single-family  homes  have  been  sold  in  this  community.   The  Company  has
constructed a recreation  complex,  a country club, and two golf courses,  which
have been sold. Several shopping centers and medical centers,  schools, numerous
houses of worship and fire  stations are located in the  community.  The Company
has completed the development of this community.

     Citrus Springs

     Citrus  Springs,  with an estimated  population of over 7,300 is located 28
miles southwest of Ocala and 25 miles from the Gulf of Mexico.  Over 30,000 lots
and tracts and over 700 single-family homes have been sold at this community.  A
golf  course and a  clubhouse  (sold in 1990) and a  community  center have been
completed by the Company.  Several churches,  schools and a convenience shopping
area are located in the  community.  In 1992,  most of the  Company's  remaining
inventory  at  this  community  was  sold  to  Citony  Development   Corporation
("Citony") for  approximately  $6,500,000.  The Company  provides  miscellaneous
administrative assistance and loan servicing to Citony for a fee.

     St. Augustine Shores

     St.  Augustine  Shores,  with a  population  estimated  to be over 7,800 is
located seven miles south of St.  Augustine,  between the Intracoastal  Waterway
and U.S.  Highway 1. In December  1997,  the Company  sold all of its  remaining
inventory at St. Augustine Shores to Swan Development  Corporation  ("Swan"). As
part of the purchase,  Swan assumed the liability  for  completing  improvements
within St. Augustine Shores.

     Certain common areas of the community,  such as parks and swale areas,  are
maintained  by the  St.  Augustine  Shores  Service  Corporation,  a  non-profit
corporation,  of which  all  property  owners  are  members.  Several  houses of
worship,  shopping  facilities,  a recreational  building and a golf and country
club are also located in the community.

     Sunny Hills

     Sunny Hills,  with a population of over 1,400 residents,  is located in the
Florida  Panhandle,  45 miles  north of the Gulf of Mexico and 35 miles north of
Panama City. Over 12,000 lots and tracts and 300  single-family  homes have been
sold at this community.  The community  includes a golf course and country club,
which  was sold by the  Company,  several  houses  of  worship  and  convenience
shopping.

     During  2002,  the Company  opened a four home model center in Sunny Hills.
The  Company's  homes are  designed  to fit the needs and wants of a variety  of
housing  customers:  models  range from 1,904 to 2,498 total  square  feet.  The
construction of these models is to test the market and future sales potential in
the  geographical  area.  Houses will be sold with the lot included in the sales
price,  however  the Company  also offers a "build on your own lot"  program for
those purchasers who have previously  acquired a lot. Housing sales are expected
to be made within the local market for the foreseable future.

     Revenues  in 2003 will be  generated  from the sale of land  inventory  and
housing sales.



                                        6

<PAGE>



     Pine Ridge

     Pine Ridge,  with a population of  approximately  4,600 is located 34 miles
southwest of Ocala.  The community's  facilities  include an equestrian club and
tennis  courts.  The  Company  sold over  3,500 lots and tracts and more than 53
single-family  homes in Pine Ridge prior to the sale of its remaining  inventory
in 1987.

     Marion Oaks

     Marion Oaks, with a population of over 9,500 residents, is located 12 miles
southwest of Ocala. Over 24,000 lots and tracts have been sold in the community.
The community includes playgrounds, two golf courses (both of which are owned by
third parties),  several  recreation  buildings,  community shopping centers and
several  houses of worship.  This  community is home to the Company's  corporate
headquarters.

     The Company's homes, constructed by an independent builder, are designed to
fit the needs and wants of a variety of  housing  customers:  models  range from
1,692 square feet to 2,895 square feet.  From the smallest  home to the largest,
these  homes  feature 2 car  garages,  cathedral  ceilings  over the main living
areas, ceramic tile foyers,  plant shelves,  large fully equipped kitchens (most
with breakfast nooks or good morning  rooms),  fully enclosed  laundry  centers,
impressive master suites with walk-in closets and large bedrooms. A model center
is open at  Marion  Oaks.  Houses  are sold with the lot  included  in the sales
price;  however,  the Company  also offers a "build on your own lot" program for
those  purchasers who have previously  acquired a lot. The  FeatherNest  Housing
Village in Marion Oaks,  where the lot is included in the price of the home,  is
owned by Conquistador  Development  Corporation and marketed by the Company. All
housing  sales are made  within  the local  market  and  through  the  Company's
independent dealer network. During 2002, the Company continued to construct spec
homes and these homes generally sold prior to completion of construction.

     Revenues in 2003 will be generated  from the sale of land  inventory,  from
housing  sales,  from the  recognition of deferred  revenue as land  development
proceeds,  from  collections  on  existing  contracts  receivable  and  from the
Company's real estate brokerage and title company subsidiary operations.

     Seminole Woods

     Seminole Woods,  with a population of over 550, is comprised of 1,554 acres
of property located 20 miles north of Orlando. The community's 262 single-family
lots,  each  with a  minimum  of five  acres,  have  been  sold and  development
completed.

     Tierra Verde

     Tierra  Verde,  with a population of over 5,600,  is a 666-acre  waterfront
subdivision  located eight miles south of St.  Petersburg.  It was developed and
marketed  pursuant to a 50% joint  venture,  which no longer  exists,  between a
wholly-owned  subsidiary  of the Company and an  unaffiliated  corporation.  The
community has been sold out and development completed.

     Other Land Assets

     The Company also owns 92 acres of land in Florida  adjacent to its existing
communities.

 Other Businesses

     The Company's title  insurance  subsidiary was established in 1978 in order
to reduce title  insurance,  legal and certain related closing costs incurred by
the Company in transferring title of its land and housing to its purchasers. The
subsidiary serves as an agent for TICOR Title Insurance  Company,  Chicago Title
Insurance  Company and other title  insurers.  The Company's  realty  subsidiary
performs real estate  brokerage and rental services at the Company's Marion Oaks
and Sunny Hills communities.

                                        7

<PAGE>



  Employees

     At  December  31,  2002,  the  Company  had 42  employees,  of whom 39 were
involved  in  executive,   administrative,   sales  and  community  development/
maintenance  capacities and 3 were involved with the title insurance subsidiary.
Certain  of  the   Company's   development   activities   are   carried  out  by
subcontractors  who separately employ additional  personnel.  For the most part,
the Company's  marketing  activities are carried out by independent  dealers and
marketing personnel employed by the Company and its subsidiaries.

  Competition

     The  Company  faces  competition  in the  sale of its lots  primarily  from
property owners in the Company's  communities  seeking to resell their land. The
Company is also facing competition, on a regional level, from other builders and
developers in the sale of single-family  housing.  Such competition is generally
based upon location, price, reputation,  quality of product and the existence of
commercial and recreational facilities and amenities.

  Regulation

     The  Company's  real estate  business is subject to  regulation  by various
local, state and federal agencies.  The communities are increasingly  subject to
substantial regulation as they are planned, designed and constructed, the nature
of such regulation extending to improvements,  zoning, building,  environmental,
health and related matters. Although the Company has been able to operate within
the  regulatory  environment  in the past,  there can be no assurance  that such
regulations  could not be made more restrictive and thereby adversely affect the
Company's operations.

     Community Development

     In Florida, as in many growth areas, local governments have sought to limit
or control population growth in their communities  through  restrictive  zoning,
density reduction,  the imposition of impact fees and more stringent development
requirements.  Although the Company has taken such factors into consideration in
its master  plans by  agreeing,  for example,  to make  improvements,  construct
public  facilities and dedicate  certain  property for public use, the increased
regulation  has  lengthened  the  development  process and added to  development
costs.

     The implementation of the Florida Growth Management Act of 1985 (the "Act")
precludes  the issuance of  development  orders or permits if public  facilities
such  as  transportation,  water  and  sewer  services  will  not  be  available
concurrent  with  development.  Development  orders have been  issued  for,  and
development  has  commenced  in,  the  Company's   existing   communities  (with
development  being  completed  in  certain  of  these  communities).  Thus,  the
Company's  communities  are  less  likely  to be  affected  by  the  new  growth
management policies than future communities. Any future communities developed by
the Company will be strongly impacted by new growth management  policies.  Since
the Act and its implications are  consistently  being  re-examined by the State,
together  with  local  governments  and  various  state and  local  governmental
agencies,  the Company  cannot  further  predict the timing or the effect of new
growth management policies,  but anticipates that such policies may increase the
Company's permitting and development costs.

     Environmental

     To varying  degrees,  certain  permits and  approvals  will be necessary to
complete the  development of Marion Oaks and Sunny Hills.  Despite the fact that
the Company has  obtained  substantially  all of the permits and  authorizations
necessary to proceed with its  development  work on communities  presently being
marketed,  additional  approvals  may be  required  to develop  certain  platted
properties to be marketed in the future. Although the Company cannot predict the
impact  of  such  requirements,  they  could  result  in  delays  and  increased
expenditures.   In  addition,   the  continued   effectiveness  of  permits  and
authorizations  already  granted  is  subject  to many  factors,  some of which,
including  changes in policies,  rules and regulations and their  interpretation
and application, are beyond the Company's control.

     The Company is aware of studies indicating that prolonged exposure to radon
gas may be hazardous to one's health.  Such studies further  indicate that radon
gas  is  apparently   associated  with  mining  and  earth  moving   activities,
particularly

                                        8

<PAGE>



in phosphate-bearing geological formations. Since phosphate mining has, over the
years,  constituted a significant  industry in Florida,  various state and local
governmental  agencies are in the process of  attempting to determine the nature
and extent of indoor radon gas intrusion  throughout the state.  Similar studies
undertaken  by the Company at its Citrus  Springs  community  indicate that less
than 1% of its property in that community may be affected by radon gas;  studies
conducted at the Company's  Marion Oaks  community  revealed no  indications  of
potential  indoor radon gas problems.  None of the other properties owned by the
Company are situated over geological  formations  which are suspected of causing
radon gas problems.  Consequently,  the existence of radon gas in Florida is not
expected  to  materially  affect the  business  or  financial  condition  of the
Company.

     The Company  owns and operates one above ground fuel storage tank at Marion
Oaks. The Florida Department of Environmental  Regulation ("DER") is responsible
not only for regulating this tank, but for developing and implementing plans and
programs to prevent the discharge of pollutants by the facility. The Company has
registered  this storage tank with the DER,  constructed  a  containment  device
around the above  ground  storage  tank and conducts  periodic  inspections  and
monitoring of the facility.  The Company  surveyed  this site,  which  exhibited
evidence of potential  soil  contamination  to the DER prior to the deadline for
acceptance into the Early Detection  Incentive ("EDI") Program.  The EDI Program
provides for the State to assume the financial  responsibility for any necessary
clean-up operations when suspected  contamination has been voluntarily  reported
by the  facility  owner and  accepted  into the program by the DER. The site has
been  inspected  and reviewed  under the EDI program and is in  compliance  with
current DER regulations.

     Marketing

     The Company is also subject to a number of statutes imposing  registration,
filing and disclosure  requirements  with respect to homesites and homes sold or
proposed to be sold to the public.  On the state level, the Company's land sales
activities  are subject to the  jurisdiction  of the  Division  of Florida  Land
Sales,   Condominiums   and  Mobile  Homes  (the   "Division")   which  requires
registration  of  subdividers  and  subdivided  land;  regulates the contents of
advertising  and other  promotional  material;  inspects the Company's  land and
development work; exercises jurisdiction over sales practices; and requires full
disclosure to prospective  purchasers of pertinent  information  relating to the
property offered for sale.

     Other Obligations

     As a result of the delays in completing  the land  improvements  to certain
property  sold in certain of its  Central  and North  Florida  communities,  the
Company fell behind in meeting its contractual  obligations to its customers. In
connection  with these delays,  in 1980 the Company entered into a Consent Order
with the Division  which  provided a program for notifying  affected  customers.
Since  1980,  the  Consent  Order  was  restated  and  amended   several  times,
culminating in the 1992 Deltona Consent Order.

     On December 30, 1997, the Division approved the formation of a Lot Exchange
Trust into which the Company conveyed  sufficient  exchange inventory to provide
exchanges  to  customers  with  undeveloped  lots.  Concurrently,  the  Division
released its lien on the Company's contracts receivable,  satisfied its mortgage
on the  Company's  property and approved a settlement  of all  remaining  issues
under  the 1992  Deltona  Consent  Order.  The 1992  Deltona  Consent  Order was
formally terminated on April 13, 1998.

     Currently,  the Company has an  obligation  to complete  land  improvements
prior to sale.  Prior to 1987,  the Company had an  obligation  to complete land
improvements upon deeding which, depending on contractual provisions,  typically
occurred within 90 to 120 days after the completion of payments by the customer.
The estimated cost to complete  improvements to lots and tracts from which sales
have been made at December  31,  2002 and 2001 was  approximately  $648,000  and
$783,000,  respectively.  The foregoing  estimates reflect the Company's current
development  plans at its  communities.  These estimates as of December 31, 2002
and 2001 include a liability to provide  title  insurance  and deeding  costs of
$110,000  and  $145,000,   respectively;   and  an  estimated   cost  of  street
maintenance,  prior to assumption of such obligations by local  governments,  of
$539,000  and  $638,000,  respectively;  all of which are  included  in deferred
revenue.



                                        9

<PAGE>



     The  Company's  homesite  installment  sales  are  subject  to the  Federal
Consumer Credit Protection  ("Truth-in-Lending")  Act. The Company's  activities
are subject to regulation by the  Interstate  Land Sales  Registration  Division
("ILSRD"), which administers the Interstate Land Sales Full Disclosure Act. That
Act requires that the Company file with ILSRD copies of applicable  materials on
file with the Division as to all properties registered;  certain properties must
be registered  directly  with ILSRD,  in addition to being  registered  with the
Division.

     The Company has either  complied  with  applicable  statutory  requirements
relative to the  properties  it is  offering or has relied on various  statutory
exemptions  which have relieved the Company from such  registration,  filing and
disclosure requirements. If these exemptions do not continue to remain available
to the  Company,  compliance  with  such  statutes  may  result in delays in the
offering of the Company's properties to the public.

     The Company's land sales activities are further subject to the jurisdiction
of the laws of various states in which the Company's  properties are offered for
sale.  Florida and other  jurisdictions  in which the Company's  properties  are
offered for sale have  strengthened,  or may  strengthen,  their  regulation  of
subdividers and subdivided  lands in order to provide further  assurances to the
public. The Company has taken appropriate steps to modify its marketing programs
and registration applications in the face of such increased regulation,  and has
incurred  costs and delays in the  marketing  of certain  of its  properties  in
certain  states and  countries.  For example,  the Company has complied with the
regulations of certain states which require that the Company sell its properties
to  residents  of those  states  pursuant  to a deed and  mortgage  transaction,
regardless of the amount of the down payment. The Company intends to continue to
monitor any changes in statutes or  regulations  affecting,  or  anticipated  to
affect,  the  sale of its  properties  and  intends  to take all  necessary  and
reasonable  action to assure  that its  properties  and its  proposed  marketing
programs are in compliance with such regulations,  but there can be no assurance
that the Company will be able to timely  comply with all  regulatory  changes in
all  jurisdictions in which the Company's  properties are presently  offered for
sale to the public.

     Real estate  salespersons must, absent exemptions which may be available to
employees of the property owner,  be licensed in the  jurisdiction in which they
perform their activities. Real estate brokerage companies in Florida, as well as
their  brokers and  salespersons,  must be  licensed by the Florida  Real Estate
Commission.

     Miscellaneous

     Various subsidiaries and divisions of the Company are subject to regulation
by local,  state and federal agencies.  Such regulation extends to the licensing
of operations,  operating areas and personnel;  the  establishment of safety and
service standards; and various other matters.

                                       10

<PAGE>



ITEM 3

                                LEGAL PROCEEDINGS


     From  time  to  time  the   Company   may  become  a  party  to  legal  and
administrative  proceedings  arising  in the  ordinary  course of  business.  At
present,  the Company is not a party to any legal or  administrative  proceeding
which  might  have a  material  adverse  effect  on the  business  or  financial
condition of the Company.



                                       11

<PAGE>



ITEM 4



               SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


The annual meeting of the stockholders of the Company was held December 10, 2002
at the  Woodlands  Pavilion,  312 Marion Oaks  Boulevard,  Marion Oaks,  Florida
34473.

Holders  of  13,544,277  shares  of  Common  Stock  (holders  as of the close of
business  on the record  date,  November  1, 2002) were  entitled to vote at the
meeting.  Holders of 10,983,990 shares of Common Stock were present in person or
were represented by proxy constituting eighty-one (81%) of the total outstanding
shares. They cast their votes as set forth below:

<TABLE>
<CAPTION>

                                                        Votes cast
                                                        ----------

                                                                                Abstentions and
               Item                 For          Against        Withheld        Broker non-votes
----------------------------        -----------  ------------   --------------  ----------------
<S>                                 <C>          <C>            <C>             <C>

(I) re-elect directors,
Antony Gram (Chairman)              10,746,196   237,794              0                0
Christel DeWilde                    10,746,584   237,406              0                0
George W. Fischer                   10,746,064   237,926              0                0
Rudy Gram                           10,747,276   263,714              0                0
Thomas B. McNeill                   10,746,984   237,006              0                0

(ii)select James Moore & Co.,
PL, as the Company's 2002
auditors, subject to the discretion
of the Board of Directors.          10,738,761    92,252        152,977                0
</TABLE>

That  being all of the  scheduled  business  of the  meeting,  the  meeting  was
adjourned by voice vote.

See ITEM 11, contained herein, for additional information concerning the present
directors of the Company.




                                       12

<PAGE>



ITEM 5


                    PRICE RANGE OF COMMON STOCK AND DIVIDENDS

     The Company's Common Stock is quoted on the Over-The-Counter Bulletin Board
("OTCBB")  under the symbol  DLTA.  According to the  over-the-counter  bulletin
board,  the low and high bid prices for the Company's  stock,  during the first,
second, third and fourth quarters of 2002 and 2001 were as follows:

                                    Low Bid       High Bid
                                    -------       --------

            1st quarter 2002        $ 0.25        $ 0.39
            2nd quarter 2002        $ 0.29        $ 0.35
            3rd quarter 2002        $ 0.30        $ 0.35
            4th quarter 2002        $ 0.31        $ 0.38

            1st quarter 2001        $ 0.16        $ 0.56
            2nd quarter 2001        $ 0.25        $ 0.45
            3rd quarter 2001        $ 0.25        $ 0.46
            4th quarter 2001        $ 0.25        $ 0.37


     As of February 14, 2003, there were  approximately  1,748 record holders of
the Company's  Common  Stock,  excluding  shareholders  whose shares are held by
banks and brokerages.  The Company has not privately purchased or sold any stock
since September 30, 2001.

     The  Company  has never  paid  cash  dividends  on its  Common  Stock.  The
Company's loan agreements contain certain  restrictions which currently prohibit
the Company from paying dividends on its Common Stock.



                                       13

<PAGE>



ITEM 6


                   SELECTED CONSOLIDATED FINANCIAL INFORMATION


     The following table summarizes selected consolidated  financial information
and should be read in conjunction with the Consolidated Financial Statements and
the notes  thereto.  See  "Management's  Discussion  and  Analysis of  Financial
Condition and Results of Operations".


<TABLE>
<CAPTION>

                       Consolidated Income Statement Data
                     (in thousands except per share amounts)

                                                                                Year Ending
                                                ----------------------------------------------------------------------------
                                                December 31,    December 31,    December 31,    December 31,    December 31,
                                                    2002           2001             2000            1999            1998
                                                ------------    ------------    ------------    ------------    ------------
<S>                                             <C>             <C>             <C>             <C>             <C>

Revenues ....................................   $     10,682    $     14,569    $     10,082    $      9,132    $      6,487
Costs and expenses ..........................         12,275          14,217          11,124           9,499           9,078
                                                ------------    ------------    ------------    ------------    ------------
Income (Loss) from continuing
 operations before income taxes .............         (1,593)            352          (1,042)           (367)         (2,591)

Provision for income taxes ..................            -0-             -0-             -0-             -0-             -0-
                                                ------------    ------------    ------------    ------------    ------------
Net income (loss) applicable
  to common stock ...........................   $     (1,593)   $        352    $     (1,042)   $       (367)   $     (2,591)
                                                ============    ============    ============    ============    ============
Basic earnings per share amounts:
Net income (loss) ...........................   $       (.12)   $        .03    $       (.08)   $       (.03)   $       (.19)
                                                ============    ============    ============    ============    ============
Weighted average common shares
 outstanding ................................   13,544,277      13,544,277      13,544,277      13,544,277      13,544,277
                                                ============    ============    ============    ============    ============


                         Consolidated Balance Sheet Data
                                 (in thousands)

                                                ----------------------------------------------------------------------------
                                                December 31,    December 31,    December 31,    December 31,    December 31,
                                                    2002           2001             2000            1999            1998
                                                ------------    ------------    ------------    ------------    ------------


Total assets ................................   $     12,744    $     13,430    $     13,968    $     11,913    $     11,915
                                                ============    ============    ============    ============    ============

Liabilities .................................   $     22,576    $     21,747          22,807          20,117    $     20,175
Stockholders' equity(deficiency) ............         (9,832)         (8,317)         (8,839)         (8,204)         (8,260)
                                                ------------    ------------    ------------    ------------    ------------
Total liabilities and stockholders'
 equity (deficiency) ........................   $     12,744    $     13,430          13,968    $     11,913    $     11,915
                                                ============    ============    ============    ============    ============
</TABLE>


                                       14

<PAGE>



ITEM 7

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Since 1992, in order to meet its working capital requirements,  the Company
has been  dependent  on loans and  advances  from Selex  International  B.V.,  a
Netherlands corporation ("Selex"), Yasawa Holdings, N.V., a Netherlands Antilles
Corporation ("Yasawa"), Swan Development Corporation ("Swan"), Scafholding B.V.,
a Netherlands corporation ("Scafholding"), and other related parties.

     Scafholding agreed to purchase  contracts  receivable at 65% of face value,
with recourse, to meet the Company's ongoing capital requirements.  During 1998,
Scafholding purchased approximately  $1,396,000 in contracts receivable from the
Company,  and as of December 31, 1999,  the Company had  satisfied its principal
debt obligation to Scafholding.

     As of December  31,  2002,  the  Company's  outstanding  debt to Yasawa was
$3,000,000  secured by a first lien on the Company's  receivables and a mortgage
on all of the  Company's  properties.  The terms of repayment of the Yasawa loan
provide for  $100,000  of monthly  payments of  principal  in cash or  contracts
receivable at 100% of face value, with recourse.  Interest accrues at 6% for all
2000, at the prime rate adjusted  semi-annually to the then current rate ranging
from 9.5% to 4.75% for 2001 and 2002, and 4.25%  effective  January 1, 2003. The
Company  satisfied its principal  obligation to  Scafholding  as of December 31,
1999.  Yasawa and  Scafholding  have not required  the Company to make  interest
payments  since  September 1, 1998. As of December 31, 2002, the total amount of
accrued  interest on the Yasawa and  Scafholding  obligations  is  approximately
$1,629,000, which is included in accrued expenses.

     During 2002,  Swan loaned the Company an  additional  $3,849,000 so that it
was able to meet its working capital requirements. The Company's debt to Swan as
of December 31, 2002, of $8,282,000 is secured by a second lien on the Company's
receivables.  Swan has  agreed to  accept  contracts  receivable  at 90% of face
value,  with  recourse,  in payment of the  Company's  obligation  to Swan.  The
Company  recognizes a loss on the transfer of contracts at less than face value.
The  amount  of each  monthly  payment  will be  dependent  upon the  amount  of
contracts receivable in the Company's portfolio,  excluding contracts receivable
held as  collateral  for prior  receivable  sales.  Each  month,  the Company is
required  to  transfer  to  Swan , as  debt  repayment,  all  current  contracts
receivable  in the  Company's  portfolio  in excess of  $500,000.  Swan does not
charge  interest  for the first six months  after an  advance;  thereafter,  the
interest was 6% for 2000, at the prime rate adjusted  semi-annually  to the then
current rate  ranging  from 9.5% to 4.75% for 2001 and 2002 and 4.25%  effective
January 1, 2003. As of December 31, 2002, the accrued and unpaid interest on the
Swan notes of approximately $837,000 is included in accrued interest.

     The Company receives preferential cost of borrowings from related companies
as described above. For 2002 and 2001, the Company  recognized  interest expense
and a  contribution  to  additional  paid in capital for the first six months of
each  loan  advance  from  Swan,  computed  at the  prime  rate,  the  Company's
incremental  borrowing  rate.  Interest  is not paid to Swan for the  first  six
months of each advance, the interest expense that is recognized is recorded as a
capital  contribution  increase to capital surplus in the amounts of $78,000 and
$170,000,  for 2002 and 2001,  respectively.  For 2000,  the Company  recognized
interest  expense on all  outstanding  debt balances to Yasawa,  Scafholding and
Swan at 8%, the Company's  incremental  borrowing  rate. The difference  between
interest  calculated  at 8% and  the  amount  accrued  under  the  terms  of the
respective notes was recorded as a capital  contribution  increase to additional
paid in capital of $407,000.

Results of Operations

  Years ended December 31, 2002 and December 31, 2001

     Revenues

     Total revenues were $10,682,000 for 2002 compared to $14,569,000 for 2001.



                                       15

<PAGE>



     Gross land sales were  $6,591,000 for 2002 versus  $9,960,000 for 2001. Net
land sales (gross land sales less estimated uncollectible  installment sales and
contract  valuation  discount)  decreased  to  $4,530,000  for 2002  compared to
$8,113,000  for 2001. The decrease is attributed to a reduction in land sales in
2002,  when  compared to the prior year,  and an increase in the  allowance  for
uncollectible  sales of approximately  $500,000,  when compared to the allowance
percentage for 2001.

     For the years  2002 and 2001,  the  Company  entered  into  $6,325,300  and
$10,258,000,   respectively,   of  new  retail  land  sales  contracts,  net  of
cancellations,  and  including  deposit  sales on which the Company has received
less than 20% of the sales price.  The Company  reported a backlog of $2,241,000
and  $3,785,000  of  unrecognized  sales  as of  December  31,  2002  and  2001,
respectively.  The backlog of  unrecognized  contracts  are excluded from retail
land sales until the  applicable  rescission  period has expired and the Company
has received  payments  totaling 20% of the contract sales price.  See Note 1 to
the Consolidated Financial Statements.

     Advertising  and marketing  costs are charges to operations  when incurred.
Sales  commissions  are recognized as a liability  when the related  contract is
accepted or as a prepaid asset when paid and charged to expense when the sale is
recognized as revenue.

     Housing  revenues are recognized upon  completion of  construction  and the
passage  of  title.  Housing  revenues  were  $4,768,000  for 2002  compared  to
$4,975,000 for 2001.  Although housing revenues were flat when comparing 2002 to
2001, the Company's expanded promotional programs for housing has contributed to
an expanded housing backlog.

     Improvement  revenues  result from  recognition  of revenues  deferred from
prior period sales. Improvement revenues totaled $261,000 in 2002 as compared to
$124,000  in 2001.  Recognition  occurs  as  development  work  proceeds  on the
previously sold property or customers are exchanged to a developed lot.

     Interest  income was  $355,000  for 2002 as compared to $377,000  for 2001.
This decrease is the result of lower  contracts  receivable  balances  resulting
from the Company's repayment of debt.

     Other revenues were $768,000 for 2002 compared to $802,000 for 2001.  Other
revenues were generated  principally by the Company's  title  insurance and real
estate brokerage subsidiaries.

     Costs and Expenses

     Costs and expenses were  $12,275,000  for 2002 compared to $14,217,000  for
2001. Cost of sales totaled $5,821,000 for 2002 compared to $6,216,000 for 2001.
The decrease is a result of lower sales by the Company's independent dealers.

     Commissions,  advertising and other selling expenses totaled $3,368,000 for
2002 compared to $4,690,000 for 2001. Advertising was $144,000 for 2002 compared
to $194,000 in 2001.  Other selling expenses were $1,062,000 in 2002 as compared
to $1,207,000 in 2001.

     General and administrative  expenses were $1,615,000 in 2002 as compared to
$1,431,000 in 2001. General and administrative  expenses increased primarily due
to increased costs of public  liability  insurance costs for builder / developer
companies.

     Real  estate tax  expense  was  $794,000 in 2002 as compared to $702,000 in
2001.

     Interest expense was $460,000 in 2002 and $724,000 in 2001. The decrease in
interest  expense is the result of lower cost of funds from Swan,  an affiliated
company.  Interest in the amount of $54,000 and $164,000 was capitalized in 2002
and 2001, respectively.

     Net Income (Loss)

     The Company  reported a net loss of $(1,593,000) for 2002 compared to a net
income of $352,000 for 2001.



                                       16

<PAGE>



Years ended December 31, 2001 and December 31, 2000

     Revenues

     Total revenues were $14,569,000 for 2001 compared to $10,082,000 for 2000.

     Gross land sales were  $9,960,000 for 2001 versus  $6,804,000 for 2000. Net
land sales (gross land sales less estimated uncollectible  installment sales and
contract  valuation  discount)  increased  to  $8,113,000  for 2001  compared to
$5,361,000  for  2000.  The  increase  reflects  higher  sales by the  Company's
independent dealers and a lower estimate of uncollectible installment sales .

     New retail land sales contracts  entered into,  including  deposit sales on
which  the  Company  has  received  less  than 20% of the  sales  price,  net of
cancellations,  for the years ended December 31, 2001 and December 31, 2000 were
$10,258,000  and  $9,535,000,   respectively.  The  Company  had  a  backlog  of
$3,785,000  and  $4,413,000  in  unrecognized  sales as of December 31, 2001 and
2000,  respectively.  Such contracts are not included in retail land sales until
the  applicable  rescission  period has expired  and the  Company  has  received
payments  totaling  20%  of  the  contract  sales  price.  See  Note  1  to  the
Consolidated Financial Statements.

     Advertising  and marketing  costs are charges to operations  when incurred.
Sales  commissions  are recognized as a liability  when the related  contract is
accepted or as a prepaid asset when paid and charged to expense when the sale is
recognized as revenue.

     Housing revenues are not recognized from housing sales until the completion
of construction  and the passage of title.  Housing revenues were $4,975,000 for
2001  compared to  $3,231,000  for 2000.  The  increase  in housing  revenues is
directly related to the Company's expanded promotional programs for housing.

     Improvement  revenues  result from  recognition  of revenues  deferred from
prior period  sales.  Recognition  occurs as  development  work  proceeds on the
previously  sold  property  or  customers  are  exchanged  to a  developed  lot.
Improvement  revenues totaled $124,000 for 2001 as compared to $276,000 in 2000.
The decrease is a result of lower expenditures on development work.

     Interest  income was  $377,000  for 2001 as compared to $440,000  for 2000.
This decrease is the result of lower  contracts  receivable  balances  resulting
from the Company's repayment of debt to Swan and Yasawa.

     Gain on recovery of bad debt was $178,000 for 2001. The Company collected a
large, previously charged-off contract receivable in 2001.

     Other revenues were $802,000 for 2001 compared to $774,000 for 2000.  Other
revenues were generated  principally by the Company's  title  insurance and real
estate brokerage subsidiaries.

     Costs and Expenses

     Costs and expenses were  $14,217,000  for 2001 compared to $11,124,000  for
2000. Cost of sales totaled $6,216,000 for 2001 compared to $4,350,000 for 2000.
The increase reflects higher sales by the Company's independent dealers.

     Commissions,  advertising and other selling expenses totaled $4,690,000 for
2001 compared to $3,455,000 for 2000. Advertising was $194,000 for 2001 compared
to $351,000 for 2000. Other selling expenses were $1,207,000 in 2001 compared to
$1,170,000 in 2000.

     General and  administrative  expenses  were  $1,431,000 in 2001 compared to
$1,362,000 in 2000. General and administrative  expenses increased primarily due
to there being increased overhead.


                                       17

<PAGE>



     Real estate tax expense was $702,000 in 2001 compared to $598,000 in 2000.

     Interest expense was $724,000 in 2001 and $894,000 in 2000. The decrease in
interest expense is the result of a decrease in the interest rate on outstanding
debt offset somewhat by higher total outstanding debt. Interest in the amount of
$164,000 and $99,000 was capitalized in 2001 and 2000, respectively.

     Net Income (Loss)

     The Company reported a net income of $352,000 for 2001 as compared to a net
loss of $(1,042,000) for 2000.

Regulatory Developments which may affect Future Operations

     In Florida, as in many growth areas, local governments have sought to limit
or control population growth in their communities  through  restrictive  zoning,
density reduction,  the imposition of impact fees and more stringent development
requirements.  Although the Company has taken such factors into consideration in
its master  plans by  agreeing,  for example,  to make  improvements,  construct
public  facilities and dedicate  certain  property for public use, the increased
regulation  has  lengthened  the  development  process and added to  development
costs.

     The implementation of the Florida Growth Management Act of 1985 (the "Act")
precludes  the issuance of  development  orders or permits if public  facilities
such  as  transportation,  water  and  sewer  services  will  not  be  available
concurrent  with  development.  Development  orders have been  issued  for,  and
development  has  commenced  in,  the  Company's   existing   communities  (with
development  being  completed  in  certain  of  these  communities).  Thus,  the
Company's  communities  are  less  likely  to be  affected  by  the  new  growth
management policies than future communities. Any future communities developed by
the Company will be strongly impacted by new growth management  policies.  Since
the Act and its implications are  consistently  being  re-examined by the State,
together  with  local  governments  and  various  state and  local  governmental
agencies,  the Company  cannot  further  predict the timing or the effect of new
growth management policies,  but anticipates that such policies may increase the
Company's permitting and development costs.

     The Company's land sales activities are further subject to the jurisdiction
of the laws of various states in which the Company's  properties are offered for
sale.  In  addition,  Florida  and other  jurisdictions  in which the  Company's
properties  are offered for sale have  strengthened,  or may  strengthen,  their
regulation  of  subdividers  and  subdivided  lands in order to provide  further
assurances to the public. The Company has attempted to take appropriate steps to
modify its marketing programs and registration  applications in the face of such
increased  regulation,  but has  incurred  additional  costs  and  delays in the
marketing of certain of its  properties  in certain  states and  countries.  For
example,  the Company has complied with the  regulations of certain states which
require  that the Company  sell its  properties  to  residents  of those  states
pursuant to a deed and  mortgage  transaction,  regardless  of the amount of the
down payment. The Company intends to continue to monitor any changes in statutes
or regulations  affecting,  or anticipated to affect, the sale of its properties
and  intends to take all  necessary  and  reasonable  action to assure  that its
properties  and its  proposed  marketing  programs are in  compliance  with such
regulations,  but there can be no  assurance  that the  Company  will be able to
timely  comply with all  regulatory  changes in all  jurisdictions  in which the
Company's properties are presently offered for sale to the public.

Liquidity and Capital Resources

     Mortgages and Similar Debt

     As of December  31,  2002,  the  Company's  outstanding  debt to Yasawa was
$3,000,000  secured by a first lien on the Company's  receivables and a mortgage
on all of the  Company's  properties.  The terms of repayment of the Yasawa loan
provide for  $100,000  of monthly  payments of  principal  in cash or  contracts
receivable at 100% of face value, with recourse.  Interest accrues at 6% for all
2000, at the prime rate adjusted  semi-annually to the then current rate ranging
from 9.5% to 4.75% for 2001 and 2002, and 4.25%  effective  January 1, 2003. The
Company  satisfied its principal  obligation to  Scafholding  as of December 31,
1999.  Yasawa and  Scafholding  have not required  the Company to make  interest
payments  since  September 1, 1998. As of December 31, 2002, the total amount of
accrued  interest on the Yasawa and  Scafholding  obligations  is  approximately
$1,629,000, which is included in accrued expenses.

                                       18

<PAGE>

     During 2002,  Swan loaned the Company an  additional  $3,849,000 so that it
was able to meet its working capital requirements. The Company's debt to Swan as
of December 31, 2002, of $8,282,000 is secured by a second lien on the Company's
receivables.  Swan has  agreed to  accept  contracts  receivable  at 90% of face
value,  with  recourse,  in payment of the  Company's  obligation  to Swan.  The
Company  recognizes a loss on the transfer of contracts at less than face value.
The  amount  of each  monthly  payment  will be  dependent  upon the  amount  of
contracts receivable in the Company's portfolio,  excluding contracts receivable
held as  collateral  for prior  receivable  sales.  Each  month,  the Company is
required  to  transfer  to  Swan , as  debt  repayment,  all  current  contracts
receivable  in the  Company's  portfolio  in excess of  $500,000.  Swan does not
charge  interest  for the first six months  after an  advance;  thereafter,  the
interest was 6% for 2000, at the prime rate adjusted  semi-annually  to the then
current rate  ranging  from 9.5% to 4.75% for 2001 and 2002 and 4.25%  effective
January 1, 2003. As of December 31, 2002, the accrued and unpaid interest on the
Swan notes of approximately $837,000 is included in accrued interest.

     The Company  recognizes  the  preferential  cost of borrowing from Swan and
other  related  parties  by  recording  the  difference  between  the  Company's
incremental  borrowing rate and the contractual  obligation rate as (i) interest
expense  and  (ii) a  capital  contribution.  The  Company  recorded  a  capital
contribution  of  $78,000,  $170,000  and  $407,000  in  2002,  2001  and  2000,
respectively, due to the preferential cost of funds from affiliated companies.

     The  following  table  presents  information  with respect to mortgages and
similar debt (in thousands):

                                                        Years Ended
                                                        -----------
                                               December 31,      December 31,
                                                  2002              2001
                                               ------------      ------------

     Mortgage notes payable- Yasawa........    $ 3,000           $ 4,200
     Other loans - Swan....................      8,282             5,929
     Other Loans...........................         95               148
                                               -------           -------
       Total Mortgages and similar debt....    $11,377           $10,277
                                               -------           -------

     Substantially all of the Company's assets are pledged as collateral for its
various  obligations.  The Company's  outstanding debt to Yasawa is secured by a
first lien on the Company's  receivables  and a mortgage on all of the Company's
property; and the Company's outstanding debt to Swan is secured by a second lien
on the Company's receivables.

     Contracts and Mortgages Receivable Sales and Transfers

     Approximately $20 million of outstanding contracts receivable had been sold
or transferred by the Company subject to recourse obligations as of December 31,
2002.  There are no funds on  deposit  with  purchasers  of the  receivables  as
collateral for the recourse  obligations.  A provision has been  established for
the Company's  obligation under the recourse  provisions of which  approximately
$3,088,000 remains at December 31, 2002.

     The  Company  has an  agreement  with  Scafholding  and Citony  Development
Corporation  for the  servicing  of their  receivable  portfolios.  The  Company
received  approximately $72,000 and $73,000 in 2002 and 2001,  respectively,  in
revenue  pursuant to these  agreements.  The Company also has an agreement  with
Swan for the servicing of its receivable  portfolio;  however,  the Company does
not receive servicing fees from Swan.

     In the future,  if the Company elects to do so, Yasawa and Scafholding have
agreed to purchase contracts receivable at 65% of face value, with recourse. The
Company has an agreement with Swan whereby Swan may loan the Company funds to be
repaid with contracts receivable at 90% of face value, with recourse.

  Other Obligations

     Currently,  the Company has an  obligation  to complete  land  improvements
prior to sale.  Prior to 1991,  the Company had an  obligation  to complete land
improvements upon deeding which, depending on contractual provisions,  typically
occured  within 90 to 120 days after the completion of payments by the customer.
The estimated cost to complete  improvements to lots and tracts from which sales
have been made at December  31,  2002 and 2001 was  approximately  $648,000  and
$783,000,  respectively.  The foregoing  estimates reflect the Company's current
development plans at its

                                       19

<PAGE>



communities.  These  estimates  as of  December  31,  2002  and 2001  include  a
liability to provide title insurance and deeding costs of $110,000 and $145,000,
respectively;  and an estimated cost of street maintenance,  prior to assumption
of  such   obligations   by  local   governments,   of  $539,000  and  $638,000,
respectively; all of which are included in deferred revenue.

  Liquidity

     Retail land sales have  traditionally  produced  negative  cash flow at the
point of sale.  This is a result of (i)  regulatory  requirements  to sell fully
developed lots,  (ii) the payment of marketing and selling  expenses prior to or
shortly  after the point of sale,  and (iii) the  collection of payments on sold
lots  over  2-10  years.  In an effort to  offset  these  cash flow  effects  of
installment  land  sales,  the  Company is  directing  a greater  portion of its
marketing  efforts to the sale of lots with homes.  The Company is now  offering
lots for sale in compulsory  building  areas where a lot purchaser must complete
payments for the lot and construct a home within a limited period of time.

     The Company is dependent  on its ability to sell or  otherwise  finance its
contracts   receivable   and/or   secure  other   financing  to  meet  its  cash
requirements.  Since 1992,  the Company has been  largely  dependent  on Yasawa,
Scafholding  and Swan and related  parties for the financing of its  operations.
Although  Scafholding has purchased contracts  receivables at the rate of 65% of
face value, with recourse,  and Swan has loaned the Company  additional funds to
be paid back with  contracts  receivable at the rate of 90% of face value,  with
recourse,  there can be no  guarantee  that the Company will be able to generate
sufficient  receivables to obtain  sufficient  financing in the future,  nor can
there be any guarantee that Yasawa, Scafholding, Swan and other related parties,
or unrelated third party lenders will continue to make loans to the Company.


                                       20

<PAGE>



ITEM 7A

                           DISCLOSURE AND MARKET RISK

     The estimated fair values of financial  instruments have been determined by
the  Company  using  available  market  information  and  appropriate  valuation
methods.  Considerable  judgment  is  required  in  interpreting  market data to
develop the estimates of fair value. Accordingly, the estimates presented herein
are not necessarily indicative of the amounts the Company could realize or incur
in a current market transaction.  The use of different market assumptions and/or
estimation  methods  may have a  material  effect on the  estimated  fair  value
amounts.   The  Company's  financial   instruments  consist  of  cash  and  cash
equivalents,  contracts and mortgages  receivable  and similar debt.  The stated
amount of cash and cash equivalents is a reasonable  estimate of fair value. The
fair value of  contracts  and  mortgages  receivable  and similar  debt has been
estimated using interest rates currently available for similar terms. The stated
value of the  contracts and mortgages  receivable  and similar debt  approximate
fair value.

     Management  does not use  derivatives  to  manage  its  exposure  to market
interest rate risk.

     The  Company  is  exposed  to market  interest  rate risk on its  contracts
receivable.  Contracts  receivable consists of fixed interest rate paper with an
initial  collection term of ten years.  The stated interest rate is below market
interest rates for similar paper.  The Company  periodically  adjusts the stated
rate on new  contracts  in response to changes in the market  interest  rate and
other  competitive  sales  factors.  The Company  discounts the contracts  notes
receivable to current  market rates.  At December 31, 2002,  the average  stated
rate for contracts  receivable  was 9.3%,  and the discount rate used was 13.5%.
Under its credit  agreement,  the Company is  required  to  transfer  all excess
contracts receivable as defined to a creditor for debt reduction.  The Company's
outstanding  contracts  receivable,  net of allowance for  cancellations  before
valuation  adjustment  was  $1,074,000  at December  31, 2002.  The  unamortized
valuation  adjustment  at December 31, 2002 was $148,000.  Management  estimates
that a 1% increase  in the market  interest  rate  equals a  valuation  discount
increase of approximately $30,000, which would reduce net income.

     At December 31, 2002,  interest rates on contracts  receivable  outstanding
ranged  from 5% to 12% per annum  (weighted  average  approximately  9.3%).  The
approximate principal maturities of contracts receivable were:

                                                 December 31, 2002
                                                 -----------------
                                                  (in thousands)

        2003..............................       $      219
        2004..............................              219
        2005..............................              218
        2006..............................              186
        2007..............................              126
        2008 and thereafter...............              310
                                                 ----------
              Total.......................       $    1,278
                                                 ==========

     If a regularly scheduled payment on a contract remains unpaid 30 days after
its due date,  the  contract  is  considered  delinquent.  Aggregate  delinquent
contracts  receivable  at year  end  2002  and  2001  approximate  $408,000  and
$713,000, respectively.

     Information  with respect to interest rates and average contract lives used
in valuing new contracts receivable generated from sales follows:

                                     Average      Average Stated     Discounted
        Years ended                   Term        Interest Rate       to Yield
        -----------                   ----        -------------       --------

        December 31, 2002.........   113 months        8.7%             13.5%
        December 31, 2001.........   111 months        8.5%             13.5%
        December 31, 2000.........    98 months        7.8%             13.5%

                                       21

<PAGE>



     The Company also has exposure to market  interest rate risk on  outstanding
debt. As of December 31, 2002, the Company has outstanding debt of approximately
$11,377,000.  The stated interest rate, which is adjusted semi-annually,  is the
prime  rate,  which was 4.25% at January 1, 2003.  The  outstanding  debt has no
standard  repayment  term,  it is  dependant on the  Company's  sales and future
contracts  receivable.  Under the assumption that additional  borrowing would be
approximate to any debt repayment,  the Company  estimates that a 1% increase in
the market interest rate equals an increase in interest expense of approximately
$114,000, which would reduce net income.



                                       22

<PAGE>



ITEM 8


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                              AND SUPPLEMENTAL DATA

                                                                          Page
                                                                          ----

Independent Auditors' Report...................................            24

Consolidated Balance Sheets as of December 31, 2002 and
 December 31, 2001.............................................            25

Statements of Consolidated Operations for each of the
 years ended December 31, 2002, December 31, 2001 and
 December 31, 2000.............................................            27

Statements of Consolidated Stockholders' Equity
 (Deficit) for each of the years ended December 31, 2002,
 December 31, 2001 and December 31, 2000.......................            28

Statements of Consolidated Cash Flows for each of the years
 ended December 31, 2002, December 31, 2001 and
 December 31, 2000.............................................            29

Notes to Consolidated Financial Statements.....................            31








                                       23

<PAGE>



                          INDEPENDENT AUDITORS' REPORT



TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
THE DELTONA CORPORATION:


     We have audited the consolidated  balance sheets of The Deltona Corporation
and  subsidiaries  (the  "Company")  as of  December  31,  2002 and 2001 and the
related statements of consolidated operations, consolidated stockholders' equity
(deficit)  and  consolidated  cash flows for the years ended  December 31, 2002,
2001 and 2000. These consolidated financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
consolidated 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,  such consolidated  financial  statements referred to above
present fairly, in all material respects,  the financial position of the Company
at December  31, 2002 and 2001 and the  results of its  operations  and its cash
flows for the years ended  December 31, 2002,  2001 and 2000 in conformity  with
accounting principles generally accepted in the United States of America.

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the  consolidated   financial  statements,   the  Company  incurred  substantial
operating losses, has continued to experience  problems with liquidity and has a
stockholders'  deficit at December 31, 2002.  These  matters  raise  substantial
doubt about the Company's  ability to continue as a going concern.  Management's
plans  concerning  these  matters  are  described  in Note 1.  The  consolidated
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


JAMES MOORE & CO.  P.L.
Certified Public Accountants
Gainesville, Florida
February 6, 2003, except for Note 12,
as to which the date is March 7, 2003


                                       24

<PAGE>



                           CONSOLIDATED BALANCE SHEETS

                    THE DELTONA CORPORATION AND SUBSIDIARIES

                                     ASSETS
                                 (in thousands)


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

Cash and cash equivalents, including escrow
 deposits and restricted cash of $820 in 2002
 and $561 in 2001 ...............................   $  1,039       $    923
                                                    --------       --------

Contracts receivable for land sales .............      1,278          1,556

Less: Allowance for uncollectible contracts .....       (200)          (205)

      Unamortized valuation discount ............       (148)          (138)
                                                    --------       --------
Contracts receivable - net ......................        930          1,213
                                                    --------       --------

Mortgages and other receivables - net ...........        139            248
                                                    --------       --------

Inventories, at lower of cost or net realizable
 value:

  Land and land improvements ....................      7,237          7,941

  Other .........................................      1,754          1,261
                                                    --------       --------

        Total inventories .......................      8,991          9,202
                                                    --------       --------

Property, plant and equipment - net .............        608            623
                                                    --------       --------

Investment in venture ...........................         70             53
                                                    --------       --------

Prepaid expenses and other ......................        967          1,168
                                                    --------       --------

                Total ...........................   $ 12,744       $ 13,430
                                                    ========       ========




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


                                       25

<PAGE>



                           CONSOLIDATED BALANCE SHEETS

                    THE DELTONA CORPORATION AND SUBSIDIARIES

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                 (in thousands)



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


Mortgages and similar debt:
  Mortgage notes payable - related parties.......   $  3,000       $  4,200
  Other loans - related parties .................      8,282          5,929
  Other loans....................................         95            148
                                                    --------       --------
    Total mortgages and similar debt.............     11,377         10,277

Accounts payable-trade ..........................        332            298

Accrued interest payable - related parties.......      2,466          2,047

Obligation under recourse provisions.............      3,088          2,994

Accrued expenses and other ......................        334            447

Customers' deposits .............................      1,161          1,259

Deferred revenue.................................      3,818          4,425
                                                    --------       --------
    Total liabilities ...........................     22,576         21,747
                                                    --------       --------

Commitments and contingencies (Notes 1 and 8)

Stockholders' equity (deficit):

  Preferred stock, $1 par value - authorized
  5,000,000 shares; no shares are issued and
  outstanding, preferences will be determined
  prior to issuance.                                     -0-            -0-

  Common stock, $1 par value-authorized
  15,000,000 shares; issued and outstanding:
  13,544,277 shares in 2002 and 2001
  (excluding 12,228 shares held in treasury).....     13,544         13,544

  Additional paid-in capital.....................     52,518         52,440

  Accumulated deficit ...........................    (75,894)       (74,301)
                                                    --------       --------
    Total stockholders' equity (deficit) ........     (9,832)        (8,317)
                                                    --------       --------

                    Total........................   $ 12,744       $ 13,430
                                                    ========       ========

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

                                       26

<PAGE>


<TABLE>
<CAPTION>

                      STATEMENTS OF CONSOLIDATED OPERATIONS

                   THE DELTONA CORPORATION AND SUBSIDIARIES
                        (in thousands except share data)

                                                             Years Ended
                                               ----------------------------------------
                                               December 31,  December 31,  December 31,
                                                  2002          2001          2000
                                               ------------  ------------  ------------
<S>                                            <C>           <C>           <C>
Revenues

 Gross land sales ..........................   $  6,591      $  9,960      $  6,804
 Less: Estimated uncollectible sales .......     (1,834)       (1,774)       (1,176)
       Contract valuation discount .........       (227)          (73)         (267)
                                               --------      --------      --------
 Net land sales ............................      4,530         8,113         5,361
 Sales-housing .............................      4,768         4,975         3,231
 Recognized improvement revenue-prior
  period sales .............................        261           124           276
 Gain on recovery of bad debt ..............        -0-           178           -0-
 Interest income ...........................        355           377           440
 Other .....................................        768           802           774
                                               --------      --------      --------
                             Total .........     10,682        14,569        10,082
                                               --------      --------      --------

Costs and expenses

 Cost of sales-land ........................      1,470         1,928         1,397
 Cost of sales-housing .....................      3,943         4,028         2,716
 Cost of improvements-prior period sales ...        161            59            62
 Cost of sales-other .......................        247           201           175
 Commissions, advertising, and other selling
  expenses .................................      3,368         4,690         3,455
 General and administrative expenses .......      1,615         1,431         1,362
 Real estate tax ...........................        794           702           598
 Equity in loss of joint venture ...........         67            30           -0-
 Loss on transfer of contracts receivable ..        150           424           465
 Interest expense ..........................        460           724           894
                                               --------      --------      --------
              Total ........................     12,275        14,217        11,124
                                               --------      --------      --------

Income (loss) from operations before
 income taxes ..............................     (1,593)          352        (1,042)

Provision for income taxes .................        -0-           -0-           -0-
                                               --------      --------      --------

Net income (loss) ..........................   $ (1,593)     $    352      $ (1,042)
                                               ========      ========      ========

Net income (loss) per common share .........   $   (.12)     $    .03      $   (.08)
                                               ========      ========      ========
</TABLE>



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


                                       27

<PAGE>


<TABLE>
<CAPTION>

            STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY (DEFICIT)

                    THE DELTONA CORPORATION AND SUBSIDIARIES
                                 (in thousands)



              For the years ended December 31, 2002, 2001 and 2000

                                                                 Additional   Accumulated
                                               Common Stock      Paid-in      Earnings
                                               ($1 par value)    Capital      (Deficit)      Total
                                               --------------    -------      ---------      -----
<S>                                            <C>               <C>          <C>            <C>


Balances, December 31, 1999 ................   $   13,544        $ 51,863     $(73,611)      $ (8,204)

Imputed interest expense on debt
 with related party ........................          -0-             407          -0-            407
Net (loss)for the year .....................          -0-             -0-       (1,042)        (1,042)
                                               ----------        --------     --------       --------

Balances, December 31, 2000 ................       13,544          52,270      (74,653)        (8,839)

Imputed interest expense on debt
 with related party ........................          -0-             170          -0-            170
Net income for the year ....................          -0-             -0-          352            352
                                               ----------        --------     --------       --------

Balances, December 31, 2001 ................       13,544          52,440      (74,301)        (8,317)
                                               ----------        --------     --------
Imputed interest expense on debt
 with related party ........................          -0-              78          -0-             78
Net (loss) for the year ....................          -0-             -0-       (1,593)        (1,593)
                                               ----------        --------     --------       --------

Balances, December 31, 2002 ................   $   13,544        $ 52,518     $(75,894)      $ (9,832)
                                               ==========        ========     ========       ========

</TABLE>



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


                                       28

<PAGE>


<TABLE>
<CAPTION>

                      STATEMENTS OF CONSOLIDATED CASH FLOWS

                    THE DELTONA CORPORATION AND SUBSIDIARIES
                                 (in thousands)


                                                             Years Ended
                                               ----------------------------------------
                                               December 31,  December 31,  December 31,
                                                  2002          2001          2000
                                               ------------  ------------  ------------
<S>                                            <C>           <C>           <C>

Cash flows from operating activities:
 Cash received from operations:
   Proceeds from sale of residential units ..  $  4,768      $  4,852      $  3,282
   Collections on contracts and mortgages
    receivable .............................        688           778         1,040
   Down payments on and proceeds from sales
    of homesites and tracts ................      1,185         1,748         1,748
   Proceeds (uses) from other sources ......        876           375           490
                                               --------      --------      --------
     Total cash received from operations ...      7,517         7,753         6,560
                                               --------      --------      --------

 Cash expended by operations:
   Cash paid for residential units ..........     3,944         4,036         3,167
   Cash paid for land and land improvements .     1,469         1,494         1,309
   Cash paid for interest ...................         0             5             0
   Commissions, advertising and other selling
    expenses ................................     3,507         4,254         4,737
   General and administrative expenses ......     1,243         1,247         1,082
   Real estate taxes paid ...................       863           900           347
                                               --------      --------      --------
     Total cash expended by operations ......    11,026        11,936        10,642
                                               --------      --------      --------
       Net cash provided by (used in)
        operating activities ................    (3,509)       (4,183)       (4,082)
                                               --------      --------      --------

Cash flows from investing activities:
  Payment for acquisition and construction of
   property, plant and equipment ............       (87)          (76)          (31)
  Investment in venture .....................       (84)          (83)            0
                                               --------      --------      --------
     Net cash provided by (used in) investing
                 activities .................      (171)         (159)          (31)
                                               --------      --------      --------

Cash flows from financing activities:
  New borrowings ............................     3,849         4,600         4,245
  Repayment of borrowings ...................       (53)          (16)            0
                                               --------      --------      --------
     Net cash provided by (used in) financing
      activities ............................     3,796         4,584         4,245
                                               --------      --------      --------

Net increase (decrease) in cash and cash
 equivalents ................................       116           243           132

Cash and cash equivalents, beginning of year.       923           680           548
                                               --------      --------      --------

Cash and cash equivalents, end of year ......  $  1,039      $    923      $    680
                                               ========      ========      ========

</TABLE>


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



                                       29

<PAGE>

<TABLE>
<CAPTION>

                STATEMENTS OF CONSOLIDATED CASH FLOWS-(Continued)

                    THE DELTONA CORPORATION AND SUBSIDIARIES
                                 (in thousands)

                                                             Years Ended
                                               ----------------------------------------
                                               December 31,  December 31,  December 31,
                                                  2002          2001          2000
                                               ------------  ------------  ------------
<S>                                            <C>           <C>           <C>

Reconciliation of net income (loss) to
 net cash provided by (used in) operating
 activities:

Net income (loss) ...........................  $(1,593)      $   352       $ (1,042)
                                               -------       -------       --------
Adjustments to reconcile net income (loss)
 to net cash provided by (used in) operating
 activities:
   Depreciation .............................      102            72             66
   Provision for estimated uncollectible
    sales and recourse obligations ..........    1,834         1,774          1,176
   Contract valuation discount, net of
    amortization ............................       10          (126)            62
   Equity in loss in joint venture ..........       67            30            -0-
   Imputed Interest on debt with related
    party (See Note 5) ......................       78           170            408
   Loss on transfer of contracts receivable..      150           424            465

(Increase) decrease in assets and increase
 (decrease) in liabilities:
   Gross contracts receivable plus deductions
    from reserves ...........................   (4,392)       (7,174)        (7,558)
   Mortgages and other receivables ..........      109          (108)           (31)
   Land and land improvements ...............      704           597           (138)
   Housing completed or under construction
    and other ...............................     (493)          100           (430)
   Prepaid expenses and other ...............      201           234           (492)
   Accounts payable, accrued expenses and
    other ...................................      419           530          1,103
   Customers' deposits ......................      (98)         (138)           667
   Deferred revenue .........................     (607)         (920)         1,662
                                               -------       -------       --------
       Total adjustments and changes ........   (1,916)       (4,535)        (3,040)
                                               -------       -------       --------

Net cash provided by (used in) operating
 activities .................................  $(3,509)      $(4,183)      $ (4,082)
                                               =======       =======       ========

Supplemental disclosure of non-cash investing
 and financing activities:

Interest expense treated as contribution to
  capital (See Note 5) ......................  $    78       $   170       $    408
                                               =======       =======       ========
Increase in inventory as a result of spec
 house transfer and corresponding increase
 in debt ....................................  $   -0-       $   -0-       $    863
                                               =======       =======       ========
Transfer of contracts receivable for
 debt repayment..............................  $ 2,696       $ 5,443       $  5,850
                                               =======       =======       ========
Acquisition of equipment financed with
 debt .......................................  $   -0-       $   164       $    -0-
                                               =======       =======       ========

</TABLE>


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


                                       30

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



1.   Basis of Presentation and Significant Accounting Policies

     Basis of Presentation - Going Concern

     The  accompanying  financial  statements  of The  Deltona  Corporation  and
subsidiaries (the "Company") have been prepared on a going concern basis,  which
contemplates  the  realization of assets and  satisfaction of liabilities in the
normal course of business.

     The  Company has net loss from  operations  for 2002 of  ($1,593,000),  net
income from  operations for 2001 of $352,000 and a net loss from  operations for
2000 of ($1,042,000), resulting in a stockholders' deficit of $(9,832,000) as of
December 31, 2002.

     Following the  restructuring  of its debt in 1997 (see Note 5), the Company
commenced the  implementation  of its business plan by redirecting  its focus to
single-family  housing with the  development  of TimberWalk and other housing in
Marion Oaks. The transactions described in Note 5 with Selex International, B.V.
("Selex"),  Yasawa Holdings, N.V. ("Yasawa"),  Scafholding B.V.  ("Scafholding")
and Swan Development  Corporation ("Swan"),  provided the Company with a portion
of its financing requirements enabling the Company to commence implementation of
the marketing  program and attempt to accomplish  the objectives of its business
plan.  Selex,  Yasawa,  Scafholding  and Swan are related parties to the Company
either because they are stockholders or as a result of common control.

     The Company has been dependent on its ability to sell or otherwise  finance
contracts  receivable  and/or  secure other  financing  sources to meet its cash
requirements.  Additional  financing of $3,849,000  was required in 2002 and was
funded through additional loans from Swan. Additional financing will be required
in the future.  Although Swan has loaned the Company additional funds to be paid
back with contracts  receivable at the rate of 90% of face value,  with recourse
since 1999,  there can be no guarantee that the Company will be able to generate
sufficient  receivables to obtain sufficient financing in the future or that the
Company  will be able to obtain  financing  from Yasawa,  Scafholding,  Swan and
other related parties, or from unrelated parties. (See Notes 5 and 11.)

     The  consolidated  financial  statements  do not  include  any  adjustments
relating to the  recoverability  of asset amounts or the amounts of  liabilities
should the Company be unable to continue as a going concern.

     Significant Accounting Policies

     The Company's  consolidated financial statements are prepared in accordance
with accounting  principles  generally accepted in the United States of America.
Material intercompany accounts and transactions are eliminated.

     The Company is principally  engaged in the  development and sale of Florida
real estate through the development of planned  communities on land acquired for
that purpose.  The Company sells homesites under  installment  contracts,  which
provide for payments over periods  ranging from 2 to 10 years.  Since 1991,  the
Company  has  offered  only  developed  lots for sale.  Sales of  homesites  are
recorded under the percentage-of-completion  method in accordance with Statement
of Financial  Accounting Standards No. 66, "Accounting for Sales of Real Estate"
("SFAS No. 66").  Since 1991, the Company has not recognized a sale until it has
received 20% of the contract  sales price.  The Company  recognizes  the sale of
houses at closing under the full accrual method meeting the requirements of SFAS
No. 66. The Company does not finance the sale of homes. Substantially all of the
sales in 2002, 2001 and 2000 were through two independent brokers in New York.



                                       31

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



1.   Basis of Presentation and Significant Accounting Policies (continued)

     The  Company's  real estate  business is subject to  regulation  by various
local, state and federal agencies.  The communities are increasingly  subject to
substantial regulation as they are planned, designed and constructed, the nature
of such regulation extending to improvements,  zoning, building,  environmental,
health and related matters. Although the Company has been able to operate within
the  regulatory  environment  in the past,  there can be no assurance  that such
regulations  could not be made more restrictive and thereby adversely affect the
Company's operations.

     At the time of recording a sale the Company  records an  allowance  for the
estimated cost to cancel the related  contracts  receivable  through a charge to
the provision  for  uncollectible  sales.  If the contract is  transferred  with
recourse  (see Note 8) the  associated  allowance for contract  cancellation  is
reclassified to a liability under  "Obligation under recourse  provisions".  The
allowance for uncollectible contracts and recourse liability are maintained at a
level which,  in  management's  judgement,  is adequate to absorb  credit losses
inherent in the contracts receivable portfolio.  The amount of the allowance and
recourse liability is based on management's  evaluation of the collectibility of
the  contracts  receivable  portfolio,  including  historical  loss  experience,
economic  conditions,  and other  risks  inherent  in the  portfolio.  While the
Company uses the best  information  available to make such  evaluations it is at
least reasonably  possible,  future material adjustments to these allowances may
be necessary in the near term as a result of future  national and  international
economic and other conditions that may be beyond the Company's control. However,
the  amount of the  change  that is  reasonably  possible  cannot be  estimated.
Changes in the Company's  estimate of the allowance  for  previously  recognized
sales are reported in earnings in the period in which they become  estimable and
are charged to the  provision  for  uncollectible  contracts.  The  allowance is
increased by a provision for  uncollectible  sales,  which is charged to expense
and  reduced by  cancellations,  net of  recoveries.  The  determination  of the
adequacy of the allowance for uncollectible contracts is based on estimates that
are particularly  susceptible to significant changes in the economic environment
and market conditions.

     The Company records deferred revenue for contracts  transferred to Swan and
Yasawa that have not yet been recognized for financial  reporting purposes under
SFAS No. 66, as 20% of the  contract  sales price has not been  received.  These
contracts have not been recognized as sales when  transferred to Swan and Yasawa
because Swan and Yasawa are related  parties and because the recourse  provision
allows the  contracts  to be  returned  to the  Company in the event they become
delinquent.   The  Company  monitors  the  collection  of  contracts  receivable
transferred  to Swan and Yasawa and  recognizes the contracts as a sale when the
provisions of SFAS No. 66 are met. In addition,  the Company has determined that
the  transfer  of  contracts  to  Swan  and  Yasawa  with  recourse   meets  the
requirements of Statement of Financial  Accounting  Standard No. 140 "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
Liabilities"  ("SFAS No. 140") to be accounted for as a sale. In accordance with
the provisions of SFAS No. 140, the Company has reduced its contracts receivable
by the amount transferred and reduced debt by the payment credit given. The loss
realized  upon the transfer of contracts is  recognized as a loss on transfer of
contracts receivable. The Company does not retain any financial interests in the
contracts  receivable  transferred.  SFAS No. 140 is effective for  transactions
after  March 31,  2001.  Prior to the  issuance  of SFAS No.  140,  the  Company
followed the  provisions of Statement of Financial  Accounting  Standard No. 125
"Accounting for Transfers and Servicing of Financial Assets and  Extinguishments
of Liabilities" ("SFAS No. 125"). There was no effect on the Company's financial
reporting resulting from the transition from SFAS No. 125 to SFAS No. 140.

     Land improvement costs are allocated to individual homesites based upon the
relationship  that the homesite's  sales price bears to the total sales price of
all homesites in the community.  The estimated costs of improving  homesites are
based upon independent  engineering estimates made in accordance with sound cost
estimation and provide for anticipated cost-inflation factors. The estimates are
systematically  reviewed.  When  cost  estimates  are  revised,  the  percentage
relationship  they bear to deferred  revenues is  recalculated  on a  cumulative
basis to determine future income recognition as performance takes place.

                                       32

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



1.   Basis of Presentation and Significant Accounting Policies (continued)


     Interest  costs  directly  related  to, and  incurred  during,  a project's
construction  period  are  capitalized.  In 2002,  2001 and 2000,  approximately
$54,000, $164,000, and $99,000, respectively, of interest was capitalized.

     Property,  plant and equipment is stated at cost.  Depreciation is provided
by the  straight-line  method over the estimated  useful lives of the respective
assets,  which  range  from  5  to  33  years.  Additions  and  betterments  are
capitalized,  and maintenance  and repairs are expensed as incurred.  Generally,
upon the sale or  retirement  of assets,  the accounts are relieved of the costs
and  related  accumulated  depreciation,  and any gain or loss is  reflected  in
income.

     Advertising  and marketing  costs are charges to operations  when incurred.
Sales  commissions  are recognized as a liability  when the related  contract is
accepted or as a prepaid asset when paid and charged to expense when the sale is
recognized as revenue.

     For the purposes of the statements of consolidated  cash flows, the Company
considers  its  investments,  which are  comprised of short term,  highly liquid
investments  purchased  with a  maturity  of three  months  or less,  to be cash
equivalents.

     In accordance  with  Statement of Financial  Accounting  Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," long-lived assets, such as inventories and property,  plant and
equipment to be held and used are to be reviewed for impairment  whenever events
or changes in  circumstances  indicate that the carrying amounts of an asset may
not be  recoverable.  As of  December  31,  2002 and 2001,  there were no assets
considered impaired under the provisions of the Statement.

     The estimated fair values of financial  instruments have been determined by
the  Company  using  available  market  information  and  appropriate  valuation
methods.  Considerable  judgment  is  required  in  interpreting  market data to
develop the estimates of fair value. Accordingly, the estimates presented herein
are not necessarily indicative of the amounts the Company could realize or incur
in a current market transaction.  The use of different market assumptions and/or
estimation  methods  may have a  material  effect on the  estimated  fair  value
amounts.   The  Company's  financial   instruments  consist  of  cash  and  cash
equivalents,  contracts and mortgages  receivable,  and similar debt. The stated
amount of cash and cash equivalents is a reasonable  estimate of fair value. The
fair value of  contracts  and  mortgages  receivable  and similar  debt has been
estimated using interest rates currently available for similar terms. The stated
value of the contracts and mortgages  receivable  and similar debt  approximates
fair value.

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

     Certain  amounts  for 2001 and 2000 have been  reclassified  to  conform to
presentations adopted in 2002. These reclassifications include in 2002, the loss
recognized on the transfer of contracts receivable reclassified from a component
of   "Estimated   uncollectible   sales"  to  "Loss  on  transfer  of  contracts
receivable",   and  the  estimated   liability  for  obligations  with  recourse
provisions was reclassified  from a component of "Accrued expenses and other" to
"Obligations under recourse provisions".




                                       33

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



2.   Contracts and Mortgages Receivable

     The Company's  contracts  receivable are  collateralized by improved vacant
residential  lots  .  The  Company's  contracts   receivable  portfolio  is  not
diversified and a substantial  portion of its customers'  ability to honor their
contracts is dependent on local economic conditions of its customers.

     Contracts receivable that management has the intent and ability to hold for
the  foreseeable  future or until  maturity  or pay-off  are  reported  at their
outstanding   principal   adjusted  for  any  charge-offs,   the  allowance  for
uncollectible contracts receivable, and any valuation allowance.

     Interest rates on contracts receivable outstanding as of December 31, 2002,
ranged from 5% to 12% per annum (weighted average  approximately  9.3%), and the
approximate principal maturities on these contracts were:

                                            December 31, 2002
                                            -----------------
                                              (in thousands)
        2003.........................         $     219
        2004.........................               219
        2005.........................               218
        2006.........................               186
        2007.........................               126
        2008 and thereafter..........               310
                                              ---------
              Total..................         $   1,278
                                              =========

     If a regularly scheduled payment on a contract remains unpaid 30 days after
its due date,  the  contract  is  considered  delinquent.  Aggregate  delinquent
contracts  receivable  at December  31, 2002 and 2001  approximate  $302,000 and
713,000, respectively.

     Contracts  receivable  are  considered  eligible  to cancel when a required
payment has not been received by the end of the  contractual  grace period.  The
length of the contractual grace period ranges from 90 to 180 days depending upon
the  amount of  equity  paid into the  contract.  The  accrual  of  interest  on
contracts  receivable  is  discontinued  at the time the  contract is  cancelled
following  the  contractual  grace  period.  The accrued  interest on  cancelled
contracts is charged against the reserve for uncollectible contracts.  Contracts
are  returned  to  accrual  status  when  the  principal  and  interest  amounts
contractually  due are brought  current or a reasonable  program is  established
with the customer to bring payments  current and future  payments are reasonably
assured.

     Information  with respect to interest rates and average contract lives used
in valuing new contracts receivable generated from sales follows:

                                     Average      Average Stated     Discounted
     Years ended                       Term       Interest Rate        to Yield
     -----------                    ----------    --------------     ----------
     December 31, 2002...........   113 months         8.7%             13.5%
     December 31, 2001...........   111 months         8.5%             13.5%
     December 31, 2000...........    98 months         7.8%             13.5%

     During  2002 and 2001,  the Company  transferred  contracts  and  mortgages
receivable,  with recourse, in satisfaction of debt of $2,696,000 and 5,443,000,
respectively. The Company is also required to make monthly principal payments of
contracts  receivable  with recourse to Yasawa,  Scafholding and Swan. (See Note
5.)



                                       34

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



2.   Contracts and Mortgages Receivable (continued)

     A credit risk  concentration  results  when the  Company has a  significant
credit  exposure to an individual  or a group  engaged in similar  activities or
having similar economic  characteristics  that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or other
conditions. The contracts receivable are generally diversified among individuals
but concentrated in certain socio-economic groups and geographical locations.

3.   Inventories

     Information  with  respect to the  classification  of inventory of land and
land  improvements  including  land held for sale or transfer as of December 31,
2002 and 2001, is as follows:

                                           2002         2001
                                        ---------     ---------
                                               (in thousands)
     Unimproved land..............      $     420     $   420
     Land in various stages of
       development................          2,622       2,147
     Fully improved land..........          4,195       5,374
                                        ---------     -------
           Total..................      $   7,237     $ 7,941
                                        =========     =======

4.   Property, Plant and Equipment

     Property,  plant and equipment and accumulated  depreciation consist of the
following:

                                  December 31, 2002        December 31, 2001
                                 -------------------      --------------------
                                         Accumulated                Accumulated
                                 Cost    Depreciation     Cost      Depreciation
                                 ------  ------------     ------    ------------
                                               (in thousands)

     Land and land
      improvements............   $   98  $    -0-         $   98    $    -0-
     Other buildings,
      improvements and
      furnishings.............    1,185       879          1,115         834
     Construction and other
      equipment...............      962       758            948         704
                                 ------  --------         ------    --------
           Total..............   $2,245  $  1,637         $2,161    $  1,538
                                 ======  ========         ======    ========

     Depreciation  charged to operations  for the years ended December 31, 2002,
2001 and 2000 was approximately $102,000, $72,000 and $66,000, respectively.

5.   Mortgages and Similar Debt

     As of December  31,  2002,  the  Company's  outstanding  debt to Yasawa was
$3,000,000  secured by a first lien on the Company's  receivables and a mortgage
on all of the  Company's  properties.  The terms of repayment of the Yasawa loan
provide for  $100,000  of monthly  payments of  principal  in cash or  contracts
receivable  at 100% of face value,  with  recourse.  Interest  accrues at 6% for
2000, at the prime rate adjusted  semi-annually to the then current rate ranging
from 9.5% to 4.75% for 2001 and 2002 and 4.25%  effective  January 1, 2003.  The
Company  satisfied its principal  obligation to  Scafholding  as of December 31,
1999.  Yasawa and  Scafholding  have not required  the Company to make  interest
payments  since  September 1, 1998. As of December 31, 2002, the total amount of
interest  accrued on the Yasawa and  Scafholding  obligations  is  approximately
$1,629,000, which is included in accrued interest.

     During 2002,  Swan loaned the Company an  additional  $3,849,000 so that it
was able to meet its working capital requirements. The Company's debt to Swan as
of December 31, 2002, of $8,282,000 is secured by a second lien on the


                                       35

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



5.   Mortgages and Similar Debt (continued)

Company's receivables.  Swan has agreed to accept contracts receivable at 90% of
face value, with recourse,  in payment of the Company's  obligation to Swan. The
Company  recognizes a loss on the transfer of contracts at less than face value.
The  amount  of each  monthly  payment  will be  dependent  upon the  amount  of
contracts receivable in the Company's portfolio,  excluding contracts receivable
held as  collateral  for prior  receivable  sales.  Each  month,  the Company is
required  to  transfer  to  Swan , as  debt  repayment,  all  current  contracts
receivable  in the  Company's  portfolio  in excess of  $500,000.  Swan does not
charge  interest  for the first six months  after an  advance;  thereafter,  the
interest was 6% for 2000, at the prime rate adjusted  semi-annually  to the then
current rate  ranging  from 9.5% to 4.75% for 2001 and 2002 and 4.25%  effective
January 1, 2003. As of December 31, 2002, the accrued and unpaid interest on the
Swan notes of approximately $837,000 is included in accrued interest.

     The Company  records  interest  expense for all  borrowing at the Company's
incremental  borrowing  rate,  which is  currently  the  prime  rate.  Since the
interest  does not  accrue for the first six  months of each loan  advance  from
Swan,  the interest  calculated is expensed and recorded as  additional  paid-in
capital. This amount was approximately $78,000 in 2002 and $170,000 in 2001. For
2000, the Company recorded  interest expense on all outstanding debt balances to
Yasawa,  Scafholding and Swan at 8%, the Company's  incremental  borrowing rate.
The difference  between  interest  calculated at 8% and the amount accrued under
the terms of the respective notes was approximately $407,000 and was recorded as
interest expense and additional paid-in capital.

     In the future,  if the Company elects to do so, Yasawa and Scafholding have
agreed to purchase contracts receivable at 65% of face value, with recourse. The
Company has an agreement with Swan whereby Swan may loan the Company funds to be
repaid with contracts receivable at 90% of face value, with recourse.

     The following table presents information (in thousands) with respect to the
minimum  principal  maturities  of mortgages  and similar debt for the next five
years (excluding amounts owed to Swan) as of December 31, 2002.


        2003............................       $   1,255
        2004............................           1,240
        2005............................             600
        2006............................             -0-
        2007............................             -0-
                                               ---------
                                               $   3,095

     Indebtedness  under various purchase money mortgages and loan agreements is
collateralized by substantially all of the Company's assets,  including stock of
wholly-owned subsidiaries.

     The  Company  has an  agreement  with  Scafholding  and Citony  Development
Corporation  for the  servicing  of their  receivable  portfolios.  The  Company
received  approximately  $72,000,  $73,000, and $75,000, in 2002, 2001 and 2000,
respectively, in revenue pursuant to these agreements. The Company also services
the Swan receivable  portfolio,  which consisted of 952 contracts as of December
31, 2002; however, the Swan portfolio is serviced at no charge to Swan under the
Trust and Servicing Agreement.

6.   Income Taxes

     The Company  follows the  provisions  of Statement of Financial  Accounting
Standard No. 109 "Accounting for Income Taxes."  Differences  between accounting
rules and tax laws cause  differences  between  the basis of certain  assets and
liabilities for financial reporting purposes and tax purposes. The tax effect of
these differences, to the extent they are temporary, is recorded as deferred tax
assets and liabilities.  Income tax expense is the tax payable or refundable for
the period  plus or minus the change  during the period in  deferred  assets and
liabilities.  Temporary  differences  which give rise to deferred tax assets and
liabilities  consist of  recognition of income from land sales  differently  for
financial reporting and

                                       36

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



6.  Income Taxes (continued)

tax  purposes,  recognizing  estimated  losses  on  contract  cancellations  and
recourse obligations when estimated but not for tax purposes until realized, and
interest accrued to related parties but not for tax purposes until paid.

     For the years ended  December 31, 2002 and 2000, the Company had a net loss
for  tax  and  financial  reporting  purposes.  Accordingly,  there  was  no tax
provision for such years.  For the year ended December 31, 2001, the Company had
a net income for financial  reporting  purposes but a net loss for tax purposes.
The 2001  provision  for taxes in  thousands  consists  of the  following:

                                                2001
                                             ---------

        Current.........................     $     -0-
        Deferred........................        66,000
        Tax benefit of net operating
         loss carryforward..............       (66,000)
                                             ---------
              Net provision for income
               taxes....................     $     -0-
                                             =========

     As of  December  31,  2002,  the Company  had a net  deferred  tax asset of
approximately  $17,800,000,  which primarily resulted from the tax effect of the
Company's net operating loss carryforward of $45,000,000.  A valuation allowance
of $17,800,000 has been established against the net deferred tax asset.

     As of  December  31,  2001,  the Company  had a net  deferred  tax asset of
approximately  $14,619,000,  which primarily resulted from the tax effect of the
Company's net operating loss carryforward of $36,917,000.  A valuation allowance
of $14,619,000 has been established against the net deferred tax asset.

     The  Company's  regular net  operating  loss  carryover for tax purposes is
estimated  to be  approximately  $37,500,000  at  December  31,  2002,  of which
$9,189,000  was available  through  2005,  $9,780,000  through 2006,  $5,029,000
through 2008,  $5,401,000  through  2009,  $1,977,000  through 2011,  $1,425,000
through 2019,  $695,000 through 2020,  $307,000 in 2021, and $3,697,000  through
2022. In addition to the net operating loss carryover,  alternative  minimum tax
credits of $386,000 are available to reduce federal income tax liabilities  only
after the net operating loss carryovers have been utilized.

     There can be no assurances that the Company will generate taxable income to
utilize any of the  carryforwards or, that the generation of such taxable income
may not  trigger  an  alternative  tax  liability  that would  offeset  any such
carryforwards.  The  utilization  of the Company's  net  operating  loss and tax
credit  carryforwards could be impaired or reduced under certain  circumstances,
pursuant to changes in the federal  income tax laws.  Events  which affect these
carryforwards  include,  but are not  limited  to,  cumulative  stock  ownership
changes of 50% or more over a three-year  period, as defined,  and the timing of
the utilization of the tax benefit carryforwards.

7.   Liability for Improvements

     The Company has an obligation to complete  land  improvements  upon deeding
which,  depending on contractual  provisions,  typically occurs within 90 to 120
days after the  completion  of payments by the customer.  The estimated  cost to
complete  improvements  to lots and tracts  from  which  sales have been made at
December  31,  2002  and  2001  was   approximately   $648,000   and   $783,000,
respectively.  The foregoing estimates reflect the Company's current development
plans at its  communities  (see Note 8). These estimates as of December 31, 2002
and 2001 include a liability to provide  title  insurance  and deeding  costs of
$110,000  and  $145,000,   respectively;   and  an  estimated   cost  of  street
maintenance,  prior to assumption of such obligations by local  governments,  of
$538,000  and  $638,000,  respectively;  all of which are  included  in deferred
revenue.


                                       37
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



7.   Liability for Improvements (continued)

     The anticipated  expenditures,  in thousands, for land improvements,  title
insurance  and deeding to  complete  areas from which sales have been made as of
December 31, 2002 are as follows:

     2003...............................         $  309
     2004...............................            205
     2005...............................             54
     2006...............................             20
     2007 and thereafter................             60
                                                 ------
            Total.......................         $  648
                                                 ======

8.   Commitments and Contingent Liabilities

     Total rental expense for the years ended  December 31, 2002,  2001 and 2000
was approximately $78,000, $82,000 and $89,000, respectively.

     The  Company  has  short-term  leases on its  headquarters  building in the
TimberWalk  section of Marion Oaks,  and on its Miami office.  Estimated  rental
expense under these  short-term  leases is expected to be approximately $135,000
annually. The Company has no material equipment leases.

     The  Company   earns   administrative   fees  for  selling  lots  owned  by
Scafholding.  In the years ended  December 31, 2002,  2001 and 2000, the Company
earned $159,770, $205,878 and $38,520, respectively, in fees for sold lots.

     Homesite  sales  contracts  provide  for the return of all  monies  paid in
(including   paid-in  interest)  should  the  Company  be  unable  to  meet  its
contractual  obligations after the use of reasonable  diligence.  If a refund is
made, the Company will recover the related homesite and any improvement thereto.

     On properties where customers have contractually  assumed the obligation to
pay real estate taxes,  monies received from customers for payment of such taxes
are deposited into a tax escrow maintained by the Company until paid.

     In 1990 and 1992,  the Company sold  contracts and mortgages  receivable to
third parties. These transactions,  among other things, require that the Company
replace or repurchase any receivable  that becomes 90 days  delinquent  upon the
request of the purchaser.  Such  requirement  can be satisfied from contracts in
which the  purchaser  holds a security  interest  (approximately  $800,000 as of
December 31,  2002).  The Company  provides for estimated  future  cancellations
based  on the  Company's  historical  experience  for  receivables  the  Company
services.  The Company did not replace any delinquent  receivables in 2002, 2001
or  2000.  As  of  December  31,  2002  and  2001,   $969,000  and   $1,060,000,
respectively, in receivables were delinquent. (See Note 12.)

     Approximately  $20  million of  contracts  receivable,  subject to recourse
provisions  were sold or  transferred  by the Company as of December  31,  2002.
There are no funds on deposit with  purchasers of the  receivables as collateral
for the recourse obligation. However, the Company may recover the underlying lot
when the contract is cancelled.  The Company has estimated its obligations under
the recourse  provisions,  following the same methodology utilized in estimating
contract  cancellations  (see  Note  1)  to  be  approximately   $3,088,000  and
$2,994,000  at  December  31, 2002 and 2001,  respectively.  Because of inherent
uncertainties  in  estimating  the  ultimate  amount  to be  required  under the
recourse provisions,  it is reasonably possible that the Company's estimate will
change in the near term.

     In addition to the matters  discussed above, from time to time, the Company
may become a party to claims and other litigation relating to the conduct of its
business,  which is routine in nature and, in the opinion of management,  should
have no material effect upon the Company's operation.



                                       38

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



9.   Common Stock and Earnings Per Share Information

     Net income  (loss) per common  share is  computed  in  accordance  with the
requirements  of Statement of Financial  Accounting  Standards No. 128 "Earnings
Per Share" ("SFAS No.  128").  SFAS No. 128 requires net income (loss) per share
information  to be computed  using a simple  weighted  average of common  shares
outstanding during the periods presented.

     The net income (loss) for 2002, 2001 and 2000 were ($1,593,000),  $352,000,
and ($1,042,000), respectively.

     The average  number of shares of common stock and common stock  equivalents
used to calculate  basic  earnings  (loss) per share in 2002,  2001 and 2000 was
13,544,277.

10.  Investment in Venture

     The Company  entered into a joint venture  agreement (the  "Venture")  with
Scafholding (see Note 1) in 2001 for the purchase of property tax  certificates,
application of tax deeds,  administration  and the acquisition and sale of land.
The Company provides administrative, managerial, sales and marketing services to
the Venture.  The Company is reimbursed by the Venture for all  commissions  and
marketing  costs  plus an  administrative  fee of 10% of all sales  consummated.
Scafholding  provides  financing  to the  Venture  and has  loaned  the  Venture
approximately  $1,554,000 as of December 31, 2002. The Company  collected $3,549
in administrative  fees and reimbursements in 2002; there were no reimbursements
or  administrative  fees earned for 2001.  Interest on the  outstanding  debt to
Scafholding  accrues at the fixed rate of 7.75%. Net income is to be distributed
equally between the Company and Scafholding.  The Company records its investment
in the Venture  using the equity  method of accounting as control of the Venture
rests with Scafholding as specified in the joint venture agreement.


11.  Capital Transactions

     In 2002, the Company filed a Form 13E(3) and a preliminary  proxy statement
related to a proposed going private  transaction.  These documents are currently
being reviewed by the SEC staff.  These filings were done pursuant to actions by
the Board of Directors.  On December 13, 2001, the Board of Directors  approved,
subject to stockholder  approval, a 1 for 500,000 reverse split of the Company's
common stock and a related amendment to the Company's  Articles of Incorporation
reducing  the number of  authorized  shares to 30.  Based on the current  common
stockholdings, if voted and approved by the stockholders, the reverse split will
reduce the  number of the  Company's  stockholders  to two  stockholders:  Selex
International,  B.V., a Netherlands  corporation  ("Selex") and Yasawa Holdings,
N.V., a Netherlands Antilles corporation ("Yasawa").  The date of the meeting of
stockholders  to consider both matters will be determined upon the conclusion of
the review and subsequent  amendments to the  disclosures  in preliminary  proxy
statement and Form13E(3)filings.

12.  Subsequent Events

     On March 7, 2003,  the Company  closed on an agreement that resulted in the
termination of its repurchase  obligation on contracts  receivable  sold in 1990
and 1992. The termination of this recourse obligation covering  approximately $1
million of contracts receivable, substantially all of which were non-performing,
will  result in a  one-time  gain on  termination  of a recourse  obligation  of
approximately  $870,000 and a reduction in the liability for  "Obligation  under
recourse  provisions".  This one-time gain will be reported in the first quarter
of 2003. In terminating the obligation,  the Company acquired over 200 contracts
receivable,  substantially  all of which  are  non-performing,  each of which is
collateralized  by an improved vacant  residential lot, and over 150 lots, which
were added to the Company's land inventory.  As a part of this transaction,  the
Company received lots that are being conveyed to Citony Development  Corporation
pursuant to a 1992  purchase  agreement,  which  conveyed  all of the  Company's
property in the Citrus Springs subdivision,

                                       39

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES



12.  Subsequent Events (continued)

including  any lots  reacquired  under this  transaction.  The  aggregate  costs
incurred of approximately $195,000 will be assigned to the acquired assets based
on a basket-purchase method of allocation.

     If the  termination of the repurchase  obligation had occurred prior to the
earliest reported year, the impact of the transaction on the reported Results of
Operations  in 2002,  2001 and 2000 would have been to increase  the  "Estimated
uncollectible  sales expense" and to decrease net income or increase net loss in
each of the years by $80,000,  $260,000 and  $260,000,  respectively.  Set forth
below is the Summary Pro forma results, as if the transaction  occurred prior to
the earliest reported year:

            Pro Forma Results                   Years ended December 31,
                                             2002         2001          2000
                                            --------    --------      --------
Revenues, as reported                       $ 10,682    $ 14,569      $ 10,082
Costs and expenses, as reported               12,275      14,217        11,124
Pro forma - increase in expenses                  81         260           260
                                            --------    --------      --------
Pro forma Net income (loss)                 $ (1,674)   $     92      $ (1,302)
                                            ========    ========      ========
Pro forma income (loss) per share           $   (.12)   $    .01      $   (.10)
Weighted average common shares outstanding  13,544,277  13,544,277    13,544,277


     The pro forma results are provided for illustration only of the transaction
described  above.  The pro forma results should not be considered  indicative of
future results of operations.

     Between January 1, 2003 and March 7, 2003, Swan loaned the Company $800,000
under  similar  terms as  described in Note 5. These funds were used to meet the
Company's  current working capital  requirements.  In January and February 2003,
the Company transferred  contracts receivable with a face value of approximately
$200,000  to  Scafholding  and  contracts   receivable  with  a  face  value  of
approximately $100,000 to Swan under terms described in Note 5 above.

13.  Supplemental Unaudited Quarterly Financial Data

     Set  forth  on the  following  page  is  supplemental  unaudited  quarterly
financial data prepared  pursuant to the rules and regulations of the Securities
and Exchange Commission.  The information  furnished reflects, in the opinion of
management,  all adjustments  (consisting only of normal recurring  adjustments)
necessary for a fair statement of the results for the interim periods presented.
In the fourth  quarter of 2002,  the results were  negatively  impacted by lower
land sales and by increased  cancellations of contracts which  contributed to an
increase in the allowance for uncollectible contracts of approximately $500,000.

                                       40

<PAGE>



                 SUPPLEMENTAL UNAUDITED QUARTERLY FINANCIAL DATA
                    (in thousands, except per share amounts)


                                       Net Income
                                         (Loss)
                                          From
                                       Operations
                                         Before         Net       Net Income
                                         Income       Income      (loss) per
                            Revenues     Taxes        (Loss)         Share
                            --------   ----------    --------     ----------

2002
  First.....                $ 2,930    $    133      $    133     $   .01
  Second....                $ 3,216    $    (47)     $    (47)    $   .00
  Third.....                $ 3,035    $   (293)     $   (293)    $  (.02)
  Fourth....                $ 1,501    $ (1,386)     $ (1,386)    $  (.11)
                            -------    --------      --------     -------
Total.......                $10,682    $ (1,593)     $ (1,593)    $  (.12)
                            =======    ========      ========     =======


2001
  First....                 $ 3,407    $     61      $     61     $   .01
  Second...                 $ 3,495    $     44      $     44     $   .00
  Third....                 $ 3,029    $     15      $     15     $   .00
  Fourth...                 $ 4,638    $    232      $    232     $   .02
                            -------    --------      --------     -------
Total......                 $14,569    $    352      $    352     $   .03
                            =======    ========      ========     =======

2000
  First....                 $ 2,087    $   (402)     $   (402)    $  (.03)
  Second...                 $ 2,503    $    (69)     $    (69)    $  (.01)
  Third....                 $ 2,794    $     69      $     69     $   .01
  Fourth...                 $ 2,698    $   (640)     $   (640)    $  (.05)
                            -------    --------      --------     -------
Total......                 $10,082    $ (1,042)     $ (1,042)    $  (.08)
                            =======    ========      ========     =======







                                       41

<PAGE>

ITEM 9.

                         INDEPENDENT PUBLIC ACCOUNTANTS


Audit Fees

The Company paid audit and review fees and out of pocket expenses to James Moore
& Co. P.L. totaling $69,306 for the year ended December 31, 2002.

Financial Information Systems and Implementation Fees

The  Company  did  not  incur  any  fees  or  costs  associated  with  financial
information systems or implementation fees.

All Other Fees

The Company also paid fees to James Moore & Co. P.L. for the year ended December
31, 2002 for preparation of tax related  documentation  in the amount of $13,900
and $3,410 for fees related to  consultation  regarding  selection  criteria and
process for the new Chief Financial Officer.






                                       42

<PAGE>

ITEM 10.

               DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors of the Company

     The  Board  of  Directors  of  the  Company  presently   consists  of  five
individuals:  Antony Gram (Chairman of the Board),  Christel DeWilde,  George W.
Fischer, Rudy Gram and Thomas B. McNeill.

     The  table  below  sets  forth the names of the  present  directors  of the
Company,  together with certain  information as of March 3, 2003 with respect to
each of them.  The entire Board of Directors is elected  annually to hold office
until  the next  Annual  Meeting  of  Stockholders  and until  their  respective
successors  are duly elected and qualified.  Unless  otherwise  indicated,  each
nominee  has held the  position  shown,  or has been  associated  with the named
employer in the executive capacity shown, for more than the past five years.

                                                                     Year
                                                                     First
                                                                     Elected
Name and Age            Principal Occupation and Other Information   Director
------------            ------------------------------------------   --------

Christel DeWilde 40     Independent Consultant for Antony Gram         1998
(b)(d)                  since January 2003.  From February 1995
                        through December 2002, Ms. DeWilde was
                        employed as financial analyst for Antony
                        Gram.  Ms. DeWilde was Chief Financial
                        Officer of the Sab Wabco Group, Brussels,
                        Belgium from December 1992 to February 1995.

George W. Fischer, 62   Mr. Fischer is retired.  From 1975 through     1992
(a),(b),(c)             1995 he served as President of H.E.C.
                        Fischer, Inc., a closely held real estate
                        company.

Antony Gram, 60         Chairman of the Board of Directors and         1992
(a), (c), (d), (e)      Chief Executive Officer of the Company
                        since July 13, 1994 and President since
                        October 2, 1998. For more than the past
                        five years, Mr. Gram has served as
                        Managing Director of Gramyco, a
                        scaffolding company, based in Belgium.

Rudy Gram, 39           Vice President, Swan Development               1995
(a),(c),(e)             Corporation, based in St. Augustine,
                        Florida since 1995.

Thomas B. McNeill, 68   Retired partner of the law firm of Mayer,      1975
(b)(d)                  Brown, Rowe & Maw, formerly Mayer, Brown &
                        Platt, Chicago, Illinois.

Current Committee Members & Affiliations:
        (a)           Member, Executive Committee.
        (b)           Member, Audit Committee.
        (c)           Member, Executive Compensation Committee.
        (d)           Member, Nominating Committee.
        (e)           Rudy Gram is the son of Antony Gram.

Additional Information Concerning the Board of Directors

     Currently, Directors DeWilde, McNeill and Rudy Gram receive a fee of $1,000
per month for  services  as a Director of the  Company  and are  reimbursed  for
travel and related costs incurred with respect to committee and board  meetings.
Mr. Fischer receives a fee of $1,600 per month for services as a Director of the
Company and as the Board's  representative  on the Management  Committee;  he is
also  reimbursed for travel and related costs incurred with respect to committee
and board                              43

<PAGE>


meetings. Mr. Antony Gram does not receive a monthly Director's fee; however, he
is reimbursed  for travel and related  costs  incurred with respect to committee
and board meetings and other Company business activities.

     The Board of  Directors  has  several  standing  committees:  an  Executive
Committee,  an  Audit  Committee,  an  Executive  Compensation  Committee  and a
Nominating Committee.

     The  Executive  Committee,  of which  Antony  Gram is  Chairman,  exercises
certain powers of the Board of Directors  during the intervals  between meetings
of the Board and met once during 2002.

     The Audit  Committee,  of which Mr.  McNeill is Chairman,  confers with the
independent  auditors  of the  Company and  otherwise  reviews  the  adequacy of
internal  controls,  reviews  the scope and results of the audit,  assesses  the
accounting  principles followed by the Company,  and recommends the selection of
the independent auditors.  There were two meetings of the Audit Committee during
2002.

     The Executive  Compensation Committee is chaired by Mr. Fischer, who serves
on no similar  committee of any other  company.  While the other  members of the
Committee, Messrs. Antony Gram and Rudy Gram, may serve together as directors of
other companies,  none serves as a member of any other  compensation  committee.
The Committee  reviews the methods and means by which management is compensated,
studies and recommends new methods of compensation, and reviews the standards of
compensation for management.  In addition,  the Executive Compensation Committee
administers  the Annual  Executive  Bonus Plan.  No member of the  Committee  is
eligible to participate in any of the Company's  compensation and benefit plans.
See "Compensation  Committee Report." The Executive  Compensation Committee held
one meeting during 2002.

     The Nominating Committee,  of which Mr. McNeill is Chairman,  recommends to
the Board of Directors  nominees to fill  additional  directorships  that may be
created and to fill  vacancies  that may exist on the Board of Directors.  There
was one meeting of the Nominating Committee during 2002, held as part of a Board
of  Directors   meeting.   The  Nominating   Committee  will  consider  nominees
recommended by stockholders. Recommendations by stockholders should be submitted
to the  Secretary  of the  Company and should  identify  the nominee by name and
provide detailed background  information.  Recommendations  received by December
31, 2002 will be considered by the  Nominating  Committee for  nomination at the
2003 Annual Meeting.

     During 2002,  the Board of Directors  held three  meetings.  Each  director
attended at least 75% of the  aggregate  of the total  number of meetings of the
Board of Directors  and the total number of meetings  held by all  committees on
which he or she served.

Executive Officers of the Company

     The table  below sets forth the  executive  officers  of the  Company as of
February  14,  2003,  and the Chairman of the Board in his capacity as President
and Chief Executive Officer,  their ages and their principal  occupations during
the  past  five  years.  Each  has been  appointed  to  serve in the  capacities
indicated until their  successors are appointed and qualified,  subject to their
earlier resignation or removal by the Board of Directors.

                                           Principal Occupation
Name and Age                            During the Past Five Years
------------                            --------------------------

Antony Gram, 60.............    Chairman of the Board of Directors and Chief
                                Executive Officer of the Company since
                                July 13, 1994 and President since October 2,
                                1998. For more than the past five years,
                                Mr. Gram has served as Managing Director of
                                Gramyco, a scaffolding company, based in
                                Belgium.


Sharon J. Hummerhielm, 53...    Executive Vice President and Corporate
                                Secretary since October 2, 1998, Mrs
                                Hummerhielm served as Vice President-
                                Administration and Corporate Secretary
                                since May 1995 and Vice President -
                                Administration prior to that time, having
                                joined the Company in March 1975.



                                       44

<PAGE>




                                           Principal Occupation
Name and Age                            During the Past Five Years
------------                            --------------------------

Robert O. Moore, 54.........    Treasurer and Chief Financial Officer since
                                joining the Company in July 2002.  From
                                2001 until joining the Company, he was a
                                financial consultant.  From 2000 until 2001
                                he was Chief Financial Officer of SkyWay
                                Partners, Inc a developer and operator of
                                telecommunications  systems.  From 1998
                                until 2000, he was Vice President of Finance,
                                Chief Financial Officer and Corporate Secretary
                                for Mark III Industries, a manufacturer of vans
                                and trucks.



                                       45

<PAGE>


ITEM 11.

                             EXECUTIVE COMPENSATION

     Due to the  Company's  liquidity  situation,  Antony  Gram  has  served  as
Chairman of the Board , Chief  Executive  Officer and  President  of the Company
without  compensation.   The  Securities  and  Exchange  Commission's  rules  on
executive   compensation   disclosure   require,   however,   that  the  Summary
Compensation  Table which appears below,  depict the  compensation  for the past
three years of the Company's  chief  executive  officer and its four most highly
compensated  executive officers whose annual salary and bonuses exceed $100,000.
Accordingly,  the table set forth below,  discloses the annual compensation paid
to Antony Gram (Chairman of the Board,  Chief  Executive  Officer and President)
and Sharon  Hummerhielm  (Executive Vice President and Corporate  Secretary) for
the three years ended December 31, 2002.

Summary Compensation Table

<TABLE>
<CAPTION>
Summary Compensation Table

                          Annual                           Long Term
                          Compensation                     Compensation
                          -------------------------------------------------------------------------------
<S>              <C>      <C>         <C>    <C>           <C>              <C>     <C>     <C>
                                                           Awards                           Payouts
                                                           ------------------------         -------------
Name and         Fiscal   Salary      Bonus  Other Annual  SARs/Restricted  Stock   LTIP    All Other
Principal        Year      ($)         ($)   Compensation   Stock Awards    Options Payouts Compensation
Position                                     (a)                              (#)            ($)
---------------------------------------------------------------------------------------------------------
Antony Gram,     2002      --          --        --           --              --     --           --
Chairman of the  2001      --          --        --           --              --     --           --
Board, President 2000      --          --        --           --              --     --           --
& CEO

Sharon J.        2002     $124,945     --        --           --              --     --           --
Hummerhielm      2001     $122,947   $13,933(b)  --           --              --     --           --
Exec. VP &       2000     $122,939   $10,245(b)  --           --              --     --           --
Corporate Sec'y

<FN>
     -------

(a)         In accordance with the rules of the Commission, amounts totaling
            less than the lower of $50,000 or 10% of the total annual salary
            and bonus have been omitted.

(b)         Ms.Hummerhielm was awarded a bonus of $13,933 in 2001 , which was
            paid in December 2002; a bonus of $10,245 in 2000, which was paid
            in January  2001.  To date, no bonus was awarded for 2002.
            January 2000.

</FN>
</TABLE>

Employment Contracts

     One  executive  officer,  Mrs.  Hummerhielm,  is  employed  pursuant  to an
employment  agreement which provides that if her employment is terminated due to
death, payment of compensation to her beneficiary  continues for six months and,
if employment is otherwise  terminated by the Company  without cause (defined as
gross misconduct),  she is entitled to receive one year's compensation,  payable
in twenty-four equal semi-monthly installments.  For purposes of this agreement,
compensation  includes  salary,  car allowances,  vacation pay, fringe benefits,
benefit plans, perquisites and other like items.

                          COMPENSATION COMMITTEE REPORT

Compensation Philosophy

               It is the goal of the Company and this Committee to align all
compensation, including executive compensation, with business objectives and
both individual and corporate performance, while simultaneously attracting and
retaining employees who contribute to the long-term success of the Company. The
Company attempts, within its resources, to pay competitively and for performance
and management initiative, while striving for fairness in the administration of
its compensation program.



                                       46

<PAGE>

Executive Compensation Program

     It has long  been  the  policy  of the  Company  to  encourage  and  enable
employees  upon whom it  principally  depends to acquire a personal  proprietary
interest  in the  Company.  In prior  years,  the total  executive  compensation
program of the Company consisted of both cash and equity-based  compensation and
was  comprised of three key  elements:  salary,  an annual bonus and a long term
incentive plan.

     Salary

     Salaries  paid to  officers  (other  than the Chief  Executive  Officer and
President) are based upon the Committee's  review of the nature of the position,
competitive salaries and the contribution,  experience and Company tenure of the
officer. Salaries (if any) paid to the Chief Executive Officer and President are
determined by the Committee,  subject to  ratification by the Board of Directors
and are based upon the Committee's subjective evaluation of contributions to the
Company,  performance  and salaries paid by competitors to their Chief Executive
Officer and President. Since January 2000, Mrs. Hummerhielm,  and other officers
were granted salary increases.

     Annual Bonus

     Although  the  Company's  liquidity  situation  has required the Company to
limit the  awarding  of bonuses to only  certain  limited  instances,  it is the
intention of the Committee that an executive's annual compensation  consist of a
base salary and an annual bonus.  All officers and  managerial  employees of the
Company  (except  those  who  are  otherwise   entitled  to  receive  additional
compensation) will be considered by the Compensation Committee for a bonus. Such
bonuses are earned based upon the success of the Company,  or of the  subsidiary
or division for which the  individual  is  responsible,  in achieving its goals.
There were bonuses awarded to all  non-commissioned  employees of the Company in
2002 for 2001, including officers, as a percentage of their base salary.

     Long Term Incentive Program

     Presently,  there are no  long-term  cash and  equity  incentives  provided
through any Stock Plan.

     Chief Executive Officer Compensation

     Since July 13,  1994,  Antony  Gram has served as Chairman of the Board and
Chief Executive  Officer of the Company.  In October 1998, he was also appointed
to the position of President.  Mr. Gram has been  responsible  for resolving the
problems  facing the Company and  developing  an  alternative  business  plan to
enable the  Company  to  continue  as a going  concern.  During  the  process of
resolving such  difficulties  and  developing  such plan, Mr. Gram has agreed to
serve without compensation,  with the understanding that all ordinary, necessary
and  reasonable  expenses  incurred  by him in the  performance  of his  duties,
including  travel and  temporary  living  expenses,  will be  reimbursed  by the
Company and with the further understanding that the Committee and the Board will
thereafter  consider  establishing an appropriate  salary to be paid him for his
services.

     Compliance With Internal Revenue Code Section 162(m)

     Section  162(m) of the Internal  Revenue Code,  enacted in 1993,  generally
disallows a tax deduction to public companies for  compensation  over $1,000,000
paid to the  corporation's  Chief Executive Officer and four other mostly highly
compensated executives officers. Qualifying performance-based  compensation will
not be  subject to the  deduction  limit if certain  requirements  are met.  The
compensation  currently paid to the Company's Chief Executive Officer and highly
compensated executive officers does not approach the $1,000,000  threshold,  and
the Company does not anticipate  approaching  such threshold in the  foreseeable
future. Nevertheless, the Company intends to take the necessary action to comply
with the Code limitations.

     Future Compensation Trends

     The Committee anticipates undertaking a review of all compensation programs
and policies of the Company, and making appropriate modifications and revisions,
in conjunction with the Company's development of future business plans.

                                       47

<PAGE>

ITEM 12.

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Based upon  information  furnished  to the Company or  contained in filings
made  with the  Commission,  the  Company  believes  that the only  persons  who
beneficially  own more than five  percent (5%) of the shares of the Common Stock
of the Company are Yasawa (52.41%),  Selex (20.82%) and Antony Gram, through his
holdings in Selex and Yasawa (73.23%).

     All of the issued and outstanding  stock of Selex,  Ottergeerde 14, 4941 VM
Raamsdonksveer, The Netherlands, is owned by Wilbury, a majority of which is, in
turn, owned by Antony Gram. As the majority shareholder of Wilbury,  Antony Gram
is treated as the beneficial  owner of all of the Company's Common Stock held by
Selex.  In  addition,   Mr.  Gram  beneficially  owns  Yasawa,  c/o  Zarf  Trust
Corporation,  N.V.,  1-5 Plaza JoJo  Correa,  PO Box 897,  Willemstad,  Curacao,
Netherlands  Antilles.  Since Yasawa is the direct owner of 7,098,975  shares of
the Common  Stock of the  Company,  and Selex is the direct  owner of  2,820,066
shares  of the  Common  Stock  of the  Company,  Mr.  Gram is  deemed  to be the
beneficial  owner of an  aggregate  of  9,919,041  shares of Common Stock of the
Company (73.23%).

     The  following  table sets forth  information,  as of  February  14,  2003,
concerning  the beneficial  ownership by all directors and nominees,  by each of
the executive  officers  named in the Summary  Compensation  Table (the "Summary
Compensation Table") and by all directors and executive officers as a group. The
number of shares  beneficially  owned by each  director or executive  officer is
determined  under  the  rules  of the  Commission,  and the  information  is not
necessarily indicative of beneficial ownership for any other purpose.


                                           Amount and Nature           Percent
                                         of Beneficial Ownership       of Class
                                         -----------------------       --------
Current Directors and/or Nominees:
    Address: c/o The Deltona Corporation
             8014 SW 135th Street Road
             Ocala, FL 34473

               George W. Fischer.......       35,000 - Direct             *
               Antony Gram ............    9,919,041 - Indirect         73.23%
               Rudy Gram...............      324,378 - Direct            2.39%
               Thomas B. McNeill ......          200 - Direct             *
               Christel DeWilde........          -0-                      *

Current Executive Officers named in
 Summary Compensation Table:
    Address: c/o The Deltona Corporation
             8014 SW 135th Street Road
             Ocala, FL 34473

               Antony Gram.............    9,919,041 - Indirect         73.23%
               Sharon J. Hummerhielm...          200 - Direct             *

All executive officers and directors as
 a group, consisting of 7 persons
 (including those listed above)........   10,278,819                    75.89%

-------------
     *    Represents holdings of less than 1%.


     Based upon  information  furnished  to the Company or  contained in filings
made  with the  Commission,  the  Company  believes  that the only  persons  who
beneficially  own more than five  percent (5%) of the shares of the Common Stock
of the Company are Yasawa (52.41%),  Selex (20.82%) and Antony Gram, through his
holdings in Selex and Yasawa (73.23%).

     Mr. Rudy Gram, a member of the Board of Directors is the son of Mr.  Antony
Gram.


                                       48

<PAGE>


     From June 19, 1992  through  March 1999,  the Company had entered into loan
agreements with Selex International B.V., a Netherlands  corporation  ("Selex"),
Yasawa  Holdings,  N.V., a Netherlands  Antilles  Corporation  ("Yasawa"),  Swan
Development Corporation ("Swan") and related parties. Since December,  1992, the
Company has been  dependent on loans and advances from Selex,  Yasawa,  Swan and
their affiliates in order to meet its working capital requirements.

Section 16(a) Beneficial Ownership Reporting Compliance

     The Securities Exchange Act of 1934 requires the Company's  directors,  its
executive  officers  and any  persons  holding  more  than  ten  percent  of the
Company's Common Stock to report their initial ownership of the Company's Common
Stock and any subsequent changes in that ownership to the Commission.  Under the
Section 16(a) rules, the Company is required to disclose in this Proxy Statement
any failure to file such required reports by their prescribed due dates.

     To the Company's knowledge,  based solely on a review of the copies of such
reports  furnished  to the  Company and  written  representations  that no other
reports  were  required  during the fiscal year ended  December  31,  2002,  all
Section 16(a) filing requirements were satisfied.

                                       49

<PAGE>



ITEM 13.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Executive  Compensation Committee (the "Committee") is comprised of Mr.
Fischer, Chairman, and Messrs. Antony Gram and Rudy Gram.

     Mr. Antony Gram, a member of the  Committee,  has served as Chairman of the
Board and Chief  Executive  Officer of the  Company,  and thus,  as an executive
officer of the Company,  since July 13, 1994.  Additionally,  Mr. Antony Gram is
deemed to be the beneficial  owner of 73.23% of the Company's Common Stock since
he is the beneficial  owner of Yasawa  Holdings,  N.V.  ("Yasawa")  (which holds
52.41% of the Common Stock of the Company as of March 15, 2002),  as well as the
holder  of  a  majority  equity  interest  in  Wilbury   International  N.V.,  a
Netherlands Antilles corporation  ("Wilbury"),  which owns all of the issued and
outstanding  stock of Selex  International  B.V. ("Selex) (which holds 20.82% of
the Common Stock of the Company as of March 15, 2002).  See "Ownership of Voting
Securities of the Company."

     Mr.  Rudy  Gram,  a  member  of the  Committee,  a member  of the  Board of
Directors and a candidate for re-election to the Board of Directors,  is the son
of Mr. Antony Gram. See "Ownership of Voting Securities of the Company."

     From June 19, 1992  through  March 1999,  the Company had entered into loan
agreements with Selex International B.V., a Netherlands  corporation  ("Selex"),
Yasawa  Holdings,  N.V., a Netherlands  Antilles  Corporation  ("Yasawa"),  Swan
Development Corporation ("Swan") and related parties. Since December,  1992, the
Company has been  dependent on loans and advances from Selex,  Yasawa,  Swan and
their affiliates in order to meet its working capital requirements.

     Scafholding agreed to purchase  contracts  receivable at 65% of face value,
with recourse, to meet the Company's ongoing capital requirements.  During 1998,
Scafholding purchased approximately  $1,396,000 in contracts receivable from the
Company.

     As of December  31,  2002,  the  Company's  outstanding  debt to Yasawa was
$3,000,000  secured by a first lien on the Company's  receivables and a mortgage
on all of the  Company's  properties.  The terms of repayment of the Yasawa loan
provide for  $100,000  of monthly  payments of  principal  in cash or  contracts
receivable  at 100% of face value,  with  recourse.  Interest  accrues at 6% for
2000, at the prime rate adjusted  semi-annually to the then current rate ranging
from 9.5% to 4.75% for 2001 and 2002 and 4.25%  effective  January 1, 2003.  The
Company  satisfied its principal  obligation to  Scafholding  as of December 31,
1999.  Yasawa and  Scafholding  have not required  the Company to make  interest
payments  since  September 1, 1998. As of December 31, 2002, the total amount of
interest  accrued on the Yasawa and  Scafholding  obligations  is  approximately
$1,629,000, which is included in accrued interest.

     During 2002,  Swan loaned the Company an  additional  $3,849,000 so that it
was able to meet its working capital requirements. The Company's debt to Swan as
of December 31, 2002, of $8,282,000 is secured by a second lien on the Company's
receivables.  Swan has  agreed to  accept  contracts  receivable  at 90% of face
value,  with  recourse,  in payment of the  Company's  obligation  to Swan.  The
Company  recognizes a loss on the transfer of contracts at less than face value.
The  amount  of each  monthly  payment  will be  dependent  upon the  amount  of
contracts receivable in the Company's portfolio,  excluding contracts receivable
held as  collateral  for prior  receivable  sales.  Each  month,  the Company is
required  to  transfer  to  Swan , as  debt  repayment,  all  current  contracts
receivable  in the  Company's  portfolio  in excess of  $500,000.  Swan does not
charge  interest  for the first six months  after an  advance;  thereafter,  the
interest was 6% for 2000, at the prime rate adjusted  semi-annually  to the then
current rate  ranging  from 9.5% to 4.75% for 2001 and 2002 and 4.25%  effective
January 1, 2003. As of December 31, 2002, the accrued and unpaid interest on the
Swan notes of approximately $837,000 is included in accrued interest.

     The Company  recognized  interest  expense and a contribution to additional
paid in  capital  for  preferential  cost of funds  advanced  by Swan and  other
affiliated  companies.  The first six months of each loan advance from Swan that
is non-interest  bearing, the Company recognizes interest at the prime rate, the
Company's  incremental borrowing rate. The Company recorded interest expense and
a capital contribution in the amount of approximately $78,000 and $170,000,  for
2002 and 2001,  respectively.  For 2000 the  company  recognized  an  additional
interest  expense and capital  contribution of $408,000 on all outstanding  debt
balances  to  Yasawa,  Scafholding  and Swan at 8%,  the  Company's  incremental
borrowing rate and the amount accrued under the terms of the respective notes.

                                       50

<PAGE>


     During 1998, the Company  transferred 14 lots and 4 tracts of land to Swan.
In  return,  Swan  built an  office  complex  on part of the land for use by the
Company for a period of 54 months, renewable thereafter.  The Company valued the
land transferred at approximately $440,000 and recorded the net present value of
the use of the office  complex of  approximately  $375,000 as prepaid rent.  The
difference  between the net  present  value of the rent and the cost of the land
was recorded as deferred profit and is recognized over the lease term.

     In January 2000, the Company purchased 16 lots and homes under construction
from   Scafholding   for   approximately   $862,000.   This  amount   represents
Scafholding's  lot  cost  and  payments  to  date  to  the  home  builder.  This
transaction   was  100%  financed  by  Swan  under  its  existing  note  payable
arrangement.

     During  2001,  the Company  entered  into a joint  venture  agreement  (the
"Venture")  with  Scafholding,  (see Note 12),  for the purchase of property tax
certificates,  application of tax deeds,  administration and the acquisition and
sale of  land.  The  Company  provides  administrative,  managerial,  sales  and
marketing services to the Venture.  The Company is reimbursed by the Venture for
all  commissions and marketing  costs plus an  administrative  fee of 10% of all
sales consummated.  Scafholding provides financing to the Venture and has loaned
the Venture  approximately  $1,554,000 as of December 31, 2002.  Interest on the
outstanding  debt  accrues  at the  fixed  rate of  7.75%.  Net  income is to be
distributed equally between the Company and Scafholding. The Company records its
investment  in the Venture on the equity  method as control of the Venture rests
with Scafholding as specified in the joint venture agreement.

     In the future,  if the Company elects to do so, Yasawa and Scafholding have
agreed to purchase contracts receivable at 65% of face value, with recourse. The
Company has an agreement with Swan whereby Swan may loan the Company funds to be
repaid with contracts receivable at 90% of face value, with recourse.

     In 2002, the Company filed a Form 13E(3) and a preliminary  proxy statement
related to a proposed going private  transaction.  These documents are currently
being reviewed by the SEC staff.  These filings were done pursuant to actions by
the Board of Directors.  On December 13, 2001, the Board of Directors  approved,
subject to stockholder  approval, a 1 for 500,000 reverse split of the Company's
common stock and a related amendment to the Company's  Articles of Incorporation
reducing  the number of  authorized  shares to 30.  Based on the current  common
stockholdings, if voted and approved by the stockholders, the reverse split will
reduce the  number of the  Company's  stockholders  to two  stockholders:  Selex
International,  B.V., a Netherlands  corporation  ("Selex") and Yasawa Holdings,
N.V., a Netherlands Antilles corporation ("Yasawa").  The date of the meeting of
stockholders  to consider both matters will be determined upon the conclusion of
the review and subsequent  amendments to the  disclosures  in preliminary  proxy
statement and Form13E(3) filings.



                                       51

<PAGE>


ITEM 14

         EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


(a)     1.   Financial Statements

             See Item 8, Index to Consolidated Financial Statements and
             Supplemental Data.


        2.   Financial Statement Schedules
                                                                     Page
                                                                     ----

             Independent Auditors' Report....................         53

             Schedule II - Valuation and qualifying accounts
                           for each of the three years ended
                           December 31, 2002.................         54

             All other  schedules are omitted  because they are not applicable
             or not required,  or because the required information is included
             in the Consolidated Financial Statements or Notes thereto.

        3.   Exhibits

             Attached  hereto  as  Exhibit  10(pp)  is the  Purchase  and Sale
             Agreement  between the Company and Finova  Capital  Group for the
             acquisition of the remaining  contracts  receivable  purchased in
             1990 and 1992 by Oxford  Finance  Company.  See the Exhibit Index
             included herewith.

(b)     Reports on Form 8-K

             None.

                                       52

<PAGE>


                          INDEPENDENT AUDITORS' REPORT



TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF THE DELTONA CORPORATION:


     We have  audited  the  consolidated  financial  statements  of The  Deltona
Corporation  and  subsidiaries  (the "Company") as of December 31, 2002 and 2001
and for the years ended  December  31,  2002,  2001 and 2000 and have issued our
reports thereon dated February 6, 2003,  except for Note 12 as to which the date
is March 7, 2003,  (which  expresses  an  unqualified  opinion  and  includes an
explanatory  paragraph  relating to the Company's ability to continue as a going
concern),  included elsewhere in this Annual Report on Form 10-K. Our audit also
included the financial  statement schedules listed in Item 14(a)2 of this Annual
Report on Form 10-K. These financial  statement schedules are the responsibility
of the Company's  management.  Our responsibility is to express an opinion based
on  our  audit.  In  our  opinion,  such  financial  statement  schedules,  when
considered in relation to the basic consolidated financial statements taken as a
whole,  present  fairly  in all  material  respects  the  information  set forth
therein.




JAMES MOORE & COMPANY P.L.
Certified Public Accountants
Gainesville, Florida
February 6, 2003 except for Note 12
as to which the date is March 7, 2003


                                       53

<PAGE>



                                                                     SCHEDULE II

<TABLE>
<CAPTION>

                      THE DELTONA CORPORATION AND SUBSIDIARIES

                        VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)


                                                                                 Additions
                                                                                 Charged to
Those Valuation and Qualifying Accounts                Balance at  Revenues,     Deductions     Balance at
Which are Deducted in the Balance Sheet                Beginning   Costs, and    from           End of
  from the Assets to Which They Apply                  of Period   Expenses      Reserves       Period
---------------------------------------                ----------  -----------   ----------     ----------
<S>                                                    <C>         <C>           <C>            <C>
Year ended December 31, 2002


  Allowance for uncollectible contracts(a)(c).......   $  205      $ 1,834        $  1,839       $  200
                                                       ======      =======        ========       ======

  Unamortized contract valuation discount(b)........   $  138      $   227        $    217       $  148
                                                       ======      =======        ========       ======
Year ended December 31, 2001


  Allowance for uncollectible contracts(a)(c).......   $  291      $ 1,774        $  1,860       $  205
                                                       ======      =======        ========       ======

  Unamortized contract valuation discount(b)........   $  264      $    73        $    199       $  138
                                                       ======      =======        ========       ======


Year ended December 31, 2000


  Allowance for uncollectible contracts(a)(c).......   $  606      $ 1,176        $  1,491       $  291
                                                       ======      =======        ========       ======

  Unamortized contract valuation discount(b)........   $  293      $   267        $    296       $  264
                                                       ======      =======        ========       ======


<FN>

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

(a) Represents estimated uncollectible contracts receivable (see Notes 1 and 2
    to Consolidated Financial Statements).

(b) Represents the unamortized  discount generated from initial  valuations  of
    contracts receivable (see Notes 1 and 2 to Consolidated Financial
    Statements).

(c) In 2002,  the loss  recognized  on the transfer of contracts  receivable has
    been  reclassified from  a component of "Estimated  uncollectible  sales" to
    "Loss on  transfer  of  contracts  receivable"  and  the amount for 2001 and
    2000, have been reclassified to conform to this presentation.
</FN>
</TABLE>



                                       54

<PAGE>





                                   SIGNATURES

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

THE DELTONA CORPORATION
  (Company)


By:/s/ Robert O. Moore                           DATE:         March 12, 2002
   ----------------------
   Robert O.Moore, Treasurer, Chief Financial
   Officer and Chief Accounting Officer

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



  /s/  Antony Gram
------------------------------------------------
       Antony Gram, Chairman of the Board of Directors,
       Chief Executive Officer and President

  /s/  Christel DeWilde
------------------------------------------------
       Christel DeWilde, Director

  /s/  George W. Fischer
------------------------------------------------
       George W. Fischer, Director

 /s/   Rudy Gram
------------------------------------------------
       Rudy Gram, Director

 /s/   Thomas B. McNeill
------------------------------------------------
       Thomas B. McNeill, Director             DATE:        March 12, 2002


                                       55

<PAGE>


<TABLE>
<CAPTION>

                              INDEX TO EXHIBITS
                                                                                 Sequentially
Exhibit                                                                            Numbered
Number                  Exhibits                                                     Page
--------                -------------------------------------------------------- ------------
<S>                     <C>                                                      <C>
 2(a)                   Purchase Agreement dated November  6,  1985,  among  the
                        Company,  its  utility  subsidiaries  and  Topeka  Group
                        Incorporated, including as exhibits  thereto the form of
                        Deltona  Warrant, the form of Utility Subsidiary Warrant
                        and the form of Security Agreement. Incorporated  herein
                        by reference to Exhibit 2(a) to the  Company's Quarterly
                        Report on Form 10-Q for the quarter ended September 30,
                        1985.

 2(b)                   Stock  Redemption  and Stock  Purchase  Agreement  dated
                        November 8, 1985, by and among the Company,  its utility
                        subsidiaries and Topeka Group Incorporated, including as
                        an exhibit the specimen Articles of Amendment of Deltona
                        Utilities,  Inc.  Incorporated  herein by  reference  to
                        Exhibit 2(b) to the Company's  Quarterly  Report on Form
                        10-Q for the quarter ended September 30, 1985.

 2(c)                   Agreement dated November 17, 1987 modifying the November
                        6,  1985  Purchase  Agreement  among  the  Company,  its
                        utility  subsidiaries  and Topeka  Group,  Incorporated,
                        including as an exhibit thereto a specimen Amended Stock
                        Redemption and Stock Purchase Agreement by and among the
                        Company,  its  utility  subsidiaries  and Topeka  Group,
                        Incorporated.*

 2(d)                   Letter to American Stock Transfer to Transfer 6,809,338
                        shares of common stock to Yasawa Holding N.V.

 3(a)                   Restated Certificate of Incorporation and Certificate of
                        Designation,  Preferences  and Rights  relating  to  the
                        Series A Cumulative Preferred Stock of the Company.*

 3(b)                   By-laws of the Company. ++

 4(a)                   Fifth Amended and Restated Credit and Security Agreement
                        dated as of March 25, 1987, between the Company, certain
                        subsidiaries of the Company, Citibank, N.A., and certain
                        other banks. Incorporated herein by reference to Exhibit
                        4(a) to the Company's  Quarterly Report on Form 10-Q for
                        the quarter ended March 27, 1987.

 4(b)                   Modification Agreement, dated  June 30, 1988, to Exhibit
                        4(b). Incorporated by reference to Exhibit4 to Company's
                        Quarterly Report on Form 10-Q for the quarter ended June
                        24, 1988.

 4(C)                   Extension of Maturity Date,  dated January 30, 1989,  to
                        Exhibit 4(b).***

 4(d)                   Extension of Maturity Date,  dated January 31, 1990,  to
                        Exhibit 4(b).****

 4(e)                   Conveyance   Agreement  between  the  Company,   certain
                        subsidiaries of the Company, Citibank, N.A., and certain
                        other banks. Incorporated herein by reference to Exhibit
                        4 to the Company's Quarterly Report on Form 10-Q for the
                        quarter ended September 27, 1991.

 4(f)                   Sixth Amended and Restated Credit and Security Agreement
                        dated as of June 18, 1992, between the Company,  certain
                        subsidiaries of the Company, Citibank, N.A., and certain
                        other banks, including therewith the Receivables Sharing
                        Agreement and the form of Warrant issued to the banks.++

 4(g)                   Option granted to  Selex  Sittard  B.V.,  dated June 19,
                        1992. Incorporated by reference to Exhibit4 to Company's
                        Quarterly Report on Form 10-Q for the quarter ended June
                        26, 1992.

 4(h)                   Waiver and  Relinquishment  by Selex Sittard B.V., dated
                        September  14, 1992,  as to certain  shares under option
                        pursuant to that Option  granted  Selex  Sittard B.V. on
                        June 19, 1992. Incorporated by reference to Exhibit 4 to
                        Company's  Quarterly Report on Form 10-Q for the quarter
                        ended September 25, 1992.

 4(i)                   Seventh Amendment to Credit and Security Agreement dated
                        December 2, 1992 by and among Yasawa Holdings, N.V., the
                        Company and certain subsidiaries of the Company. +++

 4(j)                   Warrant  Exercise  and Debt  Reduction  Agreement  dated
                        December 2, 1992  by  and between the Company and Yasawa
                        Holdings, N.V. +++

 4(k)                   Loan Agreement  dated April 30, 1993 between the Company
                        and Selex  International,  B.V., including therewith the
                        Mortgage  and  Note  entered  into   pursuant   thereto.
                        Incorporated  herein by  reference  to  Exhibit 4 to the
                        Company's  Quarterly Report on Form 10-Q for the quarter
                        ended March 26, 1993.

 4(l)                   Loan  Agreement  dated July 14, 1993 between the Company
                        and Selex  International  B.V,  including  therewith the
                        Mortgage  and  Note  entered  into   pursuant   thereto.
                        Incorporated  herein by  reference  to  Exhibit 4 to the
                        Registrant's  Quarterly  Report on Form 10-Q  dated June
                        25, 1993.

                                      56


<PAGE>



                              INDEX TO EXHIBITS
                                                                                 Sequentially
Exhibit                                                                            Numbered
Number                  Exhibits                                                     Page
--------                -------------------------------------------------------- ------------
4(m)                    First,  Second,  Third,  Fourth and Fifth  Amendments to
                        Loan   Agreement   dated  July  14,  1993   between  the
                        Registrant and Selex International,  B.V.,  Incorporated
                        herein by  reference  to  Exhibit 4 to the  Registrant's
                        Report on Form 8-K dated February 17, 1994.

4(n)                    Eighth   Amendment  and  Consolidation  of  Credit   and
                        Security  Agreement between the Company and Yasawa dated
                        November 13, 1997.++++

4(o)                    Renewal Promissory Note from the Company  to  Yasawa  in
                        the amount of $6,692,732 dated November 13, 1997.++++

4(p)                    Consolidated   Mortgage   Modification   and    Spreader
                        Agreement between the Company and Yasawa dated  November
                        13, 1997.++++

4(q)                    Partial Release of Mortgage and Financing Statement from
                        the Company to Yasawa dated November 13, 1997.++++

4(r)                    Satisfaction  of  Mortgage   dated   November  13,  1997
                        from Selex International, B.V. for Selex I loan.++++

4(s)                    Satisfaction  of  Mortgage  dated November 13, 1997 from
                        Selex international, B.V. for Selex II loan.++++

4(t)                    General  Release  from  Selex  International, B.V. dated
                        November 13, 1997.++++

4(u)                    Renewal Promissory Note from the Company to Scafholding,
                        B.V. in the amount of $2,293,950 dated November 13, 1997
                        ++++

4(v)                    Satisfaction   of   Mortgage  dated  January  28,  1998,
                        effective December 30, 1997 , of the  Mortgage  given by
                        the Company to  the  Division  of  Florida  Land  Sales,
                        Condominiums and Mobile Homes.++++

4(w)                    UCC3  effective  December  30, 1997 from the Division of
                        Florida  Land  Sales,   Condominiums  and  Mobile  Homes
                        releasing   its   lien   on  the   Company's   contracts
                        receivable.++++

4(x)                    Promissory  Note from  the Company to Swan in the amount
                        of $5,690,000 dated March 26, 1999.+++++

10(a)                   Employment  Agreement  dated  June 15, 1992  between the
                        Company and Earle D. Cortright, Jr.++

10(b)                   Employment Agreement dated  November 1, 1988 between the
                        Company and Michelle R. Garbis.**

10(c)                   Agreement dated June 15, 1992  extending  the Employment
                        Agreement dated November 1, 1988,as amended, between the
                        Company and Michelle R. Garbis.++

10(d)                   Employment Agreement dated February 28, 1992 between the
                        Company and David M. Harden and amendment thereto dated
                        June 15, 1992.++

10(e)                   Employment  Agreement dated  June 15, 1992  between  the
                        Company and Sharon J. Hummerhielm. ++

10(f)                   Employment  Agreement  dated  June 15, 1992  between the
                        Company and Charles W. Israel.++

10(g)                   Letter  Agreement  dated  October 26, 1988  between  the
                        Company and Stephen J. Diamond. **

10(h)                   1982  Employees'  Incentive  Stock  Option  Plan.
                        Incorporated  herein  by  reference  to  Exhibit 4(g) to
                        Company's   Registration   Statement   on   Form    S-8,
                        registration number 2-78904.

10(i)                   Annual  Executive  Bonus  Plan  adopted  by  the Company
                        on November 13, 1986.   Incorporated herein by reference
                        to Exhibit 10(x)  to the Company's Annual Report on Form
                        10-K for the year ended December 26, 1986.

10(j)                   1987  Stock  Incentive  Plan  adopted  by the Company on
                        November 13, 1986,  subject  to  the   approval  of  the
                        Company's stockholders. Incorporated herein by reference
                        to Exhibit 10(y)  to the Company's Annual Report on Form
                        10-K for the year ended December 26, 1986.

10(k)                   Resolution of the Board of  Directors of Company adopted
                        February 25, 1987 amending the 1982 Employees' Incentive
                        Stock Option Plan.   Incorporated herein by reference to
                        Exhibit 10(d) to the Company's Annual Report on Form 10K
                        for the year ended December 26, 1986.

                                      57

<PAGE>
                           INDEX TO EXHIBITS
                                                                                 Sequentially
Exhibit                                                                            Numbered
Number                  Exhibits                                                     Page
--------                -------------------------------------------------------- ------------
10(l)                   Amendment to  Annual Executive Bonus Plan, as adopted by
                        the Company on October 20, 1988.**

10(m)                   Amendment to 1987 Stock  Incentive  Plan,  as adopted by
                        the Company on October 20, 1988.**

10(n)                   Settlement Agreement,  made  and  entered  into  by  and
                        between  the  National  Audubon  Society, Collier County
                        Conservancy,

                        Florida  Audubon  Society,  Environmental  Defense Fund,
                        Florida Division of the Izaak Walton League,  Department
                        of Environmental Regulation of the State of Florida, the
                        Board of  Trustees  of the  Internal  Improvement  Trust
                        Fund, the Department of Veteran and Community Affairs of
                        the State of Florida, the South Florida Water Management
                        District and Company dated July 20, 1982,  and Agreement
                        of Exchange executed  pursuant thereto,  dated March 24,
                        1984.  Incorporated herein by reference to Exhibit 10(C)
                        to the Company's  Quarterly  Report on Form 10-Q for the
                        quarter ended June 30, 1984.

10(o)                   Agreement,  retroactive  to  June 19, 1992, amending the
                        Employment  Agreement  dated  June  15, 1992 between the
                        Company and Earle D. Cortright, Jr.  Incorporated herein
                        by  reference  to  Exhibit 10(o) to the Company's Annual
                        Report on Form 10-Kfor the year ended December 31, 1993.

10(p)                   Employment  Agreement,  effective July 15, 1992, between
                        the Company and Joseph Mancilla, Jr. Incorporated herein
                        by reference to Exhibit  10(p) to the  Company's  Annual
                        Report  on Form  10-K for the year  ended  December  31,
                        1993.

10(q)                   Sale, Purchase, Repurchase and Servicing Agreement dated
                        October 7,1988 between the Company and Morsemere Federal
                        Savings Bank.**

10(r)                   Agreement dated  February  27,  1989 between Company and
                        Oxford Finance Companies, Inc.***

10(s)                   Agreement dated  February 7, 1990  between  Company  and
                        Oxford Finance Companies, Inc.****

10(t)                   Promissory  Note dated October 12, 1990 from the Company
                        to Empire of Carolina, Inc.+

10(u)                   Settlement  Agreement  dated  November  6, 1989  between
                        Company  and  Topeka  Group  Incorporated.  Incorporated
                        herein  by  reference  to  Exhibit  10 to the  Company's
                        Quarterly  Report  on Form  10-Q for the  quarter  ended
                        September 29, 1989.

10(v)                   Loan  and Escrow Agreement dated June  15,  1992 between
                        Company  and Selex Sittard B.V., including therewith the
                        Mortgage and Note entered into pursuant thereto.++

10(w)                   Agreement dated  June  12,  1992 between Company and The
                        Oxford  Finance Companies, Inc., including therewith the
                        Collateral   Trust   Agreement   entered  into  pursuant
                        thereto.++

10(x)                   The  1992  Deltona  Consent  Order, dated June 17, 1992,
                        between  Company and the State of Florida, Department of
                        Business Regulation,  Division  of  Florida  Land Sales,
                        Condominiums   and   Mobile   Homes  (the  "Division"),
                        including therewith the Escrow  Agreement  entered  into
                        pursuant thereto.++

10(y)                   The St.  Augustine  Shores Restated Consent Order, dated
                        June 17, 1992, between Company and the Division.++

10(z)                   The Consent Order, dated June 15, 1992, between Company
                        and the Division  pertaining to ad valorem taxes on real
                        estate.++

10(aa)                  Agreement  of Purchase  and Sale dated  December 2, 1992
                        between the Company and Scafholding, B.V. +++

10(bb)                  Citrus Springs Joint Venture Agreement dated December 2,
                        1992  between  the   Company  and   Citony   Development
                        Corporation.+++

10(cc)                  Agreement of  Purchase and Sales dated December 2, 1992
                        between the Company,  Margolf Investments, Inc. and Five
                        Points Title Service Co., Inc., as Escrow Agent. +++

10(dd)                  Lease Agreement  dated  December 2, 1992 between Margolf
                        as Landlord and the Company as Tenant. +++

10(ee)                  Loan Agreement dated December 2,1992 between Scafholding
                        B.V. and the Company. +++

10(ff)                  Employment Agreement, effective  March 15, 1993, between
                        the Company and Bruce M. Weiner.  Incorporated herein by
                        reference to Exhibit  10(ff)  to  the  Company's  Annual
                        Report on Form 10-K for the year ended December 31, 1993

10(gg)                  Agreement dated March 10, 1993  between  the Company and
                        Charles Lichtigman concerning the sale of contracts and
                        mortgages receivable.  Incorporated herein by reference
                        to Exhibit 10 to the Company's Quarterly Report on Form
                        10-Q for the quarter ended March 26, 1993.

10(hh)                  Agreement for Purchase  and  Sale  of  Land in St. Johns
                        County, Florida dated March 8, 1994. Incorporated herein
                        by reference to Exhibit 10 to the Registrant's Report on
                        Form 8-K dated February 17, 1994.

10(ii)                  Agreement of Purchase  and Sale  between the Company and
                        Swan Development Corporation concerning the sale of all
                        remaining inventory in St. Augustine Shores Subdivision
                        dated November 13, 1997.++++


                                            58


<PAGE>

                           INDEX TO EXHIBITS
                                                                                 Sequentially
Exhibit                                                                            Numbered
Number                  Exhibits                                                     Page
--------                -------------------------------------------------------- ------------
10(jj)                  Agreement  between  the  Company  and  Swan  Development
                        Corporation concerning the St. Augustine Shores Exchange
                        program dated November 13, 1997.++++

10(ll)                  Lot Exchange  Trust  Agreement between the Company, Five
                        Points  Title  Services  Company,  Inc  and the Division
                        of Florida  Land  Sales,  Condominiums  and Mobile Homes
                        dated November 13, 1997.++++

10(mm)                  Letter  from   the   Division  of  Florida  Land  Sales,
                        Condominiums  and  Mobile  Homes dated December 30, 1997
                        approving the  sale  of  St.  Augustine  Shores  to Swan
                        Development Corporation.++++

10(nn)                  Letter  from  the   Division  of  Florida   Land  Sales,
                        Condominiums  and Mobile  Homes dated  December 30, 1997
                        approving  the  material  change  for the sale of common
                        stock, sale of receivables, Lot Exchange Trust Agreement
                        and release of lien.++++

10(oo)                  Joint Venture Agreement dated September 1, 2001  between
                        Five Points  Title  as Trustee  for Scafholding B.V. and
                        the Company++++++

10(pp)                  Purchase  and  Sale  Agreement dated  February  27, 2003
                        between  the  Company and Finova Capital Corporation for
                        the  acquisition of  the remaining  contracts receivable
                        purchased in  1990  and 1992 by Oxford Finance Company.

11                      Statement  of  computation  of  net  income  (loss)  per
                        common share.

18                      Letter  dated  March 22, 1991  from  Deloitte  &  Touche
                        regarding  a change in the method of applying accounting
                        principles or practices by Company.+

21                      Subsidiaries of Company.

23                      Consent of James Moore & Co. , P.L.

99.1                    Certification  of  Chief  Executive Officer pursuant to
                        18  U.S.C. Section 1350, as adopted  pursuant to Section
                        906 of the Sarbanes-Oxley Act of 2002

99.2                    Certification  of  Chief  Financial Officer pursuant to
                        18  U.S.C. Section 1350, as adopted  pursuant to Section
                        906 of the Sarbanes-Oxley Act of 2002

--------------------------
*                       Incorporated by reference  to such exhibit to Company's
                        Annual Report on Form 10-K for the year ended
                        December 25, 1987.

**                      Incorporated by reference to such exhibit to Company's
                        Quarterly Report on Form 10-Q for the quarter ended
                        September 23, 1988.

***                     Incorporated by reference to such exhibit to Company's
                        Annual Report on Form 10-K for the year ended
                        December 30, 1988.

****                    Incorporated by reference to such exhibit to Company's
                        Annual Report on Form 10-K for the year ended
                        December 29, 1989.

+                       Incorporated by reference to such exhibit to Company's
                        Annual Report on Form 10-K for the year ended
                        December 28, 1990.

++                      Incorporated by reference to such exhibit to Company's
                        Annual Report on Form 10-K for the year ended
                        December 27, 1991.

+++                     Incorporated by reference to such exhibit to Company's
                        Report on Form 8-K dated December 2, 1992.

++++                    Incorporated by reference to such exhibit to Company's
                        Annual Report on Form 10-K for the year ended
                        December 31, 1997.

+++++                   Incorporated by reference to such exhibit to Company's
                        Annual Report on Form 10-K for the year ended
                        December 31, 1999.

++++++                  Incorporated by reference to such exhibit to Company's
                        Annual Report on Form 10-K for the year ended
                        December 31, 2001.


                                        59

</TABLE>