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


                                    FORM 10-Q


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

              For the quarterly period ended September 30, 2002

                                 OR

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

       For the transition period from __________________ to ______________


                          Commission File Number 0-2380

                               SPORTS ARENAS, INC.
                               -------------------
             (Exact name of registrant as specified in its charter)


                               Delaware 13-1944249
                               -------------------
               (State of Incorporation) (I.R.S. Employer I.D. No.)


             7415 Carroll Road, Suite C, San Diego, California 92121
             -------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code (858) 408-0364




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
                                               ---    ---

The number of shares  outstanding  of the  issuer's  only class of common  stock
($.01 par value) as of October 31, 2002 was 27,250,000 shares.

<PAGE>

                               SPORTS ARENAS, INC.

                                    FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 2002

                                      INDEX






Part I - Financial Information:


Item 1.- Consolidated Condensed Financial Statements:

        Unaudited Balance Sheets as of September 30, 2002
           and June 30, 2002 .........................................   1-2

        Unaudited Statements of Operations for the Three Months Ended
                September 30, 2002 and 2001 ..........................    3

        Unaudited Statements of Cash Flows for the Three Months Ended
                September 30, 2002 and 2001...........................    4

        Notes to Financial Statements.................................   5-6


Item 2.- Management's Discussion and Analysis of Financial Condition
                and Results of Operations.............................   7-10

Item 3.- Quantitative and Qualitative Disclosures about Market Risk...    10

Item 4.- Controls and Procedures .....................................    11

Part II - Other Information...........................................    11

Signatures............................................................    12

Officer Certifications ...............................................   13-14
<PAGE>


                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                     ASSETS
                                  (Unaudited)

                                                    September 30,   June 30,
                                                         2002         2002
                                                     -----------  -----------


Current assets:
   Cash and cash equivalents ........................$    53,014  $    39,345
   Receivables ......................................    370,555      444,996
   Inventories ......................................    778,954      792,690
   Prepaid expenses .................................    111,746       38,706
                                                     -----------  -----------
      Total current assets ..........................  1,314,269    1,315,737
                                                     -----------  -----------

Receivables due after one year:
   Note receivable- affiliate, net ..................       --           --
                                                     -----------  -----------

Property and equipment, at cost:
   Equipment and leasehold improvements .............  2,345,406    2,345,406
      Less accumulated depreciation and amortization  (1,367,144)  (1,314,680)
                                                     -----------  -----------
       Net property and equipment ...................    978,262    1,030,726
                                                     -----------  -----------

Other assets:
   Intangible assets, net ...........................     27,963       37,284
   Investments ......................................    432,657      423,657
   Other ............................................     95,999       95,999
                                                     -----------  -----------
                                                         556,619      556,940
                                                     -----------  -----------

                                                     $ 2,849,150  $ 2,903,403
                                                     ===========  ===========







                                       1
<PAGE>


                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND SHAREHOLDERS' DEFICIT
                                  (Unaudited)


                                                    September 30,   June 30,
                                                         2002         2002
                                                     -----------  -----------

Current liabilities:
   Notes payable-short term .........................$   725,631  $   445,000
   Current portion of long-term debt ................      5,000        8,000
   Accounts payable .................................  1,100,474      963,402
   Accrued payroll and related expenses .............    262,332      215,093
   Accrued interest .................................     29,223      276,735
   Other liabilities ................................    121,457       92,803
                                                     -----------  -----------
      Total current liabilities .....................  2,244,117    2,001,033
                                                     -----------  -----------

Long-term debt, excluding current portion ...........      5,935        5,456
                                                     -----------  -----------

Distributions received in excess of basis
  in investment ..................................... 18,226,081   18,008,401
                                                     -----------  -----------

Other liabilities ...................................    204,000      192,000
                                                     -----------  -----------

Minority interest in consolidated subsidiary ........    802,677      802,677
                                                     -----------  -----------


Shareholders' deficit:
   Common stock, $.01 par value, 50,000,000
     shares authorized, 27,250,000 shares
     issued and outstanding .........................    272,500      272,500
   Additional paid-in capital .......................  1,730,049    1,730,049
   Accumulated deficit ..............................(18,344,717) (17,817,221)
                                                     -----------  -----------
                                                     (16,342,168) (15,814,672)
   Less note receivable from shareholder ............ (2,291,492)  (2,291,492)
                                                     -----------  -----------

     Total shareholders' deficit ....................(18,633,660) (18,106,164)
                                                     -----------  -----------

Commitments and contingencies (Note 6)

                                                     $ 2,849,150  $ 2,903,403
                                                     ===========  ===========









     See accompanying notes to consolidated condensed financial statements.


                                       2
<PAGE>

                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                 THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (Unaudited)

                                                         2002         2001
                                                     -----------  -----------
Revenues:
   Bowling ..........................................$   357,603  $   383,821
   Rental ...........................................     17,976       58,859
   Golf .............................................    635,074      444,223
   Other ............................................     41,828       38,139
   Other-related party ..............................     48,224       46,069
                                                     -----------  -----------
                                                       1,100,705      971,111
                                                     -----------  -----------
Costs and expenses:
   Bowling ..........................................    342,765      346,919
   Rental ...........................................     18,700       58,710
   Golf .............................................    646,261      499,069
   Selling, general, and administrative .............    576,753      652,763
   Depreciation and amortization ....................     65,819       71,663
                                                     -----------  -----------
                                                       1,650,298    1,629,124
                                                     -----------  -----------

Loss from operations ................................   (549,593)    (658,013)
                                                     -----------  -----------

Other income (charges):
   Investment income:
     Related party ..................................      9,070        6,771
     Other ..........................................       --          1,807
   Interest expense and amortization of finance costs    (33,648)     (24,982)
   Equity in income (loss) of investees .............     46,675      (33,301)
                                                     -----------  -----------
                                                          22,097      (49,705)
                                                     -----------  -----------


Net loss ............................................$  (527,496) $  (707,718)
                                                     ===========  ===========


Basic and diluted net loss per common share
 (based on 27,250,000 weighted average
 common shares outstanding) .........................   $(0.02)      $(0.03)
                                                        =======      =======









     See accompanying notes to consolidated condensed financial statements.



                                       3
<PAGE>
                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                 THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                   (Unaudited)

                                                         2002         2001
                                                     -----------  -----------
Cash flows from operating activities:
  Net loss ..........................................$  (527,496) $  (707,718)
  Adjustments to reconcile net loss to the net
   cash used by operating activities:
      Depreciation and amortization .................     65,819       71,663
      Equity in (income) loss of investees ..........    (46,675)      33,301
      Deferred income ...............................     12,000       12,000
    Changes in assets and liabilities:
      Decrease in receivables .......................     74,441      111,992
      Decrease in inventories .......................     13,736       21,006
      Increase in prepaid expenses ..................    (73,040)     (18,838)
      Increase (decrease) in accounts payable .......    137,072      (68,124)
      Increase in accrued expenses ..................    109,012       75,787
      Other .........................................      9,321        9,321
                                                     -----------  -----------
        Net cash used by operating activities .......   (225,810)    (459,610)
                                                     -----------  -----------

Cash flows from investing activities:
   Distribution to holders of minority interest .....       --        (25,000)
   Distributions from investees .....................    242,000      145,500
                                                     -----------  -----------
        Net cash provided by investing activities ...    242,000      120,500
                                                     -----------  -----------

Cash flows from financing activities:
   Scheduled principal payments on long-term debt ...     (2,521)     (12,760)
                                                     -----------  -----------
       Net cash used by financing activities ........     (2,521)     (12,760)
                                                     -----------  -----------

Net increase (decrease) in cash and
   cash equivalents .................................     13,669     (351,870)
Cash and cash equivalents, beginning of period ......     39,345      515,204
                                                     -----------  -----------

Cash and cash equivalents, end of period ............$    53,014  $   163,334
                                                     ===========  ===========

Supplemental Disclosure of Non-Cash Financing Activities:
  Reclassification of principal payments on short-term
    debt to accrued interest ........................$   280,631  $      --
                                                     ===========  ===========


     See accompanying notes to consolidated condensed financial statements.


                                       4
<PAGE>
                      SPORTS ARENAS, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                     SEPTEMBER 30, 2002 AND 2001 (Unaudited)

1.   The information  furnished  reflects all adjustments of a recurring  nature
     which  management  believes  are  necessary  to a  fair  statement  of  the
     Company's financial position,  results of operations and cash flows for the
     interim periods.

2. Due to  the  seasonal  fluctuations  of  the  bowling  and  golf  club  shaft
   manufacturing operations, the financial results for the interim periods ended
   September 30, 2002 and 2001, are not necessarily indicative of operations for
   the entire year.

3. Investments:

   (a) Investments consist of the following:
                                                    September 30,   June 30,
                                                         2002        2002
                                                     -----------  -----------
     Vail Ranch Limited Partnership
       (equity method) ..............................$   432,657  $   423,657
                                                     ===========  ===========
     Investment in UCV, L.P. classified
      as liability- Distributions received
      in excess of basis in investment ..............$18,226,081  $18,008,401
                                                     ===========  ===========

      The  following  is a  summary  of  the  equity  in  income  (loss)  of the
      investments accounted for by the equity method:
                                           2002        2001
                                         --------    --------
        UCV, L.P. ....................   $ 37,675    $ 19,699
        Vail Ranch Limited Partnership      9,000     (53,000)
                                         --------    --------
                                         $ 46,675    $(33,301)
                                         ========    ========

      The following is a summary of distributions received from investees:
                                           2002        2001
                                         --------    --------
        UCV, L.P. ....................   $242,000    $145,500
        Vail Ranch Limited Partnership       --          --
                                         --------    --------
                                         $242,000    $145,500
                                         ========    ========

   (b) Investment in UCV, L.P.

      The operating  results of this investment are included in the accompanying
      consolidated   condensed   statements   of   operations   based  upon  the
      partnership's  fiscal year (March 31).  Summarized  information  from UCV,
      L.P.'s (UCV) unaudited  statements of income for the  three-month  periods
      ended June 30, 2002 and 2001 are as follows:
                                           2002        2001
                                       ----------  ----------
        Revenues ..................... $1,376,000  $1,329,000
        Operating and general and
          administrative costs .......    461,000     418,000
        Depreciation .................      3,000       3,000
        Interest expense .............    836,000     868,000
        Net income ...................     76,000      40,000

4. Contingencies:

   The Company is involved in various routine  litigation and disputes  incident
   to its  business.  In  management's  opinion,  based in part on the advice of
   legal counsel,  none of these matters will have a material  adverse effect on
   the Company's financial position.

                                       5
<PAGE>

5. Business segment information:

   The Company operates principally in four business segments:  bowling centers,
   commercial real estate rental, real estate  development,  and golf club shaft
   manufacturing.  Other revenues,  which are not part of an identified segment,
   consist of property  management  and  development  fees  (earned  from both a
   property 50 percent  owned by the Company and a property in which the Company
   has no ownership) and commercial brokerage.

   The following is  summarized  information  about the Company's  operations by
   business segment.


<TABLE>
<CAPTION>
                                                 Real Estate   Real Estate                   Unallocated
                                      Bowling        Rental     Development        Golf        And Other       Totals
                                   ------------   ------------  ------------   ------------   ------------   ------------
THREE MONTHS ENDED SEPTEMBER 30, 2002:
--------------------------------------
<S>                                <C>            <C>           <C>            <C>            <C>            <C>
Revenues .......................   $   357,603    $    17,976   $      --      $   635,074    $    90,052    $ 1,100,705
Depreciation and amortization...         6,099         13,355          --           41,757          4,608         65,819
Interest expense ...............          --             --            --             --           33,648         33,648
Equity in income of investees ..          --           37,675         9,000           --             --           46,675
Segment profit (loss) ..........       (74,522)        23,596         9,000       (371,872)      (122,768)      (536,566)
Investment income ..............                                                                                   9,070
Loss from operations ...........                                                                                (527,496)
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 2001:
--------------------------------------
<S>                                <C>            <C>           <C>            <C>            <C>            <C>
Revenues .......................   $   383,821    $    58,859   $      --      $   444,223    $    84,208    $   971,111
Depreciation and amortization...         2,490         13,829          --           42,774         12,570         71,663
Interest expense ...............          --             --            --             --           24,982         24,982
Equity in income of investees ..          --           19,699       (53,000)          --             --          (33,301)
Segment profit (loss) ..........       (53,573)         6,019       (58,000)      (465,254)      (145,488)      (716,296)
Investment income ..............                                                                                   8,578
Loss from operations ...........                                                                                (707,718)
</TABLE>

6. Impact of Adopting SFAS No. 142, Goodwill and Other Intangible Assets

     The  Company  does  not  have  goodwill  or  intangible  assets  that  have
     indefinite useful lives recorded on the accompanying consolidated condensed
     balance  sheets.  The Company only  maintains  intangible  assets that have
     finite useful lives which are amortized over their useful lives.

7. Liquidity

     The  accompanying  consolidated  condensed  financial  statements have been
     prepared assuming the Company will continue as a going concern. The Company
     has suffered  recurring losses,  has a working capital  deficiency,  and is
     forecasting  negative  cash flows for the next twelve  months.  These items
     raise  substantial doubt about the Company's ability to continue as a going
     concern.  The Company's ability to continue as a going concern is dependent
     on either  refinancing  or selling  certain real estate  assets,  obtaining
     additional investors in its subsidiary,  Penley Sports, or increases in the
     sales  volume  of  Penley  Sports.  The  consolidated  condensed  financial
     statements  do  not  contain  adjustments,  if  any,  including  diminished
     recovery  of  asset  carrying   amounts,   that  could  arise  from  forced
     dispositions and other insolvency costs.

                                       6
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
----------------------------------------------------------
            CONDITION AND RESULTS OF OPERATIONS:
            -----------------------------------
                         LIQUIDITY AND CAPITAL RESOURCES
                         -------------------------------
The independent  auditors'  report dated September 23, 2002 included in our June
30,  2002  Annual  Report  on Form  10-K  contained  the  following  explanatory
paragraph:

     The  accompanying  consolidated  financial  statements  have been  prepared
     assuming that the Company will continue as a going concern. As discussed in
     Note 14 to the consolidated financial statements,  the Company has suffered
     recurring  losses,  has a  working  capital  deficiency  and  shareholders'
     deficit,  and is forecasting  negative cash flows from operating activities
     for the next twelve months.  These items raise  substantial doubt about the
     Company's  ability to continue as a going  concern.  Management's  plans in
     regard to these  matters are also  described  in Note 14. The  consolidated
     financial  statements do not include any adjustments that might result from
     the outcome of this uncertainty.

Management estimates negative cash flow of $500,000 to $700,000 in total for the
remaining  three  quarters  of the year  ending  June 30,  2003  from  operating
activities after deducting capital  expenditures and principal payments on notes
payable and adding estimated distributions from UCV.

The  short-term  loan from the  Company's  partner in UCV is due on demand.  The
Company is exploring selling its partner a portion of the Company's  interest in
UCV in satisfaction of the remaining loan obligations.  At this point management
is unable to assess the likelihood a transaction will be consummated.

Vail Ranch Limited Partners is negotiating the sale of its partnership  interest
in Temecula Creek Partners to its other partner in Temecula  Creek.  The Company
estimates  that its share of the  proceeds  from  this sale to be  approximately
$550,0000 to $650,000. The Company is obligated to pay approximately one-half of
these proceeds to its minority partner.

Management  expects  continuing  cash flow deficits until Penley Sports develops
sufficient  sales  volume  to  become  profitable.  Although,  there  can  be no
assurances  that  Penley  Sports  will  ever  achieve   profitable   operations,
management  estimates that a combination of continued  increases in the sales of
Penley Sports and reduction of its operating  costs will result in Penley Sports
and the Company achieving a breakeven level of operations at the end of the next
two quarters.

Management is currently  evaluating  other sources of working capital  including
the  sale  of  assets  or  obtaining  additional  investors  in  Penley  Sports.
Management  has not assessed the likelihood of any other sources of long-term or
short-term  liquidity.  If the  Company is not  successful  in  obtaining  other
sources of working  capital  this  could have a material  adverse  effect on the
Company's ability to continue as a going concern.  However,  management believes
it will be able to meet its financial obligations for the next twelve months.

The Company has a working  capital  deficit of $929,848 at  September  30, 2002,
which is a $244,552  increase  from the working  capital  deficit of $685,296 at
June 30, 2002. The increase in working capital deficit is primarily attributable
to the cash used by operating  activities  for the three months ended  September
30, 2002. The following is a schedule of the cash provided (used) before changes
in assets and liabilities, segregated by business segments:

                                      2002          2001        Change
                                  ----------    ----------    ----------
    Bowling ...................   $  (68,000)   $  (51,000)   $  (17,000)
    Rental ....................       (1,000)         --          (1,000)
    Golf ......................     (331,000)     (423,000)       92,000
    Development ...............         --          (5,000)        5,000
    General corporate expense
      and other ...............      (97,000)     (112,000)       15,000
                                  ----------    ----------    ----------
    Cash used by continuing
      operations ..............     (497,000)     (591,000)       94,000
    Capital expenditures, net
      of financing ............         --            --            --
    Principal payments on
      long-term debt ..........       (3,000)      (13,000)       10,000
                                  ----------    ----------    ----------
    Cash used .................     (500,000)     (604,000)      104,000
                                  ==========    ==========    ==========
    Distributions received from
      investees ...............      242,000       146,000        96,000
                                  ==========    ==========    ==========



                                        7
<PAGE>

                          CRITICAL ACCOUNTING POLICIES
                          ----------------------------
In  response to the SEC's  release No.  33-8040,  "Cautionary  Advice  Regarding
Disclosure About Critical Accounting  Policies",  the Company has identified its
most  critical  accounting  policy as that related to the carrying  value of its
long-lived  assets.  Any event or circumstance  that indicates to the Company an
impairment  of the fair  value of any asset is  recorded  in the period in which
such event or  circumstance  becomes  known to the  Company.  During the quarter
ended September 30, 2002 no such event or  circumstance  occurred that would, in
the  opinion of  management,  signify the need for a material  reduction  in the
carrying  value of any of the  Company's  assets.

                          NEW ACCOUNTING PRONOUNCEMENTS
                          -----------------------------
In June of 2002, the FASB issued SFAS No. 146,  Accounting for Costs  Associated
with Exit or Disposal  Activities.  SFAS No. 146 addresses financial  accounting
and  reporting  for  costs  associated  with  exit or  disposal  activities  and
nullifies   Emerging  Issues  Task  Force  (EITF)  Issue  No.  94-3,   Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity  (including Certain Costs Incurred in a Restructuring).  The provisions
of this  statement  are  effective  for  exit or  disposal  activities  that are
initiated  after  December 31, 2002,  with early  application  encouraged.  This
statement will only have an effect on the Company's financial  statements to the
extent future exit or disposal activities relevant to SFAS No. 146 occur.


              "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES
                          LITIGATION REFORM ACT OF 1995
              ----------------------------------------------------
With the  exception  of  historical  information  (information  relating  to the
Company's  financial  condition and results of operations at historical dates or
for historical periods),  the matters discussed in this Management's  Discussion
and  Analysis of  Financial  Condition  and Results of  Operations  are forward-
looking  statements that  necessarily  are based on certain  assumptions and are
subject to certain risks and uncertainties. These forward-looking statements are
based on management's  expectations as of the date hereof,  and the Company does
not  undertake  any  responsibility  to update  any of these  statements  in the
future.  Actual future  performance and results could differ from that contained
in or suggested by these  forward-looking  statements as a result of the factors
set forth in this  Management's  Discussion and Analysis of Financial  Condition
and Results of  Operations  and  elsewhere  in the  Company's  filings  with the
Securities and Exchange Commission.

                              RESULTS OF OPERATIONS
                              ---------------------
The  following is a summary of the changes in the results of  operations  of the
three-month  period  ended  September  30, 2002 to the same period in 2001 and a
discussion of the significant changes:
<TABLE>
<CAPTION>
                                                      Rental     Real Estate               Unallocated
                                         Bowling     Operation   Development     Golf       And Other      Totals
                                        ---------    ---------    ---------    ---------    ---------    ---------
<S>                                     <C>          <C>          <C>          <C>          <C>           <C>
    Revenues ........................   $ (26,218)   $ (40,883)   $    --      $ 190,851    $   5,844      129,594
    Costs ...........................      (4,154)     (40,010)        --        147,192         --        103,028
    SG&A-direct .....................      (3,515)        --           --        (49,706)     (22,789)     (76,010)
    SG&A-allocated ..................      (1,209)        --         (5,000)       1,000        5,209         --
    Depreciation and amortization ...       3,609         (474)        --         (1,017)      (7,962)      (5,844)
    Interest expense ................        --           --           --           --          8,666        8,666
    Equity in investees .............        --         17,976       62,000         --           --         79,976
    Segment profit (loss) ...........     (20,949)      17,577       67,000       93,382       22,720      179,730
    Investment income ...............                                                                          492
    Net loss  .......................                                                                      180,222
</TABLE>

BOWLING OPERATIONS:
-------------------

Bowl  revenues  decreased by 7% primarily due to a 14% decrease in the number of
games bowled.  This decrease was almost identical for both open and league play.
This decrease was offset by a 9% increase in the average price of games bowled.


                                       8
<PAGE>
RENTAL OPERATIONS:
------------------
This  segment  includes  the  equity in income  of the  operation  of a 542 unit
apartment   project  (UCV),  a  subleasehold   interest  in  land  underlying  a
condominium  project  (PS  Sublease)  (which  was sold in March  2002),  and the
sublease of a portion of the Penley  factory.  The following is a summary of the
changes in operations:
                                             2002 vs. 2001
                                  --------------------------------------
                                  PS Sublease      Other        Combined
                                  ----------    ----------    ----------
    Revenues ..................   $  (41,459)    $     576     $ (40,883)
    Costs .....................      (40,710)          700       (40,010)
    SG&A-allocated ............         --            --            --
    Depreciation and
       amortization ...........         (474)         --            (474)
    Interest expense ..........         --            --            --
    Equity in income of UCV ...         --          17,976        17,976
    Segment profit (loss) .....         (275)       17,852        17,577

The primary  reason for the decline in rental  revenues and costs related to the
sale of the PS Sublease in March 2002.

The equity in income of UCV  increased  by $18,000  in 2002  primarily  due to a
decrease in interest  expense  related to the lower interest rate  applicable to
the  refinancing in March 2002. The following is a summary of the changes in the
operations of UCV, LP in 2002 compared to the prior period:

      Revenues ..............................   $  47,000
      Costs .................................      43,000
      Depreciation ..........................        --
      Interest and amortization of loan costs     (32,000)
      Net income ............................      36,000

Rental  income of UCV  increased  primarily  due to a 6% increase in the average
rental rate.  This increase was  partially  offset by an increase in the vacancy
for the period from 1.4 percent to 2.9 percent.

REAL ESTATE DEVELOPMENT OPERATIONS:
-----------------------------------
The  increase  in the equity in income of Vail Ranch  Limited  Partners  (VRLP),
relates  to the  increase  in the income  from the  operation  of the  partially
completed shopping center for which the first store commenced operations in July
2000 and is now reaching a level of stabilzed operations after being leased up.

GOLF OPERATIONS:
----------------

Golf  revenues  increased  in 2002 due to  increases in sales to small golf club
manufacturers and golf equipment distributors. The following is a breakdown
of the percentage of sales by customer category:

                                    2002  2001
                                    ----  ----
     Golf equipment distributors .   35%   23%
     Small golf club manufacturers   28%   16%
     Golf shops ..................   29%   48%
     Other .......................    8%   13%

                                       9
<PAGE>

Operating expenses of the golf segment consisted of the following in 2002 and
2001:
                                     2002          2001        Decrease
                                  ----------    ----------    ----------
    Costs of sales and
       manufacturing overhead .   $  598,000    $  440,000    $  158,000
    Research and development ..       48,000        59,000       (11,000)
                                  ----------    ----------    ----------
       Total golf costs .......      646,000       499,000       147,000
                                  ==========    ==========    ==========
    Marketing and promotion ...      178,000       266,000       (88,000)
    Administrative costs- direct      79,000        41,000        38,000
                                  ----------    ----------    ----------
      Total SG&A-direct .......      257,000       307,000       (50,000)
                                  ==========    ==========    ==========

Total golf costs  increased in 2002  primarily due to the cost of goods sold and
other  manufacturing  overhead  (primarily  payroll)  associated  with increased
sales. Marketing and promotion expenses decreased primarily due to the
Company not renewing  the contract  with its  marketing  consultant  in May 2002
($43,000  decrease).  Marketing  and  promotion  otherwise  decreased  due  to a
decrease in the tour program  expenses  that  resulted from staffing the program
with one person instead of two.  Administrative expenses increased primarily due
to $23,000 increase in bad debt expense.


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

The Company is exposed to market risk primarily due to  fluctuations in interest
rates.  The  Company  utilizes  both fixed  rate and  variable  rate  debt.  The
following  table  presents  principal  maturities and related  weighted  average
interest rates of the Company's  long-term fixed rate and variable rate debt for
the fiscal years ended June 30.

                           2003       2004       Total       Fair Value
                       ----------   -------    ----------    ----------
                                                                 (1)
Fixed rate debt ..     $    5,000   $ 6,000    $   11,000    $   11,000
Weighted average
   interest rate .         13.6%       13.6%       13.6%

Variable rate debt     $  726,000      --      $  726,000    $  726,000
Weighted average
   interest rate .          5.8%        --          5.8%

The amounts for 2003 relate to the nine months ending June 30, 2003.

   (1)The fair value of fixed-rate  debt and  variable-rate  debt were estimated
      based on the current rates offered for fixed-rate  debt and  variable-rate
      debt with similar risks and maturities.

The variable rate debt includes a $726,000 short term note payable that is due
on demand,  which for  purposes of this  calculation  has been treated as though
paid during the year ending June 30, 2003.

The Company's unconsolidated subsidiary, UCV, has two notes payable which mature
April 1, 2003 as a result of a  refinancing  in March  2002.  The first  loan is
variable rate debt of $36,000,000 for which the interest rate was 5.4 percent as
of June 30, 2002.  However,  there is a floor of 5.4% established by the lender
and a cap purchased by UCV which  effectively caps the maximum rate on this loan
at 7%. The scheduled  principal  payments for UCV's fiscal years ending March 31
2003 is $36,000,000.  The estimated fair value of this debt is $36,000,000 based
on the  current  rates  offered  for this  type of loan with  similar  risks and
maturities.  The second  loan of  $2,000,000  is fixed  rate debt at 12.5%.  The
scheduled  principal  payments  for UCV's  fiscal  years ending March 31 2003 is
$2,000,000.  The estimated  fair value of this debt is  $2,000,000  based on the
current rates offered for this type of loan with similar risks and maturities.

The Company does not enter into  derivative  or interest rate  transactions  for
speculative or trading purposes.

                                       10
<PAGE>

ITEM 4. CONTROLS AND PROCEDURES
-------------------------------
We  maintain  disclosure  controls  and  procedures  (as  defined in  Securities
Exchange Act 1934 Rules 13a-14(c) and 15d-4(c)) that are designed to ensure that
information  required to be  disclosed  in our Exchange Act reports is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer,  as appropriate,  to allow timely decisions
regarding  required  disclosure.  In designing  and  evaluating  the  disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated,  can provide only reasonable assurance
of achieving the desired  control  objectives,  and management  necessarily  was
required to apply its judgment in evaluating the  cost-benefit  relationship  of
possible controls and procedures,

Within 90 days prior to the date of this  quarterly  report,  we carried  out an
evaluation,  under the  supervision  and with the  participation  of management,
including  our Chief  Executive  Officer  and Chief  Financial  Officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.  Based on the  foregoing,  our  Chief  Executive  Officer  and Chief
Financial  Officer  concluded that our disclosure  controls and procedures  were
effective.

Changes in Internal Controls:

There have not been any significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation. There were no significant deficiencies or material weaknesses,
and therefore no corrective actions were taken.



                                     PART II
                                OTHER INFORMATION



ITEM 1. Legal Proceedings

         As of September  30, 2002,  there were no changes in legal  proceedings
         from  those  set  forth in Item 3 of the Form  10-K  filed for the year
         ended June 30, 2002.


ITEM 2. Changes in Securities

            NONE


ITEM 3. Defaults upon Senior Securities

            N/A


ITEM 4. Submission of Matters to a Vote of Security Holder
        --------------------------------------------------

            NONE

ITEM 5. Other Information

            NONE


ITEM 6. Exhibits & Reports on Form 8-K

      (a) Exhibits: NONE

      (b) Reports on Form 8-K:  NONE



                                       11
<PAGE>


                                   SIGNATURES


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




      SPORTS ARENAS, INC.



      By:  /s/ Harold S. Elkan
         ----------------------
                  Harold S. Elkan, President and Director


      Date:   November 14, 2002
            --------------------



      By:/s/ Steven R. Whitman
         ---------------------
            Steven R. Whitman, Treasurer,
            Principal Accounting Officer and Director



      Date: November 14, 2002
           ------------------




                                       12
<PAGE>

                                 CERTIFICATIONS

I, Harold S. Elkan, certify that:

1.   I have reviewed this quarterly report on Form I0-Q of Sports Arenas, Inc.;

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

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

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

     a.  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

     b.  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     c.  presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

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

     a.  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

     b.  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         controls; and

6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were any significant changes in
     internal controls or in other factors that could significantly affect
     internal controls subsequent to the date of our most recent evaluation,
     including any corrective actions with regard to significant deficiencies
     and material weaknesses.

Date: November 14, 2002     By:/s/ Harold S. Elkan
      -----------------        ---------------------
                                   Harold S. Elkan
                                    President and Chief Executive Officer

                                       13
<PAGE>


I, Steven R. Whitman, certify that:

1.   I have reviewed this quarterly report on Form I0-Q of Sports Arenas, Inc.;

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

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

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

     a.  designed such disclosure controls and procedures to ensure that
         material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

     b.  evaluated the effectiveness of the registrant's disclosure controls and
         procedures as of a date within 90 days prior to the filing date of this
         quarterly report (the "Evaluation Date"); and

     c.  presented in this quarterly report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

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

     a.  all significant deficiencies in the design or operation of internal
         controls which could adversely affect the registrant's ability to
         record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

     b.  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         controls; and

6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were any significant changes in
     internal controls or in other factors that could significantly affect
     internal controls subsequent to the date of our most recent evaluation,
     including any corrective actions with regard to significant deficiencies
     and material weaknesses.

Date: November 14, 2002         By:/s/ Steven R. Whitman
                                   ---------------------
                                       Steven R. Whitman
                                        Chief Financial Officer


                                       14