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, 2001

                                 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, 2001 was 27,250,000 shares.

<PAGE>

                               SPORTS ARENAS, INC.

                                    FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 2001

                                      INDEX






Part I - Financial Information:


Item 1.- Consolidated Condensed Financial Statements:

        Unaudited Balance Sheets as of September 30, 2001
           and June 30, 2001..........................................   1-2

        Unaudited Statements of Operations for the Three Months Ended
                September 30, 2001 and 2000...........................    3

        Unaudited Statements of Cash Flows for the Three Months Ended
                September 30, 2001 and 2000...........................    4

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


Item 2.- Management's Discussion and Analysis of Financial Condition
                and Results of Operations.............................   7-9

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

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


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


<PAGE>


                      SPORTS ARENAS, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                     ASSETS
                                  (Unaudited)

                                                    September 30,   June 30,
                                                         2001         2001
                                                     -----------  -----------


Current assets:
   Cash and cash equivalents ........................$   163,334  $   515,204
   Receivables ......................................    212,920      324,912
   Inventories ......................................    564,105      585,111
   Prepaid expenses .................................     80,203       61,365
                                                     -----------  -----------
      Total current assets ..........................  1,020,562    1,486,592
                                                     -----------  -----------

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  (1,118,460)  (1,060,626)
                                                     -----------  -----------
       Net property and equipment ...................  1,226,946    1,284,780
                                                     -----------  -----------

Other assets:
   Intangible assets, net ...........................    140,862      150,657
   Investments ......................................    352,446      405,446
   Other ............................................    120,999      120,999
                                                     -----------  -----------
                                                         614,307      677,102
                                                     -----------  -----------

                                                     $ 2,861,815  $ 3,448,474
                                                     ===========  ===========







                                       1
<PAGE>


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

                      LIABILITIES AND SHAREHOLDERS' DEFICIT
                                  (Unaudited)


                                                    September 30,   June 30,
                                                         2001         2001
                                                     -----------  -----------

Current liabilities:
   Notes payable-short term .........................$ 1,250,000  $ 1,250,000
   Current portion of long-term debt ................     22,000       32,000
   Accounts payable .................................    640,183      708,307
   Accrued payroll and related expenses .............    225,908      195,367
   Accrued interest .................................    227,439      203,578
   Other liabilities ................................    204,851      183,466
                                                     -----------  -----------
      Total current liabilities .....................  2,570,381    2,572,718
                                                     -----------  -----------

Long-term debt, excluding current portion ...........     11,182       13,942
                                                     -----------  -----------

Distributions received in excess of basis
  in investment ..................................... 15,931,529   15,792,373
                                                     -----------  -----------

Other liabilities ...................................    156,000      144,000
                                                     -----------  -----------

Minority interest in consolidated subsidiary ........    827,677      852,677
                                                     -----------  -----------


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 ..............................(16,346,011) (15,638,293)
                                                     -----------  -----------
                                                     (14,343,462) (13,635,744)
   Less note receivable from shareholder ............ (2,291,492)  (2,291,492)
                                                     -----------  -----------

     Total shareholders' deficit ....................(16,634,954) (15,927,236)
                                                     -----------  -----------

Commitments and contingencies (Note 5)

                                                     $ 2,861,815  $ 3,448,474
                                                     ===========  ===========









     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, 2001 AND 2000
                                   (Unaudited)

                                                         2001         2000
                                                     -----------  -----------
Revenues:
   Bowling ..........................................$   383,821  $   608,911
   Rental ...........................................     58,859      168,833
   Golf .............................................    444,223      287,009
   Other ............................................     38,139       34,282
   Other-related party ..............................     46,069       44,351
                                                     -----------  -----------
                                                         971,111    1,143,386
                                                     -----------  -----------
Costs and expenses:
   Bowling ..........................................    346,919      533,377
   Rental ...........................................     58,710       69,283
   Golf .............................................    499,069      552,597
   Development ......................................       --         41,280
   Selling, general, and administrative .............    652,763      748,238
   Depreciation and amortization ....................     71,663       99,116
                                                     -----------  -----------
                                                       1,629,124    2,043,891
                                                     -----------  -----------

Loss from operations ................................   (658,013)    (900,505)
                                                     -----------  -----------

Other income (charges):
   Investment income:
     Related party ..................................      6,771         --
     Other ..........................................      1,807         --
   Interest expense:
     Development activities .........................       --        (83,394)
     Other and amortization of finance costs ........    (24,982)    (129,990)
   Equity in income (loss) of investees .............    (33,301)      55,162
                                                     -----------  -----------
                                                         (49,705)    (158,222)
                                                     -----------  -----------


Net loss ............................................$  (707,718) $(1,058,727)
                                                     ===========  ===========


Basic and diluted net loss per common share
 (based on 27,250,000 weighted average
 common shares outstanding) .........................  $(0.03)       $(0.04)
                                                       =======       =======









     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, 2001 AND 2000
                                          (Unaudited)

                                                         2001         2000
                                                     -----------  -----------
Cash flows from operating activities:
  Net loss ..........................................$  (707,718) $(1,058,727)
  Adjustments to reconcile net loss to the net
   cash used by operating activities:
      Amortization of deferred financing costs ......       --          2,280
      Depreciation and amortization .................     71,663       99,116
      Equity in (income) loss of investees ..........     33,301      (55,162)
      Deferred income ...............................     12,000       12,000
      Interest accrued on assessment district
        obligations .................................       --         83,394
    Changes in assets and liabilities:
      Decrease in receivables .......................    111,992       81,315
      Decrease in inventories .......................     21,006       27,973
      Increase in prepaid expenses ..................    (18,838)     (41,169)
      Increase (decrease) in accounts payable .......    (68,124)     141,018
      Increase in accrued expenses ..................     75,787       97,257
      Other .........................................      9,321        8,997
                                                     -----------  -----------
        Net cash used by operating activities .......   (459,610)    (601,708)
                                                     -----------  -----------

Cash flows from investing activities:
   Decrease in notes receivable .....................       --         71,079
   Capital expenditures .............................       --       (167,767)
   Increase in development costs on
     undeveloped land ...............................       --         (5,734)
   Distribution to holders of minority interest .....    (25,000)        --
   Distributions from investees .....................    145,500       84,000
                                                     -----------  -----------
        Net cash provided (used) by investing
          activities ................................    120,500      (18,422)
                                                     -----------  -----------

Cash flows from financing activities:
   Scheduled principal payments on long-term debt ...    (12,760)     (70,804)
   Proceeds from note payable .......................       --        700,000
                                                     -----------  -----------
       Net cash provided (used) by  financing
          activities ................................    (12,760)     629,196
                                                     -----------  -----------

Net increase (decrease) in cash and
   cash equivalents .................................   (351,870)       9,066
Cash and cash equivalents, beginning of period ......    515,204       13,961
                                                     -----------  -----------

Cash and cash equivalents, end of period ............$   163,334  $    23,027
                                                     ===========  ===========






     See accompanying notes to consolidated condensed financial statements.


                                       4
<PAGE>
                      SPORTS ARENAS, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                     SEPTEMBER 30, 2001 AND 2000(Unaudited)

1. The information  furnished reflects all adjustments 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. Certain  prior  period  amounts  have been  reclassified  to  conform  to the
   presentation used in the current period.

3. Due to  the  seasonal  fluctuations  of  the  bowling  and  golf  club  shaft
   manufacturing operations, the financial results for the interim periods ended
   September 30, 2001 and 2000, are not necessarily indicative of operations for
   the entire year.

4. Investments:

   (a) Investments consist of the following:
                                                    September 30,   June 30,
                                                          2001        2001
                                                     -----------  -----------
     Vail Ranch Limited Partnership
       (equity method) ..............................$   352,446  $   405,446
                                                     ===========  ===========
     Investment in UCV, L.P. classified
      as liability- Distributions received
      in excess of basis in investment ..............$15,931,529  $15,792,373
                                                     ===========  ===========

      The  following  is a  summary  of  the  equity  in  income  (loss)  of the
      investments accounted for by the equity method:
                                           2001        2000
                                         --------    --------
        UCV, L.P. ....................   $ 19,699    $ 70,162
        Vail Ranch Limited Partnership    (53,000)    (15,000)
                                         --------    --------
                                         $(33,301)   $ 55,162
                                         ========    ========

      The following is a summary of distributions received from investees:
                                           2001        2000
                                         --------    --------
        UCV, L.P. ....................   $145,500    $ 84,000
        Vail Ranch Limited Partnership       --          --
                                         --------    --------
                                         $145,500    $ 84,000
                                         ========    ========

   (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, 2001 and 2000 are as follows:
                                           2001        2000
                                       ----------  ----------
        Revenues ..................... $1,329,000  $1,235,000
        Operating and general and
          administrative costs .......    418,000     407,000
        Depreciation .................      3,000       5,000
        Interest expense .............    868,000     683,000
        Net income ...................     40,000     140,000

5. 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>

6. 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, 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>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 2000:
--------------------------------------
<S>                                <C>            <C>           <C>            <C>            <C>            <C>
Revenues .......................   $   608,911    $   185,081   $      --      $   287,009    $    78,633    $ 1,159,634
Depreciation and amortization...        25,842         29,612          --           33,585         10,077         99,116
Interest expense ...............        37,417         41,423        83,394          2,019         49,131        213,384
Equity in income of investees ..          --           70,162       (15,000)          --             --           55,162
Loss on sale ...................          --             --            --             --             --             --
Segment profit (loss) ..........      (155,380)       108,925      (144,674)      (742,411)      (125,187)    (1,058,727)
Investment income ..............                                                                                    --
Loss from operations ...........                                                                              (1,058,727)
</TABLE>

                                        2001          2000
                                    -----------   -----------
Revenues per segment schedule ..    $  971,111    $ 1,159,634
Intercompany rent eliminated ...          --          (16,248)
                                    -----------   -----------
Consolidated revenues ..........    $  971,111    $ 1,143,386
                                    ===========   ===========

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 or increases in the sales
   volume of its subsidiary, 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 Company has a working  capital  deficit of $1,549,819 at September 30, 2001,
which is a $463,693  increase from the working  capital deficit of $1,086,126 at
June 30, 2001. The increase in working capital deficit is primarily attributable
to the cash used by operating  activities  for the three months ended  September
30, 2001. The following is a schedule of the cash provided (used) before changes
in assets and liabilities, segregated by business segments:
                                      2001          2000        Change
                                  ----------    ----------    ----------
    Bowling ...................   $  (51,000)   $ (129,000)   $   78,000
    Rental ....................         --          70,000       (70,000)
    Golf ......................     (423,000)     (709,000)      286,000
    Development ...............       (5,000)      (46,000)       41,000
    General corporate expense
      and other ...............     (112,000)     (103,000)       (9,000)
                                  ----------    ----------    ----------
    Cash used by continuing
      operations ..............     (591,000)     (917,000)      326,000
    Capital expenditures, net
      of financing ............         --        (174,000)      174,000
    Principal payments on
      long-term debt ..........      (13,000)      (71,000)       58,000
                                  ----------    ----------    ----------
    Cash used .................     (604,000)   (1,162,000)      558,000
                                  ==========    ==========    ==========
    Distributions received from
      investees ...............      146,000        84,000        62,000
                                  ==========    ==========    ==========

The  Company has been unable to  generate  sufficient  cash flow from  operating
activities to meet  scheduled  principal  payments on long-term debt and capital
replacement  needs  during  the last  several  years.  It has used its  share of
distributions  from investees and proceeds from refinancings and sales of assets
to fund these deficits.

Management  estimates  negative cash flow of $900,000 to $1,000,000 in total for
the  remaining  quarters  of the  year  ending  June  30,  2002  from  operating
activities after deducting capital  expenditures and principal payments on notes
payable.  Management  expects  continuing cash flow deficits until Penley Sports
develops sufficient sales volume to become profitable.  However, there can be no
assurances  that  Penley  Sports  will  ever  achieve   profitable   operations.
Management  is  currently  evaluating  other  sources  of working  capital  from
refinancing  the  long-term  debt of UCV or  obtaining  additional  investors in
Penley  Sports to provide  sufficient  funds for the  expected  future cash flow
deficits. 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.

                          NEW ACCOUNTING PRONOUNCEMENTS
                          -----------------------------

In  June  2001,  the  Financial   Accounting  Standards  Board  ("FASB")  issued
Statements of Financial  Accounting  Standards ("SFAS") SFAS No. 143, Accounting
for Asset  Retirement  Obligations.  SFAS No.  143 is  effective  for  financial
statements  issued for fiscal years  beginning  after June 15, 2002 and requires
that the fair  value  of a  liability  for an  asset  retirement  obligation  be
recognized  in the period in which it is  incurred if a  reasonable  estimate of
fair value can be made. The associated asset retirement costs are capitalized as
part of the carrying  amount of the  long-lived  asset.  The Company has not yet
assessed the impact of SFAS No. 143.

In August 2001, the Financial  Accounting  Standards  Board issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, which supersedes
both SFAS No. 121,  Accounting for the  Impairment of Long-Lived  Assets and for
Long-Lived Assets to Be Disposed Of and the accounting and reporting  provisions
of APB  Opinion  No. 30,  Reporting  the  Results of  Operations--Reporting  the
Effects of Disposal of a Segment of a Business,  and Extraordinary,  Unusual and
Infrequently Occurring Events and Transactions (Opinion 30), for the disposal of
a segment of a  business  (as  previously  defined  in that  Opinion).  SFAS 144
retains the  fundamental  provisions in SFAS 121 for  recognizing  and measuring
impairment  losses on long-lived assets held for use and long-lived assets to be
disposed of by sale,  while also  resolving  significant  implementation  issues
associated  with SFAS 121.  The  provisions  of SFAS No. 144 are  effective  for
financial statements issued for fiscal years beginning after December 15, 2001.

Management  does not expect the adoption of SFAS 144 for long-lived  assets held
for use to have a material impact on the Company's financial statements because

                                       7
<PAGE>

the impairment assessment under SFAS 144 is largely unchanged from SFAS 121. The
provisions of the Statement for assets held for sale or other disposal generally
are  required  to be  applied  prospectively  after the  adoption  date to newly
initiated  disposal  activities.  Therefore,  management  cannot  determine  the
potential effects that adoption of SFAS 144 will have on the Company's financial
statements.

              "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, 2001 to the same period in 2000 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 ........................   $(225,090)   $(126,222)   $    --      $ 157,214    $   5,575     (188,523)
    Costs ...........................    (186,458)     (10,573)     (41,280)     (53,528)        --       (291,839)
    SG&A-direct .....................     (57,040)        --           --        (72,585)      17,902     (111,723)
    SG&A-allocated ..................     (22,630)      (6,000)        --         (1,000)      29,630         --
    Depreciation and amortization ...     (23,352)     (15,783)        --          9,189        2,493      (27,453)
    Interest expense ................     (37,417)     (41,423)     (83,394)      (2,019)     (24,149)    (188,402)
    Equity in investees .............        --        (50,463)     (38,000)        --           --        (88,463)
    Segment profit (loss) ...........     101,807     (102,906)      86,674      277,157      (20,301)     342,431
    Investment income ...............                                                                        8,578
    Loss from operations ............                                                                      351,009
</TABLE>
  Note: The change in rental  revenues  and SG&A  expenses  do not  include the
        effect of the net change in elimination of intercompany rent of $16,248.

BOWLING OPERATIONS:
-------------------
The segment  includes the  operations  of two bowling  centers,  Valley Bowl and
Grove Bowl. On December 21, 2000,  the Company  closed the  operations of Valley
Bowl in  conjunction  with the sale of the real estate on December 29, 2000. The
following  is a summary  by  bowling  center of the  changes  in the  results of
operations:
                                              2001 vs. 2000
                                    -------------------------------------
                                      Grove        Valley      Combined
                                    ---------    ----------    ----------
    Revenues ..................     $ (4,802)    $(220,288)    $(225,090)
    Costs .....................      (15,578)     (170,880)     (186,458)
    SG&A-direct ...............      (11,578)      (45,462)      (57,040)
    SG&A-allocated ............       (5,930)      (16,700)      (22,630)
    Depreciation and
       amortization ...........         --         (23,352)      (23,352)
    Interest expense ..........         --         (37,417)      (37,417)
    Segment profit (loss) .....       28,284        73,523       101,807

The following is a comparison  of the  operations of the Grove Bowl to the prior
year.  Bowl  revenues  decreased  by 1%  primarily  due to a 16% decrease in the
number of games bowled. All of this decrease was in the open play. This decrease
was offset by a 9% increase in the average price of all games bowled. Bowl costs
decrease  primarily  due to decreases  in utility  rates.  SG&A costs  decreased
primarily due to decreases in promotion costs.
                                       8
<PAGE>
RENTAL OPERATIONS:
------------------
This segment  includes the  operations of the office  building sold December 28,
2000,  the equity in income of the  operation  of a 542 unit  apartment  project
(UCV), a subleasehold  interest in land  underlying a condominium  project,  the
sublease  of a portion  of the  Penley  factory  and other  miscellaneous  rents
received  on  undeveloped  land.  The  following  is a summary of the changes in
operations:
                                             2001 vs. 2000
                                  --------------------------------------
                                    Office        Other        Combined
                                  ----------    ----------    ----------
    Revenues ..................   $ (126,708)    $     486     $(126,222)
    Costs .....................      (27,973)       17,400       (10,573)
    SG&A-allocated ............       (6,000)         --          (6,000)
    Depreciation and ..........      (15,783)         --         (15,783)
    amortization
    Interest expense ..........      (41,423)         --         (41,423)
    Equity in income of UCV ...         --         (50,463)      (50,463)
    Segment profit (loss) .....      (35,529)      (67,377)     (102,906)

A  temporary  easement  granted by the  Company  for the use of a portion of its
undeveloped land in Temecula,  California expired in September 2000. The Company
had been  amortizing  approximately  $17,000  of  deferred  rent to income  each
quarter.  Other  rental  revenues  decreased  by $17,000 in 2001 related to this
easement.

Other rental  revenues  and other rental costs  increased in 2001 by $17,000 and
$18,000   respectively,   related  to  the  sublease  for  the  Penley  factory.
Approximately  10,000 square feet of the Penley  factory  space  (38,000  square
feet) was  subleased  commencing  in November 2000 under a lease that expires in
October 2002.

The equity in income of UCV  decreased  by  $50,000 in 2001 and  $79,000 in 2000
primarily due to increases in interest  expense and other costs of UCV that were
only  partially  offset by increases in revenues.  The following is a summary of
the changes in the operations of UCV, LP in 2001 compared to the prior period:

      Revenues ..............................   $  94,000
      Costs .................................      11,000
      Depreciation ..........................      (2,000)
      Interest and amortization of loan costs     185,000
      Net income ............................    (100,000)

Rental  income of UCV  increased  primarily  due to a 6% increase in the average
rental  rate plus a  decrease  in the  vacancy  rate  from  2.7% to 1.4%.  UCV's
interest  expense  increased  primarily due to an increase in long-term  debt in
March 2001. UCV increased its long-term debt in March 2001 by $3,960,510.

REAL ESTATE DEVELOPMENT OPERATIONS:
-----------------------------------
Development  costs  primarily  consisted of legal costs  incurred to contest the
City of Temecula's  attempts to down-zone the undeveloped land owned by Old Vail
Partners and property taxes on the undeveloped land. Interest expense related to
development  activities  primarily  related to  interest  accrued on  assessment
district obligations of Old Vail Partners. The undeveloped land was sold in June
2001.

The  increase  in the  equity in loss of Vail  Ranch  Limited  Partners  (VRLP),
relates  to the  increase  in the  loss  from  the  operation  of the  partially
completed shopping center for which the first store commenced operations in July
2000.

GOLF OPERATIONS:
----------------
Prior to January  2000,  golf club shaft sales were  principally  to custom golf
shops.  In January  2000,  Penley  commenced  sales to two of the  largest  golf
equipment  distributors.  In addition to increases in sales related to these two
customers,  direct sales to the after market also  increased,  likely due to the
credibility  and increased  exposure from the Penley  products being included in
the catalogs of these two distributors.

                                       9
<PAGE>

Operating expenses of the golf segment consisted of the following in 2001 and
2000:
                                     2001          2000      Decrease
                                  ----------    ----------    ----------
    Costs of sales and
       manufacturing overhead .   $  440,000    $  485,000    $  (45,000)
    Research and development ..       59,000        68,000        (9,000)
                                  ----------    ----------    ----------
       Total golf costs .......      499,000       553,000       (54,000)
                                  ==========    ==========    ==========
    Marketing and promotion ...      266,000       319,000       (53,000)
    Administrative costs- direct      41,000        60,000       (19,000)
                                  ----------    ----------    ----------
      Total SG&A-direct .......      307,000       379,000       (72,000)
                                  ==========    ==========    ==========

Total golf costs  decreased in 2001  primarily  due to cost cutting  measures to
reduce  manufacturing  overhead.  Marketing  and  promotion  expenses  decreased
primarily  due to decreases in player  sponsorship  fees  ($18,000),  trade show
expenses ($22,000) and tour program expenses  ($9,000).  The Company changed its
approach to sponsorship  fees to fewer but higher  profile  players for calendar
2001. The decrease in trade show expenses  related to the Company not presenting
a trade booth at the Las Vegas golf industry trade show in September 2001, which
was  cancelled.  Administrative  expenses  decreased  primarily  due to  $11,000
decrease in professional fees related to trade mark and patent filings.


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.

                           2002       2003    2004       Total       Fair Value
                       ----------   -------  -------   ----------    ----------
                                                                         (1)
Fixed rate debt ..     $   22,000   $ 7,000  $ 4,000   $   33,000    $   33,000
Weighted average
   interest rate .        11.9%       13.4%    13.6%      12.7%

Variable rate debt     $1,250,000      --       --     $1,250,000    $1,250,000
Weighted average
   interest rate .         7.8%        --       --         7.8%

The amounts for 2002 relate to the nine months ending June 30, 2002.

   (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 $1,250,000 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, 2002.

The  Company's  unconsolidated  subsidiary,  UCV,  has  variable  rate  debt  of
$33,000,000  as of June 30, 2001 for which the  interest  rate was 8.5  percent.
However,  the  combination  of a  floor  established  by  the  lender  and a cap
purchased  by UCV has  resulted  in the rate being  fixed at 8.5 percent for the
initial term of the loan.  The  scheduled  principal  payments for each of UCV's
fiscal years ending March 31 is: 2002- none;  2003-  $33,000,000,  and in total-
$33,000,000.  The estimated fair value of this debt is $33,800,000  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>


                                     PART II
                                OTHER INFORMATION



ITEM 1. Legal Proceedings

         As of September  30, 2001,  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, 2001.


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, 2001
            --------------------



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



      Date: November 14, 2001
           ------------------




                                       12
<PAGE>