**U.S. SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C. 20549**

** **

**FORM 10-Q**

** **

**(MarkOne)**

| **ý** |   | **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                             |
|------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                               |
|       |   | **FOR  THE QUARTERLY PERIOD ENDED MARCH 31, 2003.**                                                                                                                                                                                                                                |
|       |   |                                                                                                                                                                                                                                                                               |
| **o**      |   | **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                            |
|       |   |                                                                                                                                                                                                                                                                               |
|       |   | **FOR  THE TRANSITION PERIOD FROM                       TO                       .** |

** **

**CommissionFile Number 0-24554**

 

### ****

### ** **

 

| **Canterbury  Park Holding Corporation**                        |
|-----------------------------------------------------------------|
| (Exact name of business  issuer as specified in its charter)    |
|                                                            |   |   |
| **Minnesota**                                                   |   | **41-1775532** |
| (State or other jurisdiction of  incorporation or organization) |   | (IRS Employer  Identification No.) |
|                                                            |   |   |
| **1100 Canterbury Road, Shakopee,  Minnesota**                  |   | **55379** |
| (Address of principal  executive offices)                       |   | (Zip Code) |
|                                                            |   |   |
| **(952) 445-7223**                                              |
| (Issuer’s Telephone  Number)                               |

 

Indicate by check markwhether the Registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act during the past 12 months (or for suchshorter 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 ý   NO  o

 

Indicate by check markwhether the registrant is an accelerated filer (as defined in Rule 12b-2 of theExchange Act.   YES  o   NO  ý

 

The Company had 3,664,073shares of common stock, $.01 par value per share, outstanding as of May 7,2003.

 

----

 

Canterbury ParkHolding Corporation

 

## **INDEX**

##### ** **

| **PART  1.** | **FINANCIAL  INFORMATION** |
|--------------|----------------------------|
|         |                       |   |
|         | Item 1.                    | Financial Statements |
|         |                       |   |
|         |                       | Consolidated Balance Sheets as of  March 31, 2003 and December 31, 2002 |
|         |                       |   |
|         |                       | Consolidated  Statements of Operations for the periods ended  March 31, 2003 and 2002 |
|         |                       |   |
|         |                       | Consolidated  Statements of Cash Flows for the periods ended  March 31, 2003 and 2002 |
|         |                       |   |
|         |                       | Notes to Consolidated Financial Statements |
|         |                       |   |
|         | Item 2.                    | Management’s Discussion  and Analysis of Financial Condition and Results of Operations |
|         |                       |   |
|         | Item 3.                    | Quantitative  and Qualitative Disclosure about Market Risk |
|         |                       |   |
|         | Item  4.                   | Controls  and Procedures |
|         |                       |   |
| **PART II.** | **OTHER INFORMATION**      |
|         |                       |   |
|         | Item 1.                    | Legal Proceedings |
|         |                       |   |
|         | Item 2.                    | Changes in Securities and Use of Proceeds |
|         |                       |   |
|         | Item 3.                    | Defaults Upon Senior Securities |
|         |                       |   |
|         | Item 4.                    | Submission of Matters to a Vote of Security  Holders |
|         |                       |   |
|         | Item 5.                    | Other Information |
|         |                       |   |
|         | Item 6.                    | Exhibits and Report on Form 8-K |
|         |                       |   |
|         | Signatures                 |
|         |                       |
|         | Certifications             |

 

2

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**CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES**

 

**CONSOLIDATED BALANCESHEETS**

**MARCH 31, 2003 AND DECEMBER 31, 2002**

 
|                                                                                                                              |   | **March 31,  2003** |       | **December  31,  2002** |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|------------|-------------------------|--------|
| **ASSETS**                                                                                                                        |   |                |       |                    |   |
|                                                                                                                              |   |                |       |                    |   |
| CURRENT  ASSETS                                                                                                                   |   |                |       |                    |   |
| Cash                                                                                                                              |   | $                   | 5,177,904  |                    | $      | 3,408,869 |   |
| Accounts  receivable                                                                                                              |   | 171,341             |       | 305,581                 |   |
| Inventory                                                                                                                         |   | 123,071             |       | 125,585                 |   |
| Deposits                                                                                                                          |   | 20,000              |       | 20,000                  |   |
| Prepaid  expenses                                                                                                                 |   | 493,567             |       | 302,192                 |   |
| Income  taxes receivable                                                                                                          |   |                |       | 316,671                 |   |
| Total  current assets                                                                                                             |   | 5,985,883           |       | 4,478,898               |   |
|                                                                                                                              |   |                |       |                    |   |
| PROPERTY  AND EQUIPMENT, net of accumulated depreciation of $7,860,240 and $7,573,572,  respectively                              |   | 14,523,331          |       | 14,551,014              |   |
|                                                                                                                              |   |                |       |                    |   |
|                                                                                                                              |   | $                   | 20,509,214 |                    | $      | 19,029,912 |   |
|                                                                                                                              |   |                |       |                    |   |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                                                    |   |                |       |                    |   |
|                                                                                                                              |   |                |       |                    |   |
| CURRENT  LIABILITIES                                                                                                              |   |                |       |                    |   |
| Accounts  payable                                                                                                                 |   | $                   | 1,503,563  |                    | $      | 1,535,824 |   |
| Card  club accruals                                                                                                               |   | 1,476,928           |       | 1,492,663               |   |
| Accrued  wages and payroll taxes                                                                                                  |   | 1,002,188           |       | 984,374                 |   |
| Accrued  interest                                                                                                                 |   | 1,560               |       |                    |   |
| Advance  from MHBPA                                                                                                               |   | 450,558             |       | 179,346                 |   |
| Accrued  property taxes                                                                                                           |   | 284,142             |       | 228,890                 |   |
| Income  taxes payable                                                                                                             |   | 284,348             |       |                    |   |
| Payable  to horsepersons                                                                                                          |   | 406,351             |       | 355,576                 |   |
| Deferred  tax liability                                                                                                           |   | 333,000             |       | 346,000                 |   |
| Total  current liabilities                                                                                                        |   | 5,742,638           |       | 5,122,673               |   |
|                                                                                                                              |   |                |       |                    |   |
| COMMITMENTS  AND CONTINGENCIES (Note 4)                                                                                           |   |                |       |                    |   |
|                                                                                                                              |   |                |       |                    |   |
| STOCKHOLDERS’  EQUITY                                                                                                        |   |                |       |                    |   |
| Common  stock, $.01 par value, 10,000,000 shares authorized, 3,640,473 and 3,638,473,  respectively, shares issued andoutstanding |   | 36,405              |       | 36,385                  |   |
| Additional  paid-in capital                                                                                                       |   | 10,931,215          |       | 10,910,985              |   |
| Accumulated  earnings                                                                                                             |   | 3,798,956           |       | 2,959,869               |   |
| Total  stockholders’ equity                                                                                                  |   | 14,766,576          |       | 13,907,239              |   |
|                                                                                                                              |   | $                   | 20,509,214 |                    | $      | 19,029,912 |   |

 

See notes to consolidatedfinancial statements.

 

3

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**CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES**

 

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**PERIODS ENDED MARCH 31, 2003 AND 2002**

 
|                                          |   | **Three  Months  Ended  March 31, 2003** |      | **Three  Months  Ended  March 31, 2002** |   |
|-----------------------------------------------|--------|------------------------------------------|-----------|------------------------------------------|--------|
|                                          |   |                                     |      |                                     |   |
| OPERATING  REVENUES:                          |   |                                     |      |                                     |   |
| Pari-mutuel                                   |   | $                                        | 3,125,627 |                                     | $      | 3,340,284 |   |
| Card  Club                                    |   | 4,918,462                                |      | 4,541,776                                |   |
| Concessions                                   |   | 728,077                                  |      | 781,815                                  |   |
| Admissions  and parking                       |   | 25,186                                   |      | 31,959                                   |   |
| Programs  and racing forms                    |   | 130,510                                  |      | 134,076                                  |   |
| Other  operating revenue                      |   | 301,388                                  |      | 117,313                                  |   |
|                                          |   | 9,229,250                                |      | 8,947,223                                |   |
|                                          |   |                                     |      |                                     |   |
| OPERATING  EXPENSES:                          |   |                                     |      |                                     |   |
| Pari-mutuel  expenses                         |   |                                     |      |                                     |   |
| Statutory  purses                             |   | 896,988                                  |      | 870,196                                  |   |
| Host  track fees                              |   | 520,310                                  |      | 554,658                                  |   |
| Pari-mutuel  taxes                            |   | 42,597                                   |      | 52,520                                   |   |
| Minnesota  breeders’ fund                |   | 232,164                                  |      | 239,706                                  |   |
| Salaries  and benefits                        |   | 3,566,876                                |      | 3,420,549                                |   |
| Cost  of concession sales                     |   | 327,969                                  |      | 317,596                                  |   |
| Cost  of publication sales                    |   | 168,067                                  |      | 148,738                                  |   |
| Depreciation  and amortization                |   | 288,168                                  |      | 290,158                                  |   |
| Utilities                                     |   | 247,756                                  |      | 188,825                                  |   |
| Repairs,  maintenance and supplies            |   | 200,708                                  |      | 300,373                                  |   |
| Property  taxes                               |   | 55,252                                   |      | 54,510                                   |   |
| Advertising  and marketing                    |   | 365,586                                  |      | 265,444                                  |   |
| Other  operating expenses                     |   | 859,481                                  |      | 663,844                                  |   |
|                                          |   | 7,771,922                                |      | 7,367,117                                |   |
|                                          |   |                                     |      |                                     |   |
| NONOPERATING  (EXPENSES) REVENUES:            |   |                                     |      |                                     |   |
| Interest  expense                             |   | (2,162                                   | )         | (5,660                                   | )      |
| Other,  net                                   |   | 8,921                                    |      | 6,953                                    |   |
|                                          |   | 6,759                                    |      | 1,293                                    |   |
|                                          |   |                                     |      |                                     |   |
| INCOME  BEFORE INCOME TAX EXPENSE             |   | 1,464,087                                |      | 1,581,399                                |   |
|                                          |   |                                     |      |                                     |   |
| INCOME  TAX EXPENSE (Note 1)                  |   | (625,000                                 | )         | (650,361                                 | )      |
|                                          |   |                                     |      |                                     |   |
| NET  INCOME                                   |   | $                                        | 839,087   |                                     | $      | 931,038 |   |
|                                          |   |                                     |      |                                     |   |
| BASIC  NET INCOME PER COMMON SHARE (Note 1)   |   | $                                        | .23       |                                     | $      | .26 |   |
|                                          |   |                                     |      |                                     |   |
| DILUTED  NET INCOME PER COMMON SHARE (Note 1) |   | $                                        | .21       |                                     | $      | .24 |   |

 

See notes to consolidatedfinancial statements.

 

4

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**CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES**

 

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**PERIODS ENDED MARCH 31, 2003 AND 2002**

 
|                                                                     |   | **Three  Months  Ended  March 31, 2003** |      | **Three  Months  Ended  March 31, 2002** |   |
|--------------------------------------------------------------------------|--------|------------------------------------------|-----------|------------------------------------------|--------|
|                                                                     |   |                                     |      |                                     |   |
| CASH  FLOWS FROM OPERATING ACTIVITIES:                                   |   |                                     |      |                                     |   |
| Net  income                                                              |   | $                                        | 839,087   |                                     | $      | 931,038 |   |
| Adjustments  to reconcile net income to net cash provided by operations: |   |                                     |      |                                     |   |
| Depreciation  and amortization                                           |   | 288,168                                  |      | 290,158                                  |   |
| Deferred  income taxes                                                   |   | (6,000                                   | )         | 20,300                                   |   |
| Decrease  in accounts receivable                                         |   | 134,240                                  |      | 264,902                                  |   |
| (Increase)  decrease in other current assets                             |   | (188,861                                 | )         | 43,490                                   |   |
| Increase  in income taxes payable                                        |   | 601,019                                  |      | 416,387                                  |   |
| Increase  in accounts payable and accrued expenses                       |   | 20,593                                   |      | 168,709                                  |   |
| Increase  (decrease) in accrued interest                                 |   | 1,560                                    |      | (14,189                                  | )      |
| Increase  in accrued property taxes                                      |   | 55,252                                   |      | 54,510                                   |   |
| Net  cash provided by operations                                         |   | 1,745,058                                |      | 2,175,305                                |   |
|                                                                     |   |                                     |      |                                     |   |
| CASH  FLOWS FROM INVESTING ACTIVITIES:                                   |   |                                     |      |                                     |   |
| Additions  to property and equipment                                     |   | (260,485                                 | )         | (1,172,105                               | )      |
|                                                                     |   |                                     |      |                                     |   |
| CASH  FLOWS FROM FINANCING ACTIVITIES:                                   |   |                                     |      |                                     |   |
| Proceeds  from issuance of common stock                                  |   | 13,250                                   |      | 137,151                                  |   |
| Proceeds  from (payment on) advance from MHBPA, net                      |   | 271,212                                  |      | (37,463                                  | )      |
| Net  cash provided by financing activities                               |   | 284,462                                  |      | 99,688                                   |   |
|                                                                     |   |                                     |      |                                     |   |
| NET  INCREASE IN CASH                                                    |   | 1,769,035                                |      | 1,102,888                                |   |
|                                                                     |   |                                     |      |                                     |   |
| CASH  AT BEGINNING OF PERIOD                                             |   | 3,408,869                                |      | 3,088,844                                |   |
|                                                                     |   |                                     |      |                                     |   |
| CASH  AT END OF PERIOD                                                   |   | $                                        | 5,177,904 |                                     | $      | 4,191,732 |   |
|                                                                     |   |                                     |      |                                     |   |
| INTEREST  PAID                                                           |   | $                                        | 0         |                                     | $      | 19,849 |   |
|                                                                     |   |                                     |      |                                     |   |
| INCOME  TAXES PAID                                                       |   | $                                        | 40,000    |                                     | $      | 215,000 |   |

 

See notes to consolidatedfinancial statements.

 

5

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# **CANTERBURY PARK HOLDINGCORPORATION AND SUBSIDIARIES**

 

**NOTES TO****CONSOLIDATED FINANCIAL STATEMENTS**

**PERIODS ENDED MARCH 31, 2003 AND 2002**

 

1.               SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES

 

The summary ofsignificant accounting policies is included in the notes to consolidatedfinancial statements in the 2002 Annual Report on Form 10-K.

 

*Income Taxes* -Income tax expense is computed by applying the estimated annual effective taxrate to the year-to-date income.

 

*Unaudited Financial Statements*- The consolidated balance sheet as of March 31, 2003, the consolidatedstatements of operations for the three months ended March 31, 2003 and 2002,the consolidated statements of cash flows for the three months ended March 31,2003 and 2002, and the related information contained in these notes have beenprepared by management without audit. In the opinion of management, all accruals (consisting of normalrecurring accruals) which are necessary for a fair presentation of financialposition and results of operations for such periods have been made.  Results for an interim period should not beconsidered as indicative of results for a full year.

 

*NetIncome Per Share -*Basic net income per common share is basedon the weighted average number of common shares outstanding during each period.The weighted average number of common shares outstanding for the three monthsended March 31, 2003 and March 31, 2002 were 3,639,051 and 3,537,262,respectively.  Diluted net income percommon share takes into effect the dilutive effect of potential common sharesoutstanding.  The Company’s onlypotential common shares outstanding are stock options.  After considering the dilutive effect ofstock options outstanding, the weighted average shares used to calculate dilutedearnings per share for the three months ended March 31, 2003 and 2002 were4,045,541 and 3,841,099, respectively.

 

2.               BORROWINGS UNDERCREDIT AGREEMENT

 

Borrowings under theCompany’s credit agreement with Bremer Bank include a commercial revolvingcredit line which provides for maximum advances of $2,250,000 with interest atthe prime rate.  The Company had noborrowings under this credit line at March 31, 2003.  The credit agreement contains certain covenants requiring theCompany to maintain certain financial ratios. The Company was in compliance with these requirements as of March 31,2003.  Management believes that fundsavailable under this line of credit, along with funds generated from card cluband simulcast operations, will be sufficient to satisfy its liquidity andcapital resource requirements during 2003.

 

3.               OPERATING SEGMENTS

 

During the first threemonths of 2003 and 2002, the Company had three reportable operatingsegments:  card club, horse racing andconcessions.  The card club segmentincludes operations of the Canterbury Card Club. The horse racing segmentincludes simulcast and live racing operations, and the concessions segmentprovides concessions during simulcast and live racing, in the card club andduring special events.  The Company’sreportable operating segments are strategic business units that offer differentproducts and services.  They are managedseparately because the segments differ in the nature of the products andservices provided as well as processes to produce those products andservices.  The horse racing and cardclub segments are regulated by the State of Minnesota Racing Commission.

 

6

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The accounting policiesof the operating segments are the same as those described in the summary ofsignificant accounting policies.  Prioryears are restated to be consistent with the revised current year allocationmethod.

 

Depreciation, interestexpense and income taxes are allocated to the segments but no allocation ismade to concessions for shared facilities. However, the concessions segment pays approximately 25% of grossrevenues earned on live racing and special event days to the horse racingsegment for use of the facilities.

 

The following tableprovides information about the Company’s operating segments (in 000’s):

 
|                                |   | **Three  Months Ended March 31, 2003** |   |
|-------------------------------------|--------|----------------------------------------|--------|
|                                |   | **Card Club**                          |   | **Horse  Racing** |   | **Concessions** |   | **Total** |   |
|                                |   |                                   |   |   |   |   |   |   |   |
| Revenues  from external customers   |   | $                                      | 4,919  |   | $ | 3,582 |   | $ | 728 |   | $ | 9,229 |   |
| Intersegment  revenues              |   |                                   |   | 28 |   | 319 |   | 347 |   |
| Net  Interest expense               |   |                                   |   | (7 | ) |   |   | (7 | ) |
| Depreciation  and amortization      |   | 136                                    |   | 152 |   |   |   | 288 |   |
| Segment  income before income taxes |   | 624                                    |   | 830 |   | 84 |   | 1,538 |   |
| Segment  Assets                     |   | $                                      | 3,863  |   | $ | 16,524 |   | $ | 1,231 |   | $ | 21,618 |   |

 
|                                |   | **Three  Months Ended March 31, 2002** |   |
|-------------------------------------|--------|----------------------------------------|--------|
|                                |   | **Card Club**                          |   | **Horse  Racing** |   | **Concessions** |   | **Total** |   |
|                                |   |                                   |   |   |   |   |   |   |   |
| Revenues  from external customers   |   | $                                      | 4,542  |   | $ | 3,623 |   | $ | 782 |   | $ | 8,947 |   |
| Intersegment  revenues              |   |                                   |   | 41 |   | 292 |   | 333 |   |
| Net  Interest expense               |   |                                   |   | (1 | ) |   |   | (1 | ) |
| Depreciation  and amortization      |   | 136                                    |   | 154 |   |   |   | 290 |   |
| Segment  income before income taxes |   | 555                                    |   | 1,026 |   | 111 |   | 1,692 |   |
|                                     |        |                                        |        |  |  |  |  |  |  |  |  |  |  |

 
|            |   | **At December 31, 2002** |   |
|-----------------|--------|--------------------------|--------|
| Segment  Assets |   | $                        | 4,003  |   | $ | 14,883 |   | $ | 1,116 |   | $ | 20,002 |   |
|                 |        |                          |        |  |  |  |  |  |  |  |  |  |  |

 

7

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The following arereconciliations of reportable segment revenue, income before income taxes, andassets, to the Company’s consolidated totals (in 000’s):

 
|                                                    |   | **Quarter  Ended  March 31, 2003** |   | **Quarter  Ended  March 31, 2002** |   |
|---------------------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
| Revenues:                                               |   |                               |   |                               |   |
| Total  revenue for reportable segments                  |   | $                                  | 9,576  |                               | $      | 9,280 |   |
| Elimination  of intersegment revenues                   |   | (347                               | )      | (333                               | )      |
| Total  consolidated revenues                            |   | 9,229                              |   | 8,947                              |   |
|                                                    |   |                               |   |                               |   |
| Income  before income taxes:                            |   |                               |   |                               |   |
| Total  segment income before income taxes               |   | $                                  | 1,538  |                               | $      | 1,692 |   |
| Elimination  of intersegment income before income taxes |   | (74                                | )      | (111                               | )      |
| Total  consolidated income before income taxes          |   | 1,464                              |   | 1,581                              |   |

 
|                                     |   | **March 31,  2003** |   | **December  31  2002** |   |
|------------------------------------------|--------|---------------------|--------|------------------------|--------|
| Assets:                                  |   |                |   |                   |   |
| Total  assets for reportable segments    |   | $                   | 21,618 |                   | $      | 20,002 |   |
| Elimination  of intercompany receivables |   | (1,109              | )      | (972                   | )      |
| Total  consolidated assets               |   | 20,509              |   | 19,030                 |   |
|                                          |        |                     |        |                        |        |  |  |

 

4.               CONTINGENCIES

 

In accordance with anEarn Out Note, given to the prior owner of the racetrack as part of theconsideration paid by the Company to acquire the racetrack, if (i) off-trackbetting becomes legally permissible in the State of Minnesota and (ii) theCompany begins to conduct off-track betting with respect to or in connectionwith its operations, the Company will be required to pay to the IMR Fund, L.P.the greater of $700,000 per operating year, as defined, or 20% of the netpretax profit, as defined, for each of five operating years.  At the date (if any) that these twoconditions are met, the five minimum payments will be discounted back to theirpresent value and the sum of those discounted payments will be recorded as anincrease to the purchase price.  Thepurchase price will be further increased if payments become due under the 20%of Net Pre-Tax Profit calculation.  Thefirst payment is to be made 90 days after the end of the third operating yearin which off-track betting is conducted by the Company.  Remaining payments would be made within 90days of the end of each of the next four operating years.

 

The Company isperiodically involved in various legal actions arising in the normal course ofbusiness.  At March 31, 2003, managementbelieves that the resolution of any legal actions outstanding will not have amaterial impact on the consolidated financial statements.

 

The Minnesota Departmentof Labor and Industry (DOL&I) is conducting an audit for the period April10, 1999 through April 10, 2001 regarding compliance with the tip law sectionsof the Minnesota Fair Labor Standards Act. At March 31, 2003, the Company has received no communications from theDOL&I regarding the disposition of their audit.  Management believes that the Company’s practices regarding tipsare consistent with the requirements of Minnesota law.

 

8

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*5.**             *STOCK BASED EMPLOYEE COMPENSATION

 

At March 31, 2003, theCompany has a stock option plan which provides for the granting of awards inthe form of stock options, restricted stock, stock appreciation rights, anddeferred stock to key employees and non-employees, including directors of andconsultants to the Company and any subsidiary, to purchase up to a maximum of1,150,000 shares of common stock.  TheCompany accounts for that plan under the recognition and measurement principlesof APB Opinion No. 25, *Accounting for StockIssued to Employees,* and related interpretations.  No stock-based employee compensation cost isreflected in net income, as all options granted under the plan had an exerciseprice equal to the market value of the underlying common stock on the date ofgrant.  The following table illustratesthe effect on net income and earnings per share if the Company had applied thefair value recognition provisions of FASB Statement No. 123, *Accounting for Stock-Based Compensation,*tostock-based employee compensation.

 
|                                                                                                                                                |   | **Three  Months Ended March 31,** |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                                                                                                |   | **2003**                          |    | **2002** |   |
| Net  Income:                                                                                                                                        |   |                              |    |   |   |
| As  reported                                                                                                                                        |   | $                                 | 839,087 |   | $ | 931,038 |   |
| Deduct:  Total stock-based employee compensation  expense determined under fair value based method for all awards, net of  related tax effects |   | (29,371                           | )       | (72,219 | ) |
| Pro  forma net income                                                                                                                               |   | 809,716                           |    | 858,819 |   |
|                                                                                                                                                |   |                              |    |   |   |
| Earnings  Per Share:                                                                                                                                |   |                              |    |   |   |
| Basic  - as reported                                                                                                                                |   | $                                 | .23     |   | $ | .26 |   |
|                                                                                                                                                |   |                              |    |   |   |
| Basic  - pro forma                                                                                                                                  |   | $                                 | .22     |   | $ | .24 |   |
|                                                                                                                                                |   |                              |    |   |   |
| Diluted  - as reported                                                                                                                              |   | $                                 | .21     |   | $ | .24 |   |
|                                                                                                                                                |   |                              |    |   |   |
| Diluted  - pro forma                                                                                                                                |   | $                                 | .20     |   | $ | .22 |   |

 

6.               CURRENT ACCOUNTINGPRONOUNCEMENTS

 

In December 2002, theFASB issued SFAS No. 148, *Accounting forStock-Based Compensation – Transition and Disclosure*, which amendsSFAS No. 123, Accounting for Stock-Based Compensation.  SFAS No. 148 provides alternative methods oftransition for a voluntary change to the fair value based method of accountingfor stock-based employee compensation. In addition, SFAS No. 148 amends thedisclosure requirement of SFAS No. 123 to require more prominent and morefrequent disclosures in financial statements of the effects of stock-basedcompensation. The transition guidance and annual and interim disclosureprovisions of SFAS No. 148 became effective for the Company on January 1, 2003.The Company has elected to continue to apply Accounting Principles Board (APB)Opinion No. 25 and related interpretations in accounting for stock optionplans, as permitted under SFAS No. 123 and SFAS No. 148. Accordingly, nocompensation cost has been recognized for its stock option plan upon adoptionof SFAS No. 148.

 

9

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| **ITEM  2:** | **MANAGEMENT’S  DISCUSSION****AND  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |
|--------------|-----------------------------------------------------------------------------------------------------|

** **

** **

**General:**

 

Canterbury Park HoldingCorporation (the “Company”) owns and operates Canterbury Park Racetrack andCard Club in Shakopee, Minnesota.  Theprimary businesses of the Company are pari-mutuel horse racing, hostingunbanked card games, and food and beverage operations.

 

The Racetrack is the onlypari-mutuel horse racing facility in the State of Minnesota.  The Racetrack earns revenues frompari-mutuel take-out on races simulcast year-round to Canterbury Park fromracetracks throughout the country and from live race meets featuringthoroughbred and quarter horse racing. Live race meets commence in the month ofMay and conclude in September.  Duringlive race meets, the Company televises its races to out-of-state racetracksaround the country, and earns additional pari-mutuel revenue on wagers placedat the out-of-state racetracks.

 

 The Canterbury Card Club (the “Card Club”) isthe only facility in the State of Minnesota given the legislative authority tohost unbanked card games in which players compete against each other and notagainst the house.  The Company receivesa percentage of the wagers from the players as compensation for providing theCard Club facility and services.  TheCard Club is open twenty-four hours a day, seven days a week.

 

In December 2002, theCompany acquired a recreational vehicle (RV) park, located on approximately 29acres, adjacent to the Minnesota River, approximately two miles from theRacetrack.  The RV Park has 68independent sites and 40 dependent sites, an indoor swimming pool, laundryfacilities, game room and mini store. The sites will be rented to horsemen participating in Canterbury’s racingoperations, seasonal employees, and the general public.   The Company also generates revenues fromadmissions, parking, publication sales, facility rental for special events,vehicle storage, advertising and other sources.

 

The Minnesota Racing Commission is authorized byMinnesota law to regulate Card Club and horse racing operations.  The law requires that up to 14% of the grossrevenue generated by the Card Club be paid to the Racetrack’s purse fund andthe State of Minnesota Breeders’ Fund. The original 15,828 square foot Card Club, constructed within theRacetrack grandstand facility, was completed in mid-April 2000 and providedroom for approximately 40 tables.  InMay 2001, the Company expanded the Card Club to 50 tables, the maximum allowedby Minnesota law.

 

**Results of Operations for the Three Months Ended March 31,2003 and March 31, 2002:**

 

Total operating revenues increased approximately$282,000, or 3.2%, during three months ended March 31, 2003 compared to thethree months ended March 31, 2002.

 

Pari-mutuel revenue decreased $214,657 or 6.4% in thethree-month period ended March 31, 2003 compared to the same period in2002.  Total wagering handle for thethree month period ended March 31, 2003 was down $1,180,000 or 7.3%, comparedto total handle during the same quarter a year ago. The decline in simulcasthandle was primarily due to the cancellation of nearly 100 racing programs,because of severe winter weather at other racetracks.  Total pari-mutuel expenses including state pari-mutuel taxes,contributions to the Minnesota Breeders’ Fund, statutory purses and host feeswere $1,692,059 and $1,717,080 for the quarters ending March 31, 2003 and 2002,respectively.  The decrease is dueprimarily to a decline in Statutory purses and Host track fees associated withthe decline in simulcast revenues, partially offset by an increase in Statutorypurse expense related to Card Club operations.

 

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Card Club revenues increased 8.3% to $4,918,462 for thefirst three months of 2003 compared to $4,541,776 for the same period in2002.  The increase is primarily due tothe increased awareness and popularity of the Casino Games room.

 

Concession revenues decreased 6.9% to $728,077 for thequarter ended March 31, 2003 compared to $781,815 for the first quarter of 2002primarily due to the decrease in attendance for the snowmobile racing weekendshosted at the Racetrack.

 

Operating expenses in the first quarter of 2003(excluding pari-mutuel expenses) increased by approximately $429,826 or 7.6%,compared to 2002 primarily due to increased business in the Card Club, andcosts associated with efforts to secure increased gaming authorizations fromthe Minnesota Legislature.  Salary andbenefit costs, increased $146,327, or 4.3% primarily due to increased Card Cluboperations.  Advertising and marketingincreased $100,142, or 37.7%, primarily due to direct mail expenses related toour legislative efforts, and increased participation in our Most Valued Player(MVP) club for simulcasting patrons. Utilities increased $58,931 or 31.2% compared to 2002, primarily due tohigher usage and increased rates.  Otheroperating expenses, which include property and liability insurance andprofessional fees, increased $195,637 or 29.5%, primarily caused by increasedinsurance rates and professional fees related to the Company’s legislativeefforts for additional gaming authorizations.

 

Income before incometaxes decreased $117,312, or 7.4%, to $1,464,087 for the three months ended March31, 2003, from $1,581,399 for the three months ended March 31, 2002.  Income tax expense was $625,000 and $650,361for the first quarter of 2003 and 2002, respectively, resulting in net incomeof $839,087 and $931,038, respectively.

 

#### **Commitmentsand Contingencies:**

 

There have been no material changes in our outstandingcommitments and contingencies since those reported at December 31, 2002.

 

**Liquidityand Capital Resources:**

 

Cash provided by operating activities for the threemonths ended March 31, 2003 of $1,745,058 resulted principally from net incomeof $839,087, depreciation and amortization of $288,168, an increase in incometaxes payable of $601,019, and a decrease in accounts receivable of $134,240.During the period January 1, 2002 through March 31, 2002, cash provided byoperating activities was $2,175,305, which resulted principally from net incomeof $931,038, depreciation and amortization of $290,158, an increase in incometaxes payable of $416,387, a decrease in accounts receivable of $264,902 and anincrease in accounts payable and accrued expenses of $168,709.

 

Net cash used ininvesting activities for the first quarter of 2003 of $260,485 resultedprimarily from acquisitions of equipment. This compared to $1,172,105 in thefirst quarter of 2002, related primarily to the purchase of 12 acres of landjust south of the main parking lot and acquisitions of equipment.

 

Cash provided by financing activities during the firstthree months of 2003 consisted of proceeds received upon the exercise of stockoptions of $13,250 and net proceeds from the advance from the MinnesotaHorsemen’s Benevolent and Protective Association (the “MHBPA”) of $271,212.Cash provided by financing activities during the first three months of 2002consisted of proceeds received upon the exercise of stock options of $137,151,partially offset by net payments on the advance from the MHBPA of $37,463.

 

The Company is required by statute to segregate aportion of funds received from revenues in the Card Club and wagering on simulcastand live horse races for future payment as purses for live horse races at theRacetrack or other uses of Minnesota’s horsepersons associations.  Pursuant to an 

 

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agreement with the MHBPA, during the three months ended March 31, 2003and 2002, the Company transferred into a trust account for these purposes orpaid directly to the MHBPA approximately $550,000 and $850,000respectively.  At March 31, 2003, the Companyhad an additional liability to MHBPA of $450,558.  This liability will be paid in 2003, including interest earned atthe prime-lending rate, in accordance with the agreement with the MHBPA.

 

The Company has a credit agreement withBremer Bank.  Borrowings under thecredit agreement include a commercial revolving credit line providing formaximum advances of $2,250,000 with interest at the prime rate.  The Company had no borrowings under the lineof credit at March 31, 2003 or December 31, 2002.  The credit agreement contains certain covenants requiring theCompany to maintain certain financial ratios. The Company was in compliance with these requirements at all timesthroughout the quarter ended March 31, 2003.

 

Cash balances at March 31, 2003 were $5,177,904compared to $3,408,869 at December 31, 2002. The Company believes that funds available in its cash accounts, amountsavailable under the general credit and security agreement, along with fundsgenerated from operations, will be sufficient to satisfy its liquidity andcapital resource requirements during 2003 for regular operations.  If the “Racino” as discussed below under“Legislation” receives necessary legislative approval, the Company will requiresubstantial additional debt and/or equity financing.  The Company believes that such financing with reasonable termscan be obtained.

 

**Critical Accounting Policies:**

 

Inpreparing the financial statements, we follow accounting principles generallyaccepted in the United States of America, which in many cases require us tomake assumptions, estimates and judgments that affect the amountsreported.  Many of these policies arerelatively straightforward.  There are,however, a few policies that are critical because they are important indetermining the financial condition and results of operations and they can bedifficult to apply.  We believe that themost critical accounting policies applied in the preparation of our financialstatements relate to: a) accounting for contingencies, under which we accrue aloss when it is probable that a liability has been incurred and the amount canbe reasonably measured; and b) measuring long-term assets for impairment.  An impairment loss would be measured by theamount by which the carrying value of the asset exceeds the fair value of theasset.  To date, management hasdetermined that no impairment of these assets exists.

 

Thedifficulty in applying these policies arises from the assumptions, estimatesand judgments that have to be made currently about matters that are inherentlyuncertain, such as future economic factors, operating results and valuations aswell as management intentions.  As thedifficulty increases, the level of precision decreases, meaning that actualresults can and probably will be different from those currently estimated.  We base our assumptions, estimates andjudgments on a combination of historical experience and other reasonablefactor.

 

**Legislation:**

 

On February 18, 2003, a bill was introduced in theMinnesota Legislature, which seeks authority for the Minnesota State Lottery tooperate electronic gaming devices at the Racetrack.  Often referred to as “Racinos”, this concept at Canterbury Parkwould include 2,000 gaming devices, a 250-room hotel, an Olympic scale horsepark and additional restaurant venues. Based on the success of several Racinos in other states, the Companyfeels that if this legislation becomes law, it will enhance horse racing withincreased purses, provide growth and development opportunities for the Company,and produce significant new tax revenues for state and local governments.  The effort to obtain legislative authorityfor these electronic gaming devices has required and will continue to requiresubstantial expenditures and there can be no assurance that this bill or aversion of this bill will be enacted into law.

 

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**FactorsAffecting Future Performance:**

 

From time to time, in reports filed with theSecurities and Exchange Commission, in press releases, and in othercommunications to shareholders or the investing public, the Company may makeforward-looking statements concerning possible or anticipated future financialperformance, business activities or plans which are typically preceded by thewords “believes,” “expects,” “anticipates,” “intends” or similar expressions.  For such forward-looking statements, theCompany claims the protection of the safe harbor for forward-looking statementscontained in federal securities laws. Shareholders and the investing public should understand that suchforward-looking statements are subject to risks and uncertainties which couldcause actual performance, activities or plans to differ significantly fromthose indicated in the forward-looking statements.  Such risks and uncertainties include, but are not limited to:fluctuations in attendance at the Racetrack, changes in the level of wageringby patrons, continued interest in the unbanked card games offered at the CardClub, legislative and regulatory changes, the impact of wagering products andtechnologies introduced by competitors; fluctuations in purse fund payments;upward pressure on salary and benefit expense; the general health of the gamingsector; higher than expected expense related to new marketing initiatives; andother factors discussed from time to time in the Company’s filings with theSecurities and Exchange Commission.

 

**ITEM 3:****                           ****QUANTITATIVE****AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

Weare exposed to market risk from changes in interest rates on borrowings underour commercial revolving credit line that bears interest at the primerate.  At March 31, 2003 we have no debtborrowings under our credit facility.

 

Wehave no derivative financial instruments or derivative commodity instruments inour cash and cash equivalents and marketable securities.  We invest cash and cash equivalents ininvestment grade, highly liquid investments, consisting of money marketinstruments, bank certificates of deposit, overnight investments in commercialpaper, and short term government and corporate bonds.

 

**ITEM 4:****    CONTROLSAND PROCEDURES**

** **

Quarterly evaluation of theCompany’s Disclosure Controls and Internal Controls:

 

Within the 90 days prior to the date of thisQuarterly Report on Form 10-Q, the Company evaluated the effectiveness of thedesign and operation of its “disclosure controls and procedures” (the“Disclosure Controls”), and its “internal controls and procedures for financialreporting” (the “Internal Controls”). This evaluation (the “Controls Evaluation”) was done under thesupervision and with the participation of management, including the ChiefExecutive Officer (“CEO”) and Chief Financial Officer (“CFO”).  Rules adopted by the Securities and ExchangeCommission (the “SEC” or “Commission”) require that in this section of theQuarterly Report we present the conclusions of the CEO and the CFO about theeffectiveness of the Company’s Disclosure Controls and Internal Controls basedon and as of the date of the Controls Evaluation.

 

CEO and CFO Certifications:

 

Appearing in this Quarterly Report are twoseparate forms of “Certifications” of the CEO and the CFO.  The first form of Certification, immediatelyfollowing the Signatures section, is required in accord with Section 302 of theSarbanes-Oxley Act of 2002 (the “Section 302 Certification”).  This section of Form 10-Q 

 

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contains information concerning the ControlsEvaluation referred to in the Section 302 Certifications and this informationshould be read in conjunction with the Section 302 Certifications for a morecomplete understanding of the topics presented.  The second Certification appearing as Exhibit 99.1 is pursuant toSection 906 of Sarbanes-Oxley and concerns compliance and disclosure under theSecurities Exchange Act of 1934.

 

Disclosure Controls and InternalControls:

 

Disclosure Controls are procedures that aredesigned to ensure that information required to be disclosed in our reportsfiled under the Securities Exchange Act of 1934 (the “Exchange Act”), such asthis Quarterly Report, is recorded, processed, summarized and reported withinthe time periods specified in the SEC’s rules and forms.  Disclosure Controls are also designed toensure that such information is accumulated and communicated to the Company’smanagement, including the CEO and CFO, as appropriate to allow timely decisionsregarding required disclosure.  InternalControls are procedures designed to provide reasonable assurance that (1) theCompany’s transactions are properly authorized; (2) the Company’s assets aresafeguarded against unauthorized or improper use; and (3) the Company’stransactions are properly recorded and reported, all of which assists thepreparation of financial statements in conformity with generally acceptedaccounting principles.

 

Limitations on theEffectiveness of Controls:

 

The Company’s management, including the CEOand CFO, does not expect that the Disclosure Controls or the Internal Controlswill prevent all error and all fraud.  Acontrol system, no matter how well conceived and operated, can provide only reasonable,not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system mustreflect the fact that there are resource constraints, and the benefits ofcontrols must be considered relative to their costs.  Because of the inherent limitations in all control systems noevaluation of controls can provide absolute assurance that all control issuesand instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realitiesthat judgments in decision-making can be faulty, and that breakdowns can occurbecause of simple error or mistake. Additionally, controls can be circumvented by the individual acts ofsome persons, by collusion of two or more people, or by management override ofthe control.  The design of any systemof controls also is based in part upon certain assumptions about the likelihoodof future events, and there can be no assurance that any design will succeed inachieving its stated goals under all potential future conditions; over time,control may become inadequate because of changes in conditions, or the degreeof compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in acost-effective control system, misstatements due to error or fraud may occurand not be detected.

 

Scope of the ControlsEvaluation:

 

The CEO/CFO evaluation of DisclosureControls and Internal Controls included a review of the controls’ objectivesand design, the controls’ implementation by the Company and the effect of thecontrols on the information generated for use in this Quarterly Report.  In the course of the Controls Evaluation, wesought to identify data errors, controls problems or acts of fraud and toconfirm that appropriate corrective action, including process improvements,were being undertaken.  This type ofevaluation will be done on a quarterly and annual basis so that the conclusionsconcerning controls effectiveness can be reported in the Company’s QuarterlyReports on Form 10-Q and in the Company’s Annual Reports on Form 10-K.  Internal Controls are also evaluated on anongoing basis by our Internal Audit Department, by other personnel in theCompany and by the Company’s independent auditors in connection with theiraudit and review activities.  Theoverall goals of these various evaluation activities are to monitor ourDisclosure Controls and our Internal Controls and to make modifications asnecessary; the Company’s intent in this regard is that the Disclosure Controlsand the Internal Controls will be maintained as dynamic systems that change(including with improvements and corrections) as conditions warrant.

 

Among other matters, the Company sought inthe evaluation to determine whether there were any “significant deficiencies”or “material weakness” in the Company’s Internal Controls, or whether the 

 

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Company had identified any acts of fraud involving personnel who a havesignificant role in the Company’s Internal Controls.  This information was important both for the Controls Evaluationgenerally and because items 5 and 6 in the Section 302 Certifications of theCEO and CFO require that the CEO and CFO disclose such information to ourBoard’s Audit Committee and to the independent auditors and to report onrelated matters in this section of the Quarterly Report.  In the professional auditing literature,“significant deficiencies” are referred to as “reportable conditions”; these arecontrol issues that could have a significant adverse effect on the ability torecord, process, summarize and report financial data in the financialstatements.  A “material weakness” isdefined as a particularly serious reportable condition where the internalcontrol does not reduce to a relatively low level the risk that misstatementscaused by error or fraud may occur in amounts that would be material inrelation to the financial statements and not be detected within a timely periodby employees in the normal course of performing their assigned functions.  The Company has sought to deal with othercontrols matters in the Controls Evaluation, and in each case if a problem wasidentified, the Company considered what revision, improvement and/or correctionto make in accord with its on-going procedures.

 

In accord with SEC requirements, the CEO and CFO note that, since thedate of the Controls Evaluation to the date of this Quarterly Report, therehave been no significant changes in Internal Controls or in other factors thatcould significantly affect Internal Controls, including any corrective actionswith regard to significant deficiencies and material weaknesses.

 

Conclusions:

 

Based upon the Controls Evaluation, the CEO and CFO have concludedthat, subject to the limitations noted above, the Company’s Disclosure Controlsare effective to ensure that material information relating to the Company andits consolidated subsidiaries is made known to management, including the CEOand CFO, particularly during the period when periodic reports are being prepared,and that the Company’s Internal Controls are effective to provide reasonableassurance that the financial statements are fairly presented in conformity withgenerally accepted accounting principles.

 

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**PART II**

**OTHERINFORMATION**

 

Item1.             LegalProceedings

 

                                                Notapplicable

 

Item2.             Changesin Securities and Use of Proceeds

 

                                                Notapplicable

 

Item3.             DefaultsUpon Senior Securities

 

                                                Notapplicable

 

Item4.             Submissionof Matters to a Vote of Security Holders

 

                                                Notapplicable

 

Item5.             OtherInformation

 

                                                Notapplicable

 

Item6.             Exhibitsand Reports on Form 8-K

 

(a)                                  Exhibits

 

99.1  Certification under 18 U.S.C. 1350;

 

(b)                                 Reportson Form 8-K

 

TheCompany filed a Form 8-K dated May 15, 2003 reporting results for the firstquarter ending March 31, 2003.

 

**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 
|                      |   | Canterbury Park Holding  Corporation         |
|---------------------------|--------|----------------------------------------------|
|                      |   |                                         |
|                      |   |                                         |
| Dated:  May 15, 2003 |   | /s/  Randall D. Sampson                      |
|                      |   | Randall D. Sampson,                          |
|                      |   | President, and Chief  Executive Officer      |
|                      |   |                                         |
|                      |   |                                         |
| Dated:  May 15, 2003 |   | /s/  David C. Hansen                         |
|                      |   | David C. Hansen,                             |
|                      |   | Vice President, and  Chief Financial Officer |

 

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# **CEOCertification:**

 

# **I, Randall D. Sampson certify that:**

 

1.               I have reviewedthis quarterly report on Form 10-Q of Canterbury Park Holding Corporation;

 

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

 

3.               Based on myknowledge, the financial statements, and other financial information includedin this quarterly report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, andfor, the periods presented in this quarterly report;

 

4.               The registrant’sother certifying officer and I are responsible for establishing and maintainingdisclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and15d-14) for the registrant and we have:

 

a.               designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisquarterly report is being prepared;

b.              evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this quarterly report ( the“Evaluation date”); and

c.               presented in thisquarterly report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation date;

 

5.               The registrant’sother certifying officer and I have disclosed, based on our most recent          evaluation, to the registrant’sauditors and the audit committee of the registrant’s board of directors (orpersons performing the equivalent function):

 

a.               all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant’s ability to record, process, summarize andreport financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

b.              any fraud, whetheror not material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.               The registrant’sother certifying officer and I have indicated in this quarterly report whetheror not there were significant changes in internal controls or in other factorsthat could significantly affect internal controls subsequent to the date of ourmost recent evaluation, including any corrective actions with regard tosignificant deficiencies and material weaknesses.

 

 
| Dated: May 15, 2003 | CANTERBURY PARK HOLDING  CORPORATION |
|---------------------|--------------------------------------|
|                | /s/ Randall D. Sampson               |   |
|                | Randall D. Sampson                   |   |
|                | Chief Executive Officer              |   |

 

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# **CFOCertification:**

 

# **I, David C. Hansen certify that:**

 

1.               I have reviewedthis quarterly report on Form 10-Q of Canterbury Park Holding Corporation;

 

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

 

3.               Basedon my knowledge, the financial statements, and other financial informationincluded in this quarterly report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this quarterly report;

 

4.               Theregistrant’s other certifying officer and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

a.               designed suchdisclosure controls and procedures to ensure that material information relatingto the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which thisquarterly report is being prepared;

b.              evaluated theeffectiveness of the registrant’s disclosure controls and procedures as of adate within 90 days prior to the filing date of this quarterly report ( the“Evaluation date”); and

c.               presented in thisquarterly report our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of the Evaluation date;

 

5.               Theregistrant’s other certifying officer and I have disclosed, based on our mostrecent          evaluation, to theregistrant’s auditors and the audit committee of the registrant’s board ofdirectors (or persons performing the equivalent function):

 

a.               all significantdeficiencies in the design or operation of internal controls which couldadversely affect the registrant’s ability to record, process, summarize andreport financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

b.              any fraud, whetheror not material, that involves management or other employees who have asignificant role in the registrant’s internal controls; and

 

6.               Theregistrant’s other certifying officer and I have indicated in this quarterlyreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 

 
| Dated: May 15, 2003 | CANTERBURY PARK HOLDING  CORPORATION         |
|---------------------|----------------------------------------------|
|                | /s/ David C. Hansen                          |   |
|                | David C. Hansen                              |   |
|                | Vice President, and  Chief Financial Officer |

# ** **

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