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

                                   FORM 10-QSB

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

      For the Quarterly Period Ended September 30, 2002

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

      For the transition period from _________ to _________

                         Commission File Number: 0-24592

                                CINEMA RIDE, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                  Delaware                            95-4417467
       -------------------------------           ----------------------
       (State or other jurisdiction of             (I.R.S. Employer
       incorporation or organization)            Identification Number)

          12001 Ventura Place, Suite 340, Studio City, California 91604
         --------------------------------------------------------------
                    (Address of principal executive offices)

                    Issuer's telephone number: (818) 761-1002

                                 Not applicable
               ---------------------------------------------------
             (Former name, former address and former fiscal year, if
                           changed since last report.)


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

As of September 30, 2002, the Company had 5,382,310 shares of common stock
issued and outstanding.

Transitional Small Business Disclosure Format:  Yes [ ]  No [X]

Documents incorporated by reference:  None.




                                      -1-
<page>


                       CINEMA RIDE, INC. AND SUBSIDIARIES

                                      INDEX



PART I.   FINANCIAL INFORMATION

  Item 1.  Financial Statements

          Condensed   Consolidated   Balance   Sheets  -  September   30,  2002
          (Unaudited) and December 31, 2001

          Condensed  Consolidated  Statements of Operations (Unaudited) - Three
          Months and Nine Months Ended September 30, 2002 and 2001

          Condensed  Consolidated  Statements of Cash Flows  (Unaudited) - Nine
          Months Ended September 30, 2002 and 2001

          Notes to Condensed  Consolidated  Financial  Statements  (Unaudited) -
          Three Months and Nine Months Ended September 30, 2002 and 2001

Item 2.   Management's Discussion and Analysis or Plan of Operation

Item 3.   Controls and Procedures


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

Item 2.   Changes in Securities and Use of Proceeds

Item 6.   Exhibits and Reports on Form 8-K


SIGNATURES


CERTIFICATION


                                      -2-
<page>
<table>
<caption>

                       Cinema Ride, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets

                                     September 30,   December 31,
                                        2002             2001
                                     -----------     ------------
                                     (Unaudited)

                                     <c>              <c>
ASSETS

Current assets:
  Cash and cash equivalents         $   146,470       $   66,856
  Prepaid expenses and other
    current assets                       37,798           35,096
                                     ----------        ---------
Total current assets                    184,268          101,952
                                     ----------        ---------

Property and equipment (Note 6):
  Office equipment and furniture        115,380          111,180
  Equipment under capital lease         130,760          172,854
  Leasehold improvements                946,222        1,061,682
  Theater and film equipment          1,827,210        1,868,804
                                     ----------        ---------
                                      3,019,572        3,214,520

  Less accumulated depreciation      (2,415,883)      (2,258,404)
                                     ----------        ---------
                                        603,689          956,116
                                     ----------        ---------

Other assets:
  Visual effects library, net of
    accumulated amortization of
    $1,059,472 and $1,009,540 at
    September 30, 2002 and December
    31, 2001, respectively               33,298           83,230
  Investments in joint ventures
    (Note 6)                            355,168          323,795
  Consulting agreement                     -               7,803
  Deferred lease costs and other
    assets                               30,414           53,291
                                     ----------        ---------
                                        418,880          468,119
                                     ----------        ---------
Total assets                        $ 1,206,837       $1,526,187
                                     ==========        =========

</table>


                                   (continued)



                                      -3-
<page>
<table>
<caption>

                       Cinema Ride, Inc. and Subsidiaries
                Condensed Consolidated Balance Sheets (continued)

                                     September 30,   December 31,
                                         2002            2001
                                     -----------     ------------
                                     (Unaudited)

                                 <c>               <c>
LIABILITIES AND STOCKHOLDERS'
  EQUITY (DEFICIENCY)

Current liabilities:
  Accounts payable and accrued
    expenses                        $   286,528       $  456,454
  Current portion of capital
    lease obligations                    45,009           46,414
  Current portion of notes
    payable (Note 2)                    188,607          827,908
                                     ----------        ---------
Total current liabilities               520,144        1,330,776
                                     ----------        ---------

Non-current liabilities:
  Capital lease obligations,
    less current portion                 11,701           79,801
  Notes payable, less current
    portion (Note 2)                    667,121           47,991
  Deferred rent                          32,362           45,601
                                     ----------        ---------
                                        711,184          173,393
                                     ----------        ---------

Commitments and contingencies
  (Note 3)

Stockholders' equity (deficiency)
  (Note 5):
Preferred stock, $0.01 par value -
  Authorized - 500,000 shares
  Issued - None                            -                -
Common stock, $0.08 par value -
  Authorized - 20,000,000 shares
  Issued and Outstanding -
  5,382,310 shares and 1,945,900
  shares at September 30, 2002 and
  December 31, 2001, respectively       430,585          155,672
Additional paid-in capital           10,068,641        9,323,798
Accumulated deficit                 (10,523,717)      (9,457,452)
                                     ----------        ---------
Total stockholders' equity
  (deficiency)                          (24,491)          22,018
                                     ----------        ---------
Total liabilities and
  stockholders' equity
  (deficiency)                      $ 1,206,837       $1,526,187
                                     ==========        =========



</table>

      See accompanying notes to condensed consolidated financial statements.



                                      -4-
<page>
<table>
<caption>

                       Cinema Ride, Inc. and Subsidiaries
           Condensed Consolidated Statements of Operations (Unaudited)


                                       Three Months Ended September 30,
                                       --------------------------------
                                            2002              2001
                                         ---------         ---------

                                   <c>               <c>
Revenues                              $ 701,697         $ 714,455

Direct costs of revenues (Note 4)       335,959           335,792

Selling and marketing expenses           35,841            52,643

General and administrative
  expenses, including non-cash
  compensation expense of
  $118,000 in 2002 and $24,465
  in 2001 ($12,633 in 2002 and
  $12,600 in 2001 to officers
  and directors) (Note 5)               377,197           247,022

Depreciation and amortization            80,545            91,694

Start-up costs of new joint
  venture, including non-cash
  costs of $41,300 in 2002
  (Note 6)                               95,404            27,479

Closure costs of New Jersey
  ride facility (Note 7)                 24,847              -
                                        -------           -------
Loss from operations                   (248,096)          (40,175)

Other income (expense):
  Equity in net income (loss)
    of joint venture                       (911)            4,204
  Interest income                           295                95
  Interest expense                      (36,786)          (62,054)
  Other income                              717              -
                                        -------           -------
Net loss                              $(284,781)        $ (97,930)
                                        =======           =======

Net loss per common share -
  basic and diluted (Note 1)             $(0.05)           $(0.05)
                                           ====              ====

Weighted average common
  shares outstanding -
  basic and diluted                   5,235,633         1,945,900
                                      =========         =========

</table>




     See accompanying notes to condensed consolidated financial statements.

                                      -5-
<page>

<table>
<caption>

                       Cinema Ride, Inc. and Subsidiaries
           Condensed Consolidated Statements of Operations (Unaudited)


                                        Nine Months Ended September 30,

                                        -------------------------------
                                           2002             2001
                                        ---------        ---------

                                 <c>                <c>
Revenues                            $ 1,805,582        $1,872,578

Direct costs of revenues (Note 4)     1,008,949           974,988

Selling and marketing expenses           71,794           135,481

General and administrative
  expenses, including non-cash
  compensation expense of
  $375,756 in 2002 and $24,465
  in 2001 ($133,389 in 2002 and
  $12,600 in 2001 to officers
  and directors) (Note 5)             1,182,994           763,455

Depreciation and amortization           253,657           261,944

Start-up costs of new joint
  venture, including non-cash
  costs of $41,300 in 2002
  (Note 6)                              123,927            43,609

Closure costs of New Jersey
  ride facility, including
  non-cash costs of $118,530
  in 2002 (Note 7)                      143,377              -
                                      ---------         ---------
Loss from operations                   (979,116)         (306,899)

Other income (expense):
  Equity in net income of
    joint venture                        17,392            15,269
  Interest income                           328               693
  Interest expense                     (122,235)         (119,516)
  Other income                           17,366             -
                                       ---------        ---------
Net loss                            $(1,066,265)       $ (410,453)
                                       =========        =========

Net loss per common share -
  basic and diluted (Note 1)             $(0.25)           $(0.31)
                                           ====              ====

Weighted average common
  shares outstanding -
  basic and diluted                   4,204,819         1,303,635
                                      =========         =========



</table>


     See accompanying notes to condensed consolidated financial statements.


                                      -6-
<page>

<table>
<caption>
                       Cinema Ride, Inc. and Subsidiaries
           Condensed Consolidated Statements of Cash Flows (Unaudited)


                                        Nine Months Ended September 30,
                                        -------------------------------
                                             2002            2001
                                          ---------       ---------

                                 <c>                 <c>
Cash flows from operating activities:
Net loss                            $(1,066,265)        $(410,453)
Adjustments to reconcile net loss
  to net cash used in operating
  activities:
  Depreciation and amortization         253,657           261,944
  Common stock and warrants issued
    for services                        417,056            24,465
  Non-cash portion of closure costs
    of New Jersey ride facility         118,530              -
  Settlement of obligation to
    landlord                               -              (70,580)
  Other income                          (16,649)           -
  Equity in net income of joint
    venture                             (17,392)          (15,269)
  Amortization of consulting
    agreement                             7,803             7,803
  Amortization of deferred
    financing costs                      19,574            35,570
  Changes in operating assets and
    liabilities:
    (Increase) decrease in:
      Prepaid expenses and other
        current assets                   (3,314)           11,396
    Increase (decrease) in:
      Accounts payable and
        accrued expenses                (89,965)          129,905
      Deferred rent                     (13,239)          (13,240)
                                      ---------           -------
Net cash used in operating
  activities                           (390,204)          (38,459)
                                      ---------           -------


</table>


                                   (continued)



                                      -7-
<page>

<table>
<caption>

                       Cinema Ride, Inc. and Subsidiaries
     Condensed Consolidated Statements of Cash Flows (Unaudited) (continued)


                                        Nine Months Ended September 30,
                                        -------------------------------
                                           2002             2001
                                         ---------       ---------

                                  <c>              <c>
Cash flows from investing activities:
  Dividends received from existing
    joint venture                    $   49,503       $  47,436
  Sale of property and equipment            808           -
  Purchase of property and equipment       -             (2,192)
  Purchase of property and equipment
    for new joint venture               (65,693)           -
                                      ---------         -------
Net cash provided by (used in)
  investing activities                  (15,382)         45,244
                                      ---------         -------

Cash flows from financing activities:
  Payments on notes payable             (67,483)        (13,502)
  Principal payments on capital
    lease obligations                   (29,817)        (28,995)
  Sale of equity securities             582,500            -
                                      ---------         -------
Net cash provided by (used in)
  financing activities                  485,200         (42,497)
                                      ---------         -------

Cash and cash equivalents:
  Net increase (decrease)                79,614         (35,712)
  At beginning of period                 66,856         109,834
                                      ---------         -------
  At end of period                  $   146,470       $  74,122
                                      =========         =======






</table>



     See accompanying notes to condensed consolidated financial statements.

                                      -8-
<page>

                       Cinema Ride, Inc. and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Unaudited)
             Three Months and Nine Ended September 30, 2002 and 2001


1.  Organization and Basis of Presentation

Basis of Presentation - The condensed consolidated financial statements include
the operations of Cinema Ride, Inc. and its wholly-owned subsidiaries (the
"Company"). All significant intercompany transactions and balances have been
eliminated in consolidation.

Comments - The interim condensed consolidated financial statements are
unaudited, but in the opinion of management of the Company, contain all
adjustments, which include normal recurring adjustments, necessary to present
fairly the financial position at September 30, 2002, the results of operations
for the three months and nine months ended September 30, 2002 and 2001, and the
cash flows for the nine months ended September 30, 2002 and 2001. The
consolidated balance sheet as of December 31, 2001 is derived from the Company's
audited financial statements.

Certain information and footnote disclosures normally included in financial
statements that have been presented in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission with respect to interim
financial statements, although management of the Company believes that the
disclosures contained in these financial statements are adequate to make the
information presented therein not misleading. For further information, refer to
the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
2001, as filed with the Securities and Exchange Commission.

Business - The Company develops and operates rides consisting of 3-D motion
simulator attractions and filmed entertainment that combines projected
three-dimensional action films of approximately four minutes in duration with
computer-controlled, hydraulically-mobilized capsules that are programmed to
move in concert with the on-screen action. The technology employed by the
Company in its ride facilities includes Patent No. 5,857,917 granted to the
Company on January 12, 1999 by the United States Patent and Trademark Office for
3-D video projected motion simulator rides. The Company's ride facilities are
located in Las Vegas, Nevada; Edmonton, Alberta, Canada; and Atlanta, Georgia.

During November 2002, the Company opened a new business venture in Las Vegas,
Nevada, which is operated under the name "Coca-Cola Tickets2Nite". The new
business venture sells tickets to Las Vegas shows at 50% of the face price on
the same day of the performance (see Note 6).

The results of operations for the three months and nine months ended September
30, 2002 are not necessarily indicative of the results of operations to be
expected for the full fiscal year ending December 31, 2002.

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

Reclassification - Certain amounts have been reclassified in 2001 to conform
with the presentation in 2002.

                                      -9-
<page>

Going Concern - The consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal
course of business. The carrying amounts of assets and liabilities presented in
the consolidated financial statements do not purport to represent the realizable
or settlement values. The Company has experienced declining revenues and
recurring operating losses, and had a substantial working capital deficit at
September 30, 2002 and December 31, 2001. The Company's independent certified
public accountants, in their independent auditors' report on the consolidated
financial statements as of and for the year ended December 31, 2001, have
expressed substantial doubt about the Company's ability to continue as a going
concern.

The Company will require additional capital to fund operating and debt service
requirements. The Company has been exploring various alternatives to raise this
required capital and has raised a portion of the required capital, but there can
be no assurances that the Company will ultimately be successful in this regard.
During the nine months ended September 30, 2002, the Company raised $582,500 of
new capital through the sale of its equity securities. The private placement
offering consisted of units sold at $0.25 per unit. Each unit consisted of one
share of common stock and one common stock purchase warrant. The warrants are
exercisable at $0.50 per share for a period of 18 months from the date of
issuance.

The Company is continuing its efforts to raise new capital subsequent to
September 30, 2002. The Company is attempting to raise a total of up to $750,000
of new capital during 2002.

To the extent that the Company is unable to secure the capital necessary to fund
its future cash requirements on a timely basis and/or under acceptable terms and
conditions, the Company may not have sufficient cash resources to maintain
operations. In such event, the Company may be required to consider a formal or
informal restructuring or reorganization.

Foreign Currency Translation - Foreign currency denominated assets and
liabilities of the subsidiary where the United States dollar is the functional
currency and which have certain transactions denominated in a local currency are
remeasured as if the functional currency was the United States dollar. The
remeasurement of local currency into United States dollars creates translation
adjustments which are immaterial and which are included in the statement of
operations.

Net Loss Per Common Share - Basic loss per common share is calculated by
dividing net loss by the weighted average number of common shares outstanding
during the period. Diluted loss per common share reflects the potential dilution
that would occur if dilutive stock options and warrants were exercised. These
potentially dilutive securities were anti-dilutive for all periods presented,
and accordingly, basic and diluted loss per common share is the same for all
periods presented. As of September 30, 2002, potentially dilutive securities
consisted of outstanding stock options and warrants to acquire 1,508,188 shares
and 4,100,009 shares of common stock, respectively.

Stock-Based Compensation - The Company periodically issues stock options and
warrants to employees and non-employees in non-capital raising transactions for
services and for financing costs.

The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock-Based Compensation", which establishes a fair value
method of accounting for stock-based compensation plans.

                                      -10-
<page>

The provisions of SFAS No. 123 allow companies to either record an expense in
the financial statements to reflect the estimated fair value of stock options or
warrants to employees, or to continue to follow the intrinsic value method set
forth in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees", but to disclose on an annual basis the pro forma effect on
net income (loss) and net income (loss) per common share had the fair value of
the stock options and warrants been recorded in the financial statements. The
Company has elected to continue to account for stock-based compensation plans
utilizing the intrinsic value method. Accordingly, compensation cost for stock
options and warrants is measured as the excess, if any, of the fair market price
of the Company's common stock at the date of grant above the amount an employee
must pay to acquire the common stock.

In accordance with SFAS No. 123, the cost of stock options and warrants issued
to non-employees is measured at the grant date based on the fair value of the
award. The fair value of the stock-based award is determined using the
Black-Scholes option pricing model. The resulting amount is charged to expense
on the straight-line basis over the period in which the Company expects to
receive benefit, which is generally the vesting period.

The Company periodically issues shares of common stock for services or for
financing costs. Such shares are valued based on the market price on the
transaction date, adjusted for factors such as trading restrictions,
registration rights, trading volume and market liquidity, which generally
results in a reduction ranging from 25% to 33% to the market price at the
transaction date.


2.  Note Payable to Secured Lender

On December 31, 1996, the Company completed a financing agreement with Finova
Technology Finance, Inc., which was structured as a sale-leaseback transaction
of certain equipment owned by the Company. Based on the substance of this
transaction, this financing agreement was accounted for as a note payable for
financial reporting purposes. The gross loan amount was $1,575,027, repayable
over a four year period at $40,903 per month with a balloon payment of $157,503.
On March 10, 1999, the financing agreement was amended to reduce the monthly
payments from $40,903 to $21,789, and to extend the maturity date from January
1, 2001 to January 1, 2004, with no change in the balloon payment of $157,503.
The loan bore interest at 16.75% per annum. The financing agreement requires the
Company to repurchase the equipment at the end of the lease for $1.00.

Effective June 25, 2001, the Company completed a Second Modification Agreement
and Waiver of Defaults with the secured lender, which provided for: (1) the
waiver of all prior payment defaults; (2) the reduction of the monthly payment
from $21,789 to $10,674, which represents interest only payments at 16.75% per
annum; (3) the increase in the principal balance due the lender of accrued
interest payable of $50,083; (4) the acceleration of the due date of the loan
from January 1, 2004 to March 1, 2002; (5) the repricing of a common stock
purchase warrant previously issued to the lender to purchase 12,500 shares of
common stock exercisable through December 31, 2003, which reduced the exercise
price from $16.00 per share to $1.00 per share; (6) the issuance of common stock
purchase warrants to the lender to purchase 25,000 shares of common stock at
$0.50 per share and 25,000 shares of common stock at $1.00 per share exercisable
through June 25, 2011; and (7) the revision of the lender's Warrant Holder
Rights Agreement to eliminate demand registration rights.

The Company calculated the fair value of the warrants to purchase an aggregate
of 50,000 shares of common stock and the repricing of the warrant to purchase
12,500 shares of common stock pursuant to the Black-Scholes option pricing


                                      -11-
<page>

model. The aggregate fair value of $47,250 was recorded as deferred financing
costs, and was charged to operations as financing expense through March 1, 2002.
In addition, previously recorded deferred financing costs were charged to
operations as financing expense through the accelerated due date of the loan of
March 1, 2002.

The balance of this loan was $780,613 at December 31, 2001. Since this loan was
due in full on March 1, 2002, the Company classified the entire obligation to
the secured lender as a current liability in the consolidated financial
statements at December 31, 2001. Required monthly payments on such loan were in
arrears at December 31, 2000 and 2001, and the Company did not make the balloon
payment due on March 1, 2002.

Effective April 17, 2002, the Company completed a Third Modification Agreement
and Waiver of Defaults with the secured lender, which provided for: (1) the
waiver of all prior payment defaults; (2) interest on the unpaid balance at
16.64% per annum; (3) the payment of interest only for the months of March,
April and May 2002; and (4) commencing June 2002, monthly payments of principal
and interest of $18,955 for a period of five years. As a result of the
completion of this agreement, the balance of this loan has been reclassified
into current and long-term portions, with $112,237 classified as a current
liability and $632,423 classified as a long-term liability at September 30,
2002.


3.  Legal Proceedings

The Company's former Chief Financial Officer, Toufic R. Bassil, has asserted
claims against the Company for breach of his employment agreement and his
wrongful termination as an officer of the Company without cause effective March
1, 1999. These claims are being asserted pursuant to a binding arbitration
proceeding through the American Arbitration Association. Although the arbitrator
has determined that the Company is liable for damages from breach of the
employment agreement, damages have not yet been determined. The wrongful
termination claim is still in the discovery stage and the Company is actively
defending this matter. In the opinion of management, adequate provision has been
made in the consolidated financial statements with respect to the foregoing
claims.

During July 2002, the Company was named as a defendant in a lawsuit initiated by
the landlord of the New Jersey ride facility. The New Jersey ride facility was
closed in late June 2002 (see Note 7). The lawsuit results from the contractual
relationship between the landlord and the Company. Management believes that it
has claims against the landlord sufficient to offset any damages for which the
Company may ultimately be found liable. Management believes that it will be
successful in its defense of this lawsuit, and has therefore not accrued for any
expenses associated with this lawsuit in the financial statements. The Company's
financial statements do not include any adjustments for recovery of claims
against the landlord.


4.  Lease Restructuring

On June 13, 2001, the Company's wholly-owned subsidiary entered into a Lease
Modification Agreement with the landlord for the Company's Elizabeth, New Jersey
ride facility (the "Lease Modification Agreement"). The original lease agreement
was dated November 1, 1999. The Lease Modification Agreement provided for: (1) a
reduction in the base monthly rent from $8,575 to $4,388; (2) a decrease in the
annual gross sales utilized to calculate the additional rent due the landlord
(based on a percentage factor of 10%) from $1,029,000 to $526,575; (3) a payment
to the landlord by the Company of $50,000 in full satisfaction of all


                                      -12-
<page>

construction charges and rent for the period from October 1, 2000 through May
31, 2001; (4) forgiveness of $70,580 of accrued rent payable by the Company to
the landlord; and (5) deletion of a provision in the original lease agreement
that allowed the Company to terminate the lease if a movie theater had not
opened in the shopping mall in which the Company's ride facility is located by a
certain date.

The Company believes that the failure by the landlord to arrange for the timely
opening of a movie theater in the shopping mall in which the Company's ride
facility is located has negatively impacted operating results at this location.
Accordingly, the Company has recorded the forgiveness of accrued rent payable of
$70,580 as a reduction to direct costs of revenues for the nine months ended
September 30, 2001, since it was reimbursement by the landlord for damages that
the Company had sustained, and since rent payments were originally included in
direct costs of revenues.

See Note 7 for information with respect to litigation relating to the closure of
the New Jersey ride facility in late June 2002.


5.  Stockholders' Equity (Deficiency)

Nine Months Ended September 30, 2001:

On March 13, 2001, the Company granted its Chief Executive Officer a stock
option to purchase an aggregate of 800,000 shares of common stock expiring on
the earlier to occur of three years from the date of vesting or March 13, 2006.
The stock option is exercisable in four equal increments of 200,000 shares at
exercise prices of $0.38, $1.00, $1.50 and $2.00 per share, respectively. The
fair market value of the common stock on March 13, 2001 was $0.37 per share. The
stock option vests based on the attainment of certain milestones by the Company,
including raising new equity capital and reaching certain levels of earnings
before interest, taxes, depreciation and amortization, none of which had been
reached as of September 30, 2002. In accordance with accounting for such stock
options utilizing the intrinsic value method, no compensation expense has been
recorded in the Company's consolidated financial statements.

On June 5, 2001, the Company granted stock options to two employees to purchase
an aggregate of 240,000 shares of common stock, including an option for 150,000
shares of common stock to the Company's Vice President of Operations,
exercisable through June 5, 2006 at $0.15 per share, which was equal to fair
market value on the date of grant. The options vest in equal annual installments
on June 5, 2001, 2002 and 2003. In accordance with accounting for such stock
options utilizing the intrinsic value method, no compensation expense was
recorded in the Company's consolidated financial statements.

On June 5, 2001, the Company's Chief Executive Officer exercised a portion of a
previously issued warrant for 1,538,461 shares of common stock exercisable at
$0.13 per share through February 2, 2002. The Chief Executive Officer exercised
warrants for 923,077 shares of common stock and paid the exercise consideration
by canceling his $120,000 loan to the Company. The unexercised portion of the
warrant for 615,384 shares of common stock was extended for an additional two
years, and cashless exercise provisions were added. The exercise price of the
warrant and the fair market value of the Company's common stock on the extension
date were approximately equal. Accordingly, in accordance with accounting for
such warrants utilizing the intrinsic value method, no compensation expense was
recorded in the Company's consolidated financial statements.

                                      -13-
<page>

During June 2001, the Company issued to various employees an aggregate of
113,000 shares of common stock as a bonus. The aggregate fair market value of
the 113,000 shares was $11,865, which was charged to operations as general and
administrative expense during the nine months ended September 30, 2001.

During June 2001, the Company issued 20,000 shares of common stock to the
Company's Vice President of Operations as a bonus. The aggregate fair market
value of the 20,000 shares was $2,100, which was charged to operations as
general and administrative expense during the nine months ended September 30,
2001.

During June 2001, the Company issued 50,000 shares of its common stock to each
of its two non-employee directors as compensation for serving on the Board of
Directors. The aggregate fair market value of the 100,000 shares was $10,500,
which was charged to operations as general and administrative expense during the
nine months ended September 30, 2001.

In conjunction with the restructuring of the Company's obligations to its
primary secured lender on June 25, 2001, the Company repriced previously issued
warrants to purchase 12,500 shares of common stock through December 31, 2003
from $16.00 per share to $1.00 per share, and issued new warrants to purchase
25,000 shares of common stock at $0.50 per share and 25,000 shares of common
stock at $1.00 per share exercisable through June 25, 2011 (see Note 2).

Nine Months Ended September 30, 2002:

On January 28, 2002, the Company issued to various employees and consultants an
aggregate of 350,000 shares of common stock as a bonus. The aggregate fair
market value of the 350,000 shares was $73,500, which was charged to operations
as general and administrative expense during the nine months ended September 30,
2002.

On January 28, 2002, the Company issued to its Vice President of Operations
75,000 shares of common stock as a bonus. The aggregate fair market value of the
75,000 shares was $15,750, which was charged to operations as general and
administrative expense during the nine months ended September 30, 2002.

On January 28, 2002, the Company issued 100,000 shares of common stock to each
of its two non-employee directors as compensation for serving on the Board of
Directors. The aggregate fair market value of the 200,000 shares was $42,000,
which was charged to operations as general and administrative expense during the
nine months ended September 30, 2002.

During the nine months ended September 30, 2002, the Company sold 2,394,000
units of its securities to accredited investors in a private placement at $0.25
per unit (including 100,000 units during the three months ended September 30,
2002), generating $598,500 of equity capital, which included settlement of
accounts payable of $16,000 paid through the issuance of such securities. Each
unit consisted of one share of common stock and one common stock purchase
warrant. The warrants are exercisable at $0.50 per share for a period of 18
months from the date of issuance.

Effective as of January 3, 2002, the Company entered into a two year agreement
with a consulting firm that provides for the payment of monthly compensation,
either in the form of a payment of $10,000 or the issuance of 25,000 shares of
common stock. During the three months and nine months ended September 30, 2002,
the Company issued 50,000 shares and 200,000 shares of common stock to such


                                      -14-
<page>

firm, respectively, with a fair market value of $18,500 and $79,750,
respectively, which was charged to operations as general and administrative
expense during the respective periods. The Company also paid $10,000 to such
firm during the three months and nine months ended September 30, 2002.

Effective as July 1, 2002, the consulting agreement was amended to provide for
the Company to issue to such firm the following common stock purchase warrants:
an aggregate of 300,000 shares of common stock vesting on July 1, 2002,
exercisable for a period of five years from such date in equal installments of
100,000 shares at $0.25, $0.50 and $1.00 per share; an aggregate of 300,000
shares of common stock vesting on January 1, 2003, exercisable for a period of
five years from such date in equal installments of 100,000 shares at $1.50,
$2.00 and $2.50 per share; and an aggregate of 300,000 shares of common stock
vesting on July 1, 2003, exercisable for a period of five years from such date
in equal installments of 100,000 shares at $3.00, $3.50 and $4.00 per share. The
aggregate fair value of such warrants was calculated pursuant to the
Black-Scholes option pricing model as $496,000, which is being charged to
operations as general and administrative expense over the 18 month period
beginning July 1, 2002 and ending December 31, 2003. For the three months and
nine months ended September 30, 2002, $82,667 was charged to operations.

Effective as of July 1, 2002, the consulting agreement was amended to provide
for the Company to pay a finder's fee to such firm with respect to the private
placement of its equity securities by issuing shares of common stock equivalent
to 3% of the total equity capital raised, calculated at $0.50 per share. During
the three months and nine months ended September 30, 2002, the Company issued
17,910 shares and 35,910 shares of common stock to such firm, which were
recorded at their par value of $0.08 per share and charged to additional paid-in
capital.

During the nine months ended September 30, 2002, the Company issued 5,000 shares
of common stock as a consulting fee. The aggregate fair market value of the
5,000 shares was $2,250, which was charged to operations as general and
administrative expense during the nine months ended September 30, 2002.

During the three months and nine months ended September 30, 2002, the Company
issued 5,000 shares and 116,500 shares of common stock, respectively, to its
Chief Executive Officer with an aggregate fair market value of $1,800 and
$53,973, respectively, which was charged to operations as general and
administrative expense during the respective periods. The shares were issued
pursuant to a bonus provision of such officer's employment agreement, which
provides for the issuance of 5% of the shares issued in a private placement.

On February 4, 2002, as part of the Company's 2002 compensation agreement with
its Vice President of Operations, the Company issued a warrant to purchase
50,000 shares of common stock exercisable for a period of five years at $0.41
per share, which was the fair market value on the date of grant, vesting if 2002
revenues from the Company's Las Vegas ride facility are at least equal to 2001
revenues. As of June 30, 2002, the Company determined that it was likely that
this warrant would vest. The fair value of the warrant was calculated pursuant
to the Black-Scholes option pricing model as $32,500, which is being charged to
operations as general and administrative expense over the nine month period
beginning March 1, 2002 and ending December 31, 2002. For the three months and
nine months ended September 30, 2002, $10,833 and $21,666 was charged to
operations, respectively.

On September 27, 2002, the Company issued 10,000 shares of common stock as a
licensing fee. The fair market value of the common stock was $4,200, which was


                                      -15-
<page>

charged to operations as general and administrative expense during the three
months and nine months ended September 30, 2002.

On September 27, 2002 the Company issued 10,000 shares of common stock to
acquire certain office equipment. The fair market value of the common stock was
$4,200, which was recorded as office equipment and furniture at September 30,
2002.

In conjunction with the formation and development of the Company's new joint
venture (see Note 6), the Company issued shares of common stock and common stock
purchase warrants as described below.

On September 27, 2002, the Company issued 30,000 shares of common stock with a
fair market value of $12,600 and a warrant to purchase 50,000 shares of common
stock, exercisable at $0.42 per share for a period of three years, with a fair
value of $24,500, as a consulting fee. These amounts were charged to operations
as start-up costs of the new joint venture during the three months and nine
months ended September 30, 2002.

On September 27, 2002, the Company issued 10,000 shares of common stock as a
consulting fee. The fair market value of the common stock was $4,200, which was
charged to operations as start-up costs of the new joint venture during the
three months and nine months ended September 30, 2002.


6.  Investments in Joint Ventures

Dave & Busters, Inc.:

The Company has a joint venture agreement with Dave & Buster's, Inc., pursuant
to which it has installed a 3-D motion simulation theater at the Dave &
Buster's, Inc. facility in Atlanta, Georgia. The joint venture agreement has not
been formally extended and the operations are continuing on a month-to-month
basis. Each party to the joint venture agreement shares the joint venture's
revenues and operating expenses equally. The joint venture agreement also
requires the Company to be solely responsible for certain administrative
expenses. As of September 30, 2002, the Company's investment in this joint
venture was $291,684.

Tickets2Nite, LLC:

The Company owns 50% of a subsidiary named Tickets2Nite, LLC, which was formed
in 2002, with the other 50% being owned by an independent third party. The joint
venture commenced operations during November 2002. The joint venture sells
tickets to Las Vegas shows at 50% of the face price, on the same day of the
performance, from a ticket booth located adjacent to the giant Coca-Cola bottle
on the Las Vegas Strip, in front of the MGM Grand Hotel. The Coca-Cola Company
has entered into a Marketing Sponsorship Agreement with Tickets2Nite, LLC, as a
result of which the operations of the joint venture are being marketed as
"Coca-Cola Tickets2Nite". As of September 30, 2002, the Company's investment in
this joint venture was $63,484.

As a result of the formalization of the joint venture during the three months
ended September 30, 2002, the Company transferred equipment under capital leases
of $55,352, less accumulated depreciation of $4,616, and the related capital
lease liability of $52,945 to the investment in joint venture. During the three
months ended September 30, 2002, the Company also entered into a capital lease
for $12,700 to acquire equipment for the joint venture.

During the three months ended September 30, 2002 and 2001, the Company incurred
$95,404 and $27,479, respectively, of costs related to the development of the
new joint venture. During the nine months ended September 30, 2002 and 2001, the
Company incurred $123,927 and $43,609, respectively, of costs related to the
development of the new joint venture. Included in such costs for the three
months and nine months ended September 30, 2002 were $41,300 of non-cash costs


                                      -16-
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resulting from the issuance of common stock and common stock purchase warrants
during the three months ended September 30, 2002.

The Company  intends to account for this  investment  under the equity method of
accounting, since it does not have majority voting control of the subsidiary.


7.  Closure of New Jersey Ride Facility

During late June 2002, the Company closed its New Jersey ride facility, as a
result of unsatisfactory revenue production and a dispute with the landlord over
expense increases. As a result, the Company wrote-off certain fixed assets
related to such ride facility and incurred certain direct costs related to such
closure, resulting in a charge to operations of $24,847 and $143,377 for the
three months and nine months ended September 30, 2002. Included in the $143,377
of costs for the nine months ended September 30, 2002 were non-cash costs of
$118,530. During the nine months ended September 30, 2002, the New Jersey ride
facility generated revenues of $156,934 or 8.7% of consolidated revenues. During
the three months and nine months ended September 30, 2001, the New Jersey ride
facility generated revenues of $91,860 and $262,097, respectively, or 12.9% and
14.0% of consolidated revenues, respectively.

At September 30, 2002, property and equipment included office and equipment and
equipment under capital leases related to the New Jersey ride facility with an
original cost of $46,255 and a depreciated cost of $23,507. The Company is
pursuing opportunities to establish another Las Vegas ride facility in order to
utilize the equipment removed from the New Jersey site. This effort is expected
to take several months to accomplish, and there can be no assurances that the
Company will ultimately be successful. Should the Company not be successful in
establishing a new Las Vegas ride facility in the next several months, the
Company will write-off the property and equipment removed from the New Jersey
ride facility, to the extent that it cannot be utilized in the Company's
remaining operations.

See Note 4 for information with respect to the restructuring of the lease for
the New Jersey ride facility in June 2001.


8.  New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which is effective January 1, 2002. SFAS No. 142 requires, among other
things, the discontinuance of goodwill amortization. In addition, SFAS No. 142
includes provisions for the reclassification of certain existing recognized
intangibles as goodwill, reassessment of the useful lives of the existing
recognized intangibles, reclassification of certain intangibles out of
previously reported goodwill and the identification of reporting units for
purposes of assessing potential future impairments of goodwill. SFAS No. 142
also requires the Company to complete a transitional goodwill impairment test
six months from the date of adoption. The Company does not expect that the
adoption of SFAS No. 142 will have any impact on the Company's financial
statement presentation or disclosures.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". This statement addresses the diverse accounting practices for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. The Company will be required to adopt this
statement effective January 1, 2003. The Company is reviewing SFAS No. 143 to
determine what effect, if any, it will have on its financial statement
presentation or disclosures.

                                      -17-
<page>

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", which is effective January 1, 2002. SFAS No. 144
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of", and a portion of APB Opinion No. 30,
"Reporting the Results of Operations". This statement provides a single
accounting model for long-lived assets to be disposed of and significantly
changes the criteria that would have to be met to classify an asset as
held-for-sale. Classification as held-for-sale is an important distinction since
such assets are not depreciated and are stated at the lower of fair value and
carrying amount. This statement also requires expected future operating losses
from discontinued operations to be displayed in the period(s) in which the
losses are incurred, rather than as of the measurement date as presently
required. The Company does not anticipate that the adoption of SFAS No. 144 will
have a material effect on the Company's financial statement presentation or
disclosures.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. Such costs covered by
the standard include lease termination costs and certain employee severance
costs that are associated with a restructuring, discontinued operation, plant
closing, or other exit or disposal activity. SFAS No. 146 replaces the previous
accounting guidance provided by the Emerging Issues Task Force Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS
No. 146 is to be applied prospectively to exit or disposal activities initiated
after December 31, 2002. The Company does not anticipate that the adoption of
SFAS No. 146 will have a material impact on the Company's financial statement
presentation and disclosures.


                                      -18-
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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:

This Quarterly Report on Form 10-QSB for the quarterly period ended September
30, 2002 contains "forward-looking" statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, including statements that include the
words "believes", "expects", "anticipates", or similar expressions. These
forward-looking statements include, among others, statements concerning the
Company's expectations regarding its working capital requirements, financing
requirements, its business, growth prospects, competition and results of
operations, and other statements of expectations, beliefs, future plans and
strategies, anticipated events or trends, and similar expressions concerning
matters that are not historical facts. The forward-looking statements in this
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
2002 involve known and unknown risks, uncertainties and other factors that could
cause the actual results, performance or achievements of the Company to differ
materially from those expressed in or implied by the forward-looking statements
contained herein.

Overview:

The Company is in the business of developing and operating rides consisting of
3-D motion simulator attractions and filmed entertainment that combines
projected three-dimensional action films of approximately four minutes in
duration with computer-controlled, hydraulically-mobilized capsules that are
programmed to move in concert with the on-screen action. The Company's ride
facilities are located in Las Vegas, Nevada; Edmonton, Alberta, Canada; and
Atlanta, Georgia.

During November 2002, the Company opened a new business venture in Las Vegas,
Nevada, which is operated under the name "Coca-Cola Tickets2Nite". The new
business venture sells tickets to Las Vegas shows at 50% of the face price on
the same day of the performance (see "New Business Venture" below).

Because of the seasonal nature of tourist traffic, attendance patterns at
attractions may vary. The degree of this seasonality varies among attractions,
depending on the nature of tourist and local traffic patterns at a given
location as well as the nature of entertainment alternatives available to
audiences. The Company expects that attendance at its facilities will be the
highest during June through August (the height of the tourist season) and lowest
during January and February. As a result, the Company's results of operations at
its facilities will depend upon revenues generated from the peak tourist periods
and any significant decrease in revenues in such periods could have a material
adverse effect upon the Company's results of operations.

Going Concern:

The consolidated financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The
carrying amounts of assets and liabilities presented in the consolidated
financial statements do not purport to represent the realizable or settlement
values. The Company has experienced declining revenues and recurring operating
losses, and had a substantial working capital deficit at September 30, 2002 and
December 31, 2001. The Company's independent certified public accountants, in
their independent auditors' report on the consolidated financial statements as
of and for the year ended December 31, 2001, have expressed substantial doubt
about the Company's ability to continue as a going concern.

                                      -19-
<page>

The Company will require additional capital to fund operating and debt service
requirements (see "Liquidity and Capital Resources - September 30, 2002" below).
The Company has been exploring various alternatives to raise this required
capital and has raised a portion of the required capital, but there can be no
assurances that the Company will ultimately be successful in this regard. During
the nine months ended September 30, 2002, the Company raised $582,500 of new
capital through the sale of its equity securities. The private placement
offering consisted of units sold at $0.25 per unit. Each unit consisted of one
share of common stock and one common stock purchase warrant. The warrants are
exercisable at $0.50 per share for a period of 18 months from the date of
issuance.

The Company is continuing its efforts to raise new capital subsequent to
September 30, 2002. The Company is attempting to raise a total of up to $750,000
of new capital during 2002.

To the extent that the Company is unable to secure the capital necessary to fund
its future cash requirements on a timely basis and/or under acceptable terms and
conditions, the Company may not have sufficient cash resources to maintain
operations. In such event, the Company may be required to consider a formal or
informal restructuring or reorganization.

Closure of New Jersey Ride Facility:

During late June 2002, the Company closed its New Jersey ride facility, as a
result of unsatisfactory revenue production and a dispute with the landlord over
expense increases. As a result, the Company wrote-off certain fixed assets
related to such ride facility and incurred certain direct costs related to such
closure, resulting in a charge to operations aggregating $24,847 and $143,377
for the three months and nine months ended September 30, 2002. Included in the
$143,377 of costs for the nine months ended September 30, 2002 were non-cash
costs of $118,530. During the nine months ended September 30, 2002, the New
Jersey ride facility generated revenues of $156,934 or 8.7% of consolidated
revenues. During the three months and nine months ended September 30, 2001, the
New Jersey ride facility generated revenues of $91,860 and $262,097,
respectively, or 12.9% and 14.0% of consolidated revenues, respectively.

At September 30, 2002, property and equipment included office and equipment and
equipment under capital leases related to the New Jersey ride facility with an
original cost of $46,255 and a depreciated cost of $23,507. The Company is
pursuing opportunities to establish another Las Vegas ride facility in order to
utilize the equipment removed from the New Jersey site. This effort is expected
to take several months to accomplish, and there can be no assurances that the
Company will ultimately be successful. Should the Company not be successful in
establishing a new Las Vegas ride facility in the next several months, the
Company will write-off the property and equipment removed from the New Jersey
ride facility, to the extent that it cannot be utilized in the Company's
remaining operations.

During July 2002, the Company was named as a defendant in a lawsuit initiated by
the landlord of the New Jersey ride facility. The New Jersey ride facility was
closed in late June 2002. The lawsuit results from the contractual relationship
between the landlord and the Company. Management believes that it has claims
against the landlord sufficient to offset any damages for which the Company may
ultimately be found liable. Management believes that it will be successful in
its defense of this lawsuit, and has therefore not accrued for any expenses
associated with this lawsuit in the financial statements. The Company's
financial statements do not include any adjustments for recovery of claims
against the landlord.

                                      -20-
<page>

New Business Venture:

The Company owns 50% of a subsidiary named Tickets2Nite, LLC, which was formed
in 2002, with the other 50% being owned by an independent third party. The joint
venture commenced operations during November 2002. The joint venture sells
tickets to Las Vegas shows at 50% of the face price, on the same day of the
performance, from a ticket booth located adjacent to the giant Coca-Cola bottle
on the Las Vegas Strip, in front of the MGM Grand Hotel. The Coca-Cola Company
has entered into a Marketing Sponsorship Agreement with Tickets2Nite, LLC, as a
result of which the operations of the joint venture are being marketed as
"Coca-Cola Tickets2Nite". As of September 30, 2002, the Company's investment in
this joint venture was $63,484.

Critical Accounting Policies:

The Company prepared the consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Management periodically evaluates the estimates and judgments made.
Management bases its estimates and judgments on historical experience and on
various factors that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates as a result of different
assumptions or conditions.

The following critical accounting policies affect the more significant judgments
and estimates used in the preparation of the Company's consolidated financial
statements.

Impairment of Long-Lived Assets:

The Company's long-lived assets include property and equipment and the visual
effects library. At December 31, 2001, the net value of property and equipment
and the visual effects library was $1,039,346, which accounted for 68.1% of the
Company's total assets. At September 30, 2002, the net value of property and
equipment and the visual effects library was $636,987, which accounted for 52.8%
of the Company's total assets. In assessing the impairment of property and
equipment and the visual effects library, the Company makes assumptions
regarding the estimated future cash flows and other factors to determine the
fair value of the respective assets. If these estimates or the related
assumptions change in the future, the Company may be required to record
impairment charges for these assets.

Investments in Joint Ventures:

The Company accounts for its investments in joint ventures under the equity of
method of accounting. The value of the Company's investments in joint ventures
was $323,795 at December 31, 2001, representing 21.2% of the Company's total
assets. The value of the Company's investment in joint ventures was $355,168 at
September 30, 2002, representing 29.2% of the Company's total assets. The
Company periodically evaluates the recoverability of its investments in joint
ventures based on the respective joint venture's current and prospective
operating performance. If the Company determines that its investment in a joint
venture is not recoverable, it will be required to recognize a loss in such
period.

                                      -21-
<page>

Income Taxes:

The Company records a valuation allowance to reduce its deferred tax assets
arising from net operating loss carryforwards to the amount that is more likely
than not to be realized. In the event the Company was to determine that it would
be able to realize its deferred tax assets in the future in excess of its
recorded amount, an adjustment to the deferred tax assets would be credited to
operations in the period such determination was made. Likewise, should the
Company determine that it would not be able to realize all or part of its
deferred tax assets in the future, an adjustment to the deferred tax assets
would be charged to operations in the period such determination was made.

Results of Operations:

Three Months Ended September 30, 2002 and 2001 -

Revenues. Revenues decreased by $12,758 or 1.8% to $701,697 in 2002, as compared
to $714,455 in 2001. Included in revenues for the three months ended September
30, 2001 were revenues from the New Jersey ride facility, which was closed in
late June 2002, of $91,860 or 12.9% of total revenues. Revenues from the
Company's Las Vegas ride facility increased sufficiently in 2002 to offset most
of the impact from the absence of revenues from the New Jersey ride facility.

Direct Costs of Revenues. Direct costs of revenues were stable at $335,959 in
2002, as compared to $335,792 in 2001. Direct costs of revenues were 47.9% of
revenues in 2002, as compared to 47.0% of revenues in 2001.

Selling and Marketing Expenses. Selling and marketing expenses decreased by
$16,802 or 31.9% to $35,841 in 2002, as compared to $52,643 in 2001, as a result
of reduced use of marketing and promotional materials. Selling and marketing
expenses were 5.1% of revenues in 2002, as compared to 7.4% of revenues in 2001.

General and Administrative Expenses. General and administrative expenses
increased by $130,175 or 52.7% to $377,197 in 2002, as compared to $247,022 in
2001. Included in general and administrative expenses in 2002 and 2001 was
non-cash compensation of $118,000 and $24,465, respectively, including $12,633
and $12,600 to officers and directors, respectively. Excluding such non-cash
compensation, general and administrative expenses increased by $36,640 or 16.5%
in 2002 as compared to 2001, primarily as a result of higher costs for
professional fees and salaries.

Depreciation  and  Amortization.  Depreciation  and  amortization  decreased  by
$11,149 or 12.2% to $80,545 in 2002, as compared to $91,694 in 2001.

Start-Up Costs of New Joint Venture. The Company incurred start-up costs with
respect to the development of its new joint venture of $95,404 in 2002, as
compared to $27,479 in 2001. Included in such costs in 2002 were $41,300 of
non-cash costs resulting from the issuance of common stock and common stock
purchase warrants.

Closure Costs of New Jersey Ride Facility. During late June 2002, the Company
closed its New Jersey ride facility, as a result of unsatisfactory revenue
production and a dispute with the landlord over expense increases. As a result,
the Company wrote-off certain fixed assets related to such ride facility and
incurred certain direct costs related to such closure, resulting in a charge to
operations of $24,847 for the three months ended September 30, 2002.

Loss from Operations. The loss from operations was $248,096 for the three months
ended September 30, 2002, as compared to a loss from operations of $40,175 for
the three months ended September 30, 2001.

                                      -22-
<page>

Interest Expense. Interest expense decreased by $25,268 to $36,786 in 2002, as
compared to $62,054 in 2001, primarily as a result of adjustments in 2001 that
reduced interest expense, which were recorded in conjunction with the
restructuring of the note payable to the Company's primary secured lender in
June 2001.

Interest Income.  Interest income was $295 in 2002, as compared to $95 in 2001.

Equity in Net Income (Loss) of Joint Venture. Equity in net loss of joint
venture was $911 in 2002, as compared equity in net income of joint venture of
$4,204 in 2001.

Other Income. Other income was $717 in 2002. There was no other income in 2001.

Net Loss. Net loss was $284,781 the three months ended September 30, 2002, as
compared to a net loss of $97,930 for the three months ended September 30, 2001.
Net loss increased in 2002 as compared to 2001 primarily as a result of an
increase in general and administrative expenses and start-up costs of the new
joint venture.

Nine Months Ended September 30, 2002 and 2001 -

Revenues. Revenues decreased by $66,996 or 3.6% to $1,805,582 in 2002, as
compared to $1,872,578 in 2001. Included in revenues for the nine months ended
September 30, 2002 and 2001 were revenues from the New Jersey ride facility,
which was closed in late June 2002, of $156,934 and $262,097, respectively, or
8.7% and 14.0% of total revenues, respectively. Revenues from the Company's Las
Vegas ride facility increased sufficiently in 2002 to offset most of the impact
from the absence of revenues from the New Jersey ride facility.

Direct Costs of Revenues. Direct costs of revenues decreased by $36,619 or 3.5%
to $1,008,949 from $1,045,568 in 2001 (excluding forgiveness of accrued rent
payable of $70,580 in 2001, which was credited to direct costs of revenues).
Direct costs of revenues were 55.9% of revenues in 2002, as compared to 55.8% of
revenues in 2001 (excluding the accrued rent payable adjustment).

Selling and Marketing Expenses. Selling and marketing expenses decreased by
$63,687 or 47.0% to $71,794 in 2002, as compared to $135,481 in 2001, as a
result of reduced use of marketing and promotional materials. Selling and
marketing expenses were 4.0% of revenues in 2002, as compared to 7.2% of
revenues in 2001.

General and Administrative Expenses. General and administrative expenses
increased by $419,539 or 55.0% to $1,182,994 in 2002, as compared to $763,455 in
2001. Included in general and administrative expenses in 2002 and 2001 was
non-cash compensation of $375,756 and $24,465, respectively, including $133,389
and $12,600 to officers and directors, respectively. Excluding such non-cash
compensation, general and administrative expenses increased by $68,248 or 9.2%
in 2002 as compared to 2001, primarily as a result of higher costs for liability
insurance, professional fees and salaries.

Depreciation and Amortization. Depreciation and amortization decreased by $8,287
or 3.1% to $253,657 in 2002, as compared to $261,944 in 2001.

Start-Up Costs of New Joint Venture. The Company incurred start-up costs with
respect to the development of its new joint venture of $123,927 in 2002, as


                                      -23-
<page>

compared to $43,609 in 2001. Included in such costs in 2002 were $41,300 of
non-cash costs resulting from the issuance of common stock and common stock
purchase warrants.

Closure Costs of New Jersey Ride Facility. During late June 2002, the Company
closed its New Jersey ride facility, as a result of unsatisfactory revenue
production and a dispute with the landlord over expense increases. As a result,
the Company wrote-off certain fixed assets related to such ride facility and
incurred certain direct costs related to such closure, resulting in a charge to
operations of $143,377 for the nine months ended September 30, 2002.

Loss from Operations. The loss from operations was $979,116 for the nine months
ended September 30, 2002, as compared to a loss from operations of $306,899 for
the nine months ended September 30, 2001.

Interest  Expense.  Interest expense increased by $2,719 to $122,235 in 2002, as
compared to $119,516 in 2001.

Interest Income.  Interest income was $328 in 2002, as compared to $693 in 2001.

Equity in Net Income of Joint Venture. Equity in net income of joint venture was
$17,392 in 2002, as compared to $15,269 in 2001.

Other  Income.  Other  income was $17,366 in 2002.  There was no other income in
2001.

Net Loss. Net loss was $1,066,265 for the nine months ended September 30, 2002,
as compared to a net loss of $410,453 for the nine months ended September 30,
2001. Net loss increased in 2002 as compared to 2001 primarily as a result of an
increase in general and administrative expenses, start-up costs of the new joint
venture and closure costs of the New Jersey ride facility.

Liquidity and Capital Resources - September 30, 2002:

During the last few years, the Company has relied on the proceeds from loans
from both unrelated and related parties and capital leases to provide the
resources necessary to develop its ride facilities and operate its business.
However, during the nine months ended September 30, 2002, the Company raised
$582,500 of new capital through the sale of its securities, which has been used
to fund existing operations.

The Company is continuing its efforts to raise new capital subsequent to
September 30, 2002. The Company is attempting to raise a total of up to $750,000
of new capital during 2002.

Operating Activities. The Company's operations utilized cash of $390,204 during
the nine months ended September 30, 2002, as compared to utilizing cash of
$38,459 during the nine months ended September 30, 2001. The increase in cash
utilized in operations in 2002 as compared to 2001 was primarily a result of an
increase in cash used to reduce accounts payable and accrued expenses. The
Company has also utilized cash resources to fund the new business venture in Las
Vegas, Nevada (see "New Business Venture" above).

At September 30, 2002, cash and cash equivalents had increased by $79,614, to
$146,470, as compared to $66,856 at December 31, 2001. The Company had a working
capital deficit of $335,876 at September 30, 2002, as compared to a working
capital deficit of $1,228,824 at December 31, 2001 (which included the entire
balance of the Company's note payable to its primary secured lender of


                                      -24-
<page>

$780,613), resulting in current ratios of .35:1 and .08:1 at September 30, 2002
and December 31, 2001, respectively. As a result of the completion of a
modification agreement with the primary secured lender effective April 17, 2002,
the balance of this loan has been reclassified into current and long-term
portions, with $112,237 classified as a current liability and $632,423
classified as a long-term liability at September 30, 2002.

Investing Activities. Net cash used in investing activities was $15,382 for the
nine months ended September 30, 2002, as compared to net cash provided by
investing activities of $45,244 for the nine months ended September 30, 2001.
During the nine months ended September 30, 2002, the Company received $808 from
the sale of property and equipment, as compared to purchasing property and
equipment for $2,192 during the nine months ended September 30, 2001. During the
nine months ended September 30, 2002 and 2001, the Company received dividends
from the Company's joint venture with Dave & Buster's, Inc. of $49,503 and
$47,436, respectively. During the nine months ended September 30, 2002, the
Company purchased property and equipment for its new business venture
aggregating $65,693 (see "New Business Venture" above).

Financing Activities. Net cash provided by financing activities was $485,200 for
the nine months ended September 30, 2002, as compared to net cash used in
financing activities of $42,497 for the nine months ended September 30, 2001.
During the nine months ended September 30, 2002 and 2001, the Company made
payments on notes payable of $67,483 and $13,502, respectively, and the Company
made principal payments on capital lease obligations of $29,817 and $28,995,
respectively.

During the nine months ended September 30, 2002, the Company converted $47,312
of accounts payable into notes payable, and $16,000 of accounts payable were
settled by the issuance of the private placement securities. The Company also
entered into a capital lease for $12,700 to acquire equipment for its new
business venture (see "New Business Venture" above).

During the nine months ended September 30, 2002, the Company raised $582,500 of
new capital through the sale of its equity securities. The private placement
offering consisted of units sold at $0.25 per unit. Each unit consisted of one
share of common stock and one common stock purchase warrant. The warrants are
exercisable at $0.50 per share for a period of 18 months from the date of
issuance.

Transactions with Secured Lender:

On December 31, 1996, the Company completed a financing agreement with Finova
Technology Finance, Inc., which was structured as a sale-leaseback transaction
of certain equipment owned by the Company. Based on the substance of this
transaction, this financing agreement was accounted for as a note payable for
financial reporting purposes. The gross loan amount was $1,575,027, repayable
over a four year period at $40,903 per month with a balloon payment of $157,503.
On March 10, 1999, the financing agreement was amended to reduce the monthly
payments from $40,903 to $21,789, and to extend the maturity date from January
1, 2001 to January 1, 2004, with no change in the balloon payment of $157,503.
The loan bore interest at 16.75% per annum. The financing agreement requires the
Company to repurchase the equipment at the end of the lease for $1.00.

Effective June 25, 2001, the Company completed a Second Modification Agreement
and Waiver of Defaults with the secured lender, which provided for: (1) the
waiver of all prior payment defaults; (2) the reduction of the monthly payment
from $21,789 to $10,674, which represents interest only payments at 16.75% per
annum; (3) the increase in the principal balance due the lender of accrued
interest payable of $50,083; (4) the acceleration of the due date of the loan


                                      -25-
<page>

from January 1, 2004 to March 1, 2002; (5) the repricing of a common stock
purchase warrant previously issued to the lender to purchase 12,500 shares of
common stock exercisable through December 31, 2003, which reduced the exercise
price from $16.00 per share to $1.00 per share; (6) the issuance of common stock
purchase warrants to the lender to purchase 25,000 shares of common stock at
$0.50 per share and 25,000 shares of common stock at $1.00 per share exercisable
through June 25, 2011; and (7) the revision of the lender's Warrant Holder
Rights Agreement to eliminate demand registration rights.

The Company calculated the fair value of the warrants to purchase an aggregate
of 50,000 shares of common stock and the repricing of the warrant to purchase
12,500 shares of common stock pursuant to the Black-Scholes option pricing
model. The aggregate fair value of $47,250 was recorded as deferred financing
costs, and was charged to operations as financing expense through March 1, 2002.
In addition, previously recorded deferred financing costs were charged to
operations as financing expense through the accelerated due date of the loan of
March 1, 2002.

The balance of this loan was $780,613 at December 31, 2001. As a result of this
loan being due in full on March 1, 2002, the Company classified the entire
obligation to the secured lender as a current liability in the consolidated
financial statements at December 31, 2001. Required monthly payments on such
loan were in arrears at December 31, 2000 and 2001, and the Company did not make
the balloon payment due on March 1, 2002.

Effective April 17, 2002, the Company completed a Third Modification Agreement
and Waiver of Defaults with the secured lender, which provided for: (1) the
waiver of all prior payment defaults; (2) interest on the unpaid balance at
16.64% per annum; (3) the payment of interest only for the months of March,
April and May 2002; (4) commencing June 2002, monthly payments of principal and
interest of $18,955 for a period of five years. As a result of the completion of
this agreement, the balance of this loan has been reclassified into current and
long-term portions, with $112,237 classified as a current liability and $632,423
classified as a long-term liability at September 30, 2002.

                                      -26-
<page>

ITEM 3.  CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the Exchange
Act of 1934 is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Securities and Exchange
Commission. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in the reports filed under the Exchange Act of 1934 is accumulated and
communicated to management, including the Chief Executive Officer/Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.

Within the 90 days prior to the filing of this report, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer/Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based upon and as of the date of that
evaluation, the Chief Executive Officer/Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed in the reports the Company files and
submits under the Exchange Act of 1934 is recorded, processed, summarized and
reported as and when required.

(b) Changes in Internal Controls

There were no changes in the Company's internal controls or in other factors
that could have significantly affected those controls subsequent to the date of
the Company's most recent evaluation.

                                      -27-
<page>


                           PART II. OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS

The Company's former Chief Financial Officer, Toufic R. Bassil, has asserted
claims against the Company for breach of his employment agreement and his
wrongful termination as an officer of the Company without cause effective March
1, 1999. These claims are being asserted pursuant to a binding arbitration
proceeding through the American Arbitration Association. Although the arbitrator
has determined that the Company is liable for damages from breach of the
employment agreement, damages have not yet been determined. The wrongful
termination claim is still in the discovery stage and the Company is actively
defending this matter. In the opinion of management, adequate provision has been
made in the consolidated financial statements with respect to the foregoing
claims.

During July 2002, the Company was named as a defendant in a lawsuit initiated by
the landlord of the New Jersey ride facility. The New Jersey ride facility was
closed in late June 2002. The lawsuit results from the contractual relationship
between the landlord and the Company. Management believes that it has claims
against the landlord sufficient to offset any damages for which the Company may
ultimately be found liable. Management believes that it will be successful in
its defense of this lawsuit, and has therefore not accrued for any expenses
associated with this lawsuit in the financial statements. The Company's
financial statements do not include any adjustments for recovery of claims
against the landlord.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

During the three months ended September 30, 2002, the Company sold 100,000 units
of its securities to accredited investors in a private placement at $0.25 per
unit, generating $25,000 of equity capital. Each unit consisted of one share of
common stock and one common stock purchase warrant. The warrants are exercisable
at $0.50 per share for a period of 18 months from the date of issuance.

Effective as of January 3, 2002, the Company entered into a two year agreement
with a consulting firm that provides for the payment of monthly compensation,
either in the form of a payment of $10,000 or the issuance of 25,000 shares of
common stock. During the three months ended September 30, 2002, the Company
issued 50,000 shares of common stock to such firm with a fair market value of
$18,500, which was charged to operations as general and administrative expense.

Effective as July 1, 2002, the consulting agreement was amended to provide for
the Company to issue to such firm the following common stock purchase warrants:
an aggregate of 300,000 shares of common stock vesting on July 1, 2002,
exercisable for a period of five years from such date in equal installments of
100,000 shares at $0.25, $0.50 and $1.00 per share; an aggregate of 300,000
shares of common stock vesting on January 1, 2003, exercisable for a period of
five years from such date in equal installments of 100,000 shares at $1.50,
$2.00 and $2.50 per share; and an aggregate of 300,000 shares of common stock
vesting on July 1, 2003, exercisable for a period of five years from such date
in equal installments of 100,000 shares at $3.00, $3.50 and $4.00. The aggregate
fair value of such warrants was calculated pursuant to the Black-Scholes option
pricing model as $496,000, which is being charged to operations as general and
administrative expense over the 18 month period beginning July 1, 2002 and
ending December 31, 2003. For the three months ended September 30, 2002, $82,667
was charged to operations.

                                      -28-
<page>

Effective as of July 1, 2002, the consulting agreement was amended to provide
for the Company to pay a finder's fee to such firm with respect to the private
placement of its equity securities by issuing shares of common stock equivalent
to 3% of the total equity capital raised, calculated at $0.50 per share. During
the three months ended September 30, 2002, the Company issued 17,910 shares of
common stock to such firm, which were recorded at their par value of $0.08 per
share and charged to additional paid-in capital.

During the three months ended September 30, 2002, the Company issued 5,000
shares of common stock to its Chief Executive Officer with an aggregate fair
market value of $1,800, which was charged to operations as general and
administrative expense. The shares were issued pursuant to a bonus provision of
such officer's employment agreement, which provides for the issuance of 5% of
the shares issued in a private placement.

On September 27, 2002, the Company issued 10,000 shares of common stock as a
licensing fee. The fair market value of the common stock was $4,200, which was
charged to operations as general and administrative expense during the three
months and nine months ended September 30, 2002.

On September 27, 2002 the Company issued 10,000 shares of common stock to
acquire certain office equipment. The fair market value of the common stock was
$4,200, which was recorded as office equipment and furniture at September 30,
2002.

In conjunction with the formation and development of the Company's new joint
venture, the Company issued shares of common stock and common stock purchase
warrants as described below.

On September 27, 2002, the Company issued 30,000 shares of common stock with a
fair market value of $12,600 and a warrant to purchase 50,000 shares of common
stock, exercisable at $0.42 per share for a period of three years, with a fair
value of $24,500, as a consulting fee. These amounts were charged to operations
as start-up costs of the new joint venture during the three months ended
September 30, 2002.

On September 27, 2002, the Company issued 10,000 shares of common stock as a
consulting fee. The fair market value of the common stock was $4,200, which was
charged to operations as start-up costs of the new joint venture during the
three months ended September 30, 2002.

The shares of common stock and warrants were issued without registration in
reliance upon the exemption afforded by Section 4(2) of the Securities Act of
1933, as amended, based on certain representations made to the Company by the
recipients.

                                      -29-
<page>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

A list of exhibits required to be filed as part of this report is set forth in
the Index to Exhibits, which immediately precedes such exhibits, and is
incorporated herein by reference.

(b) Reports on Form 8-K

Three Months Ended September 30, 2002:

On July 10, 2002, the Company filed a Current Report on Form 8-K, which included
a news release dated July 3, 2002, incorporated as Exhibit 20.1, reporting that
the Company closed its New Jersey ride facility in late June 2002.


                                      -30-
<page>

                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                       CINEMA RIDE, INC.
                                       -----------------
                                         (Registrant)


                                       /s/ MITCHELL J. FRANCIS
Date:  November 13, 2002          By:  ___________________________
                                       Mitchell J. Francis
                                       Chief Executive Officer and
                                       Chief Financial Officer
                                       (Duly Authorized Officer
                                       and Chief Financial
                                       Officer)




                                      -31-
<page>





                                INDEX TO EXHIBITS



Exhibit
Number           Description of Document
------           -----------------------


10.1             Operating Agreement of TICKETS2NITE, LLC, a Nevada limited
                 liability company, dated September 24, 2002

99.1             Certification Pursuant to Section 906 of the Sarbanes-Oxley
                 Act of 2002



                                      -32-