** **

**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 SEPTEMBER 30, 2002.**                                                                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                                        |
| **o**      | **TRANSITION REPORT UNDER SECTION 13  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                     |
|       |                                                                                                                                                                                                                                                                        |
|       | **FOR THE TRANSITION PERIOD FROM                      TO                  .** |

 

**Commission File Number 0-24554**

 

 

**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 mark whetherthe Registrant (1) filed all reports required to be filed by Section 13 or15(d) of the Exchange Act during the past 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.   YES ý   NO  o

 

The Company had 3,623,258shares of common stock, $.01 par value per share, outstanding as of November 5,2002.

 

Canterbury Park Holding Corporation

 

 

----

 

#### **INDEX**

 
| **PART 1.**  | **FINANCIAL INFORMATION** |
|--------------|---------------------------|
|         |                      |   |
|         | Item 1.                   | Financial  Statements |
|         |                      |   |
|         |                      | Consolidated Balance Sheets as of  September 30, 2002 and December 31, 2001 |
|         |                      |   |
|         |                      | Consolidated Statements of Operations for  the periods ended  September 30, 2002 and 2001 |
|         |                      |   |
|         |                      | Consolidated Statements of Cash Flows for  the periods ended  September 30, 2002 and 2001 |
|         |                      |   |
|         |                      | Notes to Consolidated Financial Statements |
|         |                      |   |
|         | Item  2.                  | Management’s  Discussion and Analysis |
|         |                      |   |
|         | Item 3.                   | Quantitative and Qualitative Disclosure  about Market Risk |
|         |                      |   |
|         | Item 4.                   | Evaluation of Disclosure Controls and  Procedures |
|         |                      |   |
|         |                      |   |
| **PART II.** | **OTHER  INFORMATION**    |
|         |                      |   |
|         | Signatures                |   |
|         |                      |   |
|         | Certifications            |
|              |                           |  |  |

 

2

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** **

**CANTERBURY PARKHOLDING CORPORATION AND SUBSIDIARY**

 

**CONSOLIDATED BALANCE SHEETS**

**SEPTEMBER 30, 2002 AND DECEMBER 31, 2001**

 
|                                                                                                                               |   | **September  30,  2002** |       | **December  31,  2001** |       |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|------------|-------------------------|------------|
| **ASSETS**                                                                                                                         |   |                     |       |                    |       |
|                                                                                                                               |   |                     |       |                    |       |
| CURRENT ASSETS                                                                                                                     |   |                     |       |                    |       |
| Cash                                                                                                                               |   | $                        | 2,707,230  |                    | $          | 3,088,844 |   |
| Accounts receivable                                                                                                                |   | 509,723                  |       | 556,192                 |       |
| Receivable from MHBPA                                                                                                              |   | 326,466                  |       |                    |       |
| Inventory                                                                                                                          |   | 125,370                  |       | 113,324                 |       |
| Deposits                                                                                                                           |   | 20,000                   |       | 45,000                  |       |
| Prepaid expenses                                                                                                                   |   | 496,527                  |       | 300,845                 |       |
| Income tax refund receivable                                                                                                       |   | 106,286                  |       |                    |       |
| Total current assets                                                                                                               |   | 4,291,602                |       | 4,104,205               |       |
|                                                                                                                               |   |                     |       |                    |       |
| PROPERTY AND EQUIPMENT, net of accumulated  depreciation of $7,280,392 and $6,425,974, respectively                                |   | 13,808,751               |       | 12,439,413              |       |
|                                                                                                                               |   |                     |       |                    |       |
|                                                                                                                               |   | $                        | 18,100,353 |                    | $          | 16,543,618 |   |
|                                                                                                                               |   |                     |       |                    |       |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                      |   |                     | ** ** |                    | ** ** |
|                                                                                                                               |   |                     |       |                    |       |
| CURRENT LIABILITIES                                                                                                                |   |                     |       |                    |       |
| Accounts payable                                                                                                                   |   | $                        | 1,783,091  |                    | $          | 1,683,092 |   |
| Card club accruals                                                                                                                 |   | 1,321,948                |       | 1,058,465               |       |
| Accrued wages and payroll taxes                                                                                                    |   | 1,124,966                |       | 782,461                 |       |
| Accrued interest                                                                                                                   |   | 1,795                    |       | 15,878                  |       |
| Advance from MHBPA                                                                                                                 |   |                     |       | 373,240                 |       |
| Accrued property taxes                                                                                                             |   | 284,134                  |       | 237,784                 |       |
| Income taxes payable                                                                                                               |   |                     |       | 134,330                 |       |
| Payable to horsepersons                                                                                                            |   | 273,992                  |       | 235,158                 |       |
| Deferred tax liability                                                                                                             |   | 162,000                  |       | 168,000                 |       |
| Total current liabilities                                                                                                          |   | $                        | 4,951,926  |                    | $          | 4,688,408 |   |
|                                                                                                                               |   |                     |       |                    |       |
| COMMITMENTS AND CONTINGENCIES (Note 4)                                                                                             |   |                     |       |                    |       |
|                                                                                                                               |   |                     |       |                    |       |
| STOCKHOLDERS’ EQUITY                                                                                                          |   |                     |       |                    |       |
| Common stock, $.01 par value, 10,000,000  shares authorized, 3,594,674 and 3,529,324, respectively, shares issued and  outstanding |   | 35,939                   |       | 35,293                  |       |
| Additional paid-in capital                                                                                                         |   | 10,650,492               |       | 10,240,249              |       |
| Accumulated earnings                                                                                                               |   | 2,461,996                |       | 1,579,668               |       |
| Total stockholders’ equity                                                                                                    |   | 13,148,427               |       | 11,855,210              |       |
|                                                                                                                               |   | $                        | 18,100,353 |                    | $          | 16,543,618 |   |

 

See notes to consolidatedfinancial statements.

 

3

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**CANTERBURY PARKHOLDING CORPORATION AND SUBSIDIARY**

** **

**CONSOLIDATED STATEMENTS OF OPERATIONSPERIODS ENDED SEPTEMBER 30, 2002 AND 2001**

 
|                                             |   | **Three  Months Ended September 30** |      | **Nine  Months Ended September 30** |   |
|--------------------------------------------------|--------|--------------------------------------|-----------|-------------------------------------|--------|
|                                             |   | **2002**                             |      | **2001**                            |   | **2002** |   | **2001** |   |
| OPERATING REVENUES:                              |   |                                 |      |                                |   |   |   |   |   |
| Pari-mutuel                                      |   | $                                    | 5,292,248 |                                | $      | 5,393,147 |   | $ | 13,697,766 |   | $ | 13,267,182 |   |
| Card Club                                        |   | 4,548,625                            |      | 4,556,552                           |   | 13,642,701 |   | 12,584,877 |   |
| Concessions                                      |   | 1,567,745                            |      | 1,562,357                           |   | 3,709,413 |   | 3,492,085 |   |
| Admissions and parking                           |   | 239,517                              |      | 282,109                             |   | 503,432 |   | 537,677 |   |
| Programs and racing forms                        |   | 198,735                              |      | 203,457                             |   | 540,234 |   | 540,632 |   |
| Other operating revenue                          |   | 263,679                              |      | 199,002                             |   | 894,976 |   | 502,968 |   |
|                                             |   | 12,110,549                           |      | 12,196,624                          |   | 32,988,522 |   | 30,925,421 |   |
|                                             |   |                                 |      |                                |   |   |   |   |   |
| OPERATING EXPENSES:                              |   |                                 |      |                                |   |   |   |   |   |
| Pari-mutuel expenses                             |   |                                 |      |                                |   |   |   |   |   |
| Statutory purses                                 |   | 2,592,268                            |      | 2,751,702                           |   | 5,569,180 |   | 5,392,985 |   |
| Host track fees                                  |   | 498,781                              |      | 490,264                             |   | 1,693,227 |   | 1,538,011 |   |
| Pari-mutuel taxes                                |   | 71,731                               |      | 58,676                              |   | 207,894 |   | 153,973 |   |
| Minnesota breeders’ fund                    |   | 315,906                              |      | 316,531                             |   | 871,570 |   | 809,723 |   |
| Salaries and benefits                            |   | 4,505,119                            |      | 4,424,038                           |   | 12,154,405 |   | 11,839,694 |   |
| Cost of concession sales                         |   | 609,059                              |      | 597,114                             |   | 1,471,375 |   | 1,434,466 |   |
| Cost of publication sales                        |   | 305,940                              |      | 291,019                             |   | 725,753 |   | 712,878 |   |
| Depreciation and amortization                    |   | 290,230                              |      | 294,792                             |   | 856,618 |   | 783,057 |   |
| Utilities                                        |   | 331,140                              |      | 347,119                             |   | 754,891 |   | 881,931 |   |
| Repairs, maintenance and supplies                |   | 328,647                              |      | 344,623                             |   | 1,044,677 |   | 1,041,387 |   |
| Property taxes                                   |   | 54,510                               |      | 45,755                              |   | 163,530 |   | 137,266 |   |
| Advertising and marketing                        |   | 640,644                              |      | 604,505                             |   | 1,642,073 |   | 1,506,058 |   |
| Other operating expenses                         |   | 1,193,364                            |      | 1,102,440                           |   | 2,852,808 |   | 2,699,209 |   |
|                                             |   | 11,737,339                           |      | 11,668,578                          |   | 30,008,001 |   | 28,930,638 |   |
| NONOPERATING (EXPENSES)REVENUES:            |   |                                 |      |                                |   |   |   |   |   |
| Interest expense                                 |   | (950                                 | )         | (2,202                              | )      | (6,775 | ) | (14,652 | ) |
| Other, net                                       |   | 14,739                               |      | 23,859                              |   | 26,186 |   | 63,992 |   |
|                                             |   | 13,789                               |      | 21,657                              |   | 19,411 |   | 49,340 |   |
| INCOME BEFORE INCOME TAX EXPENSE                 |   | 386,999                              |      | 549,703                             |   | 2,999,932 |   | 2,044,123 |   |
|                                             |   |                                 |      |                                |   |   |   |   |   |
| INCOME TAX EXPENSE (Note 1)                      |   | (152,320                             | )         | (171,600                            | )      | (1,221,210 | ) | (809,350 | ) |
|                                             |   |                                 |      |                                |   |   |   |   |   |
| NET INCOME                                       |   | $                                    | 234,679   |                                | $      | 378,103 |   | $ | 1,778,722 |   | $ | 1,234,773 |   |
|                                             |   |                                 |      |                                |   |   |   |   |   |
| BASIC NET INCOME PER COMMON SHARE  (Note 1) |   | $                                    | .07       |                                | $      | .11 |   | $ | .50 |   | $ | .35 |   |
|                                             |   |                                 |      |                                |   |   |   |   |   |
| DILUTED NET INCOME PER COMMON SHARE (Note  1)    |   | $                                    | .06       |                                | $      | .10 |   | $ | .46 |   | $ | .33 |   |

 

See notes to consolidatedfinancial statements.

 

4

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**CANTERBURY PARKHOLDING CORPORATION AND SUBSIDIARY**

** **

**CONSOLIDATEDSTATEMENTS OF CASH FLOWSPERIODS ENDED SEPTEMBER 30, 2002 AND 2001** 

 
|                                                                     |   | **Nine  Months  Ended  September 30,  2002** |      | **Nine  Months  Ended  September 30,  2001** |   |
|--------------------------------------------------------------------------|--------|----------------------------------------------|-----------|----------------------------------------------|--------|
|                                                                     |   |                                         |      |                                         |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                    |   |                                         |      |                                         |   |
| Net Income                                                               |   | $                                            | 1,778,722 |                                         | $      | 1,234,773 |   |
| Adjustments to reconcile net income to net  cash provided by operations: |   |                                         |      |                                         |   |
| Depreciation and amortization                                            |   | 856,618                                      |      | 783,057                                      |   |
| Gain on disposal of real estate                                          |   | (258,074                                     | )         |                                         |   |
| Decrease in accounts receivable                                          |   | 46,469                                       |      | 12,488                                       |   |
| (Increase) decrease in other current assets                              |   | (182,728                                     | )         | 13,952                                       |   |
| Increase in accounts payable and accrued  expenses                       |   | 744,821                                      |      | 1,087,810                                    |   |
| Decrease in deferred income taxes                                        |   | 100,800                                      |      | 272,960                                      |   |
| Decrease in income taxes payable                                         |   | (240,616                                     | )         | (471,610                                     | )      |
| (Decrease) increase in accrued interest                                  |   | (14,083                                      | )         | 6,819                                        |   |
| Increase in accrued property taxes                                       |   | 46,350                                       |      | 18,375                                       |   |
| Net cash provided by operations                                          |   | 2,878,279                                    |      | 2,958,624                                    |   |
|                                                                     |   |                                         |      |                                         |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                    |   |                                         |      |                                         |   |
| Real estate property addition                                            |   | (1,022,733                                   | )         |                                         |   |
| Fixed asset additions                                                    |   | (1,367,811                                   | )         | (2,105,462                                   | )      |
| Proceeds on disposal of real estate                                      |   | 422,663                                      |      |                                         |   |
| Net cash used in investing activities                                    |   | (1,967,881                                   | )         | (2,105,462                                   | )      |
|                                                                     |   |                                         |      |                                         |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                    |   |                                         |      |                                         |   |
| Proceeds from issuance of common stock                                   |   | 304,088                                      |      | 109,967                                      |   |
| Payment on advance from MHBPA, net                                       |   | (699,706                                     | )         | (939,900                                     | )      |
| Cash dividend to shareholders                                            |   | (896,394                                     | )         |                                         |   |
| Net cash used in financing activities                                    |   | (1,292,012                                   | )         | (829,933                                     | )      |
|                                                                     |   |                                         |      |                                         |   |
| NET (DECREASE) INCREASE IN CASH                                          |   | (381,614                                     | )         | 23,229                                       |   |
|                                                                     |   |                                         |      |                                         |   |
| CASH AT BEGINNING OF PERIOD                                              |   | 3,088,844                                    |      | 1,198,849                                    |   |
|                                                                     |   |                                         |      |                                         |   |
| CASH AT END OF PERIOD                                                    |   | $                                            | 2,707,230 |                                         | $      | 1,222,078 |   |
|                                                                     |   |                                         |      |                                         |   |
|                                                                     |   |                                         |      |                                         |   |
| INTEREST PAID                                                            |   | $                                            | 19,849    |                                         | $      | 0 |   |
|                                                                     |   |                                         |      |                                         |   |
| INCOME TAXES PAID                                                        |   | $                                            | 1,365,000 |                                         | $      | 1,007,500 |   |

 

See notes to consolidatedfinancial statements.

 

5

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**CANTERBURY PARKHOLDING CORPORATION AND SUBSIDIARY**

 

**NOTES TO CONSOLIDATEDFINANCIAL STATEMENTSPERIODS ENDED SEPTEMBER 30, 2002 AND 2001**

** **

1.             SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES

 

The summary ofsignificant accounting policies is included in the notes to consolidatedfinancial statements in the 2001 Annual Report on form 10-KSB.

 

*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 September 30, 2002, the consolidatedstatements of operations for the three and nine months ended September 30, 2002and 2001, the consolidated statements of cash flows for the nine months endedSeptember 30, 2002 and 2001, and the related information contained in thesenotes have been prepared 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.

 

*Net Income Per Share**-*Basic net income per common share is based on the weighted average number ofcommon shares outstanding during each year. The weighted average number of common shares outstanding for the threeand nine-month periods ended September 30, 2002 were 3,589,537 and 3,566,294,respectively.  The weighted averagenumber of common shares outstanding for the three and nine-month periods endedSeptember 30, 2001 were 3,494,060 and 3,485,815, respectively.  Diluted net income per common share takesinto effect the dilutive effect of potential common shares outstanding.  The Company’s only potential common sharesoutstanding are stock options.  Afterconsidering the dilutive effect of stock options outstanding, the weightedaverage shares used to calculate diluted earnings per share for the three andnine-month periods ended September 30, 2002 were 3,884,790 and 3,842,936,respectively.  The weighted averageshares used to calculate diluted earnings per share for the three andnine-month periods ended September 30, 2001 were 3,733,497 and 3,745,432,respectively.

 

2.             BORROWINGS UNDERCREDIT AGREEMENT

 

Borrowingsunder the Company’s credit agreement with Bremer Bank include a commercialrevolving credit line, which provides for maximum advances of $2,250,000 withinterest at the prime rate until April 20, 2003.  The Company had no borrowings under this credit line at September30, 2002.  The credit agreement containscertain covenants requiring the Company to maintain certain financialratios.  The Company was in compliancewith these requirements as of September 30, 2002.  Management believes that funds available under this line ofcredit, along with funds generated from card club and simulcast operations,will be sufficient to satisfy its liquidity and capital resource requirementsduring 2002. 

 

6

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3.             OPERATING SEGMENTS

 

During thefirst nine months of 2002 and 2001, the Company had three reportable operatingsegments:  horse racing, card club andconcessions.  The card club segmentincludes operations of the Canterbury Card Club.  The horseracing segment includes simulcast and live horse racingoperations, and the concessions segment provides concessions during simulcastand live racing, in the card club, and during special events.  The Company’s reportable operating segmentsare strategic business units that offer different products and services.  They are managed separately because thesegments differ in the nature of the products and services provided as well asprocesses to produce those products and services.  The horse racing and card club segments are regulated by theState of Minnesota Racing Commission.

 

The accountingpolicies of the operating segments are the same as those described in thesummary of significant accounting policies.

 

Depreciation,interest expense and income taxes are allocated to the segments but noallocation is made to concessions for shared facilities.  However, the concessions segment paysapproximately 25% of gross revenues earned on live racing and special eventdays to the horse racing segment for use of the facilities. 

 

The followingtables provide information about the Company’s operating segments (in 000’s):

 
|                               |   | **Nine  Months Ended September 30, 2002** |   |
|------------------------------------|--------|-------------------------------------------|--------|
|                               |   | **Horse  Racing**                         |   | **Card Club** |   | **Concessions** |   | **Total** |   |
|                               |   |                                      |   |   |   |   |   |   |   |
| Revenues from external customers   |   | $                                         | 15,635 |   | $ | 13,643 |   | $ | 3,711 |   | $ | 32,989 |   |
|                               |   |                                      |   |   |   |   |   |   |   |
| Intersegment revenues              |   | 373                                       |   |   |   | 905 |   | 1,278 |   |
|                               |   |                                      |   |   |   |   |   |   |   |
| Net interest income                |   | (19                                       | )      |   |   |   |   | (19 | ) |
|                               |   |                                      |   |   |   |   |   |   |   |
| Depreciation and amortization      |   | 419                                       |   | 437 |   |   |   | 856 |   |
|                               |   |                                      |   |   |   |   |   |   |   |
| Segment income before income taxes |   | 175                                       |   | 2,825 |   | 579 |   | 3,579 |   |
|                               |   |                                      |   |   |   |   |   |   |   |
| Segment Assets                     |   | $                                         | 13,914 |   | $ | 4,116 |   | $ | 1,119 |   | $ | 19,149 |   |

 
|                                      |   | **Nine  Months Ended September 30, 2001** |   |
|-------------------------------------------|--------|-------------------------------------------|--------|
|                                      |   | **Horse  Racing**                         |   | **Card Club** |   | **Concessions** |   | **Total** |   |
|                                      |   |                                      |   |   |   |   |   |   |   |
| Revenues from external customers          |   | $                                         | 14,815 |   | $ | 12,585 |   | $ | 3,525 |   | $ | 30,925 |   |
|                                      |   |                                      |   |   |   |   |   |   |   |
| Intersegment revenues                     |   | 556                                       |   |   |   | 950 |   | 1,506 |   |
|                                      |   |                                      |   |   |   |   |   |   |   |
| Net interest income                       |   | (49                                       | )      |   |   |   |   | (49 | ) |
|                                      |   |                                      |   |   |   |   |   |   |   |
| Depreciation and amortization             |   | 427                                       |   | 356 |   |   |   | 783 |   |
|                                      |   |                                      |   |   |   |   |   |   |   |
| Segment (loss) income before income taxes |   | (507                                      | )      | 2,553 |   | 179 |   | 2,225 |   |
|                                           |        |                                           |        |  |  |  |  |  |  |  |  |  |  |

 
|           |   | **Twelve Months Ended December 31, 2001** |   |
|----------------|--------|-------------------------------------------|--------|
|           |   |                                      |   |   |   |   |   |   |   |
| Segment Assets |   | $                                         | 11,962 |   | $ | 4,493 |   | $ | 522 |   | $ | 16,977 |   |
|                |        |                                           |        |  |  |  |  |  |  |  |  |  |  |

 

7

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The followingare reconciliations of reportable segment revenue, income before income taxes,and assets, to the Company’s consolidated totals (in 000’s):

 
|                                                    |   | **Nine  Months  Ended  September 30,  2002** |   | **Nine  Months  Ended  September 30,  2001** |   |
|---------------------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------------|--------|
| Revenues                                                |   |                                         |   |                                         |   |
| Total revenue for reportable segments                   |   | $                                            | 34,267 |                                         | $      | 32,431 |   |
| Elimination of intersegment revenues                    |   | (1,278                                       | )      | (1,506                                       | )      |
| Total consolidated revenues                             |   | 32,989                                       |   | 30,925                                       |   |
|                                                    |   |                                         |   |                                         |   |
| Income before income taxes                              |   |                                         |   |                                         |   |
| Total segment income before income taxes                |   | $                                            | 3,579  |                                         | $      | 2,225 |   |
| Elimination of intersegment income before  income taxes |   | (579                                         | )      | (181                                         | )      |
| Total consolidated income before Income  taxes          |   | 3,000                                        |   | 2,044                                        |   |

 
|                                    |   | **September 30,  2002** |   | **December 31,  2001** |   |
|-----------------------------------------|--------|-------------------------|--------|------------------------|--------|
| Assets                                  |   |                    |   |                   |   |
| Total assets for reportable segments    |   | $                       | 19,149 |                   | $      | 16,977 |   |
| Elimination of intercompany receivables |   | (1,049                  | )      | (433                   | )      |
| Total consolidated assets               |   | 18,100                  |   | 16,544                 |   |
|                                         |        |                         |        |                        |        |  |  |

 

4.     CONTINGENCIES

 

In accordance with an Earn Out Note, given tothe prior owner of the racetrack as part of the consideration paid by theCompany to acquire the racetrack in 1994, if (i) off-track betting becomeslegally permissible in the State of Minnesota and (ii) the Company begins toconduct off-track betting with respect to or in connection with 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 net pretax profit, asdefined, for each of five operating years. At the date (if any) that these two conditions are met, the five minimumpayments will be discounted back to their present value and the sum of thosediscounted payments will be recorded as an increase to the purchase price.  The purchase price will be further increasedif payments become due under the 20% of Net Pre-Tax Profit calculation.  The first payment is to be made 90 daysafter the end of the third operating year in which off-track betting isconducted by the Company.  Remainingpayments would be made within 90 days of the end of each of the next fouroperating years.

 

The Company is periodically involved invarious legal actions arising in the normal course of business.  At September 30, 2002, management believesthat the resolution of any legal actions outstanding will not have a materialimpact on the consolidated financial statements.

 

The Minnesota Department of Labor andIndustry (DOL&I) is conducting an audit for the period April 10, 1999through April 10, 2001 regarding compliance with the tip law sections of theMinnesota Fair Labor Standards Act.  AtSeptember 30, 2002, 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

----

 

5.     CURRENTACCOUNTING PRONOUNCEMENTS

 

In conjunction with the issuance of the newguidance for business combinations, the FASB issued SFAS No. 142, *Goodwill and Other Intangible Assets*,which addresses the accounting and reporting for acquired goodwill and otherintangible assets and supercedes APB Opinion 17.  Under the provisions of SFAS No. 142, intangible assets acquiredin a business combination, which do not possess finite useful lives will nolonger be amortized into net income over an estimated useful life but ratherwill be tested for impairment at least annually based on specific guidanceprovided in the new standard.  TheCompany adopted SFAS No. 142 on January 1, 2002, which had no material impacton the Company’s financial statements.

 

The FASB also issued SFAS No. 144, *Accounting for the Impairment or Disposal ofLong-Lived Assets,*which is**requiredto be adopted for fiscal years beginning after December 15, 2001.  SFAS No. 144 establishes accounting andreporting standards for the impairment or disposal of long-lived assets.  The provisions of SFAS No. 144 becameeffective for the Company on January 1, 2002 and did not have a material impacton its financial position and results of operations.

 

**MANAGEMENT****’S DISCUSSION AND ANALYSIS**

 

**General**

 

CanterburyPark Holding Corporation (the “Company”) owns and operates the Canterbury ParkRacetrack and Card Club in Shakopee, Minnesota.  The primary businesses of the Company are pari-mutuel horseracing, hosting unbanked card games, and food and beverage operations. 

 

The Racetrackis the only pari-mutuel horse racing facility in the State of Minnesota.  The Racetrack receives 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 of May and conclude inSeptember.  During live race meets, theCompany televises its races to out-of-state racetracks around the country, andreceives additional pari-mutuel revenue on wagers placed at the out-of-stateracetracks. 

 

The CanterburyCard Club (the “Card Club”) is the only facility in the State of Minnesotaauthorized by law to host unbanked card games in which players compete againsteach other and not against the house. The Company receives a percentage of the wagers from the players ascompensation for providing the Card Club facility and services.  The Card Club is open twenty-four hours aday, seven days a week.

 

The Companyalso generates revenues from admissions, parking, publication sales, facilityrental for special events, vehicle storage, advertising and other sources.

 

The Minnesota RacingCommission is authorized by Minnesota law to regulate Card Cluboperations.  The law requires that up to14% of the gross revenue generated by the Card Club be paid to the Racetrack’spurse fund and the State of Minnesota Breeders’ Fund.  The original 15,828 square foot Card Club, constructed within theRacetrack grandstand facility, opened April 19, 2000 and accommodatedapproximately 40 tables.  In May 2001,the Company expanded the Card Club to 50 tables, the maximum allowed byMinnesota law.

 

9

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**Resultsof Operations for the Three and Nine Months Ended September 30, 2002 andSeptember 30, 2001**

 

Totaloperating revenues increased approximately $2.1 million, or 6.6%, during thenine months ended September 30, 2002 compared to the nine months endedSeptember 30, 2001, and decreased $86,075, or less than 1%, for the three months ended September 30, 2002compared to the three months ended September 30, 2001.  

 

Pari-mutuelrevenues increased $430,584, or 3.2%, in the nine month period ended September30, 2002 compared to the same period in 2001. Total handle for the nine monthsended September 30, 2002 was up $791,000, or 1.1%, compared to total handleduring the nine-month period in 2001. Total handle wagered on simulcast racesyear-to-date in 2002 is up $3.4 million or 7.5% compared to year-to-dateSeptember 30, 2001.  On-track livehandle decreased by $758,000 or 4.7% compared to the same period in 2001partially due to inclement weather forcing cancellation of a number ofraces.  In addition, out-of-state livehandle decreased $1.8 million, or 14%, compared to the same period last yearprimarily because 2001 results include $2.5 million from the Claiming Crownheld at Canterbury Park while the 2002 Claiming Crown was moved to anothervenue.  See the “Summary of OperatingData” below.

 
|                              |   | **Nine  Months  Ended  September 30,  2002** |       | **Nine  Months  Ended  September 30,  2001** |   |
|-----------------------------------|--------|----------------------------------------------|------------|----------------------------------------------|--------|
| **Summary of Operating Data:**    |   |                                         |       |                                         |   |
|                              |   |                                         |       |                                         |   |
| **Racing Days**                   |   |                                         |       |                                         |   |
| Simulcast only days               |   | 212                                          |       | 210                                          |   |
| Live and simulcast days           |   | 61                                           |       | 61                                           |   |
| Harness days                      |   | 0                                            |       | 2                                            |   |
| Total Racing Days                 |   | 273                                          |       | 273                                          |   |
|                              |   |                                         |       |                                         |   |
| **On-Track Handle**               |   |                                         |       |                                         |   |
| Simulcast only days               |   | $                                            | 33,316,000 |                                         | $      | 30,805,000 |   |
| Live and simulcast days:          |   |                                         |       |                                         |   |
| Live racing                       |   | 15,256,000                                   |       | 16,014,000                                   |   |
| Simulcast racing                  |   | 15,397,000                                   |       | 14,510,000                                   |   |
| **Out-of-state Live Handle**      |   | 11,256,000                                   |       | 13,105,000                                   |   |
| Total Handle                      |   | $                                            | 75,225,000 |                                         | $      | 74,434,000 |   |
|                              |   |                                         |       |                                         |   |
| **On-Track Average Daily Handle** |   |                                         |       |                                         |   |
| Simulcast only days               |   | $                                            | 157,150    |                                         | $      | 146,690 |   |
| Live and simulcast days           |   | 502,508                                      |       | 484,508                                      |   |

 

Card Club revenues were $13.6million for the nine-months ended September 30, 2002, an increase of 8.4%compared to the nine-month period in 2001. Revenues for the three-month period ended September 30, 2002 werevirtually unchanged when compared to the same period in 2001.  Card Club revenues represented 41.4% and37.6% of total Company revenues for the nine-month and three-month periodsended September 30, 2002, respectively. The year-to-date increase is primarily due to an increased number oftables in operation in 2002 compared to 2001. The Card Club operation offered games on 50 tables in 2002, compared to42 tables in the first half of 2001.  

 

10

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Concessionsales increased 6.2% for the nine-month period and were unchanged for thethree-month period ended September 30, 2002, respectively, compared to thesame periods in 2001 due to the increased Card Club operations early in theyear. 

 

Otheroperating revenues for the nine-month and three-month periods ended September30, 2002 increased $392,008 and $64,677, respectively compared to the sameperiods in 2001 primarily due to a $258,074 gain on sale of five acres of realestate during the second quarter.

 

Operatingexpenses (excluding pari-mutuel expenses) increased 3.0% during the nine-monthperiod ended September 30, 2002 compared to the same period in 2001 and 2.6%during the three months ended September 30, 2002 compared to the same period in2001.  Salaries and benefits increasedapproximately $315,000, or 2.6%, in the nine-month period and $81,000, or 1.8%,in the three-month period compared to the same periods last year.  Advertising and marketing increased approximately$136,000, or 9.0%, in the nine month period and approximately $36,000, or 6.0%,in the three month period compared to the same periods last year due primarilyto increased participation in the patron loyalty program. Other Operatingexpenses increased approximately $153,000, or 5.6%, in the nine month periodand approximately $91,000, or 8.3%, in the three month period compared to thesame periods last year primarily due to increased professional fees related tolegislative efforts for additional gaming authorizations.  Utilities expense decreased approximately$127,000, or 14.4%, and approximately $16,000, or 4.6%, for the same periods in2001 due to rate reductions experienced during the past twelve months.  

 

Pari-mutuelexpenses increased 5.7% during the nine month period ended September 30, 2002compared to the same period last year due primarily to purse expenseattributable to the Card Club, and decreased 3.8% during the three month periodended September 30, 2002 compared to 2001 because the Racetrack hosted theClaiming Crown in 2001 but not 2002. Under Minnesota law, the Company is required to pay 10% of the first $6million of gross Card Club revenues as purse monies.  After meeting the $6 million threshold, the Company must pay 14%of gross Card Club revenues as purse monies. However, as a result of negotiations with the Minnesota Horseman’sBenevolent & Protective Association (“MHBPA”) effective January 1, 2002 theCompany agreed to pay 14% of all the Card Club gross revenues as purse monies.  In 2001, the Company estimated an annualeffective rate for purse money payments of approximately 12.40%, which wasapplied to Card Club revenues throughout the year.  Therefore, the effective rate in 2002 is higher than during 2001.

 

Income beforeincome taxes was $2,999,932 for the nine months ended September 30, 2002compared to $2,044,123 for the nine months ended September 30, 2001.  After income tax expense of $1,221,210 forthe nine months ended September 30, 2002, net income was $1,778,722 in 2002compared to $1,234,773 in 2001.  Incomebefore income taxes for the quarter ended September 30, 2002 was $386,999compared to $549,703 for the quarter ended September 30, 2001.  After income tax expense of $152,320 in thethird quarter of 2002, net income was $234,679 compared to $378,103 for thethird quarter of 2001.

 

11

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##### **Commitments and Contingencies**

** **

There havebeen no material changes in our outstanding commitments and contingencies sincethose reported at December 31, 2001.

** **

**Liquidity and Capital Resources**

** **

During theperiod January 1, 2002 through September 30, 2002, cash provided by operatingactivities was $2,878,279, which resulted principally from an increase inaccounts payable and accrued expenses of $744,821, net income of $1,778,722 anddepreciation and amortization of $856,618. These items were partially offset bya decrease in other current assets of $182,728 and a gain on sale of realestate of $258,074.  The significantincrease in accounts payable and accrued expenses is due primarily to increasesin amounts payable related to the live race meet. 

 

Net cash usedin investing activities for the first nine months of 2002 was approximately$2.0 million resulting primarily from the purchase of 12 acres of landimmediately south of the main parking lot for $1 million, and acquisitions ofequipment for $1.4 million, including $511,000 for a large screen video boardto enable better patron viewing, offset by the proceeds of $422,663 from the saleof land.  During the nine-month periodended September 30, 2001, $2.1 million was invested in building improvementsprimarily related to the expansion of the Card Club.

 

During theperiod January 1, 2002 through September 30, 2002, cash used in financingactivities was $1,292,012, representing a special cash dividend to shareholdersof $896,394, net payments to the MHBPA of $699,706 which were offset by$304,088 from the exercise of stock options. During the period January 1, 2001 through September 30, 2001, cash usedby financing activities was $829,933 representing $939,900 of net payments tothe MHBPA, which were offset by $109,967 from the exercise of stock options.

 

The Company isrequired by statute to segregate a portion of funds received from revenues inthe Card Club and wagering on simulcast and live horse races for future paymentas purses for live horse races at the Racetrack or other uses of Minnesota’sthoroughbred and quarter horse associations. Pursuant to an agreement with the MHBPA, during the nine months endedSeptember 30, 2002 and 2001, the Company transferred into a trust accountfor these purposes or paid directly to the MHBPA approximately $5,710,000 and$5,596,000, respectively.  At September30, 2002, the MHBPA owed the Company $326,466 which will be paid during thefourth quarter. 

 

The Companyhas a general credit agreement with Bremer Bank.  Borrowings under the credit agreement include a commercialrevolving credit line providing for maximum advances of $2,250,000 with interestat the prime rate until April 20, 2003. The Company had no borrowings under the line of credit at September 30,2002 or December 31, 2001.  The creditagreement contains certain covenants requiring the Company to maintain certainfinancial ratios.  The Company was incompliance with these requirements as of September 30, 2002. 

 

Cash balancesat September 30, 2002 were $2,707,230 compared to $3,088,844 at December 31,2001. The Company believes that the funds available in its cash accounts,amounts available under its $2,250,000 line of credit, along with fundsgenerated from operations, will be sufficient to satisfy its liquidity andcapital resource requirements for the foreseeable future.

 

12

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##### **Critical Accounting Policies**

 

In preparingthe financial statements, we follow accounting principles generally accepted inthe United States of America, which in many cases require us to makeassumptions, estimates and judgments that affect the amounts reported.  Many of these policies are relativelystraightforward.  There are, however, afew policies that are critical because they are important in determining thefinancial condition and results of operations and they can be difficult toapply.  We believe that the mostcritical 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.

 

The difficultyin applying these policies arises from the assumptions, estimates and judgmentsthat have to be made currently about matters that are inherently uncertain,such as future economic conditions, operating results and valuations as well asmanagement 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 reasonablefactors.

 

**Operating Plan:**

 

On July 12,2002, the Company paid a special cash dividend of $.25 per share of commonstock payable to shareholders of record on June 28, 2002.  The Company has not adopted any policiesregarding dividends and there can be no assurance that any dividend will bepaid in the future.

 

At September30, 2002, the Company had completed its 61-day 2002 live race meet featuringboth thoroughbred and quarter horse racing. During the live race meet, the Company implemented a 5% overnight purseincrease, the fourth in three years. The Company continues to experience stiff competition with racetrackslocated near Des Moines, Iowa and Chicago, Illinois in securing the betterquality horses to run at the Racetrack. Attracting the owners and trainers of better quality horses is largelyinfluenced by the ability to offer large purses.    

 

The expansionof the Card Club has positively affected operating results since its completionin May 2001.  The Company anticipatesthat the results for the remainder of 2002 will be similar to those experiencedin the final quarter of 2001 due to the operation of the maximum 50 tablesallowed by Minnesota law.

 

The Companyintends to continue to seek changes in Minnesota Law, which would authorizeadditional sources of gaming revenue. On October 10th the Company announced plans to expand the CanterburyPark property into a “Racino” which would include slot and video gaming, a 250room hotel, an Olympic scale horse park and additional restaurant venues.  Along with other necessary approvals, theaddition of slot and video gaming would require new legislation and/or anamendment to Minnesota’s Constitution. Based on the success of several Racino’s in other states, the Companyfeels that if this proposal is successful, it will enhance horse racing withincreased purses, provide substantial growth opportunities for Canterbury Park,and produce significant new tax revenues for state and local governments.  The effort to obtain legislative orconstitutional authority for slot and video gaming at the Racetrack willrequire substantial expenditures and there can be no assurance that such effortwill result in obtaining legislative or constitutional authority to offer any additionalgaming.

 

13

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**Factors Affecting Future Performance:**

 

*From time to time, in reports filed with the Securities andExchange Commission, in press releases, and in other communications toshareholders or the investing public, the Company may make forward-lookingstatements concerning possible or anticipated future financial performance,business activities or plans which are typically preceded by the words“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 such forward-lookingstatements are subject to risks and uncertainties which could cause actualperformance, activities or plans to differ significantly from those indicatedin the forward-looking statements.  Suchrisks and uncertainties include, but are not limited to: fluctuations inattendance at the Racetrack, changes in the level of wagering by patrons,continued interest in the unbanked card games offered at the Card Club,legislative and regulatory changes, the impact of wagering products andtechnologies introduced by competitors; upward pressure on salary and benefitexpense due to the tight labor market; the general health of the gaming sector;higher than expected expense related to new marketing initiatives; and otherfactors discussed from time to time in the Company’s filings with theSecurities and Exchange Commission.*

 

14

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**QUANTI****TATIVE 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 September 30, 2002 we have nodebt borrowings 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, and short-term government andcorporate bonds.

 

 

**EVAL****UATION OF DISCLOSURE CONTROLS AND PROCEDURES**

 

a).   Evaluation of disclosure controls andprocedures:  Management, including theCompany’s Chief Executive Officer and Chief Financial Officer has evaluated theeffectiveness of the design and operation of our disclosure controls andprocedures (as defined in Exchange Act rules 13a-14 and 15d-14) as of a date(the “Evaluation Date”) within 90 days prior to the filing date of thisquarterly report.  Based upon that evaluation,the Chief Executive Officer and Chief Financial Officer concluded that, as ofthe Evaluation Date, our disclosure controls and procedures are effective intimely alerting them to the material information required to be reported in ourperiodic SEC filings.

 

b).  Changes in internal controls: There were nosignificant changes made in our internal controls during the period covered bythis report or, to our knowledge, in other factors that could significantlyaffect these controls subsequent to the date of their evaluation.

 

15

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**PARTII - OTHER INFORMATION**

 
| Item 1. |   | **Legal Proceedings**                                                                                               |
|---------|--------|---------------------------------------------------------------------------------------------------------------------|
|    |   |                                                                                                                |
|    |   | Not  Applicable                                                                                                     |
|    |   |                                                                                                                |
| Item 2. |   | **Changes in Securities**                                                                                           |
|    |   |                                                                                                                |
|    |   | Not  Applicable                                                                                                     |
|    |   |                                                                                                                |
| Item 3. |   | **Defaults Upon Senior Securities**                                                                                 |
|    |   |                                                                                                                |
|    |   | Not  Applicable                                                                                                     |
|    |   |                                                                                                                |
| Item 4. |   | **Submission of Matters to a Vote of Security  Holders**                                                            |
|    |   |                                                                                                                |
|    |   | Not  Applicable                                                                                                     |
|    |   |                                                                                                                |
| Item 5. |   | **Other Information**                                                                                               |
|    |   |                                                                                                                |
|    |   | Not  Applicable                                                                                                     |
|    |   |                                                                                                                |
| Item 6. |   | **Exhibits and Reports on Form 8-K**                                                                                |
|    |   |                                                                                                                |
|    |   | (a)                  Exhibits  |
|    |   | 99.1 Certification under 18 U.S.C. 1350;                                                                            |
|    |   |                                                                                                                |
|    |   | (b)            Reports on Form 8-K                                |
|    |   | None                                                                                                                |

** **

**SIGN****ATURES**

 

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

 
|                           | Canterbury Park Holding Corporation         |
|--------------------------------|---------------------------------------------|
|                           |                                        |
| Dated:  November 14, 2002 | /s/  Randall  D. Sampson          |
|                           | Randall D. Sampson,                         |
|                           | President, and Chief Executive Officer      |
|                           |                                        |
| Dated:  November 14, 2002 | /s/  David  C. Hansen             |
|                           | David C. Hansen,                            |
|                           | Vice President, and Chief Financial Officer |

 

16

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# **CEOCertification:**

 

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

 

1.               Ihave reviewed this quarterly report on Form 10-Q of Canterbury Park HoldingCorporation;

 

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 officers 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.               designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this quarterly report is being prepared;

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

c.               presentedin this quarterly report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the Evaluationdate;

 

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

 

a.               allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

b.              anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

 

6                  Theregistrant’s other certifying officers 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:  November 14, 2002 |   |   |   | CANTERBURY  PARK HOLDING CORPORATION |
|---------------------------|--------|--------|--------|--------------------------------------|
|                      |   |   |   | /s/  Randall  D. Sampson   |   |
|                      |   |   |   | Randall D.  Sampson                  |
|                      |   |   |   | Chief  Executive Officer             |

 

17

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# **CFOCertification:**

 

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

 

1.               Ihave reviewed this quarterly report on Form 10-Q of Canterbury Park HoldingCorporation;

 

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 officers 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.               designedsuch disclosure controls and procedures to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period inwhich this quarterly report is being prepared;

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

c.               presentedin this quarterly report our conclusions about the effectiveness of thedisclosure controls and procedures based on our evaluation as of the Evaluationdate;

 

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

 

a.               allsignificant deficiencies in the design or operation of internal controls whichcould adversely affect the registrant’s ability to record, process, summarizeand report financial data and have identified for the registrant’s auditors anymaterial weaknesses in internal controls; and

b.              anyfraud, whether or not material, that involves management or other employees whohave a significant role in the registrant’s internal controls; and

 

6.               Theregistrant’s other certifying officers 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:  November 14, 2002 |   |   |   | CANTERBURY  PARK HOLDING CORPORATION         |
|---------------------------|--------|--------|--------|----------------------------------------------|
|                      |   |   |   | /s/  David  C. Hansen              |   |
|                      |   |   |   | David C.  Hansen                             |
|                      |   |   |   | Vice  President, and Chief Financial Officer |

 

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