UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE
                             SECURITIES ACT OF 1934
                     For the Fiscal Year Ended June 30, 2001

                           COMMISSION FILE NO. 0-22191

                           CCA COMPANIES INCORPORATED
               (Exact name of Company as specified in its charter)
         Delaware                                       IRS NO. 65-0675901
(State of Incorporation)                         (IRS Employer Identification)

           9130 SOUTH DADELAND BLVD., SUITE 1602 MIAMI, FLORIDA 33156
                    (Address of principal executive offices)

                                 (305) 670-3838
                (Company's telephone number, including area code)
                                 ---------------

             Securities registered pursuant to Section 12(b) of the
      Act: None Securities registered pursuant to Section 12(g) of the Act:
               Title of each Class: Common Stock $0.001 par value

         Indicate by check mark whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act during the
preceding 12 months (or for such shorter period that the Company was required to
file such reports) and (2) has been subject to such filing requirements for the
past 90 days. Yes X No

         Indicate by check mark if disclosure of delinquent filers in response
to Item 405 of Regulation S-K of Section 299.405 of this chapter is not
contained herein, and will not be contained, to the best of the Company's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to

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this Form 10-K.

         The aggregate market value of the Company's common stock held by
non-affiliates (all persons other than executive officers or directors) of the
Company at June 30, 2001 was $1,725,680.

         The number of shares of the Company's common stock outstanding at June
30, 2001 was 18,140,000.



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                                TABLE OF CONTENTS
                                     PART I

                                                                       Page

Item 1.

         Business                                                        6

         Company Overview                                                6

         Divisional Overviews                                           11

         Casino Division                                                11

         Hotel Management Division                                      14

         Sakhalin Project                                               15

         Insurance                                                      25

         Employees                                                      26

         Segments/foreign operations                                    26

Item 2.

         Properties                                                     26

Item 3.

         Legal Proceedings                                              27

                                        3

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Item 4.  Submission of Matters to a Vote of Securities Holders          28

                                     PART I

Item 5.  Market for Common Equity and Related Stockholder Matters       29

Item 6.  Selected Financial Data                                        31

Item 7.  Management's Discussion and Analysis of Financial Condition
         and Results of Operation                                       33

         Results of Operations                                          38

         Liquidity and Capital Resources                                42

         Subsequent Events                                              00

Item 8.  Financial Statements                                           51

Item 9.  Changes in and Disagreements with Accountants On
         Accounting and Financial Disclosure                            51

                                    PART III

Item 10. Directors and Executive Officers of the Registrant             52

         Compliance with Section 16(a) of the Securities
         Exchange Act of 1934                                           57

Item 11. Executive Compensation

         Summary Compensation Table                                     58

         Option Grants for the Twelve Months Ended June 30, 1999        60

Item 12. Security Ownership of Certain Beneficial Owners and Management 64

Item 13. Certain Relationships and Related Transactions                 65

                                     PART IV

Item 14. Exhibits, Financial Statements and Schedules, and Reports on
         Form 10-k                                                      69

         Financial Statements                                           00

         Exhibits                                                       70

         Signatures                                                     75


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         This Annual Report on Form 10-K contains "forward looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical fact included in this document regarding the
Company's strategies, plans, objectives, expectations, and future operating
results are forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable at this
time, it can give no assurance that such expectations will prove to have been
correct. Actual results could differ materially based upon a number of factors
including but not limited to, the Company's working capital deficit and
accumulated deficit; significant capital requirements; need for additional
financing; risks associated with geographic expansion and new lines of business;
risks inherent in international businesses; risks relating to the Sakhalin
Project; risks relating to the possible development of the Vietnamese lottery;
possible change in control; political and economic factors; risks of foreign
legal systems; business infrastructure issues; potential conflicts with other
stockholders in the Company's projects; restrictions and controls on foreign
investments and acquisitions of majority interests; government regulation;
construction risks; nature of the gaming industry; dependence on successful
gaming operations; collectability of casino and lottery receivables; effects of
inflation and currency fluctuations; competition; reliance on advances and
dividends from subsidiaries; dependence on personnel associated with developing
the Vietnamese and the Sakhalin Projects; lack of key man insurance; volatility
of prices of shares; potential adverse impact on market price of shares, shares
eligible for future sale, and additional registered

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securities; potential adverse effect of future issuances of authorized preferred
stock; potential adverse effect of Underwriter's Warrants and other Warrants;
classified board of directors; limited public market and liquidity, and other
risks detailed in the Company's Securities and Exchange Commission filings.

Item 1.  Business
                                COMPANY OVERVIEW

         CCA Companies Incorporated ("CCA") was incorporated under the laws of
the State of Delaware on March 6, 1996 as Conserver Corporation of America and
changed its name on December 2, 1997. The current active business of CCA
Companies Incorporated (with its subsidiaries, the "Company") is (i) operation
of a gaming casino in Suriname 50% owned by the Company, and (ii) pursuing the
development of a casino and hotel project in Sakhalin in the Russian Federation
on an island north of Japan (the "Sakhalin Project"). In addition, in May 2001,
the Company entered into a contract under which, subject to stockholder approval
and other significant pre-acquisition conditions, the Company will acquire all
of the stock of Emerging Market Solutions, Inc., ("EMSI") the sole asset of
which is a lottery gaming system contract (the "Lottery Gaming System Contract")
which grants to EMSI the exclusive right to provide an on-line lottery and
sports betting system in Ho Chi Minh City and the Southern Provinces of Vietnam.
Completion of such an acquisition would result in the stockholders of EMSI
initially owning more than seventy percent of the outstanding common stock of
the Company.

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See "Proposed New Lottery and Gaming Division" herein.

         Since March 1999 the Suriname casino, owned by Suriname Leisure Company
A.V.V. ("SLC"), an Aruba joint venture entity 50% owned by the Company, has been
operating in permanent quarters in the hotel where previously SLC maintained
temporary facilities for its casino operation. The Company's 100% owned Delaware
subsidiary, Dorsett Hotel & Resorts, Inc. ("Dorsett") manages the casino.

         The Sakhalin Project is currently in development and requires the
Company to obtain substantial financing to progress further. Despite numerous
discussions and several agreements the Company has not yet been able to obtain
the necessary financing. The Company is continuing to seek financing. In the
fiscal year ended June 30, 2000, the Company wrote down approximately
$13,552,000 in capitalized expenditures and goodwill related to the Sakhalin
Project, leaving approximately $2,100,000 of Sakhalin Project capitalized
expenditures on the Company's accounts. The Sakhalin Project involves plans to
develop a $140 million dollar 450- room hotel/casino complex on a ten-acre site
in the center of the City of Yuzhno-Sakhalinsk ("the City") with further
development proposed at a nearby ski mountain. The related casino as planned
would initially have 70 tables and 350 slot machines.

         The Company has entered into a nonbinding letter of intent to acquire
certain assets of Applied Gaming Solutions of Canada Inc. ("AGS"), for cash and
shares of the

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Company. AGS operates an on-line lottery in Hanoi Vietnam, and the
acquisition of such assets is intended to provide a strategic advantage for the
Company in marketing the on- line system to be developed by EMSI. See "Possible
Company Purchase of AGS Assets" herein.

         On June 30, 2000 the Company charged off the full signing fee of
$250,000 that it had paid to participate in the development and management of a
casino to be constructed within the Palestinian National Authority. The Company
believes that current political conditions in the area will delay the
construction of the project indefinitely. During the fiscal year ended June 30,
2000 the Company took a charge of $305,000 representing all related capitalized
expenditures.

Former Food Preservation Technology and Hotel Businesses

         The Company's original principal business was food preservation
technology. In November 1999, the Company's Board of Directors determined to
discontinue operations in that business.

         After mid-1997 the Company entered into hotel management agreements to
obtain (over about two years) eight hotel management contracts, mostly for
hotels in Asia. All the agreements and contracts have now been terminated, and
all operations discontinued. Currently, the Company has no active hotel
management operations.

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The Company does not currently anticipate re-entry into this business.

Recent Financial History

         The Company has incurred losses since its inception, and has a limited
operating history upon which an evaluation of its future performance can be
made. From inception in March 1996 to June 30, 1997 the Company did not have any
revenues. During the year ended June 30, 1998 the Company had revenues of
approximately $650,000, primarily attributable to its hotel management
operations commenced in January 1998 and discontinued beginning in November
1998. During the year ended June 30, 1999 the Company had revenues of $5.9
million, of which approximately $5.5 million was attributable to the Company's
casino operations in Suriname and Budapest, with the remainder attributable to
the Company's hotel management operations discontinued between November 1998 and
April 1999. In November 1999 the Company also discontinued its food preservation
technology operations. During the years ended June 30, 2000, and June 30, 2001,
the Company had revenues of $6,981,000 and $5,534,000, respectively, all from
the Suriname casino operations. On June 30, 2001 the Company had a working
capital deficit of $341,000 and cash or cash equivalents on hand of $702,000.

         From July 1998 through August 1999, the Company actively sought to
raise cash through loans or sales of its securities in order to fund its past
due obligations, current operations and completion of the Suriname casino, which
opened in March 1999. The Company was

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successful in raising sufficient funds from several private investors through
the sale of its securities, enabling it to fund its ongoing operational costs
during that period and to complete the construction of the Suriname casino. The
Company continued to finance itself in part by further issuances of securities,
and to seek loans to finance itself and the Sakhalin Project. In addition, the
Company settled various accounts payable by issuance of its securities.

         In August 1999, the Company began to receive cash payments from the
Suriname joint venture entity. Prior to August 1999, all cash from operating
profits of the casino had been used to first pay the remaining balance due on
the casino construction contract and to repay a $750,000 loan previously made by
the Company's joint venturer.

         Since August, 1999 the Company's primary recurring source of cash,
exclusive of certain loans and securities sales described above and hereinafter,
was the cash payments from SLC which is the joint venture entity that owns the
Suriname casino.

         On November 16, 1999 the Company's Common Stock was delisted from the
Nasdaq SmallCap Market. The Company's Common Stock is now traded on the OTC
Bulletin Board.

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                              DIVISIONAL OVERVIEWS


Casino Division

         Dorsett (the Company's 100% owned subsidiary) and SLC (the Company's
50% owned joint venture entity) are currently operating a casino in Suriname.
The Company anticipates eventually operating the casino in the Sakhalin Project,
if and when that project is built and licensed, and is also seeking to operate
or acquire interests in other casinos outside the U.S. The Company has one
officer (Mr. David Hartley) and approximately 275 employees engaged directly in
casino operations.

         The Company's Suriname casino, part of a joint venture, occupies two
leased floors totaling about 20,000 square feet in the Plaza Hotel, which is a
downtown hotel in the capital city of Paramaribo. The Company began operations
of its Suriname casino in October 1998 in temporary quarters. The permanent
casino was completed and became operational in March 1999. The casino has 20
gaming tables, 161 slot machines and a 50- seat restaurant. There are other
casinos in Paramaribo, the capital city, but only two compete with the Company
for the same local gaming clientele.

         The Suriname casino was constructed by the Company pursuant to an
agreement with Parbhoe Handelmij NV ("Parbhoe"), the local company that owned
the casino license and which became the 50% owner of the joint venture entity,
SLC. The casino license is now held by SLC. SLC entered into the Suriname Casino
Management Agreement in April 1998 for the Company, through Dorsett, to operate
the Casino for fifteen years at a

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base fee equal to 3% of gross revenues calculated on an annual basis and payable
monthly, plus an incentive fee of ten percent of gross operating profits,
payable monthly. SLC leased the casino premises from Parbhoe, the hotel owner,
for fifteen years beginning February 1998 for $200,000 per year, subject to
locally based escalation. The Company has been advised that the rent required by
the lease exceeds the lawful rent permitted under the rent control laws of
Suriname by $14,000 per month. The Company is seeking a refund of rent paid and
a limitation on future rent.

         The Orfeum Casino in Budapest, Hungary was acquired in September of
1998 when the Company's subsidiary Dorsett Hotels and Resorts, Inc. acquired a
95% equity interest in Roulette Kft. ("Roulette"), the local company that owned
the rights to the casino. In December 1998, the Company entered into an
agreement with A.G.M. International LTD ("AGM"), an Israeli junket operator
experienced in organizing junket and premium player groups, whereby AGM was
granted 50% ownership of Roulette primarily for agreeing to fund various costs.
During 1999, the Hungarian Gaming Board made a decision to reduce the number of
casino licenses. The Company submitted an application during 1999 in an attempt
to obtain one of the three licenses that the gaming board would be granting, but
was unsuccessful. Consequently, the casino was closed at the end of October
1999. At June 30, 1999 the Company fully reserved the balance of its loans to
Roulette Kft. which totaled approximately $610,000, and does not anticipate
repayment of any part of the loans.


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         In August 1997, the Company had entered into the two-year Star Casino
Consulting Agreement with Star Casinos Limited ("Star") as consultant, primarily
to obtain the services of Mr. David Hartley who is an experienced casino
consultant. He is now the full-time President of the Company's Casino Division.
The Company is informed that Star is owned and controlled by Mr. Hartley. The
active term of the agreement began in October 1997 and ended in December 1999.
Pursuant to the agreement the Company agreed to pay Star $250,000 per year. Mr.
Hartley did not receive a direct salary from the Company during that period. In
October 1997, the Company had granted to Star three year plan options to
purchase 100,000 shares of Common Stock at a price of $6.50 per share. (The
exercise price was reduced to $1.50 per share in September 1998, then to $.25
per share in December 1999, then to $.10 per share on October 18, 2000. The
reductions were part of several more general and simultaneous reductions in the
exercise price of options held by directors, employees or consultants.) The
options vested and became exercisable in 2 equal installments, on each
succeeding October anniversary. The agreement imposed non-compete and
non-solicitation restrictions on Star for two years after the term. Upon the
expiration of the Star Casino Consulting Agreement in 1999 the Company issued
Star 250,000 shares of Stock as payment of a $250,000 cash bonus which Star was
entitled to receive under the terms of that agreement. The Company currently
continues to engage Star on a month-to-month basis to maintain Mr. Hartley's
services, for which the Company pays Star approximately $250,000 per year. Mr.
Hartley still does not receive a direct salary from the Company. On October 24,
2000, the Company issued 480,000 shares of Common Stock to Star as payment for
$120,000 which Star was

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entitled to receive as of June 30, 2000 under the terms of the Star Casino
Consulting Agreement. The market price of a share of the Company's Common Stock
in June 2000 when the parties agreed to the issuance of such shares was $.15.

Hotel Management Division

         The Company currently has no hotel management activities. Until
November 1998, the Company had 1 officer and 3 employees engaged directly in
hotel management, and had hotel operating contracts for three open hotels, only
one of which it actively managed (the Dorsett Regency Hotel in Kuala Lumpur,
Malaysia). To make its initial entry into the hotel management and operating
business, from mid-1997 and into early 1998 the Company had entered into two
Hotel Management Agreements (as amended). One was with Dorsett Hotels and
Resorts International Ltd. ("DHI"), a company represented to be owned by David
Chiu, and one with Far East Consortium International Ltd. ("FEC"). (Not to be
confused with the Company's current subsidiary "Dorsett") Under these
agreements, the Company was granted the right (directly or through a subsidiary)
to be the exclusive manager of three particular hotels then open, and five
others then to be opened, and to do so pursuant to long-term hotel operating
contracts to be entered into with the owners of the various hotels. Until
November 4, 1998, the Company held the resulting individual Hotel Operating
Contracts for three open hotels with a total of about 1200 rooms, one of which
was being actively managed by the Company.


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         FEC and DHI failed to deliver to the Company physical control and
practical management power over two open hotels, and gave notice to the Company
that renovation or construction of five other hotels was deferred and being
reviewed. In November 1998, the Company reached a settlement terminating the
Hotel Management Agreements and all then existing Hotel Operating Contracts, and
exchanged mutual releases of related obligations. The Company received $450,000
cash, was returned 950,000 shares of its Common Stock with the obligation to
reissue 250,000 shares, retained $1,625,000 in payments of management fees and
loans, and FEC agreed to assume any and all future financial obligations with
respect to certain employment and consulting agreements the Company had entered
into. FEC held the one issued share of Preferred Stock in the Company. The share
was cancelled in November 1999 in connection with the settlement of Hotel
Management Agreements. The 250,000 shares of Common Stock that were reissued to
FEC in connection with that settlement were never delivered, and on July 11,
2001 were cancelled as a result of the failure of FEC to perform its obligations
under the settlement.

Sakhalin Project

         The Company entered into a stock purchase agreement on October 24,
1997, (the "Sakhalin Agreement") with Sakhalin General Trading Investments
Limited ("SGTI") and an assignment agreement with Sovereign Gaming and Leisure
Limited ("Sovereign") on December 12, 1997, each a limited liability company
organized under the laws of Cyprus.

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Pursuant to the Sakhalin Agreement, the Company would acquire all of the
outstanding shares of SGTI and SGTI's rights and interest in a project to
develop the Sakhalin Project, and SGTI's ownership interest in 65% of Sakhalin
City Center Ltd. ("SCC"). SCC is a closed joint stock company incorporated under
the laws of the Russian Federation that holds certain rights, including a
101-year ground lease on the proposed site of the Sakhalan Project, and a
guarantee by the city of Yuzhno-Sakhalinsk (the "City") to issue a gaming
license to SCC. In addition, the assignment agreement covers all rights and
interest to or in the Sakhalin Project held by Sovereign, including certain
operating and project management agreements with respect to the Sakhalin Project
(collectively, the "Shares and Rights") which are to be conveyed to the Company.

         On December 12, 1997, the Company completed the acquisition of 100% of
the shares of SGTI in exchange for 2,000,000 shares of the Company's common
stock. In addition the Company acquired all rights and interests of Sovereign in
exchange for 200,000 shares of common stock issued to the owners of Sovereign.
Two then-former directors of the Company were granted options to purchase
300,000 and 200,000 shares of common stock at an exercise price equal to $6.125
per share in exchange for their services in connection with the acquisition of
the Sakhalin project ("Sakhalin Options"). The Sakhalin Options subsequently
expired without being exercised. The Company advanced $3 million to SGTI.

         Pursuant to the Sakhalin Agreement, SCC will develop, subject to

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obtaining financing, a $140 million dollar 450-room hotel/casino complex
on a ten-acre site in the center of the City of Yuzhno-Sakhalinsk with
further development proposed at a nearby ski mountain. The related casino would
initially have 70 tables and 350 slot machines. The City will provide the land
and an existing ski resort under a 101-year lease, at no annual cost. Dorsett
will manage both the hotel resort and the casino for a management fee equal to
3% of turnover, as well as an incentive fee of 10% of gross profits.

         Although, there are currently several small casinos operating on the
island, the City has committed contractually that it will not permit them to
increase their floor areas or extend the range of their operations without the
written approval of SCC. In addition, the Company will also have certain rights
to participate in the development and management of any future casinos within
the jurisdiction of the City of Yuzhno-Sakhalinsk.

         The Sakhalin Agreement provides that, upon request of the Company,
Sovereign agrees to become project manager during the construction phase of the
Sakhalin project, subject to an agreement on reasonable compensation for such
services, which shall not exceed the lesser of 5% of the construction cost of
the Sakhalin Project or $5,000,000. Subsequent to the Sakhalin Agreement, Mr.
Dallas Dempster, then a paid consultant to Sovereign was recruited to be the
President and CEO of CCA. Accordingly it is the Company's current intent not to
employ Sovereign to manage the construction phase of the Sakhalin Project
directly.


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         When the Company acquired the stock in SGTI, its 65% owned subsidiary
SCC, and Sovereign Gaming and Leisure Ltd., a Cyprus company, already had a 1994
Construction Management Agreement (for Sovereign to manage the construction of
the Sakhalin Project) and a 1994 Operation Management Agreement (for it to
operate the Project). As part of the SGTI transaction, Sovereign assigned both
agreements to the Company, along with Sovereign's other rights relating to the
Project, and received 200,000 shares of the Company's Common Stock. The Common
Stock was valued at $5.25 per share and thus the value attributed to the shares
was $1,050,000. Consequently, the Company is currently the holder of the rights
to manage the development and construction of the Sakhalin Project, and upon its
completion, to operate and manage it. Under the 1994 Construction Management
Agreement, SCC is to pay the Company a project management fee of 5% of the
estimated cost of the Project for its general office expenses and management
supervision, a significant portion of which fee may be paid to the entity that
ultimately constructs the Sakhalin Project.

         The Sakhalin Project (other than its financing) has been managed by SCC
in Sakhalin City, primarily by Mr. Valery Mozolevsky, who has had long-term
employment with SCC and is experienced in the Project. If the Sakhalin Project
substantially proceeds, SCC (and the Company) may have to substantially expand
relevant management and staff, and obtain consultants and contractors for
project design, construction and management. Mr. Dallas Dempster was, and still
is, one of two Executive Directors of SCC. Mr. Valery Mozolevsky was, and still
is, the other Executive Director.

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         The casino and hotel project in Sakhalin requires the Company to get
substantial financing to progress further. The Company has continued to explore
various alternatives of financing, including discussions with numerous major
Russian companies, foreign and domestic financial and investment firms and Asian
contractors. To date, no definitive agreements have been reached. In June 1999
the Company entered into joint venture and restructuring agreements to provide
financing and management for the project, and in November 1999, the Company
submitted a loan application for financing of the Sakhalin Project to Sberbank -
Savings Bank of the Russian Federation. Those agreements were subsequently
terminated, and the loan application was abandoned. Construction and operation
of the Sakhalin Project might require substantial expertise and company
infrastructure, which the Company does not currently have and which it does not
currently have financial resources to acquire.

         Proposed New Lottery & Gaming Division.

         The Company proposes to enter into the business of developing and
managing an on-line lottery and sports betting system in Vietnam and to
establish that business as the core operations of the Company.

         In May 2001, the Company entered into a formal, written contract (the
"Purchase Contract") with six entities (the "Vendors") collectively, to purchase
from them all the issued and outstanding common stock of EMSI (the "Stock in
EMSI"). That stock is the only equity security in EMSI, so EMSI will thereby
become a wholly owned direct subsidiary of the Company. EMSI holds the Lottery
Gaming System Contract, but has no other significant assets, liabilities or
obligations.

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         The Purchase Contract makes the Vendors' obligation to sell (and the
Company's obligation to purchase) the Stock in EMSI conditional on stockholders
approval and other significant preconditions, including consummation of a
twenty into one reverse split of the Company's common stock (the "share
consolidation"), listing the Company's common stock on a reputable "exchange",
and funding EMSI with $3,000,000. Under the Purchase Contract the Company must,
from the date of that contract, use its best efforts to fulfill these conditions
precedent. The Company has submitted various proposals to its stockholders
seeking authorization to proceed with the acquisition of EMSI and related
matters.

         Consummation of the Purchase Contract will directly result in the
issuance to the Vendors of 5,500,000 shares (after the share consolidation) of
the Company's common stock which will exceed 70% of the total number of shares
of common stock to be outstanding immediately after the purchase and the sale of
the shares necessary to fund EMSI. These shares will give to Vendors legal
voting control of the Company. The Company intends to enter into an agreement
with the vendors prior to the consummation of the Purchase Contract allowing for
the continuation of the Company's current management and the two present board
members. It is anticipated that the number of directors will be increased and
that the vacancies will be filled by the current board of directors.


         The Purchase Contract states that the purchase price in dollar terms is
$ 11,000,000. This statement somewhat arbitrarily assumed that each of the
5,500,000 shares to be received by the Vendors is notionally valued at $2.00, so
all such shares could be notionally valued at $11,000,000. This valuation is
notional and for purposes of the Purchase Contract, and it does not necessarily
indicate the present or future value of a share of common stock. The Vendors'
contract obligation to sell the Stock in EMSI is not conditioned on any
particular market price for shares of common stock in the

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Company actually prevailing at or after the share consolidation, or at any other
time. So, in this respect the Purchase Contract puts on Vendors some risks and
some benefits of market price changes prior to and at the date of consummation
of the Purchase Contract.

         If the Purchase Contract is consummated the Company now intends to
enter into several related transactions ("Related Transactions"), and in some of
which, it intends to issue shares of common stock. These Related Transactions
are intended to help the Company implement its on-line lottery and wagering
systems business (the "On-Line Lottery Business"). These Related Transactions
are the sale of Funding Shares and the purchase of AGS Assets. In addition, the
Company may hereafter decide to enter into further related transactions.

         The Purchase Contract requires the Company to use its best efforts to
"fund" EMSI with $3,000,000 by selling within 60 days after the "Approval Date"
up to 1,500,000 (measured after the share consolidation) additional shares of
common stock in the Company. (Those shares that are actually sold being called
the "Funding Shares") for not less than $2.00 per share. The "Approval Date" is
the date the Company obtains approval by its stockholders of the share
consolidation, but either the Company or the Vendors may cancel the Purchase
Contract if the Funding Shares are not sold prior to September 28, 2001.

         The On-Line Lottery Business will require money to start up and to
sustain operations until they are self-sustaining and can pay back any of the
money that has been borrowed. The Company has advanced approximately $435,000 to
EMSI in anticipation of the acquisition.

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         The Company is currently negotiating with prospective purchasers for
sale of the Funding Shares. The Company believes that EMSI will need a minimum
of $3,000,000 for the hardware expenditures and other start-up expenditures to
begin operating under the On-Line Lottery Contract. If the Company also
purchases the assets of AGS, the Company will need $1,250,000 in cash to
consummate the purchase of the AGS assets. See the paragraph below entitled
"Possible Further Company Purchase of AGS Assets". The Company cannot now
predict whether it will be able to sell any Funding Shares, or at what price.
Sale of the Funding Shares at the stated minimum price is a condition precedent
to the Vendors' obligation to sell the Stock in EMSI, and to the Company's
obligation to buy that stock.
         If despite the best efforts of the Company to obtain stockholder
approval of the share consolidation, to list the common stock on a recognized
exchange, and to sell the Funding Shares for a minimum of $3,000,000, any one or
more of these things does not happen by the Closing Date, either the Vendors
collectively or the Company may declare the Purchase Agreement terminated and of
no effect. The Closing Date is to take place prior to or before September 28,
2001, but can be deferred by agreement of the Vendors collectively and the
Company. The Company believes that it may be difficult to meet these time
frames, but does not now expect that it will terminate the Purchase Contract and
believes the Vendors will not do so either.

         LOTTERY GAMING SYSTEM CONTRACT. Vendors represent and warrant to the
Company in the Purchase Contract that EMSI is a newly formed "clean shell"
without

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any significant assets, liabilities or obligations other than the Lottery Gaming
System Contract, and that EMSI has no operating or "going business", and never
had one. The undated Lottery Gaming System Contract is a new but now existing
contract between EMSI and Detetour, Corporation for Development of New
Technology and Tourism ("Detetour"), an entity owned by the sovereign Socialist
Republic of Vietnam (the "State"). Detetour is an entity with quite extensive
operations in technology and tourism, and is a major State instrumentality. No
operations have been conducted under the Lottery Gaming System Contract. It
grants to EMSI the exclusive right and the obligation to supply Detetour with an
on-line lottery and sports betting system, and to operate that system throughout
a "Territory" that covers the capital city (Ho Chi Minh City) and the "Southern
Provinces". No on-line lottery or sports betting operations have previously been
conducted under State authority within that Territory. (AGS, referred to below,
and a separate corporation organized under the laws of Alberta, Canada, holds a
contract with Detetour to manage certain aspects of the existing "on-line"
lottery operations in Hanoi City).


         The full term of the Lottery Gaming System Contract is ten years from
the date that the first on-line sales begin on the on-line lottery gaming
system. Under the Lottery Gaming System Contract EMSI is to provide the
software, central equipment and on-line terminals, marketing, maintenance and
training for an on-line electronic lottery and sports betting system in a
Territory consisting of Ho Chi Minh City and the Southern Provinces. Detetour
will pay for or provide telecommunications and consumables. Software will be

                                       23

<PAGE>



owned by EMSI. At the end of the ten year term Detetour will receive a license
of the software for $1. EMSI is to own, install, maintain and run the data
center, but Detetour is to install and maintain both the connections to the
retail terminals and the retail terminals owned by EMSI. Detetour is to provide
at least 600 retail outlets in phase one, and up to 2000 in phase two.

         POSSIBLE COMPANY PURCHASE OF AGS ASSETS. The Company is
currently negotiating with Applied Gaming Solutions of Canada, Inc. ("AGS"), a
Canadian company, to purchase AGS' assets as a going business (the "AGS
Assets"), including equipment, infrastructure, retail sales outlets and
organization and personnel relations. Since about August 1999 AGS has marketed,
and to some extent operated, on-line lottery in and around the State capital.
The Company believes that purchasing the AGS Assets, especially the retail sales
outlets and organization, would reduce the cost and difficulty of starting-up
and operating the On-Line Lottery Business in Vietnam, and would provide a
strategic advantage in marketing the On-Line Lottery Business for the majority
of the country as a national lottery and sports betting operation.

              The Company has entered into a non-binding written letter of
intent with AGS for the Company to purchase the AGS Assets for cash and shares
of common stock in the Company. Under the letter of intent, the Company is to
pay a total of $1,250,000 in cash and $400,000 by the issuance of 200,000 shares
of common stock valued at $2.00 per share at the closing (the "AGS Closing").
The first payment is called the " Employees Payment", and the second is called
the "Creditors Payment". AGS will pay the Employees Payment to certain of its
directors or former directors, including David Aftergood, the

                                       24

<PAGE>



President of AGS, to permit them to settle and discharge certain claims of
director liability. AGS will pay the Creditors Payment to its secured lender
("AGS Secured Lender")to discharge all claims of the Secured Lender. This will
permit the Secured Lender to release its security interests in the AGS Assets.
The Company expects to enter into an employment contract with Mr. Aftergood, but
its terms are not described in the letter of intent. The Company understands
that Mr. Aftergood may have legal or other commitments to AGS that might prevent
him from taking employment with the Company as one of its two key employees.

              As part of the proposed terms for purchasing the AGS Assets the
Company is to fund a new Alberta corporation ("Newco") with 800,000 shares of
common stock in the Company (as calculated after the share consolidation, and
with no consequent adjustment in the shares issuable to the Vendors for common
stock in the Company). Newco will make an exchange offer to the AGS stockholders
for the principle purpose of completing the final disposition of all Director
Liability Claims.

         Insurance

         The Company currently maintains comprehensive general liability
insurance with coverage of $1,000,000 per occurrence and umbrella insurance of
$2,000,000 per occurrence. There can be no assurance that the Company's coverage
will be adequate to protect the Company from all potential losses.



                                       25

<PAGE>


Employees

         As of June 30, 2001 the Company had 275 employees, including its 3
executive officers.

Segments/foreign Operations

         See Note 11 to the Company's consolidated financial statements.

Item 2.  Properties

         The Company maintains its principal executive offices at 9130 S.
Dadeland Boulevard, Suite 1602, Miami, Florida 33156. This office space occupies
approximately 1000 square feet, and is subject to a 3-year lease, commenced
August 1999, at a monthly rental of approximately $2,000.

         The Company's Sakhalin Project is managed from a 450 square foot leased
office in Sakhalin City pursuant to one-year renewable leases. The monthly
rental for the office is approximately $1,000.

         The Company believes its existing facilities are adequate to meet
current needs.



                                       26

<PAGE>


Item 3.  Legal Proceedings

         An arbitration proceeding before the American Arbitration Association
in New York City was initiated by Fox Haven Capital Corporation and United
Resources Partners (collectively "Fox Haven") in August of 1999 in which the
Company asserted counterclaims. On August 22, 2000, the arbitrator rendered an
award in favor of the Company which denied all of Fox Haven's claims, and
awarded the Company the total amount of $106,289. This arbitration award was
confirmed by the New York Supreme Court, and a judgment in the amount of
$111,092 was subsequently entered by that Court in favor of the Company and
against Fox Haven on February 2, 2001. The Company has not collected any amounts
on account of the judgment, and there is no assurance that any of the amounts of
the judgment are collectible.

         An action was brought in the United States District Court for the
District of Oregon by Maritime Services Corp. ("MSC") in September of 2000. MSC
seeks damages in the amount of $200,250 plus interest, claiming that the Company
was obligated to buy back, for this amount, the Company's own shares which had
been issued to MSC in or about September of 1998 as partial payment for
construction work on the Suriname casino performed for the Company by MSC. The
Company has denied all material allegations of the complaint, and believes that
the Company has no liability for MSC's claims, since the written agreement
between the parties does not support MSC's claim that the Company had any
obligation to buy back its shares from MSC. Discovery has now been completed in
this action, and each side has moved for summary judgment.

                                       27

<PAGE>




         In September 1998, Parbhoe had loaned CCA approximately $600,000 which
CCA then loaned to SLC. In late 2000 Parbhoe brought an action against SLC in
Suriname courts claiming that because of direct repayments by SLC to Parbhoe,
the debt was functionally and legally assumed by SLC. Parbhoe's action against
SLC sought to collect the loan from SLC. SLC denied any assumption or liability
to Parbhoe. The case is proceeding on this and other aspects. The Company is
currently unable to evaluate the possible outcome. The Company believes that SLC
did not assume the loan, that the Company is not in default under the loan, and
that repayment of the loan by SLC or the Company is subject to the cash payment
priorities of the Suriname Casino Agreement and the loan agreement governing the
loan.

Item 4.  Submission of Matters to a Vote of Securities Holders

         No matters were submitted to a vote of security holders by the Company
during the last fiscal year. A special meeting of stockholders is scheduled to
be held on September 26, 2001 to consider four proposals: (i) a 20 into 1
reverse split of the Common Stock of the Company; (ii) the acquisition of EMSI
referred to above; (iii) a change of name of the Company to "Lottery & Wagering
Solutions, Inc.," and (iv) an amendment to the 1996 Employee Stock Option Plan
to increase the number of shares thereunder.



                                       28

<PAGE>
                                     PART II



         Item 5.  Market for Common Equity and Related Stockholder Matters

         Price Range of Common Stock. Between June 6, 1997 (the date the Common
Stock was first listed, and November 16, 1999 the Common Stock was quoted on the
Nasdaq SmallCap market under the symbol "RIPE" or "RIPEE". Prior to June 6,
1997, there was no market for the Company's Common Stock. Since November 16,
1999 the Company's Common Stock has been traded on the OTC Bulletin Board or
Pink Sheets of the National Quotation Service.

         The following sets forth, for the quarterly periods indicated, high and
low per share closing price information for the Common Stock as reported on the
OTC Bulletin Board, or pink sheets, except for the quarter ended September 30,
1999 which sets forth high and low per share bid information for the Common
Stock reported by Nasdaq on the Nasdaq SmallCap market:

For the Quarterly Periods Beginning July 1, 1999 and ending June 30, 2001



                                       29

<PAGE>
                                                High              Low

        July 1-Sept. 30, 1999............... $1.0938.............$.375
        Oct. 1-Dec. 31, 1999................... .625.............. .12
        Jan. 1-March 31, 2000................... .40.............. .13
        April 1-June 30, 2000.................   .35................13
        July 1-Sept. 30, 2000................... .75................06
        Oct. 1-Dec. 31, 2000.................... .06................01
        Jan. 1-March 31, 2001................... .13.............. .04
        April 1-June 30, 2001.................   .17................02

         (The above prices reflect inter-dealer prices, without retail mark-up,
markdown or commission, and may not represent actual transactions).

         Approximate Number of Security Holders. As of June 30, 2001 the Company
had approximately 700 registered holders of record of its Common Stock.

         Dividend Information. The Company has not paid any cash dividends to
date and does not anticipate or contemplate paying dividends in the foreseeable
future. It is the present intention of management to utilize all

                                       30

<PAGE>



available funds and profits, if any, in the development of the
Company's business.

         Sales of Unregistered Securities. Information required by Item 701 of
Regulation S-K (as to unregistered equity securities sold during fiscal 2000),
was previously reported in the Company's Quarterly Reports on Form 10-Q for the
quarterly periods ended September 30, 2000, December 31, 2000 and March 31,
2001.

Item 6. Selected Financial Data

         The selected financial data set forth below have been derived from the
audited consolidated financial statements of the Company, certain of which are
included elsewhere in this Report, and should be read in conjunction with those
consolidated financial statements (including the notes thereto) and with
"Managements's Discussion and Analysis of Financial Condition and Results of
Operations" also included elsewhere herein.



                                       31

<PAGE>



                          STATEMENT OF OPERATIONS DATA
<Table>
<Caption>

                                                  Year Ended        Year Ended       Year Ended
                                                 June 30, 1999    June 30, 2000     June 30, 2001

                                             <c>             <c>                <c>
Revenues ...................................      $ 5,534,249       6,981,758         5,489,191
Operating expense
    Marketing and promotion.................          360,572         333,500           332,730
    General and administrative expense......        7,566,040       6,415,452         4,884,614
    Compensation charges in connection with
    Issuance of stock options and warrants..          783,000          10,000            13,000
                                                   ----------     -----------        ----------
Income (Loss) from operations...............       (3,175,363)        222,806           258,847

Other income (expenses):
    Write-down of assets....................         (609,833)    (13,857,192)
    Interest income (expense), net..........         (433,991)       (417,972)         (196,468)
    Foreign income taxes....................               --        (552,625)         (269,097)
                                                   ----------     -----------        ----------
Loss for Continuing Operations before
    Minority Interest.......................       (4,219,187)    (14,604,983)         (206,718)
Minority Interest...........................          (89,278)       (582,204)         (312,947)

Loss from Continuing Operations.............       (4,308,465)    (15,187,187)         (519,665)
                                                   ----------     -----------        ----------
Gain (Loss) from Discontinued Operations
    Food Preservation ......................         (425,175)        (64,500)             -
    Hotel Management .......................          141,550         (87,623)             -
                                                   ----------     -----------        ----------
                                                     (283,625)       (152,123)
Net Loss....................................       (4,592,090)    (15,339,310)         (519,665)
                                                   ----------     -----------        ----------
Loss per share of Common Stock:
    Basic and diluted:
      Loss from continuing operations.......             (.34)          (1.01)             (.03)
      Loss from discontinued operations.....             (.02)           (.01)             -
                                                   ----------     -----------        ----------
Net Loss per share..........................             (.36)          (1.02)             (.03)
                                                   ----------     -----------        ----------

Weighted average number of commons
    Shares outstanding......................       12,607,037      15,234,405        17,260,511

</Table>

                                       32

<PAGE>



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


         The Company has a limited operating history upon which an evaluation of
its performance and prospects can be made. During the period from March 6, 1996
to March 31, 1998, the Company's activities were primarily limited to
organizational efforts and raising public and private capital to fund its
organizational expenses and the development and initial implementation of its
business plan for its food technology business. Commencing in August 1997, the
Company's activities also included organizational and fund raising efforts
relating to its entrance into the business of managing and owning hotels and
casinos. From March 6, 1996 to June 30, 1997 the Company had no revenues. During
the year ended June 30, 1998 the Company had limited revenues of $649,620
primarily attributable to the January 1998 commencement of its hotel management
operations which were later discontinued.

         On November 4, 1998, the Company reached a settlement agreement
terminating its hotel operating contracts with FEC and DHI and subsequently in
April 1999, dismissed all of its hotel management employees. Consequently, as of
April 1999 the Company had no active hotel management operating business.
Additionally, in November 1999 the Company's Board of Directors determined that
it would discontinue all activities and efforts with respect to the Company's
food preservation business since the Company could not effectively develop a
sufficient market with the Company's food preservation technology. Accordingly,
for the years ended June 30, 2001, 2000 and 1999, the Company has reported all
activities related to its food division and hotel management operations
separately as gains

                                       33

<PAGE>



or losses from discontinued operations. Consequently, the activities
reflected in the statements of operations as revenues and expenses from
continuing operations represent those revenues and expenses which are directly
related or apportioned to the Company's casino operations.

Results of Operations for the Year Ended June 30, 2001 as Compared with the Year
Ended June 30, 2000

         Loss from Continued Operations. The Company incurred a loss from its
continuing operations of $519,665 or $.03 per share during the year ended June
30, 2001 as compared to a loss of $15,187,187 or $1.01 per share for the year
ended June 30, 2000. The significantly larger loss during the prior year
resulted primarily from the write-off of assets totaling $13,857,000 including
goodwill and construction in progress of approximately $13,552,000 related to
the Sakhalin project.

         Revenues. During the year ended June 30, 2001, the Company generated
revenues of $5,489,191 from its Suriname casino. For the year ended June 30,
2000, the Company generated revenues of $6,981,758 attributable to its casino
operations in Suriname. During the current year, the casino's revenues were
adversely affected by increased local competition from other casinos, by a
declining local economy and by a worsening conversion value of the local
currency.

         Marketing and Promotion. During the years ended June 30, 2001 and 2000,
the

                                       34

<PAGE>



Company incurred $332,730 and $333,500, respectively, in marketing and
promotional expenses in connection with its casino operations.

         General and Administrative Expenses. General and administrative
expenses were $4,884,614 for the year ended June 30, 2001 as compared to
$6,415,452 for the year ended June 30, 2000. Included in the current year's
expenses were $3,365,594 of operating expenses associated with the Company's
Suriname casino and $1,519,020 for general corporate overhead including
salaries, consulting, professional fees and travel. Included in the prior year's
expenses were $3,659,145 of operating expenses associated with the Company's
casino operations and $2,756,307 for general corporate overhead. The $1,237,287
or 45% reduction in general corporate overhead during the current year was
primarily attributable to reductions in consulting, travel, legal and
professional, insurance and telephone expenses. Casino operating costs were also
reduced as a result of the decline in business and revenues experienced in the
current year as described above.

         Compensation Charges. For the years ended June 30, 2001 and 2000,
non-cash compensation charges were $13,000 and $10,000, respectively, related to
the reduction in exercise price of certain stock options and warrants previously
issued to non-employee directors.

         Write-down of Assets. Since 1997, the Company has entered into numerous
discussions and several agreements in attempts to raise capital to finance the


                                       35

<PAGE>


Sakhalin Project without success. During the year ended June 30, 2000, due to
the Company's failure to proceed and based on its evaluation of assets for
financial impairment as required by SFAS No. 121, certain capitalized
expenditures and goodwill, totaling approximately $13,552,000 were written down.
Additionally during 2000, as a result of the unstable political conditions in
the Palestinian West Bank of the Middle East, the Company wrote off its
investment of $305,000 for a casino operating management agreement entered into
for a casino project to be constructed in Ramallah.

         Interest Expense. For the year ended June 30, 2001, interest expense
amounted to $198,330 compared to $423,630 for the year ended June 30, 2000. The
current year's expense includes approximately $164,000 attributable to interest
on loans made to the Suriname casino joint venture by the Company's joint
venture partner and $34,000 of interest on loans made to the Company for general
working capital purposes. The prior year's expense included approximately
$245,000 attributable to interest on loans made to the Suriname casino joint
venture by the Company's joint venture partner and $179,000 of expense on loans
made to the Company for general working capital purposes ($145,000 of which
related to the amortization of debt discount recorded for the value of Common
Stock warrants issued to debenture holders).

         Minority Interest. The Company's Suriname casino joint venture began
operations during the 1999 fiscal year. The Company controls the management of
the joint venture company and has a 50% equity interest. The casino's operations
are consolidated with those

                                       36

<PAGE>



of the Company and a minority interest has been recorded for the current and
prior fiscal year of $312,947 and $582,204, respectively, representing 50% of
the net income generated by the casino.

         Loss from Discontinued Operations of Food Division. In November 1999
the Company's Board of Directors determined that it would discontinue all
activities and efforts with respect to the Company's food preservation business
since the Company could not effectively develop a sufficient market with the
Company's food preservation technology. During the year ended June 30, 2000, the
Company had no revenues from its food division operations while expenses related
to efforts to sell or joint venture the food division were $64,500. There were
no food division related expenses incurred during the current year.

         Gain (Loss) from Discontinued Operations of Hotel Management. During
the year ended June 30, 2000, the Company incurred final expenses of $87,623
related to legal fees and settlement arrangements with a former officer of the
Company's hotel management operation which was terminated during the 1999 fiscal
year. There were no hotel management related expenses incurred during the
current year.

         Income taxes. The corporate income tax in Suriname assessed on casino
operations is 50% of net taxable income. The Company recorded foreign income
taxes in the amount of $269,097 related to the Suriname casino for the year
ended June 30, 2001 and $552,625 for the year ended June 30, 2000. These amounts
include deferred tax liability for 2001

                                       37

<PAGE>



of  $95,000 and $192,884.

Results of Operations for the Year Ended June 30, 2000 as Compared with
the Year Ended June 30, 1999

         Loss from Continued Operations. The Company incurred a loss from its
continuing operations of $15,187,187 or $1.01 per share during the year ended
June 30, 2000 as compared to a loss of $4,308,465 or $.34 per share for the year
ended June 30, 1999. The increase in loss during the current year resulted
primarily from the write-off of assets totaling $13,857,000 including goodwill
and construction in progress of approximately $13,552,000 related to the
Sakhalin project. This was partially offset by more profitable operations of the
Company's Suriname casino and reductions in general corporate overhead expenses.

         Revenues. During the year ended June 30, 2000, the Company generated
revenues of $6,981,758 from its Suriname casino. For the year ended June 30,
1999, the Company generated revenues of $5,534,249 attributable to its casino
operations in Suriname and Budapest which generated $4,864,989 and $669,260,
respectively. The Company's Budapest and Suriname casinos began operations in
September and October 1998, respectively. The Company in December 1998
transferred its majority interest in the Budapest casino after which no
additional revenues or income were recorded by the Company with respect to such
casino. The casino was later closed in October 1999 when

                                       38

<PAGE>



the casino license expired.

         Marketing and Promotion. During the years ended June 30, 2000 and 1999,
the Company incurred $333,500 and $360,572, respectively, in marketing and
promotional expenses in connection with its casino operations. The Company's
sales and marketing expenses during the 1999 year included $30,659 related to
the Budapest casino. The Company had no such expenses related to the Budapest
casino for the year ended June 30, 2000.

         General and Administrative Expenses. General and administrative
expenses were $6,415,452 for the year ended June 30, 2000 as compared to
$7,566,040 for the year ended June 30, 1999. Included in the current year's
expenses were $3,659,145 of operating expenses associated with the Company's
Suriname casino and $2,756,307 for general corporate overhead including
salaries, consulting, professional fees and travel. Included in the 1999
expenses were $3,758,233 of operating expenses associated with the Company's
casino operations and $3,807,807 for general corporate overhead. The $1,051,500
or 28% reduction in general corporate overhead during the current year was
primarily attributable to reductions in consulting, travel, legal and
professional, insurance and telephone expenses.

         Compensation Charges. During the year ended June 30, 1999, the Company
recorded non-cash compensation charges of $783,000 attributable to (i) the
reduction in exercise price of certain stock options and warrants previously
issued non-employee

                                       39

<PAGE>



directors and (ii) the issuance of stock options to purchase 500,000
shares of Common Stock. For the year ended June 30, 2000, non-cash compensation
charges were $10,000 related to the reduction in exercise price of certain stock
options and warrants previously issued to non-employee directors to purchase
750,000 shares of Common Stock.

         Write-down of Assets. Since 1997, the Company has entered into numerous
discussions and several agreements in attempts to raise capital to finance the
Sakhalin Project without success. During the year ended June 30, 2000, due to
the Company's failure to proceed and based on its evaluation of assets for
financial impairment as required by SFAS No. 121, certain capitalized
expenditures and goodwill, totaling approximately $13,552,000 have been written
down. Additionally during 2000, as a result of the unstable political conditions
in the Palestinian West Bank of the Middle East, the Company wrote off its
investment of $305,000 for a casino operating management agreement entered into
for a casino project to be constructed in Ramallah. During the 1999 year, the
Hungarian Gaming Board made a decision to reduce the number of casino licenses
in Budapest to three. After the Company's submission of an application for a new
license was unsuccessful, the casino was closed in October 1999 when its then
current license expired. At June 30, 1999, the Company wrote off the balance of
its outstanding loans to Roulette Kft. totaling approximately $610,000.

         Interest Expense. For the year ended June 30, 2000, interest expense
amounted to $423,630 compared to $445,105 for the year ended June 30, 1999. The
current year's

                                       40

<PAGE>



expense included approximately $245,000 attributable to interest
accrued on loans made to the Suriname casino joint venture by the Company's
joint venture partner and $179,000 of expense on loans made to the Company for
general working capital purposes ($145,000 related to the amortization of debt
discount recorded for the value of Common Stock warrants issued to debenture
holders). The prior year's expense included approximately $379,000 attributable
to interest accrued on loans made to the Suriname casino joint venture by the
Company's joint venture partner and $66,000 of interest on loans made to the
Company for general working capital purposes.

         Minority Interest. The Company's Suriname casino joint venture began
operations during the 1999 fiscal year. The Company controls the management of
the joint venture company and has a 50% equity interest. The casino's operations
are consolidated with those of the Company and a minority interest has been
recorded for the current and prior fiscal year of $582,204 and $89,278,
respectively.

         Loss from Discontinued Operations of Food Division. In November 1999
the Company's Board of Directors determined that it would discontinue all
activities and efforts with respect to the Company's food preservation business
since the Company could not effectively develop a sufficient market with the
Company's food preservation technology. During the years ended June 30, 2000 and
1999, the Company had no revenues from its food division operations while
expenses related to efforts to sell or joint venture the food division were
$64,500 and $425,175, respectively.

                                       41

<PAGE>




         Gain (Loss) from Discontinued Operations of Hotel Management. During
the year ended June 30, 1999, the Company had revenues of $363,301 from its
hotel management contracts which commenced January 1998 and were terminated on
November 4, 1998. Related marketing and administrative expenses during the 1999
period were $221,751. During the current year ended June 30, 2000, the Company
had no revenues while incurring final expenses of $87,623 during the period
related to legal fees and settlement arrangements with a former officer of the
Company's hotel management operation.

         Income taxes. The corporate income tax in Suriname assessed on casino
operations is 50% of net taxable income. The Company has recorded income taxes
related to the Suriname casino for the year ended June 30, 2000 in the amount of
$552,625 which includes a $192,884 deferred tax liability. No taxes were
recorded in 1999.

Liquidity and Capital Resources

         From March 1996 through February 1998, the Company raised capital
necessary for its business development through debt and equity private
placements. In 1996 it had a private offering of Common Stock and convertible
debentures in which it raised about $4.9 million. In June 1997, while the
Company was developing its food preservation technology business, the Company
completed an initial underwritten public offering (the "Initial Public
Offering") in which it received net proceeds of about $10,306,000 from the sale
of

                                       42

<PAGE>



2,530,000 shares of its Common Stock at a per share price of $5.00. At
that time the Common Stock began being quoted on the Nasdaq SmallCap market. In
November 1997 through February 1998 the Company began and completed another
private offering of Common Stock (the "1997 Private Offering") in which it
received net proceeds of about $8.9 million from the sale of 2,044,763 shares of
its Common Stock at $5.14 per share. The 1997 Private Offering was largely
intended by the Company to raise cash for its initial expenditures for its new
hotel and casino businesses. The Company's stockholders at a meeting in December
1997 approved entry into those businesses. As of June 30, 1998, the Company had
spent all proceeds of the 1997 Private Offering directly for those initial
expenditures.

         From July 1998 to August 1999 the Company actively sought to raise cash
through loans or sales of its securities in order to fund its past due
obligations, current operations and completion of the Suriname casino, which
opened in October 1998 and occupied permanent quarters in March 1999. Because of
the Company's dependance on outside financing, recurring losses and significant
outflows of cash, in the report on the Company's financial statements for the
year ended June 30, 1998, it was noted that there was substantial doubt about
the Company's ability to continue as a going concern. The Company was successful
in raising sufficient funds from several private investors through the sale of
its securities, enabling it to fund its ongoing operational costs during that
period and to complete the construction of the Suriname casino. The Company has
continued to finance itself in part by further issuances of securities, and to
seek loans to finance itself and the

                                       43

<PAGE>



Sakhalin Project. In addition, the Company settled various accounts
payable by issuance of its securities. During the fiscal year ended June 30,
1999 the Company received a total of $1,676,600 from the sale of 2,053,200
shares of Common Stock to private investors together with warrants to purchase
1,280,334 shares at $1.00 per share. The receipts were used for general working
capital, to pay down existing liabilities and towards the construction of the
Suriname casino. During the fiscal year ended June 30, 2000 the Company received
a total of $125,000 from the sale of 166,667 shares of Common Stock to private
investors, together with warrants to purchase 83,334 shares at $1.00 per share.
The receipts were used for general working capital.

         In October 1999, the Company entered into a convertible loan agreement
with a private investor and received $350,000 which it used to fund current and
past due obligations. On December 22, 1999 the lender converted $185,000 of the
loan amount together with interest to common stock of the Company. The balance
of the loan of $165,000 together with 15% interest was paid on April 30, 2000.

         On November 16, 1999 the Company's Common Stock was delisted from the
Nasdaq SmallCap Market. The Company's Common Stock is now traded on the OTC
Bulletin Board. The Company believes that the delisting was a result of its
inability to timely file its Form 10-K, its failure to provide a definitive plan
to obtain and maintain filing compliance and the decline of its stock price
below the price required for continued listing. These factors impaired the
Company's subsequent ability to issue its stock, options and

                                       44

<PAGE>



warrants at prices it deemed favorable. Since delisting the Company's
stock price has generally declined further.

         On January 18, 2000, Mr. James V. Stanton, Vice-Chairman of the
Company, provided a $300,000 loan to the Company with interest at the bank prime
rate. The loan was due in full on December 31, 2000. As part of the
consideration for providing the loan Mr. Stanton was granted warrants to
purchase 500,000 shares of the Company's Common Stock at an exercise price of
$.25 per share which was later reduced to $.10 per share on October 18, 2000.
The loan maturity was extended indefinitely and the Company is paying interest
on a current basis and principal as funds are available. At August 31, 2001 the
loan balance was $55,000.

         On March 1, 2000, Galileo Capital LLC ("Galileo") provided a $150,000
convertible loan to the Company with interest at 10% per annum. The loan was due
on October 31, 2000. As part of the consideration for providing the loan Galileo
was granted warrants to purchase 150,000 shares of the Company's Common Stock at
an exercise price of $.25 per share. Further, the loan was convertible into
shares of the Company's Common Stock, at $.25 per share at any time during the
term of the loan, as to all or a portion of the then outstanding principal and
interest. If all or a portion of the loan is converted the Company would issue
additional warrants to purchase one (1) share of its Common Stock for each four
(4) shares issued to Galileo under its conversion option. The warrants would be
exercisable at $.25 per share. In February, 2001 the loan and interest was paid
in full.

                                       45

<PAGE>



         In January 2001 a private investor purchased 1,333,334 shares of Common
Stock at $.075 per share. The proceeds were used for general working capital.

         In the period May 1, 2001 through July 31, 2001, the Company received
advances of approximately $480,000 from certain persons who subscribed to
purchase common stock of the Company. Such funds were used to make advances to
EMSI. Consummation of the purchase of stock under the subscription agreements is
subject to the completion of the acquisition of EMSI.

         Since August, 1999 CCA's almost sole recurring source of cash,
exclusive of the loans and securities sales described above, was the cash
payments from SLC which is the joint venture entity that owns the Suriname
casino. Parbhoe owns the hotel where the casino has its leased premises, and is
the Company's 50% joint venturer in SLC. Dorsett, the Company's 100% owned
Delaware subsidiary, manages SLC and the casino. Cash payments from SLC to CCA,
Parbhoe or their affiliates are made by SLC, under the management control of
Dorsett, according to a cash allocation priority established under the Suriname
Casino Agreement. That priority is roughly described below. From the monthly
cash profits generated by the casino payments were initially made for certain
construction loans from Parbhoe and for the balance of costs of the casino
construction, all of which, were fully paid by August 1999. After August 1999
payments of net cash flow were made to Dorsett for the accrued management fees
owed, and thereafter for interest and some principal on the Company's loans net
of amounts which the Company directed SLC to pay to Parbhoe on account of loans
which Parbhoe had made to the Company. After all such total loans are

                                       46

<PAGE>



repaid, cash is to be distributed according to the 50%- 50% ownership
interests of the joint venturers. There have been no such distributions and none
are expected until the substantial amounts of loans due to the joint venturers
are repaid. Loans to SLC (and interest thereon) from the Company at June 30,
2001 were approximately $2,708,000, and the Company owed to Parbhoe
approximately $516,000. Since January 2000 about 15% of the distributable cash
flow of the casino has been paid to Parbhoe (as directed on behalf of the
Company) or set aside for payment, and 85% to the Company and Dorsett. The total
paid to the Company was approximately $300,000 per month from September 1999
through May 2000. The Company believes that payments were and are in accordance
with the Suriname Casino Agreement, Parbhoe loan agreement and applicable law.

         Beginning in June 2000 the casino's revenues were adversely affected by
increased local competition from other casinos, by a declining local economy and
by worsening conversion value of the local currency. During the fifteen months
from June 2000 to August 2001 revenues had declined by approximately 25% to 30%
from the fifteen month period ending May 2000, and for this and other reasons
payments to the Company had declined to about $150,000 per month.

         Suriname has price controls on rents. The Company has been advised that
the rent for the casino required by the lease exceeds the lawful rent by
approximately $14,000 per month. SLC has sued Parbhoe in Suriname to recover
approximately $314,000 in past overpayments. The Company is unable to predict
the outcome of that suit, but has been advised by counsel that SLC's position
has substantial merit. Any cash recovery or reduction in rent would be subject
to the cash payment priorities described above.

                                       47

<PAGE>




         In June 2000 the Suriname government asserted that an exemption from
its 50% tax on local corporate income provided for by the Investment Tax Act did
not apply to casino income. As a consequence it assessed what the Company
believed were arbitrarily determined amounts of tax. In June 2000 the Company
paid an initial assessment of $200,000 against past tax and penalties for
calendar years ended 1998 and 1999 and subsequently paid an additional $110,000
as tax for calendar year 2000. In April 2001, SLC submitted tax reports to the
Suriname government for the calendar years ended 1998, 1999 and 2000. The
aggregate amount of tax expense calculated was approximately $375,000 payable
for periods from inception through December 31, 2000 which has been provided for
in the current and prior years financial statements.

         The Company's Suriname legal counsel has advised the Company that SLC
or the Company are entitled to a concession refund of import duty on SLC's
imported operating assets. The Company paid all import duties associated with
the casino construction in full subsequent to the fiscal year ended June 30,
2000. Suriname tax authorities have been petitioned for the concession refund of
about $67,000 that the Company believes it or SLC is entitled to. However, the
Company believes that the likelihood of obtaining a refund is remote. The
government is also contemplating imposing a value added tax on slot machine
revenues.

         The Sakhalin Project is currently generating cash losses for the
Company. Any

                                       48

<PAGE>



future development of that project will require substantial financing.
Despite numerous discussions and several agreements the Company has not yet been
able to obtain the necessary financing. The Company is currently able to provide
only what it believes is the minimum cash funding required to maintain the
prospects of the project. The other shareholders in SCC are not required either
to fund SCC's losses, the continued prospects of the project, or the development
of the project. If financing is not obtained, the Company might be forced to
abandon the project and to sell its rights for whatever price or other recovery
that could be obtained. The Company is not able to quantify what price or
recoveries might be obtained. If the Company obtains financing and proceeds with
the Sakhalin Project it will have to plan and establish an organization and
infrastructure that is not currently in place, and will have to hire other
specialists.

         The acquisition of EMSI described above, and the implementation of the
on-line lottery and sports betting system, will require significant funding by
the Company which is not currently available. The Company is actively seeking
investors to purchase common stock or other securities of the Company in order
to provide the funds for these projects.

         On June 30, 2001 the Company had $702,000 in cash or cash equivalents
on hand. The Company believes that the distribution of profits from the Suriname
casino will provide adequate cash flow to maintain the Company's current
operations for the next 12 months.

                                       49
<PAGE>
Recent Accounting Standards and Pronouncements

              In June 1998, the Financial Accounting Standards Board ("FASB")
              issued Statement of Financial Accounting Standards ("SFAS") No.
              133, "Accounting for Derivative Instruments and Hedging
              Activities" ("SFAS 133"). SFAS 133 requires the recognition of the
              fair value of all derivative instruments on the balance sheet.
              Subsequent to the issuance of SFAS 133, the FASB received many
              requests to clarify certain issues causing difficulties in
              implementation. In June 2000, the FASB issued SFAS 138, which
              responds to those requests by amending certain provisions of SFAS
              133. These amendments include allowing foreign-currency exposures
              that reduce the need for third-party derivatives and redefining
              the nature of interest rate risk to avoid sources of
              ineffectiveness. The impact on the Company's financial statements
              of adopting SFAS 133, as amended by SFAS 138, is not significant.

              In October 1998, the FASB issued Statement of Financial Accounting
              Standards No. 134 "Accounting for Mortgage-Backed Securities
              Retained After the Securitization of Mortgage Loans Held for Sale
              by a Mortgage Banking Enterprise", which is effective for the
              first fiscal quarter beginning after December 15, 1998. There is
              no impact to the Company's financial reporting or presentation due
              to the adoption of SFAS No. 134.

              In February 1999, the FASB issued Statement of Financial
              Accounting Standards No. 135 "Recission of FASB Statement No. 75
              and Technical Corrections", which is effective for financial
              statements issued after February 15, 1999. The adoption of SFAS
              No. 135 does not materially impact the financial statements of the
              Company.

              In December 1999, the Securities and Exchange Commission issued
              Staff Accounting Bulletin 101, "Revenue Recognition in Financial
              Statements" ("SAB 101"). SAB 101 provides guidance on the
              recognition, presentation and disclosure of revenues in financial
              statements and requires adoption no later than the fourth quarter
              of fiscal 2001. The Company's financial reporting or presentation
              is not materially affected by the adoption of SAB 101.

              In March 2000, the FASB issued FASB Interpretation 44, (Accounting
              For Certain Transactions Involving Stock Compensation - An
              interpretation of APB 25), which was effective July 1, 2000. FASB
              Interpretation 44 did not have any material impact on the
              Company's financial statements.

              In September 2000, the FASB issued SFAS No. 140, "Accounting for
              Transfers and Servicing of Financial Assets and Extinguishments of
              Liabilities - A Replacement of FASB No. 125". This statement
              provides accounting and reporting standards for transfers and
              servicing of financial assets and extinguishments of liabilities.
              Under these standards, after a transfer of financial assets, an
              entity recognizes the financial and servicing assets it controls
              and the liabilities it has incurred, derecognizes financial assets
              when control has been surrendered, and derecognizes liabilities
              when extinguished. This statement provides consistent standards
              for distinguishing transfers of financial assets that are sales
              from transfers that are secured borrowings. This statement is
              effective for transfers and servicing of financial assets and
              extinguishments of liabilities occurring after March 31, 2001. The
              Company does not expect that the adoption of SFAS No. 140 will
              have a material impact on its results of operations, financial
              position or cash flows.

                                       50

<PAGE>

              In June 2001, the FASB issued SFAS No. 141, SFAS No. 142 and SFAS
              No. 143. SFAS No. 141, "Business Combinations" is effective for
              all business combinations initiated after June 30, 2001 and
              addresses the financial accounting and reporting for business
              combinations. SFAS 141 supersedes APB Opinion No. 16, Business
              Combinations, and FASB Statement No. 38 Accounting for
              Preacquisition Contingencies of Purchased Enterprises. The
              Company's financial reporting or presentation is not materially
              affected by the adoption of SFAS 141.

              SFAS No 142, "Goodwill and Other Intangible Assets" addresses the
              financial accounting and reporting for acquired goodwill and other
              intangible assets and supersedes APB Opinion No. 17, Intangible
              Assets SFAS No. 142 and is required to be applied for fiscal years
              beginning after December 15, 2001.

              SFAS No. 143, "Accounting for Asset Retirement Obligations"
              addresses the financial accounting and reporting for obligations
              associated with the retirement of tangible long-lived assets and
              the associated asset retirement costs. SFAS No. 143 is effective
              for financial statements issued for fiscal years beginning after
              June 15, 2002.

              The Company's financial reporting and presentation is not
              expected to be materially affected by the adoption of SFAS
              No. 142 and 143.

Item 8.  Financial Statements and Supplementary Data

         See pages F-1 through F-41 contained herein as part of this Form 10-K
annual report.

Item 9.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure

         N/A



                                       51

<PAGE>

                                    PART III

Item 10.  Directors and Executive Officers of the Company

         The Board of Directors is divided into three classes. The terms of each
class expire successively over a three-year period. At each annual meeting of
stockholders, successors to directors whose terms expire at that meeting are to
be elected for three-year terms. The directors and officers of the Company on
June 30, 2001 are as follows:


         Name              Age         Position and Office Held

Dallas Dempster      59(1)...... President, Chief Executive Officer and Director
James V. Stanton     69(1)(2)....Vice Chairman of the Board of Directors
Miles R. Greenberg   44 .........Chief Financial Officer and Secretary
David. A. Hartley    53..........President of Casino Division

Class A Director

         DALLAS DEMPSTER was elected to the Board and also elected President and
Chief Executive Officer on July 20, 1998. Since its inception he has been one of
the two executive directors of the entity developing the Sakhalin Project, and
is a founder of that project. From 1985 to 1991 Mr. Dempster was the Chairman
and Managing Director of Burswood Resort Complex, of which he was the founder.
Burswood is the largest tourist destination resort development in Western
Australia, costing A$320 million, employing over 2,700 employees, and with
revenues in excess of A$400 million. Between 1983 and 1990 he

                                       52

<PAGE>



was Chairman of the Rottenest Island Authority on behalf of the Western
Australia government. Mr. Dempster was principal project director and/or owner
of substantial other property development projects in Sydney and Perth, a member
of the Airline Deregulation Committee, and a member of the Board of the
Aboriginal Enterprise Company Limited. Mr. Dempster worked as an independent
consultant since 1991 until joining the Company in July 1998.

Class B Director

         JAMES V. STANTON has been a director of the Company since its inception
and Vice Chairman of the Company since 1998. Mr. Stanton has his own law and
lobbying firm, Stanton & Associates, in Washington, D.C. From 1971 to 1978, Mr.
Stanton represented the 20th Congressional District of Ohio in the United States
House of Representatives. While in Congress Mr. Stanton served on the Select
Committee on Intelligence, the Government Operations Committee, and the Public
Works and Transportation Committee. Mr. Stanton has held a wide variety of
public service positions, including service as the youngest City Council
President in the history of Cleveland, Ohio and membership on the Board of
Regents of the Catholic University of America in Washington, D.C. Mr. Stanton is
also former Executive Vice President of Delaware North, a privately held
international company which, during Mr. Stanton's tenure, had annual sales of
over $1 billion and became the leading pari-mutual wagering company in the
United States, with worldwide operations including horse racing, harness racing,
dog racing, and Jai-Lai. Delaware North also owned

                                       53

<PAGE>



the Boston Garden and the Boston Bruins hockey team. From 1985 to 1994
Mr. Stanton was a principal and co-founder of Western Entertainment Corporation,
which pioneered one of the first Indian gaming operations in the United States,
a 90,000 square foot bingo and casino gaming operation located on the San Manuel
Indian Reservation in California, which generated annual revenues in excess of
$50 million. Mr. Stanton also serves on the boards of MTR Gaming Group, Inc. and
Saf T Lok, Inc.

Classified Directorships

         The Company currently has authorized five directorships, three of which
are currently vacant due to Mr. Jay M. Haft's and Mr. Jonathan M. Caplan's
resignations in 1998 and 1999, respectively and Mr. Charles Stein's resignation
effective October 2000. In 1997, the Company amended its Certificate of
Incorporation to provide for a classified Board of Directors. The Company's
Board of Directors is divided into three classes. Class A has two directorships,
of which one is held by Mr. Dempster and one of which is vacant and previously
held by Mr. Haft. Mr. Dempster was elected a director in July 1998 by the Board
of Directors, to replace a director who had resigned. Class B has two
directorships, one of which is now held by Mr. Stanton and the other of which
was held by Mr. Caplan. Class C consists of one directorship, and that
directorship is vacant. At each annual stockholder meeting commencing with the
1998 annual meeting, the successors to directors whose terms then expire are to
be elected to serve from the time of election and qualification until the third
annual meeting following election and until their successors have been duly
elected and qualified but no directors have been nominated or elected at any
subsequent annual

                                       54

<PAGE>



meeting. Any additional directorships resulting from an increase in the
number of directors are to be distributed among the three classes so that, as
nearly as possible, such class will consist of an equal number of directors. All
stockholders of the Company's Common Stock are entitled to vote in elections for
the directors of each Class.

         The Company has agreed that, for a period of five years from June 6,
1997, Janssen/Meyers Associates, L.P. ("J/M") may designate one person to be
elected to the Board of Directors of the Company subject to Board approval or,
in the alternative, J/M may designate one person to attend all meetings of the
Company's Board of Directors and to receive all notices of meetings of the
Company's Board of Directors and all other correspondence and communications
sent by the Company to members of its Board of Directors. Such designee may be
an officer or director of J/M. If J/M's designee is elected to the Board of
Directors, such designee will sit on the Company's Audit Committee. J/M has not
designated an individual to serve in such capacity. J/M was, among other things,
the Company's underwriter in the June 1997 initial public offering.

Identification of Executive Officers and Key Employee Who Are Not Directors

         MILES R. GREENBERG was appointed Vice President and Chief Financial
Officer upon joining the Company in September 1996 and appointed Senior Vice
President on January 18, 1997. From 1994 until joining the Company, Mr.
Greenberg served as Vice President and Chief Financial Officer of F3 Software
Corporation ("F3"), a developer and

                                       55

<PAGE>



marketer of electronic forms composition and automation software. From
1992 until assuming his positions at F3, he served as Controller of BLOC
Development Corporation (former parent company of F3), a publicly held entity
primarily engaged in the development, publishing and direct marketing of
computer software and hardware products. From 1985 to 1992, Mr. Greenberg served
as Vice President and Chief Financial Officer of The Levenshon Companies, Inc.
and its affiliates, a diversified financial services company. Mr. Greenberg is a
Certified Public Accountant formerly with KPMG Peat Marwick.

         DAVID A. HARTLEY has been President of the Casino Division since
October 1997. Mr. Hartley has spent the past 20 years in the casino gaming
industry. Originally trained as a Clinical Psychologist, he has had extensive
experience in virtually all aspects of casino operations, from the Queen
Elizabeth II cruise ship, to six London-based casinos. After serving as the
Manager of the Ritz Casino Club in London, he was appointed Gaming Executive in
charge of management development and training. He served in several positions at
London Clubs International Ltd., where he was responsible for that company's
expansion outside the United Kingdom. This involved researching and evaluating
prospective markets, acquiring new casino licenses, and other related activity.
Subsequent to that, he joined Regency Casinos Limited in 1992, where, until
joining the Company, he held several positions, and was most recently Chairman.
In this employment he negotiated a joint venture with Hyatt International
Corporation to establish an international casino management company, and
organized several international casinos. These included Regency Casino
Thessaloniki, a US$120 million project, including a new hotel, which is the
largest

                                       56

<PAGE>



casino in Europe with gross gaming win approaching US$140 million. Also
included was a Regency Casino Baku Azerbaijan, constructed within the Hyatt
Hotel, at a project cost of US$15 million, including the hotel, casino,
restaurants and business facilities, as well as the Mimosa Regency Casino,
Philippines, with a project cost of US$5 million. Mr. Hartley has also been
responsible for the establishment and planning and development strategy for
several other casinos, including projects in Cape Town, South Africa and a
second operation in Baku. Mr. Hartley is a hands-on manager with background,
experience, and knowledge of the casino industry in emerging markets.

Section 16(a) Beneficial Ownership Reporting Compliance

         Under the provisions of Section 16(a) of the Exchange Act, the
Company's officers, directors and 10% beneficial stockholders are required to
file reports of their transactions in the Company's securities with the
Commission. The Company believes that as of June 30, 2001, all of its executive
officers, directors and greater than 10% beneficial stockholders were in
compliance with all filing requirements applicable to them during the fiscal
year ending June 30, 2001.

Item 11.  Executive Compensation

         The following table sets forth the compensation awarded to, paid to, or
earned by Mr. Dempster, the Company's Chairman, and Chief Executive Officer and
two others

                                       57

<PAGE>



(all,"Named Executive Officers") during the period July 1, 1998 to June 30,
2001. No other executive officer of the Company serving as an executive
officer on June 30, 2001, or since that date, received a total salary and bonus
of $100,000 for the periods specified.

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                                                Long Term Compensation
                                           Annual Compensation                             Awards      Payouts
                                                                                           ------      -------
                                                              Securities  Restricted   Securities
Name and                                                      Underlying    Stock      Underlying        LTIP
Principal Position         Fiscal Year       Salary    Bonus   Options(#)   Awards     Options/SAR's(3) Awards  Compensation
----------------------     -----------       ------    -----  ----------   ---------   ---------------- ------------------

                        <c>               <c>        <c>   <c>          <c>         <c>              <c>     <c>
Dallas Dempster            July 1, 2000 to
Pesident, Chief            June 30, 2001     $300,000
Executive Officer and      July 1, 1999 to   $300,000                      1,000,000(1)(2)
Director                   June 30, 2000
                           August 1, 1998    $275,000                      1,000,000(1)(2)         -       -        -
                           June 30, 1999
Miles R. Greenberg         July 1, 2000 to
Chief financial            June 30, 2001     $140,000                        500,000
Officer and                July 1, 1999 to   $125,000
Secretary                  June 30, 2000
                           July 1, 1998 to   $115,000                         75,000(1)            -       -        -
                           June 30, 1999
David Hartley              July 1, 2000 to
President Casino           June 30, 2001     $250,000
Division(3)                July 1, 1999 to
                           June 30, 2000     $210,000           -                -                 -       -        -
                           July 1, 1998      $250,000           -                -                 -       -        -
                           June 30, 1999

         * Less than $100,000
</Table>

                                       58
<PAGE>

         (1) Reflects shares underlying options that were repriced in September
1998 (to $1.50 per share), and in December 1999 (to $.25 per share) and in
October 2000 (to $.10 per share).

         (2) Held in the name of the Tilden Park Limited, for the benefit of Mr.
Dempster's family.

         (3) Reflects amounts paid to Star Casinos Limited for the personal
services of Mr. Hartley provided by such entity. Pursuant to an agreement made
in June, 2000, Mr. Hartley received in October, 2000, 480,000 shares of common
stock of the Company in lieu of $72,000 owed to him in salary for the fiscal
year ended June 30, 2000.

         The Company has no defined benefit plan, actuarial plan, pension plan
or long-term incentive plan.

         After the Company acquired a 65% interest in SGTI in December 1997,
SGTI continued to pay Sovereign Gaming and Leisure Ltd. consulting fees of
$15,000 per month through July 1998. Mr. Dempster was paid by Sovereign
consulting fees in a similar amount for the same services, or other services,
during the same seven-month period.

                                       59

<PAGE>



                                  OPTION GRANTS

         In September 1998 the Board of Directors: (i) reduced the exercise
price of all Plan and non-Plan Options (and any warrants) previously granted any
then officer, director, employee and certain consultants to the then market
price of $1.50 (which was subsequently reduced to $.25 per share in December
1999); and (ii) granted seven persons and entities new Plan and non-Plan options
to purchase 1,500,000 shares at an exercise price of $1.50 per share (which was
subsequently reduced to $.25 per share in December 1999). On October 18, 2000
the Board of Directors again reduced the exercise price of all Plan and non-Plan
options (and warrants) previously granted to any then officer, director,
employee or consultant to a price of $.10. The following table provides certain
information regarding the stock options granted during the 12 month period ended
June 30, 2001, to the Named Executive Officer named in the Summary Compensation
Table.

          OPTION GRANTS FOR THE TWELVE-MONTH PERIOD ENDED JUNE 30, 2001
<Table>
<Caption>

                                                                                        Potential Realized
                                                                                         Value at Assumed
                                                                                          Annual Rates of
                       Number of    % of Total                                              Stock Price
                      Securities      Options                                            Appreciation for
                      Underlying    Granted to      Exercise or                           Option Term(2)
                        Options    Employees in     Base Price       Expiration           _______________
      Name           Granted(#)(1) Fiscal Period   $/Share(1)(1)        Date                5%      10%

                  <c>           <c>             <c>             <c>                  <c>
Miles Greenberg         500,000        100%            $.10         October, 2004
</Table>
 (1) On October 18, 2000 Mr. Greenberg was granted a four-year Plan option to
purchase 500,000
                                       60

<PAGE>



shares of Common Stock at $.10 per share.

(2) In accordance with the rules of the Securities and Exchange Commission,
"Potential Realizable Value" has been calculated assuming annual appreciation
over the option term of the fair market value of the Company's common stock on
the date of the grant at annual compounded rates of 5% and 10%, respectively.

         No other option was granted to any of the Named Executive Officers
under the 1996 Stock Option Plan, or otherwise granted to any such officer
during the year ended June 30, 2001, and no options were exercised by any of
them during that period.

               AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR END OPTION VALUES

         The following table sets forth information about the number and value
of options held as of June 30, 2001 by each of the Company's executive officers
named in the Summary Compensation Table.
<Table>
<Caption>

                                                        Number of Securities         Value of Unexercised
                                                       Underlying Unexercised            In-the-Money
                        Shares                       Options at Fiscal Year End    Options at Year End($)(1)
                      Acquired on      Value       ______________________________  ________________________
                     Exercise (#)  Realized ($)     Exercisable     Unexercisable  Exercisable Unexercisable

                  <c>           <c>             <c>              <c>            <c>
Dallas Dempster           0             -            2,000,000           0               0           -
Miles R. Greenberg        0             -              575,000           0               0           -
David Hartley             0             -              100,000           0               0           -

</Table>

(1) Based on the closing price of the Company's Common Stock of $.10 on June 30,
2001, as reported on the OTC Bulletin Board.

                                       61

<PAGE>



         The Company's outstanding options at June 30, 2001 totaled 3,852,500.
The Company uses the Black-Scholes option-pricing model to value options issued
to non-employee directors and consultants. Other options issued are valued using
APB 25 and FASB Interpretation 44. See Note 10 to the Consolidated Financial
Statements included in this 10-K.

Directors Compensation

         Since August 1998, non-employee directors have waived all fee
compensation. No other compensation was paid to non-employee directors in the
twelve months ended June 30, 2001. Directors who are employees of the Company
receive no additional compensation for their services rendered as directors. All
directors are reimbursed for reasonable expenses incurred in connection with
their services rendered as directors.

         In June 1997, the Board voted to form an executive compensation
committee (the "Committee") which is authorized to review all compensation
matters involving directors and executive officers and Committee approval is
required for any compensation to be paid to executive officers or directors who
are employees of the Company. As a matter of policy and to assure compliance
with Rule 16b-3(d)(1) of the Securities Exchange Act of 1934, the decisions of
the Compensation Committee are subject to ratification by a majority of the
Board.



                                       62

<PAGE>

Indemnification of Directors and Officers and Related Matters


         The Company's Certificate of Incorporation limits, to the maximum
extent permitted by the Delaware General Corporation Law ("DGCL"), the personal
liability of directors and officers for monetary damages for breach of their
fiduciary duties as directors and officers (other than liabilities arising from
acts or omissions which involve intentional misconduct, fraud or knowing
violations of law or the payment of distributions in violation of the DGCL). The
Certificate of Incorporation provides further that the Company shall indemnify
to the fullest extent permitted by the DGCL any person made a party to an action
or proceeding by reason of the fact that such person was a director, officer,
employee or agent of the Company. Subject to the Company's Certificate of
Incorporation, the By-laws provide that the Company shall indemnify directors
and officers for all costs reasonably incurred in connection with any action,
suit or proceeding in which such director or officer is made a party by virtue
of his being an officer or director of the Company, except where such director
or officer is finally adjudged to have been derelict in the performance of his
duties as such a director or officer.



                                       63

<PAGE>



         There is no pending litigation or proceeding involving any director,
officer, employee or agent of the Company where indemnification will be required
or permitted. The Company is not aware of any threatened litigation or
proceeding which may result in a claim for such indemnification.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth information as of August 31, 2001, to
the best of the Company's knowledge, about each person (including any "group" as
that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934)
known to the Company to be the beneficial owner of more than 5% of the Company's
Common Stock. The percentage of shares outstanding is based on the Company's
shares of Common Stock outstanding as of June 30, 2001, as adjusted in each case
pursuant to Rule 13-3(d)1 under the Securities and Exchange Act of 1934. As of
August 30, 2001, there were 18,140,000 shares of Common Stock outstanding.

<Table>
<Caption>
                                                        Total Number of Shares          Percentage of
Name and Address of Stockholder                           Beneficially Owned           Voting Shares*

<S>                                                        <C>                         <C>
James V. Stanton (1) c/o CCA Companies Incorporated            1,326,844                   7.0%

Dallas Dempster (2) c/o CCA Companies Incorporated (3)         2,000,000                  10.1%

Peter Janssen (3) c/o Janssen Partners 1345 Old Northern
   Blvd. Roslyn, N.Y.  11576                                   2,411,719                  12.6%

Miles R. Greenberg-Senior Vice President-Finance,
   Treasurer and Chief Financial Officer (4)                     575,000                   3.1%

David A. Hartley-President-Casino Division (5)                   830,000                   4.6%

All executive officers and directors  as a group (4 persons)   4,731,844                  21.9%
</Table>
----------
(1) Includes 20,000 shares of Common Stock which are held by Mr. Stanton, a
Director of the Company, as joint tenant with his wife, Margaret M. Stanton,
currently exercisable warrants to purchase 650,000 shares of Common Stock at a
price equal to $.10 per share, and currently exercisable options to purchase
500,000 shares and 23,644 shares of Common Stock at $.10 and $2.00 per share,
respectively. Does not include shares of Common Stock owned by Michael J.
Stanton, Bridget M. Stanton, Richard P. Stanton and Joseph M. Stanton each of
whom are adult children of Mr. James Stanton and each of whom own 20,000 shares
of Common Stock. Mr. Stanton denies beneficial ownership of such 80,000 shares.

(2) Represents currently exercisable non-Plan options granted in September 1998
to purchase 1,000,000 shares at $.10 and Plan options granted in December 1999
to purchase 1,000,000 shares at $.10 in the name of Tilden Park Limited for the
benefit of Mr. Dempster's family.

(3) Includes currently exercisable warrants to purchase 73,269 shares at $8.25
per share; warrants to purchase 235,453 shares at $5.135 per share; warrants to
purchase 666,667 shares at $1.00 per share; and warrants to purchase 450,000
shares at $.50 per share.

(4) Represents currently exercisable options to purchase 575,000 shares of
Common Stock at $.10 per share.

                                       64

<PAGE>

(5) Includes 730,000 shares of common stock and currently exercisable
options to purchase 100,000 shares at $.10 per share. All shares and options are
issued to Star Casinos Ltd., an entity owned and controlled by Mr. Hartley.

         As used in the table above, "beneficial ownership" means the sole or
shared power to vote or direct the voting or to dispose, or direct the
disposition of any security. A person is deemed to have "beneficial ownership"
of any security that such person has a right to acquire within 60 days of the
date of the above table. Any security that any person named above has the right
to acquire within 60 days is deemed to be outstanding for purposes of
calculating the ownership of such person but is not deemed to be outstanding for
purposes of calculating the ownership percentage of any other person. Unless
otherwise noted, each person listed is believed by the Company to have the sole
power to vote, or direct the voting of, and power to dispose, or direct the
disposition of all such shares. The amount of outstanding shares of Common Stock
is the amount actually outstanding plus shares deemed outstanding pursuant to
Rule 13d-3(d)(1) under the Securities and Exchange Act of 1934.

         In acquiring Sakhalin General Trading and Investments Limited ("SGTI")
the Company issued 2,000,000 shares to the former stockholders in SGTI. The
Company does not know the ultimate beneficial ownership of these shares.

Item 13. Certain Relationships and Related Transactions


                                       65

<PAGE>



         During the year ended June 30, 1998, the Company had entered into hotel
management agreements with DHI and FEC and into hotel operating contracts with
other hotel owners. The Company believes that Mr. David Chiu was then the
beneficial owner of the stock in Dorsett International. These agreements were
settled and terminated by a November 1998 settlement agreement dated November 4,
1998. Mr. Chiu is also a party to the Development Services Agreement relating to
the Sakhalin Project. That agreement is described above in the Divisional
Overview of the Sakhalin Project. The Company believes Mr. Chiu was a beneficial
owner of stock in DHI when the Company acquired it and its subsidiaries for
$500,000. He was the assignee of certain of DHI rights under that agreement. The
Company believes FEC, Mr. Chiu, his relatives or their associates held interests
in hotel owners with whom the Company had or might have entered into Hotel
Operating Contracts. FEC claims that it is entitled to be issued 250,000 shares
of Common Stock pursuant to the November 1998 settlement.

         Mr. Dallas Dempster was a paid consultant to Sovereign Gaming and
Leisure Ltd. ("Sovereign"), which assigned to the Company its 1994 Construction
Management Agreement and 1994 Operation Management Agreement with SCC. The
Company believes that he held, and currently holds, no beneficial interest in
stock in Sovereign. In September 1998, Mr. Dempster's nominee, Dabus
International Limited, for the benefit of his family, was granted non-Plan
options to purchase 1,000,000 shares of the Company's common stock at $1.50 per
share which have been repriced twice in connection with general repricings of
options and warrants held by officers and others. The most recent general
repricing was in October 2000 to $.10 per share. In December 1999, Mr.
Dempster's nominee, Tilden Park Limited for the benefit of his family, was
granted Plan

                                       66

<PAGE>



options to purchase 1,000,000 shares of the Company's Common Stock at $.25 per
share. These were similarly repriced. Tilden Park Limited transferred on that
date from Dabus International Limited the non-Plan options to purchase 1,000,000
shares of common stock previously issued to Dabus International Limited.
Sovereign was a consultant to SGTI. Mr. Dempster was a consultant to Sovereign
and received $15,000 per month from January through July 1998.

         The Company believes Mr. David Hartley controls Star and holds a
substantial interest in it. Star was a party with the Company to the Star Casino
Consulting Agreement, and was granted options in October 1997 to purchase shares
of the Company's Common Stock. These options were repriced three times in
connection with the general repricings of options and warrants held by officers,
directors, employees and consultants of the Company. The Company issued 250,000
shares of Common Stock to Star in December 1999 in lieu of a cash bonus payment
which Star was entitled to receive pursuant to The Star Consulting Agreement. On
October 24, 2000 the Company issued Star 480,000 shares of Common Stock as
payment for $120,000 Star was entitled to receive as of June 30, 2000.

         Janssen-Myers Associates ("J-M"), among other things, were the
underwriters of the Company's initial public offering in June 1997 and also the
placement agent in the Company's November 1997 Private Offering. Messrs. Janssen
and Meyers are principals in J-M and received their Company warrants from J-M.
Pursuant to the placement agreement relating to the November 1997 Private
Offering, the Company agreed to pay J-M, as placement agent, a fee equal to 10%
of the "gross proceeds" of that offering. In addition, the Company agreed to pay
J-M a non- accountable expense allowance equal to 3% of the "gross proceeds"
from the sale of shares in that offering and to reimburse certain accountable
expenses of J-M. The Company also agreed to indemnify J-M against certain
liabilities incurred under the Securities Act in connection with the November
1997 offering. The Company also granted J-M, for a period of one year after the
final closing date of the Private Offering, a right of first refusal to
purchase, or to sell for the account of the Company, any securities of the
Company which the Company may seek to sell through an underwriter, placement
agent or broker-dealer. A number of principal stockholders in the Company
granted J-M a similar right in any such sale by those stockholders of the
Company, its subsidiaries and successors.

         Peter Janssen, a principal of Janssen Myers Associates, completed the
following acquisition of Company securities: (i) On December 3, 1998 he
purchased 133,334 shares at $.75 per share and received four-year warrants to
purchase 66,667 shares of Common Stock at an exercise price of $1.00 per share;
(ii) on March 1, 1999 he purchased 200,000 shares at $.50 per share and received
four-year warrants to purchase 250,000 shares of Common Stock at an exercise
price of $1.00 per share; (iii) on April 9, 1999 he purchased 150,000 shares
at$.67 per share and received four-year warrants to purchase 350,000 shares of
Common Stock at an exercise price $1.00 per share; and (iv) on December 22,
1999, in consideration of consulting services rendered to the Company during
1998 and 1999, he received three-year warrants to purchase 450,000 shares of
Common Stock at an exercise price of $.50 per share. These were repriced in the
subsequent general repricings.


                                       67

<PAGE>



         In June 1997, and from December 1997 through February 1998, the Company
issued to J- M for nominal consideration, the "Underwriter's Warrants" to
purchase 220,000 shares at $8.25 per share and to purchase 715,668 shares at
various prices based on the market price of the Company's shares in 1997-1998.
The warrants were issued in connection with the Company's initial public
offering completed in June 1997, and the Company's private offering which began
in November 1997 and was completed in February 1998. They are exercisable for a
period of four years from issue. Sale of shares by the Company at less than the
then current average market price or less than the exercise price will trigger
anti-dilution provisions in all the Warrants held by the Underwriter. No
anti-dilution adjustment is made under any series of such warrants for issuance
of securities (i) in the same offering as the Warrant series was issued, or (ii)
upon exercise of Warrants of that series or of any other warrants or options
outstanding on the date that series of Warrants was issued. In the case of the
1997 Placement Agent Warrants, no adjustment is made for issuance of securities
(i) in contemplated transactions described in the related Private Placement
Memorandum, but not in excess of 5,500,000 shares, (ii) under the Company's 1996
Stock Option Plan as it may be amended from time to time, or (iii) upon merger
or acquisition with unaffiliated third parties.

         The Company has been advised that Mr. Peter Janssen and Mr. Bruce
Meyers, principals of J-M, purchased an aggregate of 58,422 shares in the 1997
Private Offering. In connection with the Company's initial public offering, the
Company entered into an agreement whereby it (i) agreed to employ J-M as its
investment banker and financial consultant for three years for an aggregate fee
of $100,000 paid at the closing of the Company's initial public offering; and
(ii) for a period of five years, agreed to pay J-M a fee equal to five percent
of the amount up to $5 million, and 2 1/2% of

                                       68

<PAGE>



the excess, if any, over $5 million, of the consideration in any transaction
consummated by the Company with a party introduced to the Company by J-M.

         In January 2000, Mr. Stanton provided a loan to the Company of
$300,000, which the Company used to repay past due obligations. The loan bears
interest at the bank prime rate to be calculated and billed monthly by the
National City Bank of Cleveland, Ohio. The loan was to be repaid on December 31,
2000. Mr. Stanton also received warrants to purchase 500,000 shares of Common
Stock at an exercise price of $.25 per share exercisable on or before January
18, 2004. On October 18, 2000 the exercise price was reduced to $.10 per share.
After December, the due date of the loan extended and the Company is paying
interest on a current basis and principal as funds are available. On January 25,
1999 Mr. Stanton converted all $75,000 principal and $1,600 of accrued unpaid
interest on a $75,000 loan he had made to the Company in October 1998 into
153,200 shares at a conversion price of $.50 per share. At June 30, 2001 the
loan balance was $75,000.

                                     PART IV

Item 14. Exhibits, Financial Statements & Schedules, and Reports on Form 8-K
(a)(1)   Financial Statements

         Report of Independent Certified Public Accountants (F-2)


                                       69

<PAGE>



         Consolidated Balance Sheets as of June 30, 2001 and June 30, 2000 (F-3)

         Consolidated Statements of Operations for the years ended June 30,
         2001, June 30, 2000 and June 30, 1999 (F-4)

         Consolidated Statements of Stockholders' Equity for the years ended
         June 30, 2001, June 30, 2000 and June 30, 1999 (F-5)

         Consolidated Statements of Cash Flows for the years ended June 30,
         2001, June 30, 2000 and June 30, 1999 (F-8)

         Notes to Consolidated Financial Statements (F-11)

Exhibit No.                 Item Title
----------                  ----------

2.1      Contract on the Extension of the Concession Period for the Operation
         of a Casino dated 21 July 1997 issued by the Minister of Finance in
         favor of Roulette; Loan Agreement dated 9 April 1998 between Roulette
         and Dorsett providing for a US $420,000 loan to Roulette; Amendment
         No.1 dated 5 June 1998 to the Agreement dated 3 April 1998 between CBC,
         Juste and Dorsett (incorporated by reference to the Company's Form 10-Q
         for the period ended September 30, 1998)

3.1      Certificate of Incorporation and amendments thereto (incorporated
         herein by reference to the Company's Registration Statement on Form S-1
         (File No. 333-16571))


                                       70

<PAGE>


3.2      Amendment to Company's Certificate of Incorporation (incorporated
         herein by reference to the Company's Registration Statement on Form S-1
         (File No. 333-16571), Amendment No. 5)

3.3      Amendment to Company's Certificate of Incorporation (incorporated
         herein by reference to the Company's Proxy Statement dated November 27,
         1997)

3.4      By-law of Company (incorporated herein by reference to the Company's
         Registration Statement on Form S-1 (File No. 333-16571)

4.2      Form of certificate evidencing shares of Common Stock (incorporated
         herein by reference to the Company's Registration Statement on Form S-1
         (File No. 333-16571), Amendment No. 2)

4.3      Form of Underwriter's Warrant Agreement between Company and the
         Underwriter Janssen-Meyers Associates L.P. (including form of
         Underwriter's Warrant) (incorporated herein by reference to the
         Company's Registration Statement on Form S-1 (File No. 333-16571),
         Amendment No. 5)

4.5      Amendatory Agreement dated November 6, 1996 between the Company and the
         SES Family Investment and Trading Partnership, L.P. (incorporated
         herein by reference to the Company's Registration Statement on Form S-1
         (File No. 333-16571))

4.6      Form of 10% Debenture dated September 1996 (incorporated herein by
         reference to the Company's Registration Statement on Form S-1 (File No.
         333-16571))

4.7      Form of 10% Convertible Debenture dated November 1996 (incorporated
         herein by reference to the Company's Registration Statement on Form S-1
         (File No. 333-16571))


                                       71

<PAGE>



10.1     1996 Stock Option Plan, as amended and restated (incorporated herein by
         reference to the Company's Registration Statement on Form S-1 (File No.
         333-16571))

10.2     Form of Stock Option Agreement (incorporated herein by reference to the
         Company's Registration Statement on Form S-1 (File No. 333-16571))

10.3     Distribution Agreement dated October 9, 1996 between Company and
         Agrotech 2000, S.L. (incorporated herein by reference to the Company's
         Registration Statement on Form S-1 (File No. 333-16571), Amendment
         No. 4)

10.4     Employment Agreement between Charles H. Stein and the Company,
         effective as of June 13, 1997

10.5     Form of $5.00 Warrant Agreement dated August 1996 (incorporated herein
         by reference to the Company's Registration Statement on Form S-1 (File
         No. 333-16571))

10.6     Loan Agreement dated October 9, 1996 between Company and Conserver
         Purchasing Corporation ("CPU"), as amended by Letter Agreement dated
         December 31, 1996 between Company and CPC (incorporated herein by
         reference to the Company's Registration Statement on Form S-1 (File No.
         333-16571), Amendment No. 2)

10.7     Form of Financial Consulting Agreement between Company and Underwriter
         (incorporated herein by reference to the Company's Registration
         Statement on Form S-1 (File No. 333-16571), Amendment No. 5)

10.8     Agreement dated as of August 12, 1997 by and among the Company,
         Sakhalin Trading and Investments Limited ("SGTI") and Sovereign Gaming
         and Leisure Limited ("Sovereign") (incorporated herein by reference to
         Exhibit 10.8 to the Company's Form 10-K for the fiscal year ended June
         30, 1997)

                                       72

<PAGE>




10.9     Amendment dated as of August 12, 1997 by and among the Company, SGTI
         and Sovereign (incorporated herein by reference to Exhibit 10.9 to the
         Company's Form 10-K for the fiscal year ended June 30, 1997)

10.10    Development Services Agreement dated as of October 2, 1997 between the
         Company and Dato David Chiu (incorporated herein by reference to
         Exhibit 10.10 to the Company's Form 10-K for the fiscal year ended June
         30, 1997)

10.11    Consulting Agreement effective as of August 14, 1997 between the
         Company and Star Casino Limited (incorporated herein by reference to
         Exhibit 10.11 to the Company's Form 10-K for the fiscal year ended June
         30, 1997)

10.12    Proposed form Pledge Agreement by and among the Company, Brian J.
         Bryce, Jasmine Trustees, Ltd., Jay M. Haft and James V. Stanton
         (incorporated herein by reference to Exhibit 10.12 to the Company's
         Form 10-K for the fiscal year ended June 30, 1997)

10.13    Hotel Management Agreement dated as of October 2, 1997 between the
         Company and Dorsett Hotels and Resorts International Ltd. (incorporated
         herein by reference to Exhibit 10.13 to the Company's Form 10-K for the
         fiscal year ended June 30, 1997)

10.15    Heads of Agreement dated October 3, 1997 between the Company and
         Parbhoe's Handelmij N.V. (incorporated herein by reference to Exhibit
         10.15 to the Company's Form 10-K for the fiscal year ended June 30,
         1997)

10.16    Agreement of Ownership Structure in the Sakhalin Palace Resort Project
         dated as of June 25, 1999 between the Company, Arter Capital Ltd. And
         Valmet S.A. (filed herewith)

                                                         73

<PAGE>

16.1     Letter regarding change in certifying accountant (incorporated herein
         by reference to the Company's Form 8-K dated December 18, 1997 and Form
         8-K dated June 16, 1998)

16.2     Letter regarding change in certifying accountant (incorporated herein
         by reference to the Company's Form 8-K dated July 23, 1999 and Form 8-K
         dated October 13, 1999



                                       74

<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                 CCA COMPANIES INCORPORATED

                                                  /s/  Miles R. Greenberg
                                                 -----------------------------
                                                       Miles R. Greenberg

Date: September 21, 2001

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
in the capacities and on the dates indicated.

Signature                           Title                  Date
---------                           -------                -----
Dallas R. Dempster    Officer and President
                      Chief Executive Officer,
                      Chief Operating Officer
                      and President (Principal
                      Executive Officer), Director         September 21, 2001

James V. Stanton      Vice Chairman and Director           September 21, 2001

Miles R. Greenberg    Chief Financial Officer
                      (Principal Financial
                      Officer Chief Accounting
                      Officer)                             September 21, 2001



                                       75

<PAGE>


                           CCA COMPANIES INCORPORATED

                                    CONTENTS

<TABLE>
<S>                                                                                               <C>
                                                                                                        PAGE

Independent Auditors Report....................................................................          F-2

Consolidated Balance Sheets as of June 30, 2001 and 2000.......................................          F-3

Consolidated Statements of Operations for the years ended June 30, 2001,
 2000 and 1999.................................................................................          F-4

Consolidated Statements of Stockholders' Equity for the years ended
 June 30, 2001, 2000 and 1999..................................................................          F-5

Consolidated Statements of Cash Flows for the years ended
 June 30, 2001, 2000 and 1999..................................................................          F-8

Notes to Consolidated Financial Statements.....................................................         F-11




                                      F-1
</TABLE>




<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
of CCA Companies Incorporated


We have audited the accompanying consolidated balance sheets of CCA Companies
Incorporated (a Delaware corporation) and subsidiaries as of June 30, 2001 and
2000, and the related consolidated statements of income, retained earnings, and
cash flows for the years ended June 30, 2001, 2000 and 1999. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CCA Companies
Incorporated and subsidiaries as of June 30, 2001 and 2000, and the results of
their operations and their cash flows for the year ended June 30, 2001, 2000 and
1999 in conformity with accounting principles generally accepted in the United
States of America.

SPEAR SAFER HARMON & CO.

Miami, Florida
September 7, 2001


                                      F-2


<PAGE>

<TABLE>
<CAPTION>

                                          CCA COMPANIES INCORPORATED

                                         Consolidated Balance Sheets

                                          June 30, 2001 and 2000


                                              A S S E T S

                                                         2001                        2000
                                                  -----------------            -----------------
<S>                                               <C>                         <C>

Current Assets:
   Cash and cash equivalents                      $         701,873           $          215,559
   Prepaid and other current assets                          76,362                       65,788
   Notes receivable - EMSI                                  342,000                           -
                                                  -----------------            -----------------

         Total Current Assets                             1,120,235                      281,347

Property, equipment and leasehold
 improvements, net                                        4,745,197                    5,489,279
Sakhalin development costs                                2,100,000                    2,100,000
Other assets                                                 39,447                       20,300
                                                  -----------------           ------------------

                                                  $       8,004,879           $        7,890,926
                                                  =================           ==================

                           LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable                               $         218,533           $          440,048
   Accrued expenses                                         582,791                      406,755
   Income tax payable                                       162,000                      144,650
   Notes payable                                            130,800                      335,000
   Investor deposits  and other                             367,000                       94,000
                                                  -----------------           ------------------

         Total Current Liabilities                        1,461,124                    1,420,453
                                                  -----------------           ------------------

Long-term notes payable                                     515,900                      515,900
                                                  -----------------           ------------------

Deferred income taxes                                       287,884                      192,884
                                                  -----------------           ------------------

Minority interest in consolidated subsidiary                984,429                      671,482
                                                  -----------------           ------------------

Stockholders' Equity:
   Preferred stock                                               -                            -
   Common stock                                              18,141                       16,328
   Additional paid-in capital                            47,680,676                   47,497,489
   Accumulated deficit                                  (42,943,275)                 (42,423,610)
                                                  -----------------           ------------------

         Total Stockholders' Equity                       4,755,542                    5,090,207
                                                  -----------------           ------------------

                                                  $       8,004,879           $        7,890,926
                                                  =================           ==================

</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-3

<PAGE>

<TABLE>
<CAPTION>

                                                CCA COMPANIES INCORPORATED

                                           Consolidated Statements of Operations


                                                Year Ended              Year Ended               Year Ended
                                               June 30, 2001           June 30, 2000            June 30, 1999
                                              ---------------       ----------------          ---------------
<S>                                           <C>                   <C>                       <C>

Casino Revenues                               $     5,489,191        $     6,981,758           $     5,534,249
                                              ---------------        ---------------           ---------------
Operating Expenses:
   Marketing and promotional                          332,730                333,500                   360,572
   General and administrative                       4,884,614              6,415,452                 7,566,040
   Compensation paid by the issuance of
    stock options and warrants                         13,000                 10,000                   783,000
                                              ---------------        ---------------           ---------------

         Total Operating Expenses                   5,230,344              6,758,952                 8,709,612
                                              ---------------        ---------------           ---------------

Income (Loss) from Operations                         258,847                222,806                (3,175,363)
                                              ---------------        ---------------           ---------------

Other Income (Expense):
   Write-down of assets                                    -             (13,857,192)                 (609,833)
   Interest income                                      1,862                  5,658                    11,114
   Interest expense                                  (198,330)              (423,630)                 (445,105)
                                              ---------------        ---------------           ---------------

         Total Other Income (Expense)                (196,468)           (14,275,164)               (1,043,824)
                                              ---------------        ---------------           ---------------

Foreign Income Taxes                                 (269,097)              (552,625)                       -
                                              ---------------        ---------------           ---------------

Loss from Continuing Operations Before
  Minority Interest                                  (206,718)           (14,604,983)               (4,219,187)

Minority Interest                                    (312,947)              (582,204)                  (89,278)
                                              ---------------        ---------------           ---------------

Loss from Continued Operations                       (519,665)           (15,187,187)               (4,308,465)
                                              ---------------        ---------------           ---------------

Income (Loss) from Discontinued Operations:
   Food, net                                               -                 (64,500)                 (425,175)
   Hotel Management, net                                   -                 (87,623)                  141,550
                                              ---------------        ---------------           ---------------
                                                           -                (152,123)                 (283,625)
                                              ---------------        ---------------           ---------------

Net Loss                                      $      (519,665)          $(15,339,310)          $    (4,592,090)
                                              ===============           ============           ===============

Loss per Share of Common Stock:
   Basic and Diluted:
     Loss from continuing operations          $         (0.03)       $         (1.01)          $         (0.34)
     Loss from discontinued operations                     -                   (0.01)                    (0.02)
                                              ---------------        ---------------           ---------------
Net Loss
                                              $         (0.03)       $         (1.02)          $          (.36)
                                              ===============        ===============           ===============

Weighted Average Number of Common
   Shares Outstanding                              17,260,511             15,234,405                12,607,037
                                              ===============        ===============           ===============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4

<PAGE>


<TABLE>
<CAPTION>
                                                   CCA COMPANIES INCORPORATED
                                        Consolidated Statements of Stockholders' Equity



                                               Common Stock
                                              Par Value $.001
                                         ---------------------------
                                                                      Additional        Junior
                                                                       Paid-In        Preferred      Accumulated
                                           Shares         Amount       Capital          Stock          Deficit          Total
                                        -----------    -----------   ------------    ------------  --------------  -------------
<S>                                     <C>           <C>           <C>             <C>           <C>             <C>
Balance - June 30, 1998                  11,996,048    $    11,997   $ 44,806,570    $         -   $(22,492,210)   $  22,326,357

Cancellation of shares issued to FEC at
   $1.50 per share                         (700,000)          (700)    (1,049,300)             -              -       (1,050,000)
Sale of common stock                      2,053,201          2,053      1,674,547              -              -        1,676,600
Issuance of common stock in
   consideration for the acquisition
   of Roulette                               17,857             18        124,982              -              -          125,000
Issuance of additional stock, per
   Roulette agreement, to compensate
   for fall in stock price                  116,813            117           (117)             -              -                -
Issuance of shares in exchange for
   services in acquisition of Roulette        7,143              7         49,993              -              -           50,000
Issuance of shares in exchange for
   construction services in Suriname         89,000             89        200,161              -              -          200,250
Issuance of common stock in
   consideration for the acquisition
   of food technology                       127,877            128           (128)             -              -                -
Exercise of options at $0.50 per share        7,000              7          3,493              -              -            3,500
Consulting services to Sakhalin project
   paid by the Issuance of shares           300,000            300        224,700              -              -          225,000
Non-employee directors compensated by
   the issuance of options                        -              -        233,000              -              -          233,000
Compensation charges incurred by
   reducing the exercise price of 1,462,500
   options and  warrants granted to
   directors and others                           -              -        550,000              -              -          550,000
Consulting  services paid by the
   issuance of warrants                           -              -         75,000              -              -           75,000
Cancellation of Junior Preferred Stock
   (one share outstanding in 1998)                -              -              -              -              -                -
Net loss for 1999                                 -              -              -              -     (4,592,090)      (4,592,090)
                                        -----------    -----------   ------------    -----------   ------------    -------------

Balance - June 30, 1999                  14,014,939         14,016     46,892,901              -    (27,084,300)      19,822,617

</TABLE>

See accompanying notes to consolidated financial statements.


                                       F-5

<PAGE>


<TABLE>
<CAPTION>
                                                  CCA COMPANIES INCORPORATED
                                 Consolidated Statements of Stockholders' Equity (Continued)



                                               Common Stock
                                              Par Value $.001
                                         ---------------------------
                                                                      Additional        Junior
                                                                       Paid-In        Preferred      Accumulated
                                           Shares         Amount       Capital          Stock          Deficit          Total
                                        -----------    -----------   ------------    ------------  --------------  -------------
<S>                                     <C>           <C>           <C>             <C>           <C>             <C>
Balance - June 30, 1999                  14,014,939    $    14,016   $  46,892,901   $         -   $(27,084,300)   $  19,822,617

Issuance of common stock to consultant
   as bonus per contract                    250,000            250          24,750             -              -           25,000
Issuance of shares upon conversion of
   principal and interest of loan
   from Danville                          1,481,060          1,481         194,019             -              -          195,500
Issuance of shares in consideration for
   legal services                           150,000            150          19,850             -              -           20,000
Issuance of shares to consultant
   for services                             264,000            264          65,736             -              -           66,000
Sale of common stock at $0.75 per share     166,667            167         124,833             -              -          125,000
Repricing of warrants and options                 -              -          20,000             -              -           20,000
Warrants issued in connection with debt           -              -         155,400             -              -          155,400
Net loss for 2000                                 -              -               -             -    (15,339,310)     (15,339,310)
                                        -----------    -----------   -------------   -----------   ------------    -------------

Balance - June 30, 2000                  16,326,666    $    16,328   $  47,497,489   $         -   $(42,423,610)   $   5,090,207
                                        ===========    ===========   =============   ===========   ============    =============

</TABLE>

See accompanying notes to consolidated financial statements.

                                       F-6



<PAGE>


<TABLE>
<CAPTION>
                                                      CCA COMPANIES INCORPORATED
                                     Consolidated Statements of Stockholders' Equity (Continued)



                                               Common Stock
                                              Par Value $.001
                                         ---------------------------
                                                                      Additional        Junior
                                                                       Paid-In        Preferred      Accumulated
                                           Shares         Amount       Capital          Stock          Deficit          Total
                                        -----------    -----------   ------------    ------------  --------------  -------------
<S>                                     <C>           <C>           <C>             <C>           <C>             <C>
Balance - June 30, 2000                  16,326,666    $    16,328   $  47,497,489   $         -   $(42,423,610)   $   5,090,207

Issuance of shares to consultant
  for services                              480,000            480          71,520             -             -            72,000

Sale of common stock at $.075 per share   1,333,334          1,333          98,667             -             -           100,000

Repricing of warrants and options                -              -           13,000             -             -            13,000

Net loss for 2001                                -              -               -              -       (519,665)        (519,665)
                                        -----------    -----------   -------------   -----------   ------------    -------------

Balance - June 30, 2001                  18,140,000    $    18,141   $  47,680,676   $        -    $(42,943,275)   $   4,755,542
                                        ===========    ===========   =============   ===========   ============    =============

</TABLE>


See accompanying notes to consolidated financial statements.


                                       F-7


<PAGE>


<TABLE>
<CAPTION>
                                                      CCA COMPANIES INCORPORATED
                                                 Consolidated Statements of Cash Flows



                                                                  Year Ended            Year Ended                Year Ended
                                                                June 30, 2001          June 30, 2000             June 30, 1999
                                                               ---------------        ---------------          ----------------

Operating Activities:
<S>                                                            <C>                    <C>                      <C>
   Net loss                                                    $      (519,665)       $   (15,339,310)         $     (4,592,090)
                                                               ---------------        ---------------          ----------------
   Adjustments to reconcile net loss to net cash used
    in operating activities, net of effect of
    acquisition:
     Loss from discontinued operations                                      -                 152,123                   283,625
     Minority interest                                                 312,947                582,204                    89,278
     Compensation paid by the issuance of
      stock options and warrants                                        13,000                 20,000                   783,000
     Write-down of assets                                                   -              13,857,192                   609,833
     Depreciation and amortization                                     770,478                784,462                   499,494
     Interest accrued treated as
      contribution to capital                                               -                  10,500                        -
     Legal services provided by shareholder                                 -                  20,000                   114,619
     Consulting services provided for common stock                      72,000                 91,000                    75,000
     Amortization of goodwill                                               -                 351,475                   351,475
     Deferred income taxes                                              95,000                192,884                        -
     Changes in current assets and liabilities:
     Accounts receivable                                                    -                  18,000                   (12,875)
     Prepaid expenses and other current assets                         (10,574)                99,474                   348,017
     Accounts payable and accrued  expenses                            (28,129)              (432,467)                  (60,539)
                                                               ---------------        ---------------          ----------------

         Total Adjustments                                           1,224,722             15,746,847                 3,080,927
                                                               ---------------        ---------------          ----------------

Net Cash Provided (used) by Continuing Operations                      705,057                407,537                (1,511,163)

Net Cash Used by Discontinued Operations                               (57,000)              (261,396)                 (355,322)
                                                               ---------------        ---------------          ----------------

Net Cash Provided (Used) by Operating Activities                       648,057                146,141                (1,866,485)
                                                               ---------------        ---------------          ----------------

Investing Activities:
   Property, equipment and leasehold
    improvements                                                       (26,396)              (142,602)               (3,642,111)
   Deposits on assets                                                       -                (115,208)                       -
   Project development costs and other                                 (19,147)              (305,000)                  (42,813)
   Construction finance costs and other                                     -                  (9,734)                 (313,364)
   Funds (used for) applied against
    loans and notes receivable                                        (342,000)                    -                     57,252
                                                               ---------------        ---------------          ----------------

Net Cash Used for Continued Operations                                (387,543)              (572,544)               (3,941,036)

Net Cash Provided (Used) for
 Discontinued Operations                                                    -                      -                  1,810,000
                                                               ---------------        ---------------          ----------------

Net Cash Used in Investing Activities                                 (387,543)              (572,544)               (2,131,036)
                                                               ---------------        ---------------          ----------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       F-8




<PAGE>


<TABLE>
<CAPTION>
                                                      CCA COMPANIES INCORPORATED
                                           Consolidated Statements of Cash Flows (Continued)




                                                                 Year Ended             Year Ended                Year Ended
                                                                June 30, 2001          June 30, 2000             June 30, 1999
                                                               ---------------        ---------------           ---------------


Financing Activities:
<S>                                                            <C>                 <C>                          <C>
   Warrants issued for debt                                    $            -      $          155,400           $    -
   Investor deposits                                                   330,000                      -                        -
   Proceeds from sale of common stock                                  100,000                310,000                 1,603,500
   Cash advance to (repayment by)
     Suriname Casino                                                        -                 (50,000)                   50,000
   Borrowings                                                          142,767                800,000                 2,426,600
   Repayments of notes payable                                        (346,967)              (999,100)               (1,250,000)
                                                               ---------------        ---------------           ---------------

Net Cash Provided by Financing Activities                              225,800                216,300                 2,830,100
                                                               ---------------        ---------------           ---------------

Net Increase (Decrease) in Cash and
 Cash Equivalents                                                      486,314               (210,103)               (1,167,421)

Cash and Cash Equivalents, Beginning of Year                           215,559                425,662                 1,593,083
                                                               ---------------        ---------------           ---------------

Cash and Cash Equivalents, End of Year                         $       701,873        $       215,559           $       425,662
                                                               ===============        ===============           ===============

</TABLE>

See accompanying notes to consolidated financial statements.


                                       F-9


<PAGE>


<TABLE>
<CAPTION>
                                                      CCA COMPANIES INCORPORATED
                                           Consolidated Statements of Cash Flows (Continued)




                                                                 Year Ended             Year Ended                Year Ended
                                                                June 30, 2001          June 30, 2000             June 30, 1999
                                                               ---------------        ---------------           ---------------

<S>                                                             <C>                    <C>                     <C>
Supplemental Disclosures of Cash Flow
  Information:
     Cash paid during the period for:
       Interest                                                 $       34,546         $       375,817         $       325,778
       Foreign income tax                                              156,748                 200,384                      -
     Non-cash transactions:
       Issuance of common stock in order to
         secure convertible debt                                            -                       -                   76,600
       Issuance of common stock to consultants
           for services                                                 72,000                  91,000                 225,000
       Issuance of common stock in consideration
         for the investment in Roulette                                     -                       -                  175,000
       Issuance of common stock to construction
        contractor of Suriname Casino                                       -                       -                  200,250
       Cancellation of common stock as part of
         termination of the Hotel Management
         Agreements                                                         -                       -               (1,050,000)
       Shares from debt conversion                                          -                  195,500                      -
       Compensation charges incurred on reducing
        exercise price of options and warrants
        granted to directors and others                                 13,000                  20,000                 550,000
       Issuance of warrants for consulting services                         -                       -                   75,000
       Non-employee directors compensated by
        issuance of options                                                 -                       -                  233,000
       Issuance of shares in consideration for
        legal services                                                      -                   20,000                      -


</TABLE>



See accompanying notes to consolidated financial statements.


                                       F-10


<PAGE>


                           CCA COMPANIES INCORPORATED

                   Notes to Consolidated Financial Statements

                    Years Ended June 30, 2001, 2000 and 1999


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              Subsidiaries - The consolidated financial statements include the
              accounts of the Company and its subsidiaries. The active
              subsidiaries are Suriname Leisure Company A.V.V. ("SLC") based and
              operating in Suriname and Dorsett Hotel & Resorts Inc. ("Dorsett")
              based and operating in the United States. Sakhalin General Trading
              and Investments Ltd. ("SGTI"), based in Cyprus, and Sakhalin City
              Center Ltd. ("SCC"), based in the Russian Federation, are
              relatively dormant and will only commence significant activities
              upon attaining adequate financing. The inactive subsidiaries are
              Dorsett Hotels and Resort International (m) Snd. Bhd. ("DHRI")
              based in Malaysia and Roulette Kft. ("Roulette") (majority
              shareholding disposed of in December 1998) based in Hungary.

              Nature of Operations - The Company's principal line of operation
              is to provide gaming services through the ownership and management
              of a Casino in Suriname. The Company presently relies entirely
              (except for occasional debt and equity offerings) on the working
              capital generated in Suriname to finance its activities. In
              addition, the Company is in the planning and design stage relating
              to a Casino and mountain resort project on Sakhalin Island.

              Principles of Consolidation - The accompanying consolidated
              financial statements include the accounts of CCA and its
              subsidiaries (collectively, the "Company"). Accounts of Roulette
              have been consolidated from the date of acquisition to the date on
              which CCA disposed of its majority interest, December 1998.
              Inter-company transactions and balances have been eliminated in
              consolidation.

              SCC is currently generating losses and the minority shareholders
              are not obligated to fund these losses. Accordingly, minority
              interest held in SCC is not reflected in the financial statements.

              Casino Revenue - Casino revenue is the net win from gaming
              activities, which is the difference between gaming wins and
              losses.

              Cash and Cash Equivalents - The Company considers investments with
              original maturities of three months or less at the time of
              purchase to be cash equivalents. At times, cash balances in the
              Company's bank accounts in the United States may exceed federally
              insured limits. The Company is required contractually to set aside
              2% of the annual revenues of SLC in a segregated bank account to
              fund the cost of future tangible property replacements. At June
              30, 2001, cash set aside for replacements net of expenditures
              amounted to approximately $59,000.


                                      F-11

<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              Use of Estimates in the Preparation of Financial Statements - 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 and 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.

              Financial Instruments - The carrying amounts of financial
              instruments including loans receivable, accounts receivable,
              accounts payable and debt approximate fair value.

              Excess Cost over Fair Value of Assets Acquired - The Company
              reviews the recoverability of the excess cost over the fair value
              of assets acquired on an on going basis. Accordingly, the Company
              determined in the fiscal year 2000 that recoverability of goodwill
              associated with the SGTI assets acquired was doubtful and
              accordingly, the unamortized balance was written off. (See Note 2)

              Property, Equipment and Leasehold - Property and equipment are
              recorded at cost. Depreciation and amortization is computed by the
              straight-line method based on the estimated useful lives (3 - 5
              years) of the related assets. Leasehold improvements are amortized
              over the shorter of the life of the asset or the lease.

              Advertising Costs - Costs incurred to produce marketing material
              or advertise are generally expensed when incurred.

              Income Taxes - For the purpose of these financial statements the
              Company has adopted the provisions of SFAS No. 109, "Accounting
              for Income Taxes" for all periods presented. Under the asset and
              liability method of SFAS 109, deferred taxes are recognized for
              differences between financial statement and income tax bases of
              assets and liabilities.

              Stockholders Equity - The stockholder equity consists of
              accumulated deficit, additional paid in capital, preferred stock
              and common stock. In 2001 and 2000, the Company was authorized to
              issue 5,000,000 shares of preferred stock with a par value of
              $.01. Specific powers, preferences, rights, qualifications,
              limitations and restrictions are to be designated by the Company's
              Board of Directors at the time of issuance. At 2001 and 2000,
              there were no shares of preferred stock issued. In 2001 and 2000,
              the Company was authorized to issue 50,000,000 shares of common
              stock with a par value $.001. In 2001, there were 18,140,000
              common shares issued and in 2000, there were 16,326,666 common
              shares issued.

              Stock Based Compensation - SFAS No. 123, "Accounting for Stock
              Based Compensation" establishes a fair value method for accounting
              for stock-based compensation plans either through recognition or
              disclosure. The Company did not adopt the fair value based method
              for employees but instead discloses the pro forma effects of the
              calculation required by the statement. (See Note 10)


                                      F-12

<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              Impairment of Long-Lived Assets - The Company utilizes SFAS No.
              121, "Accounting for the Impairment of Long-Lived Assets and for
              Long-Lived Assets to be Disposed of". Under the provisions of this
              statement, the Company has evaluated its long-lived assets for
              financial impairment, and will continue to evaluate them as events
              or changes in circumstances indicate that the carrying amount of
              such assets may not be fully recoverable.

              The Company evaluates the recoverability of long-lived assets by
              measuring the carrying amount of the assets against the estimated
              undiscounted future cash flows associated with them. At the time
              such evaluations indicate that the future undiscounted cash flows
              of the Long-lived assets are not sufficient to recover the
              carrying value of such assets, the assets are adjusted to their
              fair values.

              The Company recorded charges of approximately $610,000 for the
              year ended June 30, 1999 relating to Roulette and $305,000 for
              costs of a management contract for the Ramallah Project (see Note
              2). For the year ended June 30, 2000, the Company recorded charges
              of approximately $13,552,000 relating to SGTI and SCC (see Note 2)
              as a result of a financial impairment of several of its long-lived
              assets.

              Earnings Per Share - Basic net loss per share of common stock is
              based on the weighted average number of common shares outstanding
              during each period. Diluted loss per share of common stock is
              computed on the basis of the weighted average number of common
              shares and common shares equivalent securities outstanding.
              Securities having an anti-dilutive effect are excluded from the
              calculation.

              The weighted average number of common shares outstanding for all
              periods presented retroactively reflects stock splits and reverse
              stock splits effected by the Company.

              Options amounting to 3,852,500 for the year ended June 30, 2001,
              4,934,619 for the year ended June 30, 2000 and 4,062,619 for the
              year ended June 30, 1999 and warrants amounting to 4,624,013 for
              the year ended June 30, 2001, 5,369,013 for the year ended June
              30, 2000 and 3,819,012 for the year ended June 30, 1999 have not
              been included in the computation of net loss per common
              stock-diluted because of their anti-dilutive effect.

              Foreign Currency Translation - The statutory currencies in the
              countries in which the Company's subsidiaries are based are the
              Cyprus Pound, the Russian Ruble, the Malaysian Ringgit, the United
              States Dollar, the Suriname Guilder and the Hungarian Forints. The
              reporting currency is the U.S. Dollar.

                                      F-13
<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              The functional currency for The Company's subsidiaries, SGTI and
              SLC, is the United States Dollar. All assets and liabilities,
              materially all contracts, transactions and normal business
              activities have been transacted, conducted, negotiated and
              recorded in U.S. Dollars. It is the Company's position that the
              operations of the Company are not integrally connected to the
              currencies of Cyprus and Suriname. Pursuant to Financial
              Accounting Standards Board Statement No. 52, "Foreign Currency
              Translation" (FAS 52), the Company's Russian subsidiary, SCC, is
              situated in a highly inflationary economy. Accordingly, SCC's
              functional currency will be the U.S. Dollar.

              RECENT PRONOUNCEMENTS

              In June 1998, the Financial Accounting Standards Board ("FASB")
              issued Statement of Financial Accounting Standards ("SFAS") No.
              133, "Accounting for Derivative Instruments and Hedging
              Activities" ("SFAS 133"). SFAS 133 requires the recognition of the
              fair value of all derivative instruments on the balance sheet.
              Subsequent to the issuance of SFAS 133, the FASB received many
              requests to clarify certain issues causing difficulties in
              implementation. In June 2000, the FASB issued SFAS 138, which
              responds to those requests by amending certain provisions of SFAS
              133. These amendments include allowing foreign-currency exposures
              that reduce the need for third-party derivatives and redefining
              the nature of interest rate risk to avoid sources of
              ineffectiveness. The impact on the Company's financial statements
              of adopting SFAS 133, as amended by SFAS 138, is not significant.

              In October 1998, the FASB issued Statement of Financial Accounting
              Standards No. 134 "Accounting for Mortgage-Backed Securities
              Retained After the Securitization of Mortgage Loans Held for Sale
              by a Mortgage Banking Enterprise", which is effective for the
              first fiscal quarter beginning after December 15, 1998. There is
              no impact to the Company's financial reporting or presentation due
              to the adoption of SFAS No. 134.

              In February 1999, the FASB issued Statement of Financial
              Accounting Standards No. 135 "Recission of FASB Statement No. 75
              and Technical Corrections", which is effective for financial
              statements issued after February 15, 1999. The adoption of SFAS
              No. 135 does not materially impact the financial statements of the
              Company.

              In December 1999, the Securities and Exchange Commission issued
              Staff Accounting Bulletin 101, "Revenue Recognition in Financial
              Statements" ("SAB 101"). SAB 101 provides guidance on the
              recognition, presentation and disclosure of revenues in financial
              statements and requires adoption no later than the fourth quarter
              of fiscal 2001. The Company's financial reporting or presentation
              is not materially affected by the adoption of SAB 101.

              In March 2000, the FASB issued FASB Interpretation 44, (Accounting
              For Certain Transactions Involving Stock Compensation - An
              interpretation of APB 25), which was effective July 1, 2000. FASB
              Interpretation 44 did not have any material impact on the
              Company's financial statements.

                                      F-14
<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              In September 2000, the FASB issued SFAS No. 140, "Accounting for
              Transfers and Servicing of Financial Assets and Extinguishments of
              Liabilities - A Replacement of FASB No. 125". This statement
              provides accounting and reporting standards for transfers and
              servicing of financial assets and extinguishments of liabilities.
              Under these standards, after a transfer of financial assets, an
              entity recognizes the financial and servicing assets it controls
              and the liabilities it has incurred, derecognizes financial assets
              when control has been surrendered, and derecognizes liabilities
              when extinguished. This statement provides consistent standards
              for distinguishing transfers of financial assets that are sales
              from transfers that are secured borrowings. This statement is
              effective for transfers and servicing of financial assets and
              extinguishments of liabilities occurring after March 31, 2001. The
              Company does not expect that the adoption of SFAS No. 140 will
              have a material impact on its results of operations, financial
              position or cash flows.

              In June 2001, the FASB issued SFAS No. 141, SFAS No. 142 and SFAS
              No. 143. SFAS No. 141, "Business Combinations" is effective for
              all business combinations initiated after June 30, 2001 and
              addresses the financial accounting and reporting for business
              combinations. SFAS 141 supersedes APB Opinion No. 16, Business
              Combinations, and FASB Statement No. 38 Accounting for
              Preacquisition Contingencies of Purchased Enterprises. The
              Company's financial reporting or presentation is not materially
              affected by the adoption of SFAS 141.

              SFAS No 142, "Goodwill and Other Intangible Assets" addresses the
              financial accounting and reporting for acquired goodwill and other
              intangible assets and supersedes APB Opinion No. 17, Intangible
              Assets. SFAS No. 142 is required to be applied for fiscal years
              beginning after December 15, 2001.

              SFAS No. 143, "Accounting for Asset Retirement Obligations"
              addresses the financial accounting and reporting for obligations
              associated with the retirement of tangible long-lived assets and
              the associated asset retirement costs. SFAS No. 143 is effective
              for financial statements issued for fiscal years beginning after
              June 15, 2002.

              The Company's financial reporting and presentation is not
              expected to be materially affected by the adoption of SFAS
              No. 142 and 143.

              Reclassifications - Certain prior year balances have been
              reclassified to conform to the 2001 presentation.

                                      F-15
<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 2 - LINES OF BUSINESS

              THE SURINAME CASINO AND THE CASINO LEASE

              The Company is a party to an agreement (the "Suriname Casino
              Agreement") with Parbhoe Handelmij NV (Parbhoe), a Suriname
              limited liability company. Under the agreement the parties formed
              and each acquired a 50% interest in Suriname Leisure Company
              (SLC), an Aruban limited liability company to develop a casino
              project (the "Suriname Casino") in Paramaribo, the capital city of
              Suriname.

              Pursuant to the Suriname Casino Agreement, the Company's fully
              owned subsidiary Dorsett, entered into the "Suriname Casino
              Management Agreement" with SLC to manage the Suriname Casino. As
              of June 30, 1999, the Company had advanced approximately 4.6
              million dollars to SLC for this project, of which approximately
              4.0 million dollars was spent for property, equipment and
              leasehold improvements. The Company retains a lien and security
              interest in the property and equipment until the advance is paid
              back by SLC. Repayment is subject to certain restrictions based
              upon an obligation to repay a loan received from Parbhoe. (See
              Note 7) As of June 30, 2001 the amount due from SLC to CCA towards
              loans and interest costs approximated $ 2,192,357 all of which is
              eliminated in consolidation.

              The Suriname Casino Management Agreement provides for fifteen
              years exclusive operating rights of the Suriname Casino for a base
              fee equal to three percent of revenues, as defined, plus an
              incentive fee of ten percent of gross profits, as defined.

              Initially, commencing October 1998, the Company operated a small
              temporary casino. The Company moved into the permanent casino
              facility when it was completed in March 1999. The Suriname casino
              currently occupies two leased floors, totaling about 20,000 square
              feet, in the Plaza Hotel, which is in downtown Paramaribo. The
              casino has approximately 20 gaming tables, 161 slot machines and a
              50-seat restaurant.

              The Company leases the Casino premises from Parbhoe.  (See Note 9)

              SAKHALIN ISLAND (RUSSIAN FEDERATION) CASINO AND RESORT

              The Company currently owns rights and has secured property under a
              101-year lease, at no annual cost, on a ten acre site to build and
              operate a 140 million-dollar 450-room year round hotel/casino
              resort. The Company initially planned to have 70 tables and 350
              slot machines with the intent to add additional gaming equipment.
              The site is located in the center of the City of Yuzhno-Sakhalinsk
              ("City") on Sakhalin Island (the "Sakhalin Project"). Sakhalin
              Island is a Russian territory located just north of Japan. This
              proposed hotel/casino, if built, would be easily accessible for
              gaming activities from Japan, China, Korea, and the Russian
              mainland. Further development was planned at a nearby ski
              mountain. The Company will manage both the hotel resort and the
              casino for a management fee equal to 3% of revenues, as defined,
              as well as an incentive fee of 10% of gross profits.

                                      F-16
<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 2 - LINES OF BUSINESS (CONTINUED)

              The Company has entered into numerous discussions and several
              agreements in attempts to raise capital to finance the Sakhalin
              Project without success. In 2000, due to the Company's failure to
              proceed and based on its evaluation of assets for financial
              impairment as required by SFAS No. 121, certain capitalized
              expenditures and goodwill (the excess of the aggregate purchase
              price over the fair market value of net assets acquired), net of
              amortization, totaling approximately $13,552,000 were written
              down. (See Note 1).

              The Company believes that its outlay to secure the lease with the
              City for the land and an existing ski resort and the money
              expended principally for demolition and the relocation of the
              residents living on the site has not been financially impaired.
              Accordingly, approximately $2,100,000 expended in connection with
              the lease and demolition remains on the Company's accounts.

              In addition to granting the lease, the City has committed
              contractually that it will not permit the several small existing
              casinos to increase their floor areas or extend the range of their
              operations without the written approval of SCC. The Company will
              also have certain rights to participate in the development and
              management of any future casinos within the jurisdiction of the
              City.

              The Sakhalin Agreement provides that, upon request of the Company,
              Sovereign may agree to become project manager during the
              construction phase of the Sakhalin project, subject to reasonable
              compensation for such services, which shall not exceed the lesser
              of 5% of the construction cost of the Sakhalin Project or
              $5,000,000. Subsequent to the Sakhalin agreement, Mr. Dallas
              Dempster ("Dempster"), a paid consultant to Sovereign, was
              recruited to be the President and Chief Executive Officer ("CEO")
              of CCA. Accordingly, it is the Company's current intent not to
              employ Sovereign and to manage the construction phase of the
              Sakhalin project directly.

              In October 1997, the Company entered into an agreement (the
              "Development Services Agreement") with Mr. David Chiu ("Chiu") for
              certain development services to be performed, including using his
              best efforts to secure the necessary debt financing and guarantees
              for the complete turnkey construction of the Sakhalin Project. The
              Development Service Agreement expired in August 1998 without Chiu
              rendering any services.

              In September 1998, the Company entered into a letter of intent
              with JSC Rosneftegazstroy ("RNGS"), a large Russian construction
              company. The letter of intent was aimed at RNGS guaranteeing the
              financing of a turnkey construction contract on Sakhalin Project
              and acting as a subcontractor. The Company and RNGS never
              contractually acted on the letter of intent and it subsequently
              was abandoned.

              In June 1999, the Company entered into an agreement ("Financing
              Agreement") with the Arter Group Limited ("Arter") and Valmet S.A.
              ("Valmet") (See Notes 4 and 8). According to the agreement, Arter
              and Valmet will negotiate on the Company's behalf to acquire
              financing of 70% of the Sakhalin Project's total estimated cost.

                                      F-17
<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 2 - LINES OF BUSINESS (CONTINUED)

              In March 2001, as permitted by agreement, the Company notified
              Arter and Valmet that, effective in May 2001, it was electing to
              cancel the Financing Agreement.

              The Sakhalin Project requires substantial financing to progress
              further. If financing is not obtained, the Company may be forced
              to abandon the project. If the Company is forced to abandon the
              project, the Company will attempt to market the plans, licenses
              and rights in order to recover as much of the historic
              expenditures as possible. The Company is unable at this time to
              quantify what recoveries it will attain, if any. In 2001, the
              Company continues to explore additional possibilities to protect
              its investment but has, to date, found no viable answer.

              If the Company is successful in financing the Sakhalin Project,
              the Company will have to design and set up infrastructure that is
              not currently in place. In addition, the Company will have to
              employ a significant number of people and retain consultants and
              contractors to manage, design and construct the property, which
              will require significant financial resources.

              HOTEL MANAGEMENT AGREEMENTS

              Under certain agreements with Dorsett Hotels and Resorts
              International Ltd. ("DHR) and Far East Consortium International
              Ltd. ("FEC"), the Company acquired the right to manage and operate
              three hotels that were in service and the right to manage and
              operate five other hotels that were scheduled to open in the
              future.

              The Company paid consideration of 3 million dollars in cash and
              promised to issue two million shares of the Company's common stock
              payable on a pro-rata basis on the assignment of the hotel
              operating contracts with each hotel. Subsequently, the Company
              issued 950,000 shares of its common stock on the assignment of
              contracts with three operating hotels with a total of
              approximately 1,200 rooms.

              Contrary to the terms of the Hotel Operating Contracts, the
              Company was not permitted to actively manage two of the Hotels. In
              addition, the Company was notified that the renovation and/or
              construction of the five hotels that were to be turned over to the
              Company in the future had been stopped and that the projects were
              being reviewed for financial efficacy.

              As a result of the failure to comply with the terms of the
              agreements, the parties reached a settlement in November 1998 to
              terminate the agreements and exchange mutual releases. According
              to the terms of the settlement, CCA received $450,000 in cash, the
              return of 950,000 shares of previously issued stock (with the
              obligation to reissue 250,000 shares to FEC) and retained
              management fees earned. In addition, Company indebtedness of one
              million dollars borrowed from FEC in July 1998 was canceled. (See
              Note 3 and 9)

                                      F-18
<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 2 - LINES OF BUSINESS (CONTINUED)

              BUDAPEST CASINO

              In September 1998 the Company purchased a 95% interest in the
              equity of Roulette, a Hungarian limited liability company that
              operated the Orfeum Casino in Budapest. In addition to a deposit
              of $100,000 paid toward the purchase and additional advances of
              $608,000 made prior to the closing, the Company delivered to the
              sellers 17,857 shares of the Company's common stock based on a
              value of $7.00 per share or $125,000 in total. In May 1999, as
              required by contract, the Company issued 116,813 additional shares
              of its common stock to make up for a shortfall in the value of the
              stock originally delivered due to a decline in the market value of
              the stock.

              For arranging the transaction, the Company paid a minority
              shareholder of Roulette a fee of $75,000 that was capitalized as
              part of the Company's investment.

              In December 1998, the Company entered into an agreement with
              A.G.M. International LTD ("AGM"). AGM is an Israeli junket
              operator experienced in organizing junket and premium casino
              player groups. AGM was given 50% of the ownership of Roulette by
              agreeing to pay the Company $100,000 at closing and to pay an
              additional $100,000 if Roulette was able to renew its gaming
              license, which was due to expire November 1999. The agreement also
              required AGM to fund $100,000 of additional operating capital
              needed in order to continue and $50,000 for general improvements.

              During 1999, the Hungarian Gaming Board decided to reduce the
              number of casino licenses that existed at that time. Roulette was
              unsuccessful in its bid to obtain one of the reduced numbers of
              gaming licenses available and was forced to close the casino at
              the end of October 1999.

              At June 30, 1999, the Company wrote off its entire investment in
              Roulette as delineated below:


                Investment in Roulette                        $       300,000
                Loans to Roulette                                     608,311
                                                              ---------------

                                                                      908,311
                Less:  Loss from the Roulette subsidiary             (298,478)
                                                              ---------------

                                                                      609,833
                Less:  Balance of investment written-off             (609,833)
                                                              ---------------

                                                              $            -
                                                               ==============


                                      F-19

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 2 - LINES OF BUSINESS (CONTINUED)

              RAMALLAH CASINO

              On March 24, 2000, Dorsett entered into a Casino Management
              Agreement (the "Ramallah Casino Agreement") with the Ramallah
              Hotel and Casino Company Ltd. to provide technical advice,
              developmental services and to manage a Casino in Ramallah on the
              West Bank. Subsequent to that time, acts of war, insurrection and
              riots have occurred on the West Bank and in Israel. As provided by
              the contracts, all obligations to proceed under the contract have
              been suspended while the disturbances exist. The Company incurred
              approximately $305,000 in costs associated with entering the
              Ramallah Casino Agreement that, based upon the circumstances, have
              been written-off. (See Note 1)

              BUSINESS, POLITICAL AND ECONOMIC CONDITIONS

              The Company's operating activities are taking place principally in
              Suriname. Suriname experienced within the last three years
              significant devaluation of its currency.

              CURRENCY EXCHANGE CONTROLS

              With regard to the activities taking place in Suriname, it is
              management's belief that it will be able to repatriate earnings
              without official impediments.

NOTE 3 - DISCONTINUED OPERATIONS

              FOOD PRESERVATION TECHNOLOGY

              In November 1999, the Company officially abandoned its food
              preservation business and, accordingly, has reflected all losses
              attributable to such business as discontinued operations. The
              assets of the food preservation business consisted principally of
              fully reserved loans to two companies, Agrotech and CPC. In
              addition, the Company does not plan to exercise its option to
              acquire a controlling equity interest in entities that possess
              other food preservation technologies.

              The results of operations of the food preservation business
              through June 30, 2000 that have been classified as a loss from
              discontinued operations are as follows:

                                                Year Ended June 30,
                                     ----------------------------------------
                                            2000                     1999
                                     ----------------         ---------------

              Revenues               $             -          $            -
              Costs and expenses               64,500                 425,175
                                     ----------------         ---------------

              Loss from Discontinued
                Operations           $         64,500         $       425,175
                                     ================         ===============

              All activities connected to the food preservation business ceased
              in 2000.

                                      F-20
<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 3 - DISCONTINUED OPERATIONS (CONTINUED)

              HOTEL MANAGEMENT

              As a result of the termination of the Hotel Management Agreements
              in November 1998 and the subsequent dismissal of the hotel
              management employees in April 1999, the Company had no active
              hotel management operating business. The Company discontinued this
              line of business and reflected the related income, assets and
              liabilities as discontinued operations.

              The results of operations of the hotel management business through
              June 30, 2000 that have been classified as a loss from
              discontinued operations are as follows:


                                                   Year Ended June 30,
                                       ---------------------------------------
                                             2000                    1999
                                        ----------------        ---------------

              Revenues                  $        363,301        $       639,741
              Costs and expenses                 221,751              6,198,247
                                        ----------------        ---------------

              Income (Loss) from
               Discontinued Operations  $        141,500        $    (5,558,506)
                                        ================        ===============


              Unforeseen litigation relating to discontinued operations occurred
              and required expenditures during the year ending June 30, 2000.
              The Company currently does not anticipate any further activity
              connected with discontinued operations. No tax benefit due to the
              loss from discontinued operations has been recorded due to the
              Company's uncertainty regarding future earnings to apply against
              these losses.


NOTE 4 - CAPITAL STRUCTURE, PUBLIC OFFERINGS AND PRIVATE PLACEMENTS

              In September 1998, the Company issued 89,000 shares of common
              stock to Maritime Services Corporation ("MSC"), the building
              contractor for the Suriname casino. These shares were issued at a
              price of $2.25 per share or $200,250, which MSC agreed to accept
              as consideration and payment towards its construction contract
              with SLC. (Notes 8 and 9)

              In January 1999, Stanton & Associates ("Stanton"), an entity
              controlled by one of the Company's directors, accepted 153,200
              shares at $0.50 per share of the Company's common stock against
              the principal and interest of $76,600 that it was owed. (See Notes
              7 and 8)

                                      F-21

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 4 - CAPITAL STRUCTURE, PUBLIC OFFERINGS AND PRIVATE PLACEMENTS
              (CONTINUED)

              During the year ended June 30, 1999, the Company received
              $1,676,600 from the sale of 2,053,200 shares of common stock to
              private investors. At the time of the sale of common stock, the
              Company issued warrants to purchase 1,280,334 shares of the
              Company's common stock exercisable for periods ranging from 1 to 4
              years and at exercise prices of $1.00. An additional 25,000
              warrants with an exercise period of one year and an exercise price
              of $2.00 per share were issued. All warrant exercise prices exceed
              the market value of the stock at the dates that they were issued.

              During the year ended June 30, 1999, the Company issued 300,000
              shares of its common stock at $0.75 per share to Valmet, a
              consultant, for services performed relating to the Sakhalin
              project. At the same time, the Company issued 150,000 two-year
              warrants to Valmet with an exercise price of $1 and valued at
              $25,000. (See Notes 2 and 8)

              In July and August 1999, the Company received $125,000 from two
              investors for the purchase of 166,667 shares of the Company's
              common stock at market value ($0.75 per share). In addition, the
              Company agreed to issue warrants to purchase 83,334 shares of the
              Company's common stock at $1.00 per share to these investors. The
              warrants can be exercised at any time and expire in two to three
              years from the issuance date. (Note 10)

              In October 1999, the Company obtained financing through a
              Convertible Note of $350,000 from Danville Investments Pty. Ltd.,
              Australia ("Danville"). During the term of the Note or until the
              full amount of the loan had been repaid, Danville had the option
              to convert the outstanding principal plus the then accrued
              interest due on the loan into shares of common stock of the
              Company. Such conversion would be at a price equal to the five-day
              average market closing price ending on the day prior to the day of
              conversion. Danville, in December 1999, exercised its option to
              convert $185,000 of the principal of the loan plus accrued
              interest of $10,500 into 1,481,060 shares of the Company's stock
              based on the five-day average stock price of $0.132 per share.
              (Notes 7 and 10)

              In November 1999, the Company, at its annual meeting of the
              stockholders, granted the Board of Directors the authority to
              affect a 1 for 10 reverse split of its common stock on or before
              March 28, 2000. The Board elected not to exercise its authority to
              affect the reverse split and the expiration date for the action
              passed.

              The Casino Consulting Agreement provided that, at the end of the
              term of the agreement, the Casino Consultant was entitled to
              receive a $250,000 bonus. Prior to that time, the Casino
              Consultant agreed to accept 250,000 shares of the Company's common
              stock in place of the $250,000 bonus due him. In December 1999,
              when the consulting contract expired, the stock was delivered
              (market price per share - $0.13). (See Note 8)

                                      F-22


<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 4 - CAPITAL STRUCTURE, PUBLIC OFFERINGS AND PRIVATE PLACEMENTS
              (CONTINUED)

              In January 2000, the Company's Board of Directors agreed to issue
              150,000 shares of the Company's common stock at $0.13 per share to
              one of its legal counsel for services rendered to the Company.

              In March 2000, the Company issued 264,000 shares of its common
              stock at $0.25 per share to a consultant, Michael Davis, in
              settlement for consulting fees and reimbursable business expenses.

              In October 2000, the board of Directors issued 480,000 shares to a
              consultant at a market price of $0.15 as a final settlement of
              consulting fees of $120,000 accrued but not paid. The difference
              was credited to consulting fees during the year June 30, 2000.
              (See Note 8)

              In January 2001, the Company issued 1,333,334 shares of common
              stock to Richard W. Devries, Professional Corporation, the
              attorney for EMSI, at a purchase price of $0.075 per share.


NOTE 5 -  PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

              At June 30, property, equipment and leasehold improvements consist
              of the following:

<TABLE>
<CAPTION>
                                                          2001                     2000
                                                    ---------------          ---------------

              <S>                                   <C>                      <C>
              Office equipment and other assets     $       369,136          $       391,477
              Casino and restaurant equipment             1,941,754                1,972,894
              Leasehold improvements                      4,458,152                4,426,767
              Sakhalin project site costs                 2,100,000                2,100,000
                                                    ---------------          ---------------

                                                          8,891,042                8,891,138

              Less:  Accumulated depreciation            (2,023,845)              (1,301,859)
                                                    ---------------          ---------------

                                                    $     6,845,197          $     7,589,279
                                                    ===============          ===============

</TABLE>

              Depreciation expense is $770,478 for the year ended June 30, 2001,
              $784,462 for the year ended June 30, 2000 and $499,494 for the
              year ended June 30, 1999.

                                      F-23

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 6 - INCOME TAXES

              CCA AND DORSETT

              At June 30, 2001, the CCA and Dorsett had United States net
              operating loss carryforwards ("NOL") of approximately $8,770,000
              that expire through 2017. In the event of a change in ownership of
              the Company, the utilization of the NOL will be subject to
              limitation under certain provisions of the United States Internal
              Revenue Code. In addition, at June 30, 2001, CCA and Dorsett had
              capital loss carryovers of approximately $5,595,000 which
              generally can only be used to offset capital gains. Unused capital
              losses are carried forward indefinitely until they can be used
              against future capital gains.

              CCA and Dorsett will be subject to corporate income tax rates
              as high as 40% if they produce a profit in the United States.

              DHRI AND ROULETTE

              The Company's subsidiaries DHRI and Roulette experienced
              substantial losses. DHRI and Roulette closed operations and
              liquidated their net assets and are currently dormant. The Company
              does not anticipate, at this time, any future earnings against
              which losses may be applied. Accordingly, the Company has not
              provided for deferred tax assets for DHRI and Roulette.

              SCC

              At June 30, 2001, the SCC had net operating loss carryforwards
              ("NOL") of approximately $5,008,000 that expire through 2007. The
              carryforward is limited to 20% of the loss per year for five
              consecutive years.

              SCC will be subject to Russian Corporate tax on taxable profits
              and gambling tax once the Sakhalin Project commences operations.
              Currently, the Federal profit tax is 11% and the regional tax can
              be as high as 19%. In addition, gambling tax is levied based on
              fixed rates per gambling table, betting booking office and slot
              machines.

              Repatriation of profits generated by SCC in the Russian Federation
              by CCA may be highly regulated by the Russian Central Bank and the
              Taxing Authority. Any transfers of funds to entities outside the
              Russian Federation require special authorization from the Central
              Bank and the payment of dividends are subject to heavy double
              taxation laws. The Company believes that once the Sakhalin Project
              commences operations, the Russian Central Bank and the Taxing
              Authority will make profit repatriation concessions available.


                                      F-24

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 6 - INCOME TAXES  (CONTINUED)

              SGTI

              SGTI, which holds the Company's investment in SCC, is incorporated
              in Cyprus. Companies that are registered in Cyprus but are managed
              and controlled outside of Cyprus are not liable for tax on income
              occurring, derived and received outside of the country.

              SURINAME CASINO

              In 1999, SLC requested that the Government of Suriname (the
              "Government") grant it certain concessions regarding the
              imposition of taxes and import duties under the Suriname
              Investment Act. To date the Government has not granted the Company
              any relief. The Company is continuing to pursue the concessions
              but feel that at this time, the chance of a favorable ruling is
              remote.

              In 2000, SLC has provided for income taxes payable to the
              Government based on a tax rate of 50% of the net taxable income
              since its inception based on the Suriname Hazard Games Act of
              1962. The Act states that income tax is levied at a rate of 50% of
              proceeds from the hazard games industry (which includes Casinos).
              SLC made no provisions for income tax or duties in the past based
              on opinions from Counsel regarding tax concessions that should
              have been granted. SLC is still pursuing tax incentives and
              entitlements that it believes according to Suriname law are
              available.

              In June 2000 the Suriname Government arbitrarily assessed and
              demanded that SLC pay $161,765 for the calendar year 1998 and
              $42,600 for the calendar year 1999 against tax and penalties that
              may be owed. Subsequently, the Government arbitrarily assessed an
              additional tax of $110,000 for the calendar year 2000. After the
              assessments were imposed, the Company submitted tax accountings to
              the Government documenting actual tax liability payable of
              approximately $375,000 based on no Suriname tax concessions being
              granted.

              Subsequent to June 2000, the Government of Suriname imposed import
              duties on the SLC's operating assets. SLC accrued and capitalized
              the amount assessed as of June 30, 2000 and is amortizing the
              balance over five years commencing retroactively as of April 1,
              1999. The Company is attempting to obtain an import duty waiver
              for the investment it made, from the Ministry of Finance in
              Suriname through its lawyer. However, it will be difficult to
              obtain a decision in the Company's favor due to the current
              economic conditions in Suriname.

              Further, the Ministry of Finance is trying to impose value-added
              tax ("VAT") on slot machines. Currently the Ministry of Finance
              has not completed their study and reporting to Suriname's
              Parliament on the issue. At this time the Company cannot quantify
              the amount payable, if any, for VAT on slot machines.


                                      F-25

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 6 - INCOME TAXES (CONTINUED)

              INCOME TAX PROVISION

<TABLE>
<CAPTION>
              The income tax provision consists of the following:

              <S>                                                               <C>
              Current                                                           $
                  U.S. Federal                                                              -
                  State and local                                                           -
                  International                                                          174,000
                                                                                ----------------

              Total current tax provision                                                174,000
                                                                                ----------------

              Deferred
                  U.S. Federal                                                              -
                  State and local                                                           -
                  International                                                           95,000
                                                                                ----------------

              Total provision for deferred income taxes                                   95,000
                                                                                ================

              Total provision for income taxes                                  $        269,000
                                                                                ================


<CAPTION>
              Items that give rise to deferred tax accounts on June 30, 2001
              follows:

              <S>                                                               <C>
              Deferred tax liabilities:
                Property, plant and equipment                                   $       (287,884)
                                                                                ----------------

              Deferred tax assets:
                United States loss carryforwards                                       3,508,000
                International (Russian) loss carryforwards                             1,502,000
                                                                                ----------------

              Net deferred tax asset before
                valuation allowances                                                   5,200,000
              Deferred tax asset valuation allowance                                   5,200,000
                                                                                ----------------

              Net deferred tax                                                  $       (287,884)
                                                                                ================

</TABLE>

              Realization of any portion of the Company's deferred tax asset at
              June 30, 2001 is dependent upon future earnings and capital gains.
              Due to the uncertainty of future earnings and capital gains,
              valuation allowances have been provided.

                                      F-26

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 6 - INCOME TAXES (CONTINUED)


              Cumulative undistributed earnings of foreign subsidiaries at June
              30, 2001 and 2000 of $964,000 and $760,000, respectively, are
              considered to be permanently reinvested and are not expected to be
              remitted to the Company. Accordingly, no Federal income or
              deferred taxes have been provided on such earnings.

NOTE 7 - NOTES PAYABLE

              In October of 1998, the Company borrowed $75,000 from Stanton &
              Associates through two Promissory Notes. Mr. James Stanton the
              owner of Stanton & Associates is also a director of the Company.
              The loan was subject to interest at the rate of 8% per annum and
              was payable along with accrued interest in a lump sum in January
              of 1999. In January 1999, Stanton accepted shares of the Company's
              common stock against the principal and interest due. (See Notes 4
              and 8)

              In December 1998, the Company arranged to borrow an additional 1.0
              million dollars from Parbhoe. Ultimately, only $750,000 was
              advanced, which SLC used to complete the construction of the
              casino. The loan was subject to a 4% monthly interest rate and was
              payable within six months of the disbursement. The loan was paid
              off in full in August of 1999.

              In October 1999, the Company obtained financing through a
              Convertible Note of $350,000 from Danville Investments Pty. Ltd.,
              Australia ("Danville"). The Company received proceeds of $215,000
              that was funded net of a $135,000 discount, which was recorded as
              deferred interest expense. The deferred interest expense was
              amortized and expensed over the life of the loan. The loan was
              subject to interest at the rate of 15% per annum, payable in full
              at the maturity of the loan in April 2000. The Company was
              obligated to deposit on a monthly basis no less than $30,000 in a
              separate bank account towards payment of the loan. In addition,
              the Company also issued Danville warrants to purchase the
              Company's common stock. The Company pledged all principal
              payments, interest and management fees due to the Company from
              Suriname Leisure Company as security against the loan. Danville,
              in December 1999, exercised its option to convert $185,000 of the
              principal of the loan plus accrued interest of $10,500 into shares
              of the Company's stock. The Company paid off the remaining balance
              of $165,000 plus interest in April 2000. (Notes 4 and 10)

              In January 2000, the Company borrowed $300,000 from Stanton. The
              Company received proceeds of $283,000 that was funded net of a
              $17,000 discount, which was recorded as deferred interest expense.
              The deferred interest expense is being amortized and expensed over
              the life of the loan. Interest on the loan is calculated at the
              Wall Street Journal prime rate, payable on a monthly basis. The
              terms of the promissory note require that the Company repay the
              loan in four monthly installments of $15,000 commencing February
              2000, seven monthly installments of $30,000 commencing June 2000,
              and a final payment of $30,000 on or before December 31, 2000. The
              Company granted Stanton a security interest, subordinated to
              Danville's interest, in all principal payments, interest and
              management fees due to the Company from Suriname Leisure Company
              and issued Stanton warrants to purchase shares of the Company's
              common stock. The Company was unable to meet the original
              repayment schedule on the Stanton debt and has made payments based
              on the availability of funds. The principal amount of the loan
              payable at year-end was $75,000. (See Notes 8, 10 and 14)

                                      F-27

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 7 - NOTES PAYABLE (CONTINUED)

              In March 2000, the Company borrowed $150,000 from Galileo Capital
              LLC ("Galileo") utilizing convertible debt. The Company received
              proceeds of $146,600 that was funded net of a $3,400 discount,
              which was recorded as deferred interest expense. The deferred
              interest expense was amortized and expensed over the life of the
              loan. The loan was subject to interest at the rate of 10% per
              annum, payable in full at the maturity of the loan in October
              2000. The Company was required to pay six equal monthly
              installments of $25,000 commencing May 2000. As additional
              consideration for the loan, the Company issued 150,000 warrants to
              Galileo to purchase shares of the Company's common stock. The
              warrants are exercisable at $0.25 per share and expire in two
              years from the date that underlying shares are registered. The
              Company was unable to meet the original repayment schedule and
              repaid the loan in full in February 2001 (See Notes 10 and 14).

              LONG-TERM

              In September 1998, CCA borrowed $600,000 from its 50% co-owner,
              Parbhoe, in SLC for the construction of its permanent casino
              facilities. Interest on the loan is calculated using an interest
              rate of 3% per month. (See Note 9)

              The outstanding balance of loans owing to Parbhoe by CCA is to be
              paid out of the excess cash flow generated by the operations of
              SLC. Principal payments of approximately $0.15 of every $1.00 of
              the excess cash flow are being utilized to pay back the advances
              owed to Parbhoe. (See Notes 2 and 9)


NOTE 8 - RELATED PARTY TRANSACTIONS

              LEGAL  (See Note 10)

              The Company incurred legal fees of approximately $10,000 for the
              year ended June 30, 2000 and $127,000 for the year ended June 30,
              1999 to legal counsel owning securities in the Company ("Related
              Counsel"). Related Counsel provided no legal services in 2001.

              Options issued by the Company to Related Counsel in June 30, 1998
              valued at approximately $285,619 were amortized as legal expense
              as counsel rendered services. Legal expense of $171,000 was
              charged during the year ended June 30, 1998 and the balance,
              $115,000, was charged during the year ended June 30, 1999.

                                      F-28

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 8 - RELATED PARTY TRANSACTIONS (CONTINUED)

              The Company repriced the exercise price of options and warrants
              previously granted to Related Counsel during the year ending June
              30, 2000 and expensed approximately $2,000. (See Note 10)

              The Company also issued to Related Counsel additional warrants and
              expensed approximately $8,000 in June 30, 2000 (See Note 10).

              CONSULTANTS

              In June 1999, the Company entered into a Financing Agreement with
              the Arter Group Limited ("Arter") and Valmet S.A. ("Valmet") to
              negotiate on the Company's behalf to acquire financing. (See Notes
              2 and 4)

              The Company was a party to an agreement (the "Casino Consulting
              Agreement") with Star Casinos Limited, (the "Casino Consultant")
              which expired in December 1999. Under the Casino Consulting
              Agreement, the Consultant agreed to provide consulting and
              technical services to the Company and any affiliated entities for
              a period of two years. David Hartley, who subsequently became the
              president of the Casino Division of the Company, owned the
              Consultant. Under the terms of the Casino Consulting Agreement,
              the Consultant received $250,000 annually plus reimbursement of
              reasonable expenses. At the end of the term of the agreement, the
              Consultant was also entitled to receive a $250,000 bonus. At that
              time, the Casino Consultant agreed to accept the Company's common
              stock in place of the $250,000 bonus due to him. The agreement
              also binds the Casino Consultant to a two-year non-compete,
              non-solicitation provision after termination of the agreement.
              (See Note 4 and 10)

              After the Casino Consulting Agreement concluded, the Casino
              Consultant agreed to continue providing the consulting services on
              a month-to-month basis at an annualized rate of $250,000.

              The Company paid the Casino Consultant $187,000 during the year
              ended June 30, 1999, $130,000 during the year ended June 30, 2000
              and $225,000 during the year ended June 30, 2001. In addition, the
              Company accrued additional consulting fees of $63,000 for the year
              ended June 30, 1999, $72,000 for the year ended June 30, 2000 (see
              note 4) and $25,000 for the year ended June 30, 2001 plus the
              reimbursement of reasonable expenses.

              CONSTRUCTION CONTRACTORS

              In September 1998, Company issued shares of the Company's common
              stock to MSC, the building contractor for the Suriname casino, as
              payment towards, in part, its construction contract with SLC.
              (Notes 4 and 9)

                                      F-29

<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 8 - RELATED PARTY TRANSACTIONS (CONTINUED)

              DIRECTORS

              The Company borrowed from Stanton & Associates $75,000 in October
              of 1998 and $300,000 in January 2000. Mr. James Stanton, the owner
              of Stanton & Associates, is a director of the Company. (See Notes
              4, 7 and 10)

              OFFICER

              In September 1998, Dempster's nominees were granted non-plan
              options in consideration for Dempster joining the Company in July
              of 1998. In December 2000, additional plan options were granted
              for services performed. (Note 10)


NOTE 9 - COMMITMENTS AND CONTINGENCIES

              RENTAL COMMITMENTS

              The Company rents office space and facilities in the United States
              under non-cancelable leases through September 2003. The minimum
              future rental commitment for leases in effect at June 30, 2001
              approximates the following:


                      Years Ended
                        June 30,
                      -----------
                          2002             $          34,424
                          2003                         2,983
                                           -----------------

                                           $          37,407
                                           =================


              The Suriname casino currently occupies two leased floors, totaling
              about 20,000 square feet, in the Plaza Hotel, which is in downtown
              Paramaribo. The Company leased the Casino premises from Parbhoe, a
              50% shareholder in SLC, for fifteen years ending in February 2013,
              for a yearly base rent of $200,000, subject to future increases
              based on the Suriname Consumer Price Index.


                                      F-30

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 9 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

              The Company continued to pay rent at the same rate from the
              beginning of the lease to June 2000 without providing for any
              increase in rent. Suriname law regulates the maximum amount of
              rent that a landlord can charge. In July 2000, the Company
              determined that, based on the maximum rent that can be charged
              under Suriname laws, it had been overcharged. The Company is
              currently attempting to recover the excess rent charged of
              approximately $315,000 in the Courts based on a Government
              validated valuation of the maximum rent permissible under Suriname
              laws. In July 2000, the Company commenced paying a reduced rental
              of approximately $3,200 per month based on the valuation. Only
              once the litigation is settled will the Company be able to predict
              the future rental expense in Suriname. (See Note 2)

              Rent expense was $82,176 for the year ended June 30, 2001,
              $256,698 for the year ended June 30, 2000, and $532,916 for the
              year ended June 30, 1999.

              THE NASDAQ SMALL CAP MARKET DELISTING

              In November 1999, the Securities of the Company were delisted from
              The NASDAQ Small Cap Market. The delisting occurred due to the
              Company's failure to comply with certain NASDAQ Marketplace Rules
              relating to the bid price and filing requirements. The NASDAQ was
              of the opinion that the Company failed to present a definitive
              plan that would enable it to attain compliance within a reasonable
              period of time and then to sustain the compliance. The panel also
              determined that it was unable to evaluate the true extent of the
              Company's compliance with NASDAQ's continued listing standards in
              the absence of accurate, complete and publicly filed audited
              financial statements.

              LITIGATION AND ARBITRATION

              The Company anticipates that it will be subjected to various
              lawsuits, claims and proceedings of a nature considered normal to
              its business.

              KAI MICHAELSON ("MICHAELSON") AND ZAMORA INVESTMENTS PTE LTD.
              ("ZAMORA")

              As a result of the termination of the Hotel Management Agreements
              in November (See Note 3), FEC assumed any and all financial
              obligations with respect to the employment of the President,
              Michaelsen, of the Company's hotel management subsidiary, DHRI.
              After a thorough independent review of Michaelsen's performance
              including an extensive investigation into allegations made by FEC
              regarding Michaelsen's operating decisions, Michaelsen's
              employment was officially terminated in April 1999. In April 1999,
              Michaelsen filed a claim against CCA for a lump sum payment of
              approximately $240,000 for past and future services under his
              employment and consulting agreements and requested an arbitration
              hearing with the American Arbitration Association.


                                      F-31

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 9 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

              The Company obtained a temporary restraining order staying the
              arbitration and petitioned the New York Supreme Court for a
              permanent stay of the hearing. It was the Company's contention
              that there was no arbitration agreement between Michaelsen and
              CCA. On March 31, 2000, the Court granted the Company's petition
              to permanently stay the arbitration. Subsequent to the order of
              stay, Michaelsen's Company, Zamora, filed a claim against Dorsett
              for $80,000 in a new arbitration claim.

              In September 2000, the Company settled the matter with Michaelson
              and Zamora. In exchange for complete releases, the Company paid
              $40,000.

              At June 30, 2001, the Company held 250,000 shares that were issued
              but never delivered to FEC pursuant to the November 1998
              termination agreement. It was the Company's position that the
              settlement of $40,000 plus legal fees of $47,000 incurred by the
              Company must be repaid by FEC for the Company to deliver the
              shares. On July 11, the Company cancelled the shares due to FEC's
              failure to fulfill its obligations under the terms of the
              agreement.

              FOX HAVEN CAPITAL CORPORATION AND UNITED RESOURCES PARTNERS
              (COLLECTIVELY "FOX HAVEN")

              During 1998 the Company utilized unsuccessfully the services of
              Fox Haven to secure financing.

              In August of 1999, Fox Haven filed a Demand for Arbitration before
              the American Arbitration Association demanding a payment of
              $250,000 from the Company as liquidated damages. Fox Haven alleged
              that the Company breached the letter of agreement by failing to
              secure adequate collateral for the proposed loan according to the
              terms of the letter agreement. The Company denied all material
              allegations of the claim and filed counterclaims alleging Fox
              Haven breached its obligations to the Company by misrepresenting
              its abilities to secure capital financing.

              On August 22, 2000, all of Fox Haven's claims were denied and the
              Company was awarded $106,289 representing a full refund of the
              $25,000 paid to Fox Haven by the Company plus the Company's
              attorney's fees and costs. To date the Company has not been paid
              any amount against the award and there is significant uncertainty
              regarding the Company's ability to collect the judgment.


                                      F-32

<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 9 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

              BREACH OF SLC LEASE

              SLC's landlord, Parbhoe, by contract, is required to provide air
              conditioning for the areas leased. Due to Parbhoe's failure to
              perform timely, SLC paid $201,000 to have air conditioning
              equipment installed in order to get the leased area ready for
              occupancy more quickly. Litigation is anticipated to recover the
              expenditure.

              MARITIME SERVICES CORPORATION ("MSC")

              In September 2000, MSC brought an action in the United States
              District Court of Oregon seeking damages in the amount of $200,250
              plus interest. MSC claims that the Company issued its own shares
              in 1998 as partial payment for construction work performed and
              that the Company was obligated to buy the shares back for the
              amount claimed as damages. (Notes 4 and 8)

              The Company has denied all material allegations of the complaint
              and believes that it has no liability for the claim.

              LONG-TERM NOTE PAYABLE

              Parbhoe has made a demand on SLC for the repayment in full of the
              $600,000 loan it made to CCA on September 3, 1998. (See Note 7) At
              that time Parbhoe refused to accept any interim payments on the
              loan. SLC has set aside the payments required to be made based on
              the terms of the loan.

              This is being rigorously defended in the Suriname Courts on the
              basis that, among other defenses, based on the loan's terms, the
              loan is not repayable on demand but on a pro-rata basis along with
              existing and new loans that are outstanding to CCA and
              additionally, the loan is owed by CCA and not SLC.


NOTE 10 - STOCK OPTIONS AND WARRANTS

              The Company applies FASB Interpretation 44, Accounting For Certain
              Transactions Involving Stock Compensation - An interpretation of
              APB 25 and APB Opinion 25, Accounting for Stock Issued to
              Employees, and related interpretations in accounting for employee
              stock options. Under FASB Interpretation 44 and APB Opinion 25,
              because the exercise price of the Company's employee stock options
              equals or exceeds the market price of the underlying stock on the
              date of grant, no compensation cost is recognized.

                                      F-33

<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 10 - STOCK OPTIONS AND WARRANTS (CONTINUED)

              Options that have been granted are exercisable either one-third
              annually at each anniversary date from the date of grant or they
              are exercisable immediately. In addition, they have maximum terms
              of not more than four years and they are not transferable.

              The Company estimates the fair value of each stock option or
              warrant at the grant date by using the Black-Scholes
              option-pricing model.

              PLAN OPTIONS

              The Company's 1996 Stock Option Plan (the "Plan") was adopted in
              November 1996, and amended in December 1996, April 1997 and
              December 1997. The Plan provides for adjustments in the number and
              type of shares covered by the Plan and options granted in the
              event of any reorganization, merger, re-capitalization or certain
              other transactions involving the Company. Under the Plan, which
              authorizes the granting of incentive stock options or
              non-incentive stock options the maximum number of shares of common
              stock for which options may be granted is 5,000,000 shares. As of
              June 30, 2001, 2,852,500 options to purchase shares of common
              stock had been granted under the Plan. The Company has set aside
              2,147,500 shares of common stock for future options that may be
              granted under the Plan.

              The Company granted a total of 500,000 options in 1999 to
              non-employee directors that vested immediately. All options issued
              to non-employee directors are exercisable between $0.10 and $1.50
              and expire four years after their issuance. The Company recorded a
              charge to operations with a corresponding credit to additional
              paid-in capital for the issuance of the options in the amount of
              $233,000 in 1999.

              The Company granted a total of 1,000,000 fully vested options,
              valid for four years, to Tilden Park Ltd., a nominee of Dempster,
              the President and the CEO and a Director of the Company in 2000
              (See Notes 8 and 14). A total of 1,130,000 options were granted to
              employees in 1999 that vested immediately. The employee options
              are exercisable between $0.10 and $1.50.

              In October 2000, the Company granted fully vested four-year
              options to purchase 500,000 shares to Miles Greenberg, the Chief
              Financial Officer of the Company, at an exercise price of $0.10
              per share.

              NON PLAN OPTIONS

              In addition to the options granted under the plan, the Company has
              issued an additional 1,905,000 non-plan options, of which, 762,000
              non plan options were forfeited in 2001 and 128,000 non plan
              options were forfeited in 2000.


                                      F-34

<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 10 - STOCK OPTIONS AND WARRANTS (CONTINUED)

              The Company issued to legal counsel ("Related Counsel") 187,500
              options valued at approximately $285,619 in June 30, 1998 against
              future legal fees. The value of the options issued in 1998 was
              amortized as legal expense as counsel rendered services. Legal
              expense of $115,000 were charged during the year ended June 30,
              1999. (See Note 8)

              In September 1998, Dempster's nominee, Dabus International
              Limited, established for the benefit of his family, was granted
              non-plan options to purchase 1,000,000 shares of the Company's
              common stock at $1.50 per share. These options were granted in
              consideration of Dempster joining the Company in July of 1998 and
              were subsequently transferred to Tilden Park Ltd., also a nominee
              of Dempster. The options were repriced to $.10 on October 18,2000
              (See Note 8).

              The Company issued 500,000 options to investors at the time of
              private placements done by the Company during the ten-month period
              ended June 30, 1997. The exercise price for these options was
              $2.00 and they expired in April 2001. During the year ended June
              30, 1998, 7,881 options out of the 500,000 options issued were
              exercised. No other options were exercised prior to their
              expiration.

              The Company also repriced 35,000 options issued to a consultant
              from $5.00 to $1.50 and the exercise date was extended from August
              1998 to August 1999.

              FASB Statement 123, "Accounting for Stock-Based Compensation,"
              requires the Company to provide pro forma information regarding
              net income (loss) and net income (loss) per share as if
              compensation cost for the Company's employee stock options had
              been determined in accordance with the fair value based method
              prescribed in FASB Statement 123.

              The Company utilized the following weighted-average assumptions
              to determine fair value:

                                             Year Ended June 30,
                                      -----------------------------------
                                         2001         2000        1999
                                      -----------------------------------

              Risk free interest rate     6%           6%          6%
              Expected life             4 years     4 years      4 years
              Expected volatility        0.5          0.5          0.5
              Dividend yield             0.0          0.0          0.0


                                      F-35

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 10 - STOCK OPTIONS AND WARRANTS (CONTINUED)

              Under the accounting provisions of FASB Statement 123, the
              Company's pro forma net loss and loss per share would have been as
              follows:

<TABLE>
<CAPTION>
                                                                         Year Ended June 30,
                                                   ---------------------------------------------------------------
                                                        2001                     2000                    1999
                                                   ---------------         ----------------        ---------------
              <S>                                  <C>                     <C>                     <C>
              Net loss:
                As reported                        $      (519,665)        $    (15,339,310)       $    (4,592,090)
                                                   ===============         ================        ===============

                Pro forma                          $      (552,665)        $    (15,399,672)       $    (5,149,789)
                                                   ===============         ================        ===============

              Net loss per common:
                As reported                        $          (.03)        $          (1.01)       $         (0.36)
                Pro forma                                     (.03)                   (1.02)                 (0.41)

</TABLE>


              A summary of the status of the Company's fixed stock option plan
              and non plan options as of June 30, 2001, 2000 and 1999 and
              changes during the years then ended is presented below:

<TABLE>
<CAPTION>

                                              June 30, 2001                 June 30, 2000                June 30, 1999
                                         --------------------------   --------------------------   --------------------------
                                                           Weighted                     Weighted                     Weighted
                                                            Average                      Average                      Average
                                                           Exercise                     Exercise                     Exercise
                                            Shares          Price         Shares         Price         Shares         Price
                                         -----------    -----------   -----------    ----------    -----------    -----------
              <S>                        <C>               <C>        <C>               <C>        <C>                <C>
              Outstanding at
               beginning of period         4,934,619         $1.10      4,062,619         $1.99      3,169,619          $4.72
              Granted                        500,000           .10      1,000,000           .25      1,630,000           1.50
              Exercised                            -                            -             -         (7,000)          0.50
              Forfeited                   (1,582,119)        (2.64)      (128,000)         (.77)      (730,000)          4.22
                                         -----------    -----------   -----------    ----------    -----------    -----------

              Outstanding at end of
               Period                      3,852,500         $0.27      4,934,619         $1.10      4,062,619          $1.99
                                         ===========    ==========    ===========    ==========    ===========    ===========

              Options exercisable at
               end of period               3,832,500         $0.27      4,789,619         $1.09      3,824,287          $2.03
                                         ===========    ==========    ===========    ==========    ===========    ===========

              Weighted-average fair
               value of options granted
               during the period                            $ 0.02                       $ 0.02                         $0.49
                                                        ==========                   ==========                   ===========

</TABLE>


                                      F-36


<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 10 - STOCK OPTIONS AND WARRANTS (CONTINUED)

              The following table presents information relating to stock options
outstanding at June 30, 2001:


<TABLE>
<CAPTION>
                                                 OPTIONS OUTSTANDING                         OPTIONS EXERCISABLE
                                   ------------------------------------------------    --------------------------------
                                                        Weighted
                                                         Average          Average                            Weighted
             Exercise                                   Exercise         Remaining                       Average Exercise
               Price                   Shares            Price         Life in Years        Shares            Price
           ------------          -------------         ---------       -------------    ------------    -----------------

           <S>                   <C>                    <C>                <C>        <C>                <C>
              $0.10                  3,185,000          $    .10             2.00         3,185,000        $     .10
              $0.25                    317,500               .25              .78           317,500              .25
              $1.50                    325,000              1.50             1.44           305,000             1.50
              $6.50                     25,000              6.50              .75            25,000             6.50
                                 -------------          --------         --------     -------------        ---------

                                     3,852,500          $    .27             1.84         3,832,500        $     .27
                                 =============          ========         ========       ===========        =========

</TABLE>


              No options have been exercised in 2001


              WARRANTS

              During the year ended June 30, 1999 the Company issued to two
              consultants three-year warrants to purchase 50,000 shares each of
              the Company's common stock at $1.00 per share. These warrants were
              valued at $50,000. The Company's operations were charged for the
              value of all warrants issued to consultants for services at the
              time of issuance.

              In July and August 1999, the Company agreed to issue warrants to
              purchase 83,334 shares of the Company's common stock, at $1.00 per
              share to two investors. The warrants can be exercised at any time
              and expire in two to three years from the issuance date. (Note 4)

              The Company issued 1,308,334 warrants with exercise prices of
              $1.00 to $2.00 during the fiscal year ending 1999.

              In June 1999, the Company issued to a consultant for services
              relating to the Sakhalin Project warrants to purchase 150,000
              shares of common stock at $1.00 per share. The warrants are valued
              at $25,000 and were recorded as capitalized finance costs.


                                      F-37

<PAGE>

                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 10 - STOCK OPTIONS AND WARRANTS (CONTINUED)

              In connection with the acquisition of financing, the Company
              issued 700,000 warrants to Danville in October 1999 (see Notes 4
              and 7), 500,000 warrants to Stanton in January 2000 (see Notes 7
              and 8) and 150,000 to Galileo Capital, LLC in March 2000 to
              purchase the Company's common stock at $0.25 per share (see Note
              7). The Galileo warrants expire in two years from the date the
              Company files a new registration, the Danville warrants expire
              three years from the date of grant and the Stanton warrants expire
              four years from the date of grant. The warrants were valued at
              $155,400.

              In December 1999, the Company issued warrants to an investor and
              past underwriter for the Company to acquire 450,000 shares of
              common stock for past services rendered at a price of $0.50 per
              share.

              In January 2000, the Company issued warrants to Related Counsel
              for services rendered to acquire 225,000 shares of the Company's
              common stock at a price of $0.25 per share and expensed $8,000 in
              June 30, 2000. (See Note 8)

              At June 30, 2001, the Company had warrants amounting to 4,624,013
              outstanding. No warrants have been exercised. All warrants were
              exercisable on the day of grant. During 2001, no warrants were
              granted and 745,000 warrants expired.

              REPRICING OF OPTIONS AND WARRANTS

              The exercise price of warrants to purchase 325,000 shares of the
              Company's common stock issued to directors and a consultant in
              1996 was changed from $5.00 to $1.50 per share in September 1998.
              The Company recorded an additional charge to operations of
              approximately $125,000 on the warrants for the repricing.

              Additionally, in September 1998, the Company's Board of Directors
              agreed to reprice the exercise price of 1,567,500 stock options
              previously granted to directors, officers and employees at prices
              ranging between $5.00 and $6.50, to $1.50 and in December 1999,
              repriced 1,920,000 stock options previously granted to directors,
              officers and employees and priced at $1.50 to an exercise price of
              $0.25.

              In 1999, the Company recorded an additional charge to operations
              of approximately $335,000 on 900,000 options previously granted to
              the directors and approximately $90,000 on 237,500 options
              previously granted to consultants during the 1998 and 1997 fiscal
              years for the repricing. In 2000, the Company recorded an
              additional charge of approximately $10,000 for the repricing of
              600,000 options and 150,000 warrants from $1.50 to $0.25
              previously granted to directors and recorded a charge of $2,000
              for repricing 212,500 options and 25,000 warrants from $1.50 to
              $0.25 previously granted to related counsel.

                                      F-38

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 10 - STOCK OPTIONS AND WARRANTS (CONTINUED)

              In October 2000, the Company repriced 2,230,000 options issued to
              officers and employees from $0.25 to $0.10. In addition, options
              of 500,000 and warrants of 650,000 issued to Stanton, a related
              party, were also repriced from $0.25 to $0.10 and the Company
              recorded a charge of approximately $13,000 for the repricing.

              COMMON STOCK SET ASIDE

              Currently, the Company has reserved 8,476,513 shares of common
              stock for exercise of options and warrants.


NOTE 11 - BUSINESS SEGMENT INFORMATION

              The Company ceased operations of its food preservation and hotel
              management business segments during the year ended June 30, 1999.
              Accordingly, at June 30, 1999, the Company's only line of business
              relates to its casino operations in Suriname and the Russian
              Federation.


NOTE 12 - PROVISIONS FOR VALUATION ALLOWANCES AND ASSETS WRITTEN OFF

              Allowances for Loans Receivables during the years ended June 30,
              1999 are as follows:


                                                            Year Ended June 30
                                                           --------------------
                                                                    1999
                                                           --------------------

              Beginning balance                               $    2,620,830
              Provision                                              608,311
              Write-offs                                          (3,229,141)
                                                              ---------------

              Ending balance                                  $        -
                                                              ===============


                                      F-39


<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)



NOTE 13 - NON-BINDING WRITTEN LETTER OF INTENT ("AGS LOI")

              In February 2001, the Company entered into a non-binding written
              letter of intent with Applied Gaming Solutions of Canada, Inc., a
              corporation organized under the laws of Alberta, Canada ("AGS").
              The terms of the letter of intent contemplate that the Company
              would purchase certain AGS Assets which include its operating
              contract with the Construction Lottery of the Capital Hanoi
              ("CCC"), equipment, infrastructure, retail sales outlets and
              organization and personnel relations and for cash and shares of
              common stock in the Company. Since approximately August 1999, AGS
              has marketed and to some extent operated CCC's on-line lottery
              business in Vietnam in and around the Hanoi City. Under the letter
              of intent, the Company is to pay a total of $1,250,000 in cash and
              to issue of 1,000,000 shares of common stock at the closing (the
              "AGS Closing"). No definitive agreement has been reached and
              negotiations are continuing.


NOTE 14 - PURCHASE  CONTRACT

              In May 2001, the Company entered into a formal, written contract
              (the "Purchase Contract"), subject to the approval of the
              shareholders, to purchase all of the issued and outstanding common
              stock of Emerging Market Solutions International, Inc. ("EMSI")
              for 5,500,000 shares of the Company's stock. The contract provides
              for a closing date on or before September 28, 2001, but it can be
              deferred by agreement between the parties to the contract.

              EMSI holds an exclusive contract (the "Lottery Gaming System
              Contract") to supply on-line lottery and sports betting systems in
              Ho Chi Minh City and the Southern provinces of Vietnam (the
              Territory). The Lottery Gaming System Contract is between EMSI and
              Detetour Corporation ("Detetour") for Development of New
              Technology and Tourism, and extends ten years from the date that
              the first on-line sales begin on the on-line lottery gaming
              system. Detetour is an entity owned by the sovereign Socialist
              Republic of Vietnam and controlled by the National Centre of
              Natural Science and Technology. The laws of the Socialist Republic
              of Vietnam, for the most part, govern the Lottery Gaming System
              Contract. No on-line lottery or sports betting operations have
              previously been conducted under Vietnamese authority within the
              Territory. EMSI has no other assets, liabilities or obligations
              and no formal operations have commenced as of June 30, 2001.

              The obligations under the contract are conditioned on the Company
              affecting a reverse split, securing a listing of the Company's
              common stock on a reputable "exchange" and funding EMSI with
              $3,000,000. The Company is required by the contract to use its
              best efforts to fulfill these conditions.

                                      F-40

<PAGE>
                           CCA COMPANIES INCORPORATED
                  Notes to Consolidated Financial Statements (Continued)


NOTE 14 - PURCHASE  CONTRACT (CONTINUED)

              The Company plans to "fund" EMSI by selling up to 1,500,000
              additional shares of common stock (the "Funding Shares") in the
              Company (measured after the Share Consolidation) for not less than
              $2.00 per share. The Company or the Sellers may cancel the
              Purchase Contract if the Funding Shares are not sold prior to
              September 28, 2001. If despite the best efforts of the Company to
              obtain approval of the share consolidation, to list the common
              stock on a recognized exchange, and to sell the Funding Shares for
              a minimum of $3,000,000, any one or more of these things does not
              happen by the closing date, either the Seller's collectively or
              the Company may declare the Purchase Agreement terminated and of
              no effect.

              The Company to date has advanced approximately $435,000 ($340,000
              prior to year end) to EMSI in anticipation of the acquisition,
              which the Company received primarily from prospective investors as
              advances to purchase common stock once the EMSI transaction is
              completed. The advances made to EMSI are not secured and, if the
              EMSI acquisition is not successful there is no assurance that the
              advances will be repaid to the Company.


NOTE 15 - SUBSEQUENT EVENTS


              Reverse Split - In an attempt to meet certain listing requirements
              on recognized securities markets, the Company adopted a resolution
              under which, subject to the approval of a majority of the
              shareholders, a twenty-into-one reverse split of all the Company's
              outstanding shares of Common Stock will be carried out. The
              Company believes that the reverse split will help to increase the
              per share market price of the Company's common stock. In addition
              to various other listing requirements, the initial public per
              share price on the NASDAQ market must be at least $4.00 and the
              initial public per share price on the AMEX must be $3.00. Once
              listed the price must be maintained over $1.00. As previously
              mentioned, the reverse split is a condition precedent of the
              contract to purchase EMSI.

              Change of Company's Name - The Company adopted a resolution under
              which, subject to the approval of a majority of the shareholders,
              the Board of Directors are authorized to change the name of the
              Company from "CCA Companies Incorporated" to "Lottery & Wagering
              Solutions Inc." The Company will not change the name unless the
              purchase of EMSI is consummated. The Company believes that, if the
              purchase is consummated, the new name will result in a more
              distinct and recognizable corporate identity that better reflects
              the Company's future plans.

              Amendment to the Company's Stock Option Plan - The Company adopted
              a resolution proposing that the number of shares of Common Stock
              available for grant under the 1996 Stock Option Plan of the
              Company be increased. After giving effect to the share
              consolidation due to the reverse split, if approved by the
              shareholders, the number of shares available will increase from
              250,000 shares currently available to 3,000,000 shares.


                                      F-41