FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

|ý                                           | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|------------------------------------------- | ----------------------------------------------------------------------------------
|for the fiscal year ended December 31, 2002
|OR                                         
|o                                           | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-23782

RENAISSANCE ENTERTAINMENT CORPORATION(Name of Registrant as Specified in its Charter)

Colorado

84-1094630(State or other jurisdiction
of incorporation or organization)

I.R.S. Employer
Identification number275 Century Circle, Suite 102,
Louisville, Colorado

80027(Address of principal executive offices)

(Zip Code)


Issuer's
telephone number, including area code: (303) 664-0300

Securities
registered under Section 12(b) of the Act:
None

Securities
registered pursuant to Section 12(g) of the Act:
Common Stock, $.03 par value

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

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o

The
issuer's revenues for the year ended December 31, 2002 were $12,013,543.

As
of March 13, 2003, the aggregate market value of the Common Stock of the Registrant, held by non-affiliates of the Registrant, based upon the average of the closing
bid and asked prices of the Common Stock as quoted on the NASD OTC Bulletin Board Market, was approximately $707,813. As of March 13, 2003, 2,144,889 shares of the Common Stock of the
Registrant were outstanding.

DOCUMENTS
INCORPORATED BY REFERENCE

None.





PART I

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended, and is subject to the safe harbors created by those sections. These forward-looking statements are subject to significant risks and
uncertainties, including those identified in the section of this Form 10-KSB entitled "Factors That May Affect Future Operating Results," which may cause actual
results to differ materially from those discussed in such forward-looking statements. The forward-looking statements within this Form 10-KSB are identified by words such as
"believes," "anticipates," "expects," "intends," "may," "will" and other similar expressions. However, these words are not the exclusive means of identifying such statements. In addition, any
statements which refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. The Company undertakes no obligation to publicly
release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances occurring subsequent to the filing of this Form 10-KSB
with the Securities and Exchange Commission ("SEC"). Readers are urged to carefully review and consider the various disclosures made by the Company in this report and in the Company's other reports
filed with the SEC that attempt to advise interested parties of the risks and factors that may affect the Company's business.

ITEM 1: BUSINESS

Overview

The Company presently owns and produces four Renaissance Faires: the Bristol Renaissance Faire in Kenosha, Wisconsin, serving the Chicago/Milwaukee metropolitan
region; the Northern California Renaissance Pleasure Faire, serving the San Francisco Bay and Sacramento metropolitan areas; the Southern California Renaissance Pleasure Faire in Devore, California
serving the greater Los Angeles metropolitan area; and the New York Renaissance Faire serving the New York City metropolitan area.

The
Renaissance Faire is a re-creation of a Renaissance village, a fantasy experience transporting the visitor back into sixteenth century England. This fantasy experience is
created through authentic craft
shops, food vendors and continuous live entertainment throughout the day, both on the street and the stage, including actors, jugglers, jousters, magicians, dancers and musicians.

Web Site.The Company maintains a home page at www.recfair.com.

Existing Renaissance Faires and Sites

Bristol Renaissance Faire.The Bristol Renaissance Faire is held at the Kenosha, Wisconsin site
leased by the Company. It has been in existence for 15 years. The Bristol Renaissance Faire is operated annually for nine weekends beginning the last weekend in June and ending the
middle of August.

During
November 1997, the Company sold this site and leased it back for a period of 20 years. See "Property." Improvements which have been constructed on the site,
including the vendor booths, are permanent. Craft shops and vendor booths are built by the individual craft vendors at their cost. In many cases, vendors invest substantial sums of money in the
construction of these shops. Historically, the Company has utilized the site for the Renaissance Faire, and the property has been vacant during the off-season.

On
April 6, 2000, the Company entered into an Asset Purchase Agreement with Willows Fare, LLC which conveyed its interest in certain assets previously used by the Bristol Faire in
its food operation. As part of this agreement, Willows Fare, LLC was granted a seven-year concession agreement with the Bristol Faire to operate as a food vendor. The purchase price of the
assets was $300,000, half of which was paid upon execution of the agreement. The Company holds a 10% promissory note for the balance of $150,000. Payments of principal and interest begin August 1, 2000 based on a 7-year amortization with a balloon payment on October 31,
2003.

Northern California Renaissance Pleasure Faire.The Northern California Renaissance Pleasure Faire
has been held in the San Francisco Bay area for the past 35 years. This Faire is held annually for six to eight weekends, typically beginning one week before the Labor Day weekend and running
through the first or second weekend of October. In 2001, the Faire operated eight weekends beginning the last weekend of August and ending in mid-October. In 2002, the Faire
operated six weekends beginning the middle of September and ending in mid-October. In 2003, it is anticipated that the Faire will operate seven weekends beginning the first weekend
of September and ending the fourth weekend of October.

On
May 3, 2002, the Company signed a long-term lease for the Northern California Faire. The new site for the Northern Faire is located at Casa de Fruta, near Gilroy,
California. The lease is for 20 years, 5-years with a 15-year extension. Lease payments in the first year include $1.00 per patron with a $150,000 minimum and increasing
each year thereafter.

Historically,
all structures, including the gates, stages, booths, shops and arenas utilized in the Northern California Renaissance Pleasure Faires have been mobile. These props were
loaded into the Company's semi-tractor/trailers and transported between the Northern and Southern California Renaissance Faires and, during the off-season, were stored at the
Southern Renaissance Faire site. The booths and craft shops utilized and owned by the individual vendors were moved onto the site for the Faire and then removed by them. The Company believes that this
long-term lease agreement will eventually allow these structures to remain in place year-round and provide the opportunity for additional income-generating events other than
the Renaissance Faire.

Southern California Renaissance Pleasure Faire.The Southern California Renaissance Pleasure Faire
has been held for the past 40 years in the Los Angeles metropolitan area. This Faire is held annually for seven or eight weekends beginning the first weekend of May and ending in
mid-June. In 2001 the Faire ran eight weekends and in 2002 seven weekends beginning the first week of May. In 2001 and 2002, the Company sponsored a School Days event in conjunction with
Events Group Corporation which was held on the Faire site in the month of May. In 2003, the Faire is scheduled to run seven weekends beginning the first weekend of May and a School Days event
is scheduled in the month of May.

The
Southern California Renaissance Pleasure Faire is held in Glen Helen Regional Park located near Devore, California. On June 27, 2000, the Company signed a
twenty-year lease with San Bernardino County Parks and Recreation Department, securing a long-term home for the Southern California Renaissance Faire. This is a
ten-year lease with two five-year options to extend. Rent on this property is based on a percentage of gross revenues, which ranges during the first ten-years of
the lease, from four to seven percent with a guaranteed minimum rental payment. Guaranteed minimum rent under the lease increases $25,000 per year for the first ten years of this lease with
2003 rent set at $274,500.

In
the past, the Southern Renaissance Pleasure Faire site was only occupied during the operating season and was vacated following completion of the Faire. Accordingly, all structures
were mobile and transported to the Northern Renaissance Faire site for storage during the off-season. With the long-term lease, the Company is now able to make permanent
improvements to the site and reduce its annual set-up cost for the Faire.

New York Renaissance Faire.The Company acquired Creative Faires, Ltd., the owner and operator
of the New York Renaissance Faire in February of 1996. The New York Renaissance Faire opened in July 1978 and re-creates a 16th century English Country Faire on 65 leased
acres in Sterling Forest, Tuxedo, New York. Creative Faires, Ltd. also produced Sterling Forest's Forest of Fear.

Historically,
the Faire has been held annually for eight weekends beginning the first weekend of August and ending the third weekend of September. The Forest of Fear is held each
year beginning the first weekend of October and ending on Halloween. In 2001 and 2002 the Company operated two School Day events. The Company has one School Days event scheduled at this site in
May of 2003. In 2003, the Company anticipates operating the Faire seven weekends beginning the first weekend of August and the Forest of Fear five weekends in October.

On
April 1, 2002, Faire Partners, Ltd., the Company's landlord for the Wisconsin site, purchased property in New York from Sterling Forest Corporation. The property has
long been the home of the New York Renaissance Faire. In April, 2002, Faire Partners Ltd. leased the property to the Company on a twenty-year term with rent payments of $425,000
in years 1 through 5, $435,000 years 6 through 15 and $450,000 for lease years 16 through 20. The leased property includes a site for a Ski Center. The Company opened the Ski
Center in December 2002 and anticipates a mid-March 2003 closing date. The lease allows Faire Partners to sell the property on which the ski area operates. Should Faire
Partners sell the property, the lease provides that the Company's rent payments and the buyout provision would be decreased in an amount proportional to the selling price of the property.

Virginia Renaissance Faire.On January 28, 2000, the Company announced the closure of the
Virginia Renaissance Faire located in Fredericksburg, Virginia. The Company completed the sale of the Virginia property in August, 2001, at a selling price of $1.3 million. The proceeds of the
sale were used to retire the first and second mortgages on the property with excess funds set aside for use as working capital. The Company does not anticipate future expenditures as a result of the
Virginia closure.

Vendors

Approximately 14% of the revenues realized from presenting the Company's Renaissance Faires are generated from the Company's relationships with vendors who sell
food and crafts and offer games and rides. Typically, there is little turnover in vendors from one season to the next. The loss of any one or more vendors would not have a material adverse effect upon
a particular Faire.

At
the Bristol Renaissance Faire site there were approximately 180 vendors in 2001 and 2002. The vendors are required to construct their shops and booths at their own cost and then
occupy the structures on a year-to-year basis for an annual fee of $1,100.

At
the Southern California Faire there were approximately 142 vendors in 2001 and 143 vendors in 2002. At the Northern California Faire there were approximately 145 vendors in 2001 and
125 vendors in 2002. At both California Faires, craft shops and booths are owned by the vendors. In lieu of a flat fee to participate, vendors pay the Company a fee equal to 12%-20% of
their gross revenues.

At
the New York Faire site there were approximately 125 vendors in 2001 and 2002. The vendors and craftspersons pay an annual fee of approximately $250 and 10%-17% of their
gross revenues.

The
decision to charge a flat fee or a percentage of revenues is based on several factors, including the custom of a particular Faire and the extent to which vendors must invest in the
construction of their booths. The advantage to the Company of the flat fee method is that it is easier to monitor and is more predictable. The advantage to the Company of the percentage method is that
the Company may participate to a greater extent as Faire attendance increases. Vendors occupy their booths and shops pursuant to written lease agreements that have a term of one year, and require
renewal by both the vendor and the Company. Under these agreements, each vendor agrees to indemnify and hold harmless the Company from any liability that may arise by virtue of the vendors' activities
at a Faire. Nevertheless, the Company maintains general public liability insurance which also provides coverage for such risks.

Revenue Sources

A Renaissance Faire generates revenues from numerous sources, including gate admissions, beverage sales, parking fees, food sales, craft fees, game fees, camping
fees, souvenir sales and sponsorship fees. The following table shows the Company's revenues during the 2001 and 2002 seasons from each of these activities.

2001

2002Gate Admissions

$
5,851,363

$
5,669,292Beverage Revenue


2,724,875


2,857,052Parking Revenue


736,379


373,783Food Revenue


2,731


0Vendor Fees


1,751,192


1,675,591Souvenir Revenue


802,637


738,565Sponsorship Fees


205,778


206,702Camping Fees


200,969


198,143Miscellaneous Fees


171,616


100,041Ski Center Revenue


0


194,374Total

$
12,447,540

$
12,013,543


Gate Admissions.Gate admissions are generally set from $14.50 to $18.50 for adults, $5.00 to $8.50
for children, and children under the age of five admitted free. Discounts range from $2.00 to $3.00 for seniors and, in some cases, students and military personnel. Off premises discount ticket sales
are available at Cub Foods, Sentry Foods, Ralph's, Calabell Market and Shoprite. Discount coupons are available at retail outlets operated by Company sponsors, including Subway, White Castle, Wendy's,
Blockbuster Video, Petland, P.C. Richard & Son, Border Bookstores and Circle K. The Company has a large group sale and advance sale program that provides discounted tickets. Admission provides
the guest with all-day continuous entertainment on multiple stages. Major entertainment acts include full contact jousting, falconry, variety acts, sword duels, Shakespearean vignettes and
authentic belly-dancing.

Beverage Income.The Company sells beer, wine and soft drinks at each Faire.

Parking Income.The California Faires charge $5 to 10.00 for preferred close-in parking.
The Bristol and New York Faires have preferred parking for $3.00 and $5.00 respectively.

Food Revenue.The food concessions at all of the Company's Faires are run by independent vendors. On
April 6, 2000, the Company entered into an agreement to sell its food concessions, at the Bristol Faire, to an independent food vendor. These vendors pay the Company a commission equal to
approximately 15-19% of their gross revenues.

Vendor Fees.Each Faire has approximately 125 to 180 independent vendors who sell their goods to
Faire patrons. Most of the craft items are handmade by the artists who often demonstrate the making of their wares at the Faire. The vendors in California pay the Company a fee of approximately
12-20% of their gross revenue. At the Bristol, Southern California and New York Faires, vendors are required to build their own booth or shop, and either pay a flat annual fee or a
percentage of their gross income.

Souvenir Revenue.At each Faire, the Company sells souvenir t-shirts, sweatshirts, beer
mugs, books and other high quality merchandise.

Sponsorship Fees.The Company solicits sponsorship arrangements. Major sponsors include Anheuser-
Busch, Inc., Miller Brewing Company, Aquafina Water, Hard Core Cider, Red Hook Ale, Andis Systems, Pepsi Cola Company, Grand Pacific Resorts, Canandaigua Wines, Samuel Adams and Guinness Import Co. Some sponsors also participate in joint advertising campaigns.

Camping Fees.The Company allows employees and independent vendors limited camping at the Faire sites
during the Faire season. The Company provides portable restroom facilities, showers and security for campers. The campers are charged and pay a fee for these services.

Marketing

The Company markets its Faires as entertainment events for the whole family, which also include shopping and food. Marketing is accomplished through local
television and radio stations which, from time-to-time, and often in conjunction with other advertisers, conduct live broadcasts from the Faires. Supplementing this television
and radio advertising, newspapers and billboards provide essential information to the general public regarding the cost of admission, location and times of operation. Artistic brochures and fliers are
directed toward groups for advance sales campaigns.

The
Company has also undertaken a "Sponsorship" campaign. Major sponsors have included Guinness Import Company, Miller Brewing Company, Aquafina Water, Anheuser-Busch, Inc., and
Pepsi Cola Company. Agreements with some sponsors have included joint advertising, sponsorship fees, and product giveaways.

Since
1998, the Company has conducted matinee programs called School Days that are designed to provide an educational experience in combination with lively entertainment for school
children. In 2001, the Company held three daily events at two of its Faire sites with 12,977 individuals attending. In 2002, the Company held three daily events at two Faire sites with 12,381
individuals in attendance. In 2003, the Company plans one daily event at each of its Southern California and New York Faire sites.

Seasonality and Weather

The Company generates its revenue primarily from the production of Renaissance Faires. Since they are exclusively outdoor events, each Faire is scheduled for the
time of year most likely to minimize the risks and hazards of inclement weather. With four Faires in various U.S. locations, the Company has been able to extend the period of revenue generation from
early May (the start of the Southern California Faire) through mid-October (the end of the Northern California Faire), with the Bristol Renaissance Faire being held during
July and August, and the New York Faire during August and September. The spread of Faires over a six-month period, and the geographic spread across the West coast, East
coast, and Midwest, helps to assure that inclement weather in one particular geographic area at any particular time does not adversely threaten the Company's entire source of revenue. However, it is
normal, for adverse weather, or even the forecast of adverse weather, to harm the financial results during certain weekends of any particular Faire.

Prior
to 2002, during the period from mid-October through April, the Company had no material income-generating activity and had to meet its working capital
requirements from cash flow earned during the Faire season augmented by short-term debt. The Company operated the Sterling Forest Ski Center generating revenue during the
December 2002 through March 2003 period. With the operation of the Sterling Forest Ski Center in New York, the potential for counter-seasonal revenue may help smooth the seasonality of
the Company's revenue stream from the Renaissance Faires.

Each
Faire is scheduled for a finite period that is determined substantially in advance in order to facilitate advertising and other promotional efforts. Since attendance at each Faire
depends on the weather, poor weather conditions can result in substantial declines in attendance and loss of revenues. All of the Renaissance Faires' are open "rain or shine". The Company is also
vulnerable to severe climatic events that are similarly beyond it's control but nevertheless could have a direct and material impact upon the Company's relative success or failure.





Competition

As a promoter and operator of family entertainment events, the Company faces significant competition from other more traditional entertainment alternatives,
including amusement parks, theme parks, local and county fairs, and specialty festivals. At each of the markets in which the Company competes, there are many entertainment events which compete for the
consumers' entertainment dollars. Many of these entertainment events have attendance and revenues substantially greater than the Company's Faires in such markets. The Company competes on the basis of
entertainment value and uniqueness of the Renaissance event. The Company emphasizes its Faires as an activity that appeals to the whole family.

While
there are more than 100 annual entertainment events produced in the country with a Renaissance theme, there are approximately 20 major Renaissance Faire productions operated in
major metropolitan areas throughout the country. As families typically do not travel to distant metropolitan areas in order to attend a Renaissance Faire, the Company does not experience direct
competition with those other major productions. More significant competition comes from other entertainment alternatives and smaller faire events in each location.

Further,
by the very nature of Renaissance Faires and the lack of protection afforded by trademark, service mark and unfair competition laws, there exist few barriers to entry into the
industry, and there can be no assurance that other companies with substantially greater resources will not develop competing Faires in the metropolitan areas where the Company has established
productions.

Intellectual Property

Because of the number of existing Faire productions with Renaissance themes, the Company does not rely upon trademark or service mark protection for the name
"Renaissance Faire" in connection with its business. However, the Company did obtain in connection with its acquisition of Living History Center assets, an assignment of a California registration of
the mark "Renaissance Pleasure Faire" which applies only to the state of California. Further, it is possible that the Company could apply for and obtain trademark or service mark registrations on a
state level for its other individual Faires, such as "Bristol Renaissance Faire" and other name-specific marks associated with the "Renaissance Faire" description as those names are
acquired or developed. While the Company may be able to protect a site-specific name for its productions, the Company does not consider this protection a significant deterrent to the entry
of competitors into existing markets, given the limited barriers to such entry.

Public Liability and Insurance

As a producer of public entertainment events, the Company has exposure for claims of personal injury and property damages suffered by visitors to the Company's
Renaissance Faires and Ski Center. The Company maintains comprehensive public liability insurance in the amount of $5,000,000 per occurrence for its Renaissance Faires and $4,000,000 per occurrence
for its Ski Center, which it considers to be adequate against this exposure. Independent vendors operating food concessions, games and rides are required to obtain liability insurance protection, and
to provide the Company with proof of such coverage.

In
2002, a personal injury complaint was filed against the Company with the Supreme Court in Orange County New York. The case contains a demand for $35,000,000 and is in excess of policy
limits that total $5,000,000. No provision has been made in the financial statements as of December 31,2002 since initial review of the claim by the Company's insurance provider indicates their
belief that the ultimate loss in this matter will not exceed insurance policy limits. A contingency exists with respect to this matter, the ultimate resolution of which cannot presently be determined.
Other than the claim described above, the Company has experienced minimum claims that have been resolved quickly without litigation.

Government Regulation

Since food and alcoholic beverages are sold at the various Faire sites, the Company, its vendors and/or subsidiaries must comply with all applicable rules,
regulations and/or ordinances pertaining to the handling and sale of such items. Any material violation of these regulations would subject the Company, its vendors and/or its subsidiaries to the
possibility of having necessary food service permits and liquor licenses revoked. Material violations may also result in penalties and fines being assessed against the Company. The Company must also
comply with all state and federal labor laws and regulations, including all minimum wage and overtime provisions.

The
Company believes that it is in compliance with all such laws, and does not anticipate that any existing law will have a material adverse impact upon the proposed business and
operations of the Company. Although future compliance cannot be assured in the event of future changes in such laws or the addition of regulations governing the proposed business and operations of the
Company, the Company will, at all times, endeavor to take all feasible and required actions necessary to maintain compliance with such laws.

Employees

Each Faire has its own full-time staff as well as seasonal and temporary employees who are engaged during the Faire presentation. On
February 28, 2003, the Company had a total of 36 full-time employees; including 8 full-time employees working in its Colorado headquarters; 8 at the Bristol Faire; 11 at
the California Faires and 9 at the New York Faire/Sterling Forest Ski Center.

During
Faire presentations, there are over 100 street actors interacting with Faire patrons at any given time, with over 1,000 seasonal employees and volunteers. The Company trains its
professional street actors, who perform under contract with the Company for a fixed fee. In addition, the Company invites numerous apprentice actors and actresses to its training programs to perform
during the Faire on a volunteer basis. Only after an actor or actress has gained a particular proficiency are they invited to become a fully-paid contract actor for the Company.

ITEM 2: PROPERTY

The Company's corporate headquarters are located at 275 Century Circle, Suite 102, Louisville, Colorado. This property measures 2,789 square feet and is
currently leased at $3,080 per month base rent, with an increase of three percent per year. This lease was renewed in January 2003 and is for a term of five years expiring in 2008. The Company
considers these offices to be suitable for its current needs.

Bristol Renaissance Faire.The Company leases approximately 160 acres in Kenosha County, Wisconsin,
which is home to the Bristol Renaissance Faire. The lease is for a period of 20 years with lease payments of $400,000 per year during each of the first two years beginning in
November 1997 and increasing to $543,333 per year in years 13 through 20. In 2003, the lease payments for the year will be $440,000. The Company has the right to acquire the property
during the term of the lease. In January, 2002 the Company's Board of Directors approved a resolution to amend the Bristol lease to provide that the repurchase price for the leased property shall be
the greater of the fair market value for the property or $4,522,443. Under the original lease the repurchase option was at an aggregate price of $4,433,333 during the first three years,
increasing to $4,900,000 during years 13 through 20. The Company has made a security deposit of $666,667, $333,333 of which was released in 2001 and the balance was to be released in 2005. The
proposed Sterling Forest lease for the New York Faire site would hold the remaining $333,333 as a security deposit for both leases and extend the release date to April 1, 2008.

Southern California Renaissance Pleasure Faire.The Southern California Faire site is leased from the
San Bernardino County Parks and Recreation Department. This is a ten-year lease with two five-year options
to extend. Rent on this property is based on a percentage of gross revenues, which ranges during the first ten-years of the lease, from four to seven percent with a guaranteed minimum
rental payment. Guaranteed minimum rent under the lease increases $25,000 per year for the first ten years of this lease with 2003 rent fixed at $274,500.

Northern California Renaissance Pleasure Faire..On May 3, 2002, the Company signed a
long-term lease for the Northern California Faire. The new site for the Northern Faire is located at Casa de Fruta, near Gilroy, California. The Company leases the site with terms expiring
through the year 2022 with rights to terminate the lease agreement at the end of the first, third, fifth, tenth and fifteenth lease years. The landlord has the right to terminate the lease
agreement at the end of the tenth lease year only. Annual lease payments on the Northern California Faire site are the sum of $75,000 plus $1.00 per patron or a minimum of $150,000 per year with a 4%
annual increase. The Company has elected not to make certain improvements to related property required under the lease and is in discussions regarding amendments to the lease terms.

New York Renaissance Faire.The New York Faire is operated on 65 acres of leased land in Tuxedo, New
York. On April 1, 2002, Faire Partners, Ltd., the Company's landlord for the Wisconsin site, purchased property in New York from Sterling Forest Corporation. The property has long been
the home of the New York Renaissance Faire. In April, 2002, Faire Partners Ltd. leased the property to the Company on a twenty-year term with rent payments of $425,000
in years 1 through 5, $435,000 years 6 through 15 and $450,000 for lease years 16 through 20. The leased property includes a site for a Ski Center. The lease allows Faire Partners
to sell the property on which the Ski Center operates as well as other parcels of property not utilized in the Company's ongoing operations. Should Faire Partners sell any portion of the property, the
lease provides that the Company's rent payments and the buyout provision would be decreased in an amount proportional to the selling price of the property.

Virginia Renaissance Faire.On July 27, 1995, the Company acquired approximately 250 acres of
land in Stafford County, Virginia, for a purchase price of $925,000. This property housed the Virginia Renaissance Faire. The construction of the Faire was financed, in part, with a
$1.5 million mortgage, repayable over 15 years at an initial interest rate of 8.65% annually. In March, 1999, the company obtained a second mortgage on this property in the amount of
$750,000. On January 28, 2000, the Company announced the closure of the Virginia Renaissance Faire. The Company completed the sale of the Virginia property in August, 2001, at a selling price
of $1.3 million. The proceeds of the sale were used to retire the first and second mortgages on the property with excess funds set aside for use as working capital. (See "Management's
Discussion and Analysis of Financial Condition and Results of Operations-Liquidity").

ITEM 3: LEGAL PROCEEDINGS

In 2002, a complaint was filed against the Company with the Supreme Court in Orange County New York. The case contains a demand for $35,000,000 and is in excess
of policy limits that total $5,000,000. The Company has been advised by the insurance provider that, based on its initial review of this claim, the loss in this matter will not exceed the insurance
policy's limits. A liability has not been accrued at
this time because the outcome of this claim lacks certainty. The Company will continue to monitor the progress of this complaint.

ITEM 4: SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

None

ITEM 5: MARKET FOR THE COMMON EQUITY  AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

Since December 21, 1998, the Company's Common Stock has been traded on the OTC Bulletin Board under the symbol FAIR. The following table reflects the high
and low prices of the Company's Common Stock for each quarterly period of the two most recent calendar years and the subsequent interim quarter. The quotations represent prices between
broker-dealers and do not include retail mark-ups and mark-downs or any commission to the broker-dealer and may not reflect prices in actual transactions.

Calendar Years Ended December 31

High

Low2001First Quarter ended March 31

0.2813

0.1563Second Quarter ended June 30

0.40

0.15Third Quarter ended September 30

0.51

0.20Fourth Quarter ended December 31

0.40

0.202002First Quarter ended March 31

0.35

0.22Second Quarter ended June 30

0.29

0.16Third Quarter ended September 30

0.39

0.25Fourth Quarter ended December 31

0.50

0.332003Year-to-date as of March 14

0.42

0.33


As
of March 12, 2003, there were approximately 151 shareholders of record.

DIVIDENDS

The Company has never paid cash dividends on its Common Stock, and does not anticipate the payment of such dividends in the foreseeable future.

ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

The following discussion should be read in conjunction with the Company's Consolidated Financial Statements, including the footnotes for the fiscal period ended
December 31, 2002.

The
Company presently owns and produces four Renaissance Faires: the Bristol Renaissance Faire in Kenosha, Wisconsin, serving the Chicago/Milwaukee metropolitan region; the Northern
California Renaissance Pleasure Faire, serving the San Francisco Bay and Sacramento metropolitan areas; the Southern California Renaissance Pleasure Faire in Devore, California serving the greater Los
Angeles metropolitan area; and the New York Renaissance Faire serving the New York City metropolitan area.

The
Renaissance Faire is a re-creation of a Renaissance village, a fantasy experience transporting the visitor back into sixteenth century England. This fantasy experience is
created through authentic craft shops, food vendors and continuous live entertainment throughout the day, both on the street and the stage, including actors, jugglers, jousters, magicians, dancers and
musicians.

On
April 1, 2002, Faire Partners, Ltd., the Company's landlord for the Wisconsin site, purchased property in New York from Sterling Forest Corporation. The property has
long been the home of the New York Renaissance Faire. In April, 2002, Faire Partners Ltd. leased the property to the Company on a twenty-year term with rent payments of $425,000 in years 1 through 5,
$435,000 years 6 through 15 and $450,000 for lease years 16 through 20. The leased property includes a site for a Ski Center that the Company opened to the public in
December 2002. The lease allows Faire Partners to sell the property on which the ski area operates. Should Faire Partners sell the property, the lease provides that the Company's rent payments
and the buyout provision would be decreased in an amount proportional to the selling price of the property. During calendar 2002, the Ski Center generated revenue and expense in the amount of $194,374
and $608,683 respectively.

On
May 3, 2002, the Company signed a long-term lease for the Northern California Faire. The new site for the Northern Faire is located at Casa de Fruta, near Gilroy,
California. The lease is for 20 years, 5-years with a 15-year extension. Lease payments in the first year include $1.00 per patron with a $150,000 minimum and increasing
each year thereafter.

The
Company had a working capital deficit of ($48,697) as of December 31, 2002. While the Company believes that it has adequate capital to fund anticipated operations for 2003, it
believes it may need additional capital for future fiscal periods. See "Liquidity and Capital Resources."

Results of Operations

The Company operated its New York Faire eight weekends in 2001 and seven in 2002. The Northern California Faire operated eight weekends in 2001 as compared to six
in 2002. The Wisconsin Faire operated nine weekends in both 2001 and 2002. The Southern California Faire operated eight weekends in 2001 and seven in 2002.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001.

Revenues decreased $433,997 or 4% from $12,447,540 in 2001 to $12,013,543 in 2002. Overall revenue and attendance at the Company's Renaissance Faires was up in
2001 with the exception of the New York and Northern California Faires. The Sterling Forest Ski Center operated two weeks in 2002, generating approximately $195,000 in revenue.

The
Northern California Faire experienced a decrease in attendance of approximately 6% in 2002. Revenue was down approximately $490,000 as compared to the 2001 operating season. As
previously discussed, a long-term lease was obtained and this Faire was relocated in 2002. It is believed that decreased attendance for this Faire is the result of its' multiple
relocations since 1999. When a Faire is relocated, a temporary decline in attendance is anticipated. Because of multiple relocations of this event, a core audience base has not been established. With
the relocation of this event in 2002, the Company anticipates attendance and revenue for this Faire to remain fairly flat over the upcoming three to five years.

The
New York Faire experienced bad weather nine out of fifteen days that the event operated. Four of the nine days of bad weather were marked by torrential rain, the
remaining five were days of oppressive heat. As a result attendance decreased 8% and revenue decreased approximately $150,000 in 2002 as compared to 2001.

Operating
costs decreased $184,733 or 4% from $3,625,983 in 2001 to $3,441,250 in 2002. The Company did not operate the Sterling Forest Ski Center in 2001. Expense associated with
operating the Ski Center in 2002 was $84,669. Operating expense associated with the Company's Renaissance Faires decreased $269,402 and is primarily the result of a decrease in the number of
operating days in 2002 as compared to 2001.

Operating
expenses (year-round operating costs and corporate overhead) increased $188,718 or 2%, from $8,498,487 in 2001 to $8,687,205 in 2002. Of the operating expenses,
depreciation and amortization decreased $39,932 or 12%, from $362,699 in 2001 to $322,767 in 2002. Salaries increased 4%, from $3,393,204 in 2001 to $3,537,193 in 2002. Salary and wage expense for the Faires actually decreased $84,759, however salaries for the Ski Center were $228,748 for 2002 resulting in a
$143,989 increase for the 2002 period as compared to the 2001 period. Advertising expense increased 6% from $1,494,174 to $1,590,999 or $96,825 of which $40,929 relates to operation of the Ski Center.
Other operating expenses (all other general and administrative expenses of the Company) decreased 1% or $12,164, from $3,248,410 in 2001 to $3,236,246 in 2002. In 2002 Ski Center operating expenses
were $254,399 and therefore expenses decreased $266,563 in this category of expenses for the Faires. This operating expense decrease is largely attributable to a decrease in the number of
operating days of the New York, Northern California and Southern California Faires. In addition, in 2001 approximately $120,000 was spent negotiating a long-term site for the
Northern California Faire whereas nothing was spent in 2002. As a result of the foregoing, net operating income (before interest charges and other income) decreased from a $323,070 net operating
profit in 2001 to net operating loss of ($114,912) for the 2002 period.

In
2001, because the Company did not have a lease for the Northern California Faire the unamortized goodwill ($367,446) associated with the Faire and the remaining book value of the
fixed assets ($40,924) for this event were written-off. This largely explains the difference in other expense which decreased $441,438 from ($856,328) in 2001 to ($414,890) in 2001. In
addition, the Company incurred expense in the amount of $39,982 in 2001 to finish closing the Virginia Faire and sell the property. Interest expense decreased $14,278 or 3% from ($539,028) in 2001 to
($524,750) in 2002. Interest income decreased $43,247 from $83,400 to $40,153 and is a result of the 2001 return of a $333,333 deposit held by Faire Partners that was previously yielding monthly
interest payments to the Company.

Combining
net operating income with other income/expense resulted in a $3,456 decrease in net loss before taxes, from ($533,258) net loss for the 2001 period to ($529,802) net loss for
the 2002 period.

Net
loss to common stockholders also decreased $3,456 from ($533,258) net loss for the 2001 period to ($529,802) net loss for the 2002 period. Finally, net loss per common share remained
the same at ($0.25) for both years based on 2,144,889 weighted average shares outstanding during the 2001 and 2002 periods.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000.

Revenues decreased $15,276 or less than 1% from $12,462,816 in 2000 to $12,447,540 in 2001. Overall revenue and attendance at the Company's Renaissance Faires was
up in 2001 with the exception of the Northern California Faire.

The
Northern California Faire experienced a decrease in attendance of approximately 12% in 2001. Revenue was down approximately $250,000 as compared to the 2000 operating season. This
decrease is thought to be partially explained by the terrorist attacks of September 11, 2001. As of that date, the Northern California Faire had operated three weekends, with five remaining.
Reviewing the results of operations for the final five weekends of this event in 2001 as compared to 2000, attendance dropped 17%. It is also believed that the decreased attendance for this Faire is
the result of its relocation in 1999. When this Faire was relocated, part of its original core audience was lost. With the potential relocation of this event in 2002, the Company anticipates
attendance and revenue for this Faire to remain fairly flat over the upcoming three to five years.

Faire
operating costs decreased $76,523 or 2% from $3,702,506 in 2000 to $3,625,983 in 2001. Operating expenses (year-round operating costs and corporate overhead) increased
$778,905 or 10%, from $7,719,582 in 2000 to $8,498,487 in 2001.





Of the operating expenses, depreciation and amortization decreased $46,826 or 11%, from $409,525 in 2000 to $362,699 in 2001. This decrease is partly the result of writing down the New
York asset base over several years due to the uncertainty of the site lease arrangements upon expiration of the lease in 2001. The final write-down of these assets was recorded in
December 31, 2000. As a result, the New York Faire depreciation expense was $60,000 less in 2001 as compared to 2000.

Salaries
increased 4%, from $3,261,800 in 2000 to $3,393,204 in 2001 reflecting a $131,404 increase for the 2001 period as compared to the 2000 period. Advertising expense showed an
increase of $130,939 or 10%, from $1,363,235 in 2000 to $1,494,174 in 2001. Other operating expenses (all other general and administrative expenses of the Company) increased $563,388 or 21%, from
$2,685,022 in 2000 to $3,248,410 in 2001. Of this operating expense increase, approximately $200,000 is attributable to the additional weekend of operation at both the Northern California and New York
Faires. Operating an extra weekend results in higher wages paid to workers and requires more advertising and other operating dollars. In addition, in 2001 approximately $120,000 was spent negotiating
a long-term site for the Northern California Faire. In addition, $53,000 was spent to disassemble the Northern California Faire site in Vacaville and place those items in storage. The
remainder of the increase is the result of escalating costs in areas such as business and health insurance ($62,000), property taxes ($30,000), merchant fees ($10,000), payroll taxes ($40,000),
utilities ($55,000) and rents, printing, express mail and travel ($120,000).

As
a result of the foregoing, net operating income (before interest charges and other income) decreased 69% from a $1,040,728 net operating profit in 2000 to net operating profit of
$323,070 for the 2001 period.

Other
expense decreased $47,427 or 5% from ($903,755) in 2000 to ($856,328) in 2001. Interest expense decreased 13% from $617,803 in 2000 to $539,028 in 2001 as a result of the Company's
decreased level of indebtedness. Because the Company does not have a lease for the Northern California Faire as of the date of this report, the unamortized goodwill ($367,446) associated with the
Faire and the remaining book value of the fixed assets ($40,924) for this event were written-off. The Company incurred expenses in the amount of $467,272 in 2000 and $39,982 in 2001 to
finish closing the Virginia Faire and selling the property.

Combining
net operating income with other income/expense resulted in a $670,231 decrease in net income before taxes, from $136,973 net profit for the 2000 period to ($533,258) net loss
for the 2001 period.

Net
income to common stockholders also decreased $670,231 from $136,973 net profit for the 2000 period to ($533,258) net loss for the 2001 period. Finally, net income per common share
decreased from $0.06 for the 2000 period to ($0.25) for the 2001 period, based on 2,144,889 weighted average shares outstanding during the 2000 and 2001 periods.

Liquidity and Capital Resources

The Company's working capital surplus decreased during 2002 from a surplus of $524,782 at December 31, 2001 to a deficit of ($48,697) at
December 31, 2002. The Company's working capital requirements are greatest during the period from January 1 through April 30, when it is incurring start-up expenses
for its first Faire of the Faire season, the Southern California Faire.

During
the first four months of fiscal 2002, the Company raised capital in the amount of $100,000 through the issuance of 12% subordinated promissory notes. The funds were
provided by Charles S. Leavell, Chairman of the Board of Directors ($50,000), and a party affiliated with the Chairman of the Board. The notes were issued in units, each unit consisting of two
promissory notes of equal principal, identical in nature except that one note is convertible to common stock at a price of $0.30 per share. Interest is due and payable quarterly and the notes mature
August 31, 2003.

During
fiscal 2000, the Company raised capital in the amount of $575,000 through the issuance of 12% subordinated promissory notes. The funds were provided by Charles S. Leavell,
Chairman of the Board of Directors ($250,000), J. Stanley Gilbert, President and Director ($225,000), and one other investor. The notes were issued in units, each unit consisting of two promissory
notes of equal principal, identical in nature except that one note is convertible to common stock at a price of $0.30 per share. Interest was due and payable quarterly and the notes matured
August 31, 2001. On the maturity date, the non-convertible portion of the notes were retired. The maturity date for the convertible portion of the notes was extended until
August 31, 2003 under the same terms and conditions as the original.

Reviewing
the change in financial position over the twelve months, current assets, largely comprised of cash and prepaid expenses, decreased from $1,489,308 at December 31,
2001 to $1,192,473 at December 31, 2002, a decrease of $296,835 or 25%. Of these amounts, cash and cash equivalents decreased from $834,257 at December 31, 2001 to $642,061 at
December 31, 2002. Accounts receivable decreased from $116,369 at December 31, 2001 to $23,530 at December 31, 2002. Inventory increased from $155,367 at December 31, 2001
to $160,500 at December 31, 2002. Notes receivable, current portion in the amount of $90,862 is the result of the sale of the Company's food operation in Wisconsin. As part of the terms of this
purchase, the Company agreed to carry a note in the amount of $150,000 for a period of three years with a balloon payment due and payable in 2003. Prepaid expenses
(expenses incurred on behalf of the Faires) decreased from $365,499 at December 31, 2001 to $275,520 at December 31, 2002. These costs are expensed once the Faires are operating.

Current
liabilities increased from $964,526 at December 31, 2001, to $1,241,170 at December 31, 2002, an increase of $276,644 or 22%. During the year, accounts payable and
accrued expenses decreased $98,843 or 27%. Notes payable current portion increased $100,958 or 24% from $313,780 at December 31, 2001 to $414,738 at December 31, 2002 as a result of the
2002 loans previously mentioned. Unearned income, which consists of the sale of admission tickets to upcoming Faires, deposits received from craft vendors for future Faires and season passes for the
Ski Center, increased from $181,177 at December 31, 2001 to $447,746 at December 31, 2002. This increase is due to deferral of Ski Center season pass revenue that will be released
pro-rata during the ski season. Deferred revenue for the Renaissance Faires is recognized once the Faires are operating.

Total
assets decreased from $4,767,849 at December 31, 2001 compared to $4,450,044 at December 31, 2002. Property, plant and equipment (net of depreciation) increased by
$165,863 or 25% from $2,709,091 at December 31, 2001 to $2,874,954 at December 31, 2002. Other miscellaneous assets such as vendor deposits, decreased from $458,588 at
December 31, 2001 to $382,617 at December 31, 2002.

Total
liabilities increased from $5,183,654 at December 31, 2001 to $5,390,651 at December 31, 2002, an increase of $206,997 or 4%. Total liabilities at December 31,
2002 include $1,241,170 in current liabilities (discussed above), plus approximately $13,000 from the long-term portion of debt primarily resulting from operating leases for equipment and
$3,969,582 lease obligation with respect to the sale/leaseback of the Bristol Faire site.

Stockholders'
Deficit increased from a deficit of ($415,805) at December 31, 2001 to a deficit of ($940,607) at December 31, 2002, an increase of $524,802. This increase
resulted principally from the 2002 net loss of ($529,802). As of December 31, 2001, the Company had outstanding 2,144,889 shares of common stock.

Although
inflation can potentially have an effect on financial results, during 2001 and 2002, it caused no material effect on the Company's operations, since the change in prices charged
by the Company and by the Company's vendors has not been significant.

Based
on the Company's budgeted expenses and revenues for the fiscal year ending December 31, 2003, management believes it will have adequate capital to fund operations and
anticipated capital expenditures for the year and repayment of indebtedness that becomes due and payable in 2003.

The
lease with the County of San Bernardino requires the Company to complete certain capital projects. These projects include items such as the construction of a perimeter fence,
planting trees, developing flower and water gardens, planting grass, installing infrastructure and constructing buildings for use at the Faire. The Company is in the process of obtaining bids on the
projects planned for 2003 but estimates that the cost of these items should not exceed $100,000. The Company has no additional significant commitments for capital expenses during the fiscal year
ending December 31, 2003. See "Factors That May Affect Future Operating Results-Need for Additional Capital" regarding the Company's financing requirements.

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

In addition to the other information contained in this report, prospective investors should carefully consider the following factors in evaluating the Company and
its business.

Recent Losses.The Company has incurred operating losses in most fiscal periods since 1995. Although the Company was
profitable in 2000, the net profit of $136,973 is not substantial. There is no assurance that the Company will remain profitable in any subsequent period.

Need for Additional Capital.The Company had a working capital deficit of ($48,697) as of December 31, 2002. See
"Management's Discussion and Analysis of Financial Condition and Results of Operations."Based on the Company's projected operations for 2003, the
Company believes it will have adequate capital to fund operations for 2003, to fund required capital expenditures during the year and to repay short-term indebtedness. To the extent that
operations do not provide the necessary working capital during 2003, the Company may need to obtain additional capital for 2003 and future fiscal periods. Additional capital may be sought through
borrowings or from additional equity financing. Such additional equity financing may result in additional dilution to investors. In any case, there can be no assurance that any additional capital can
be satisfactorily obtained if and when required.

Competition.The Company faces significant competition from numerous organizations throughout the country which offer
Renaissance Faires and other entertainment events, including amusement parks, theme parks, local and county fairs and festivals, some of which possess significantly greater resources than the Company,
and in many cases, greater expertise and industry contacts. The Company estimates that there are currently 20 major Renaissance Faires produced each year. In addition, the Company estimates that there
are 100 minor Renaissance Faire events held throughout the United States each year, ranging in duration from one day to two weekends.

Lack of Trademark Protection.Because of the large number of existing Renaissance Faires, the Company is not able to rely
upon trademark or service mark protection for the name "Renaissance Faire." As a result, there is no protection against others using the name "Renaissance Faire" for the production of entertainment
events similar to those produced by the Company. The Company's own Faires could be negatively impacted by association with substandard productions.

Public Liability and Insurance.As a producer of a public entertainment event, the Company has exposure for claims of
personal injury and property damage suffered by visitors to the Faires. To date, the Company has experienced only minimal claims, which it has been able to resolve without litigation. The Company
maintains comprehensive liability insurance which it considers to be adequate against this risk; however, there can be no assurance that a catastrophic event or claim which could result in damage or
liability in excess of this coverage will not occur.

Dependence Upon Vendors.A substantial portion of the Company's revenues generated at each Faire is derived from arrangements
that the Company has with vendors who construct elaborate booths at the Faires and sell a variety of food, crafts and souvenirs. This arrangement consists of either a fixed rental paid by the vendors
to the Company, or a percent of revenues. In either case, the success of a Faire is dependent upon the Company's ability to attract responsible vendors who sell high quality goods.

Seasonality.The Company's Renaissance Faires are located in traditionally seasonal areas that attract the greatest number of
visitors during the warm weather months in the spring, summer, and early fall. With the addition of the Sterling Forest Ski Center operation in New York, the potential for counter-seasonal
revenue may help smooth the seasonality of the Company's revenue stream from the Renaissance Faires. Unless the Company acquires or develops additional Faire sites or other events in areas that are
counter-seasonal to the present sites located in temperate climates, the Company's revenues and income will be highly concentrated from April through October 31st of each year.

Dependence Upon Weather.Each Renaissance Faire operated by the Company is scheduled for a finite period, typically
consecutive weekends during a seven to nine-week period, which are determined substantially in advance in order to facilitate advertising and other promotional efforts. The success of each
Faire is directly dependent upon public attendance, which is directly affected by weather conditions. While each of the Company's Faires are open, rain or shine, poor weather, or even the forecast of
poor weather, can result in substantial declines in attendance and, as a result, loss of revenues. Further, as the Renaissance Faires are outdoor events, they are vulnerable to severe weather
conditions that can cause damage to the Faire's infrastructure and buildings, as well as injuries to patrons and employees. Risks associated with the weather are beyond anyone's control, but have a
direct and material impact upon the relative success or failure of a given Faire.

Licensing and Other Governmental Regulation.For each Faire operated by the Company, it is necessary for the Company to apply
for and obtain permits and other licenses from local governmental authorities controlling the conduct of the Faire, service of alcoholic beverages, service of food, health, sanitation, and other
matters at the Faire sites. Each governmental jurisdiction has it's own regulatory requirements that can impose unforeseeable delays or impediments in preparing for a Faire production. While the
Company has been able to obtain all necessary permits and licenses in the past, there can be no assurance that future changes in governmental regulation or the adoption of more stringent requirements
may not have a material adverse impact upon the Company's future operations.

ITEM 7: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following financial statements are filed as part of this report:



ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.





PART II

ITEM 9: DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Name, position with the Company, age of each Director or officer, and the period during which each Director has served are as follows:

|Name               |  | Age |  | Position                                                                                |  | Director Since
|------------------ |  | --- |  | --------------------------------------------------------------------------------------- |  | --------------
|Charles S. Leavell |  | 61  |  | Chairman of the Board of Directors, Chief Executive Officer and Chief Financial Officer |  | 1993          
|Robert M. Geller   |  | 50  |  | Director                                                                                |  | 1994          
|Thomas G. Brown    |  | 57  |  | Director                                                                                |  | 1999          
|J. Stanley Gilbert |  | 65  |  | President and Chief Operating Officer, and a Director                                   |  | 1999          
|Sue Brophy         |  | 47  |  | Controller, Chief Accounting Officer                                                    |  |              

Charles S. Leavell,a graduate of Philips Academy Andover and Stanford University, founded Renaissance Entertainment Corporation in 1993.
He has served as Chairman of the Board from the Company's inception and in 1996 he was elected Chief Executive Officer. Prior to Renaissance Entertainment Corporation, Mr. Leavell served as
President and CEO of Leavell Management Group, a management company specializing in restoring partnerships and acquisitions to long-term health and profitability. It was through this
company that Leavell purchased the Company's first Renaissance Faire in 1988. Mr. Leavell's former affiliations include his long tenure with Leavell Management Group, as well as
Vice-Chair of Colorado Venture Capital Corporation, Board of Directors of CK Properties, Fountain Valley School and the Cleo Wallace Center and serving a term on the President's Council
for Coors Scholarships for the University of Colorado.

Robert M. Gellerhas been a Director of the Company since April 1, 1994. He served as Chief Financial Officer of
Online System Services, Inc., a provider of internet services, from March 1995 to October 1996. Mr. Geller has also served as the President of The Growth Strategies Group,
a consulting firm specializing in executive/board services for emerging growth companies since August 1991.

Thomas G. Brownwas elected a director of the Company on October 19, 1999. Mr. Brown has been President and
Managing Director of Wyndham Capital Corporation, an investment banking and research firm since he founded it in 1996. Mr. Brown was also a co-founder of Ablum, Brown &
Company, an investment banking firm specializing in leveraged buyout transactions. He served as its Managing Director from January 1988 until December 1995. Prior to his tenure with
Ablum, Brown & Company, Mr. Brown served as principal of several investment management and investment banking firms including seven years as a principal of Deihl, Speyer &
Brown, a regional investment banking firm. Mr. Brown is a Chartered Financial Analyst. He also serves as a director of Ashton Technology Group, Inc.

J. Stanley Gilbertbecame President and Chief Operating Officer in January, 1997. From 1988 to 1996, he was Vice President of
the Company and General Manager of the Bristol Renaissance Faire. Mr. Gilbert was cofounder and President of Just in Jest, Inc., an art studio featuring Renaissance and fantasy handmade
sculptures whose works have been displayed in galleries and museums. Prior to that Mr. Gilbert worked in senior management in the commercial banking field in both California and Colorado.

Sue Brophyhas been Controller and Chief Accounting Officer of the Company since August, 1995. Ms. Brophy holds a
Bachelor of Arts degree in Biology, a Master of Science degree in Accounting, and has been a licensed CPA since 1995.

Each
Director is elected to serve for a term of one year and until the next Annual Meeting of Shareholders or until a successor is duly elected and qualified.

Section 16(a) Beneficial Ownership Reporting Compliance

On May 1, 1991, comprehensive new rules promulgated by the Securities and Exchange Commission relating to the reporting of securities transactions by
directors and officers became effective. To the Company's knowledge, based solely on a review of the copies of reports furnished to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 2002, all required reports were filed on a timely basis.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth certain information for the Company's fiscal periods ended December 31, 2002 and December 31, 2001, regarding
compensation earned by or awarded to the Company's chief executive officer and the other executive officers whose total annual salary and bonus exceeded $100,000 (the "Named Executive Officers").

TABLE I
SUMMARY COMPENSATION TABLE

|                                      |  |           |  |    |                 |  |         |  |         | Long Term Compensation
|------------------------------------- |  | --------- |  | -- | --------------- |  | ------- |  | ------- | ----------------------
|
|
|Charles S. Leavell, Chairman and CEO  |  | 2002
2001 |  | $$ | 160,000
160,000 |  | -0-
-0- |  | -0-
-0- |                       
|J. Stanley Gilbert, COO and President |  | 2002
2001 |  | $$ | 120,000
120,000 |  | -0-
-0- |  | -0-
-0- |                       

---

Options Granted During Fiscal 2002

There were no options granted to Named Executive Officers during the fiscal year ended December 31, 2002.

Aggregated Option Exercises During Fiscal 2001 and Fiscal Year-End Option Values

The following table provides information related to the number and value of options held by the Named Executive Officers as of December 31, 2002. The
Company does not have any outstanding stock appreciation rights.

|Name               |  | Shares Acquired
on Exercise (#) |  | Value
Realized
($) |     | Number of
Unexercised
Options/SARs at
FY-end (#)
Exercisable/
Unexercisable |                 | Value of Unexercised
In-the-Money
Option/SARs
at FY-End ($)(1)
Exercisable/
Unexercisable
|------------------ |  | ------------------------------- |  | ------------------ | --- | --------------------------------------------------------------------------- | --------------- | -----------------------------------------------------------------------------------------
|Charles S. Leavell |  | -0-                             |  | $                  | -0- |                                                                             | 166,000/50,000  |                                                                                          
|J. Stanley Gilbert |  | -0-                             |  | $                  | -0- |                                                                             | 140,000/100,000 |                                                                                          

---

Employment Agreements

Effective December 11, 1998 the Company entered into an Employment Agreement with Charles S. Leavell, CEO, and J. Stanley Gilbert, President and COO. The
agreements become effective at such time as a change of control (as defined by the acquisition by any individual, entity or group of 30% of more of the then outstanding shares of common stock of the
Company or the combined voting power of the then outstanding voting securities of the Company) takes place. These agreements have a term of three years beginning with a change in control of the
Company.

Director Compensation

During the fiscal year ended December 31, 2001, Directors, other than Mr. Geller, Mr. Schwartz, Mr. Gilbert and Mr. Leavell,
received no cash compensation for their services as such, however they were reimbursed for their expenses associated with attendance at meetings or otherwise incurred in connection with the discharge
of their duties as Directors of the Company. During the fiscal year ended December 31, 2002, Mr. Geller received $1,000, Mr. Schwartz, a former director of the Company, received
$3,000 and Mr. Brown received $2,000 cash compensation associated with attendance at Board of Director meetings. During July 1997, the Board of Directors authorized the granting of
options to outside directors representing the right to acquire up to 8,000 shares (retroactively adjusted for the February 1998 one-for-five reverse stock split) for
each year that a director serves on the Board. These options were to be granted in lieu of cash compensation. In October 2000, the Board of Directors authorized a new plan for granting of
options in consideration for serving on the Company's Board of Directors. Each member of the Board of Directors who is not an employee of the Company is granted a non-statutory stock
option pursuant to the Company's Stock Option Plan, each such option to represent the right to acquire up to 60,000 shares of the Company's common stock, to have an exercise price equal to the fair
market value of the Company's common stock at the close of business ($0.16) and to have the standard terms for non-statutory stock options granted pursuant to the Plan, provided that the
options shall vest at the rate of 5,000 shares per quarter beginning 12/31/2000 for a three year period, so long as the Director continues to serve on the Company's Board of Directors and attends all
meetings.

Directors
who are also executive officers of the Company receive no additional compensation for their services as Directors.

Geller Agreement

As a Director, Mr. Geller receives compensation as outlined in the above section entitled Director Compensation. In addition, Mr. Geller provides
consulting services to the company. For these services, Mr. Geller received cash compensation in the amount of $12,500 in 2001 and $13,000 in 2002.

Schwartz Compensation

Mr. Schwartz, a former director of the Company, provided consulting services to the Company for which he received $15,000 in 2001.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee consists of Messrs. Geller and Leavell. Mr. Leavell, who is Chief Executive Officer and a director of the Company,
participates in all discussions and decisions regarding salaries, benefits and incentive compensation for all employees of the Company, except discussions and decisions relating to his own salary,
benefits and incentive compensation.

ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of the Company's Common Stock, as of March 14, 2003, by:
(i) each of the directors of the Company, (ii) all officers and directors of the Company as a group, and (iii) holders of 5% or more of the Company's Common Stock. Each person has
sole voting and investment power with respect to the shares shown, except as noted.

|Name and Address of Beneficial Owner                                        |  | Number of Shares |     | Percent of
Class(1) |  
|--------------------------------------------------------------------------- |  | ---------------- | --- | ------------------- | -
|Charles S. Leavell
275 Century Circle, Suite 102
Louisville, Colorado 80027 |  | 1,209,573        | (2) | 41.7                | %
|Robert M. Geller
275 Century Circle, Suite 102
Louisville, Colorado 80027   |  | 149,333          | (3) | 6.5                 | %
|Thomas G. Brown
275 Century Circle, Suite 102
Louisville, Colorado 80027    |  | 58,000           | (4) | 2.6                 | %
|J. Stanley Gilbert
275 Century Circle, Suite 102
Louisville, Colorado 80027 |  | 731,787          | (5) | 26.1                | %
|All Directors & Officers as a Group (6 Persons)                             |  | 2,173,693        | (6) | 57.4                | %

---



shares.
Includes warrants to purchase 40,000 shares, 20,000 of which are held by Leavell Management Group, Inc. Includes conversion rights to 499,999 shares of Common Stock, 83,333 of which
are held by Leavell Management Group, Inc. Mr. Leavell disclaims beneficial ownership of the securities held by LMG for purposes of Section 16 under the Exchange Act. This does
not include warrants to purchase 40,000 shares owned by an estate to which Mr. Leavell is a beneficiary.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Promissory Notes2000

In 1999, the Company authorized the issuance of up to $1,000,000 of 12% subordinated promissory notes due August 31, 2001 in units, each unit consisting of
two promissory notes (A Notes and B Notes)of equal principal, identical in nature except that one note is convertible to common stock at a price of $0.30 per share (B Notes). During the first
six months of fiscal 2000, the Company raised capital in the amount of $575,000 through the issuance of these notes. The funds were provided by Charles S. Leavell ($250,000), CEO and Chairman
of the Board of Directors, J. Stanley Gilbert ($225,000), President and a Director, and one other investor. In August, 2001, the A Notes were retired and the maturity date on the B Notes was extended
to August 31, 2002. In 2002 an additional extension was granted until August 31, 2003.

Promissory Notes2002

During the first quarter of 2002, the Company authorized the issuance of 12% subordinated promissory notes due August 31, 2003 in units, each unit
consisting of two promissory notes (A Notes and B Notes) of equal principal, identical in nature except that one note is convertible to common stock at a price of $0.30 per share (B Notes). During
fiscal 2002, the Company raised capital in the amount of $100,000 through the issuance of these notes. The funds were provided by Charles S. Leavell ($50,000), CEO and Chairman of the Board of
Directors and one other investor and related party.

Faire Partners, Ltd.

In November of 1997, the Company sold it's Wisconsin property in a sale-leaseback transaction to Faire Partners, Ltd. of El Paso, Texas.
One of the owners of Faire Partners, Ltd. was related to the CEO and Chairman of the Board of Directors of the Company. This related party is now deceased and his ownership in Faire
Partners, Ltd. is currently part of his estate. Because the Company's CEO and Chairman of the Board of Directors of the Company is a beneficiary of this estate, the estate may be deemed a related party. See "Item 2-Property" for the terms of this transaction. During fiscal 2001 and 2002 the Company paid Faire Partners, Ltd. $440,000 pursuant to this
transaction.

On
April 1, 2002, Faire Partners, Ltd. purchased property in New York from Sterling Forest Corporation. The property has long been the home of the New York Renaissance
Faire. In April, 2002, Faire Partners Ltd. leased the property to the Company on a twenty-year term with rent payments of $425,000 in years 1 through 5, $435,000 years
6 through 15 and $450,000 for lease years 16 through 20. The leased property includes a site for a Ski Center. The Company anticipates opening a Ski Center for the 2002/2003 ski season. The
lease allows Faire Partners to sell the property on which the ski area operates. Should Faire Partners sell the property, the lease provides that the Company's rent payments and the buyout provision
would be decreased in an amount proportional to the selling price of the property.

The
Company believes that the foregoing transactions were on terms as favorable to the Company as could have been obtained from non-affiliated parties.





PART IV

ITEM 13: EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

|Exhibit No |  | Title                                                                                                                                                                                                                                                                                                
|---------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.0(i)     |  | Amended and Restated Articles of Incorporation, incorporated by reference from the Amendment No. 1 to Registrant's Registration Statement on Form 8-A filed with the Commission on April 12, 1994.                                                                                                   
|3.0(ii)    |  | By-Laws, incorporated by reference from the Amendment No. 1 to Registrant's Registration Statement on Form 8-A filed with the Commission on April 12, 1994.                                                                                                                                          
|*3.1       |  | Articles of Amendment to the Articles of Incorporation.                                                                                                                                                                                                                                              
|4.1        |  | Specimen Certificate of Common Stock, incorporated by reference from the Amendment No. 1 to Registrant's Registration Statement on Form 8-A filed with the Commission on April 12, 1994.                                                                                                             
|*4.2       |  | Renaissance Entertainment Corporation 1993 Stock Incentive Plan. (1)                                                                                                                                                                                                                                 
|*10.1      |  | Specimen Vendor and Exhibitor Agreement for the Bristol Renaissance Faire.                                                                                                                                                                                                                           
|*10.2      |  | Specimen Vendor and Exhibitor Agreement for the Northern and Southern Renaissance Pleasure Faires.                                                                                                                                                                                                   
|*10.3      |  | Specimen Bristol Renaissance Faire Concession Agreement.                                                                                                                                                                                                                                             
|*10.4      |  | Specimen Bristol Renaissance Faire Games Concession Agreement.                                                                                                                                                                                                                                       
|10.9       |  | Purchase Agreement dated November 12, 1997 between Faire Partners, LLC and Renaissance Entertainment Corporation, including Lease Agreement and Warrant to Purchase Common Stock as exhibits thereto, incorporated by reference from Registrant's
Registration Statement on Form S-1 (No. 333-43503).
|10.10      |  | Lease dated January 21, 1998 by and between Attache Publishing Services, Inc. and the Company, incorporated by reference from the Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.                                                                                    
|10.11      |  | Employment Agreement dated December 11, 1998 with Charles S. Leavell, incorporated by reference from Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1998.                                                                                                                 
|10.12      |  | Employment Agreement dated December 11, 1998 with J. Stanley Gilbert, incorporated by reference from Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1998.                                                                                                                 
|10.15      |  | Warrant Agreement dated December 17, 1999, incorporated by reference from Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1999.                                                                                                                                            
|10.17      |  | Asset Purchase Agreement between Jim and Marta Selway and the Company dated April 6, 2000, incorporated by reference from Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1999.                                                                                            
|10.18      |  | Form of Subordinated Subscription and Purchase Agreement for 2000, including A Note and Convertible B Note incorporated by reference from Registrant's Quarterly Report on Form 10-QSB for the period ended March 31,
2000.                                                                          
|           |  |                                                                                                                                                                                                                                                                                                      

|10.20   |  | Lease dated June 27, 2000 by and between San Bernardino County Community and Cultural Resources Department and the Company incorporated by reference from Registrant's Annual Report on Form 10-KSB for the year ended December 31,
2000.
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.25   |  | Amendment dated October 30, 2000 to Lease with Faire Partners, LLC incorporated by reference from Registrant's Annual Report on Form 10-KSB for the year ended December 31, 2000.                                                        
|10.28   |  | Form of Subordinated Subscription and Purchase Agreement for 2002, including A Note and Convertible B Note filed herewith incorporated by reference from Registrant's Annual Report on Form 10-KSB for the year ended December 31,
 2001.
|10.29   |  | Amendment dated August 31, 2001 to Subordinated Subscription and Purchase Agreement for 2000 incorporated by reference from Registrant's Annual Report on Form 10-KSB for the year ended December 31, 2001.                              
|10.30   |  | Lease agreement dated March 19,2002 by and between Faire Partners, Ltd. and the Company incorporated by reference from Registrant's Quarterly Report on Form 10-QSB for the period ended March 31, 2002.                                 
|10.31   |  | Lease agreement dated May 3, 2002 by and between Casa De Fruta and the Company incorporated by reference from Registrant's Quarterly Report on Form 10-QSB for the period ended March 31, 2002.                                          
|10.32   |  | Amendment dated February 28, 2002 to Faire Partners, Ltd. lease dated November, 1997 incorporated by reference from Registrant's Quarterly Report on Form 10-QSB for the period ended March 31, 2002.                                    
|10.33   |  | Amendment dated March 18, 2002 to Faire Partners, Ltd. lease dated November, 1997 incorporated by reference from Registrant's Quarterly Report on Form 10-QSB for the period ended March 31, 2002.                                       
|**10.34 |  | Amendment dated January 27, 2003 to lease dated January 21, 1998 by and between Attache Publishing Service filed herein.                                                                                                                 
|**10.35 |  | School Days Contractual Agreement dated December 9, 2002 by and between Sheridan Sechter & Associates and the Company filed herein.                                                                                                      
|**10.36 |  | Contractual Agreement dated December 9, 2002 by and between Sheridan Sechter & Associates and the Company filed herein.                                                                                                                  
|**10.37 |  | Agreement to Terminate Contractal Relationships dated December 12, 2002 between Events Group Corporation and the Company filed herein.                                                                                                   
|**99.1  |  | Officer Certification                                                                                                                                                                                                                    

---

The
Registrant filed no Current Reports on Form 8-K during the final quarter of the fiscal period ended December 31, 2002.





SIGNATURES

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

|                     |  | RENAISSANCE ENTERTAINMENT CORPORATION
|-------------------- |  | -------------------------------------
|Date: March 26, 2003 |  | By:                                  

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

|Signature                               |  | Title                                                               |  | Date          
|--------------------------------------- |  | ------------------------------------------------------------------- |  | --------------
|                                        |  |                                                                     |  |               
|/s/CHARLES S. LEAVELLCharles S. Leavell |  | Chairman of the Board, Chief Executive and Chief Financial Officers |  | March 26, 2003
|/s/SUE BROPHYSue Brophy                 |  | Chief Accounting Officer, Controller and Corporate Secretary        |  | March 26, 2003
|/s/J. STANLEY GILBERTJ. Stanley Gilbert |  | Director, President, and Chief Operating Officer                    |  | March 26, 2003
|/s/ROBERT M. GELLERRobert M. Geller     |  | Director                                                            |  | March 26, 2003
|/s/THOMAS G. BROWNThomas G. Brown       |  | Director                                                            |  | March 26, 2003



CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In
connection with the Annual Report of Renaissance Entertainment Corporation (the "Company") on Form 10-KSB for the period ended December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"), I, Charles S. Leavell, Chief Executive and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
§1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)  The
Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2)  The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

| |  | /s/CHARLES S. LEAVELLCharles S. Leavell
Chief Executive and Chief Financial Officer
| |  | -----------------------------------------------------------------------------------
| |  | March 26, 2003                                                                     





RENAISSANCE ENTERTAINMENT CORPORATION

FINANCIAL STATEMENTS

with

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

December 31, 2002 and December 31, 2001



RENAISSANCE ENTERTAINMENT CORPORATION        FINANCIAL STATEMENTS

with

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

|                                                   |                                                 | Page
|-------------------------------------------------- | ----------------------------------------------- | ----
|Report of Independent Certified Public Accountants |                                                 | F-3 
|Audited Financial Statements:                      |                                                 |     
|                                                   | Balance Sheets                                  |     
|                                                   | Statements of Operations                        |     
|                                                   | Statement of Changes in Stockholders' (deficit) |     
|                                                   | Statements of Cash Flows                        |     
|                                                   | Notes to Financial Statements                   |     





REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board
of Directors
Renaissance Entertainment Corporation

We
have audited the balance sheets of Renaissance Entertainment Corporation as of December 31, 2002 and 2001 and the related statements of operations and changes in stockholders' (deficit), and
cash flows for the years ended December 31, 2002 and 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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 an audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the 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 provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Renaissance Entertainment Corporation as of December 31, 2002 and
2001 and the results of operations, changes in stockholders' (deficit) and cash flows for the years ended December 31, 2002 and 2001 in conformity with accounting principles generally
accepted in the United States of America.

The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1, the Company has suffered recurring losses from
operations, has a negative working capital and has a stockholders' deficit that raise substantial doubts about its
ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Schumacher &
Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, CO 80211

March 6,
2003





RENAISSANCE ENTERTAINMENT CORPORATION        BALANCE SHEETS

ASSETS

|                                              |                               | December 31,
2002                                                                                                                        |           | December 31,
2001 |            
|--------------------------------------------- | ----------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------- | --------- | ----------------- | -----------
|Current Assets:                               |                               |                                                                                                                                          |           |                   |            
|                                              |                               | Cash and equivalents                                                                                                                     |           | $                 | 642,061    
|                                              |                               | Accounts receivable, net of allowance for doubtful accounts of $1,345 and $8,696 at December, 31 2002 and 2001 respectively.             |           |                   | 23,530     
|                                              |                               | Inventory, at lower of cost or market                                                                                                    |           |                   | 160,500    
|                                              |                               | Note receivable, current portion (Note 16)                                                                                               |           |                   | 90,862     
|                                              |                               | Prepaid expenses and other current assets                                                                                                |           |                   | 275,520    
|                                              |                               |                                                                                                                                          |           |                   |            
|                                              | Total Current Assets          |                                                                                                                                          |           | 1,192,473         |            
|                                              |                               | Property and equipment, net of accumulated depreciation of $1,046,001 and $1,927,061 at December 31, 2002 and 2001 respectively (Note 7) |           |                   | 2,874,954  
|                                              |                               | Note receivable, net of current portion (Note 16)                                                                                        |           |                   |           
|                                              |                               | Other assets                                                                                                                             |           |                   | 382,617    
|                                              |                               |                                                                                                                                          |           |                   |            
|Total Assets                                  |                               | $                                                                                                                                        | 4,450,044 |                   | $          
|                                              |                               |                                                                                                                                          |           |                   |            
|LIABILITIES AND STOCKHOLDERS' (DEFICIT)       |                              
|Current Liabilities:                          |                               |                                                                                                                                          |           |                   |            
|                                              |                               | Accounts payable and accrued expenses                                                                                                    |           | $                 | 369,466    
|                                              |                               | Notes payable, current portion (Note 3)                                                                                                  |           |                   | 414,738    
|                                              |                               | Lease obligation payable, current Portion (Note 9)                                                                                       |           |                   | 9,220      
|                                              |                               | Unearned income                                                                                                                          |           |                   | 447,746    
|                                              |                               |                                                                                                                                          |           |                   |            
|                                              | Total Current Liabilities     |                                                                                                                                          |           | 1,241,170         |            
|                                              |                               | Lease obligation payable, net of current portion (Note 9)                                                                                |           |                   | 3,969,582  
|                                              |                               | Notes payable, net of current portion (Note 3)                                                                                           |           |                   | 13,055     
|                                              |                               | Other                                                                                                                                    |           |                   | 166,844    
|                                              |                               |                                                                                                                                          |           |                   |            
|                                              | Total Liabilities             |                                                                                                                                          |           | 5,390,651         |            
|                                              |                               |                                                                                                                                          |           |                   |            
|                                              |                               | Commitments (Notes 2, 3, 4, 8, 9, 10, 11, 12, 14 and 15)                                                                                 |           |                   |           
|                                              |                               | Stockholders' (deficit) (Notes 2 and 13):                                                                                                |           |                   |            
|                                              |                               | Preferred stock, $1.00 par value, 1,000,000 shares authorized, none issued and outstanding                                               |           |                   |           
|                                              |                               | Common stock, $.03 par value, 50,000,000 shares authorized, 2,144,889 issued and outstanding at December 31, 2002 and 2001               |           |                   | 64,346     
|                                              |                               | Additional paid-in capital                                                                                                               |           |                   | 9,435,827  
|                                              |                               | Accumulated deficit                                                                                                                      |           |                   | (10,440,780
|                                              |                               |                                                                                                                                          |           |                   |            
|                                              | Total Stockholders' (deficit) |                                                                                                                                          |           | (940,607          | )          
|                                              |                               |                                                                                                                                          |           |                   |            
|Total Liabilities and Stockholders' (deficit) |                               | $                                                                                                                                        | 4,450,044 |                   | $          
|                                              |                               |                                                                                                                                          |           |                   |            

The
accompanying notes are an integral part of the financial statements.



RENAISSANCE ENTERTAINMENT CORPORATION        STATEMENTS OF OPERATIONS

|                                              |                                       | Year Ended
December 31,
2002 |           | Year Ended
December 31,
2001 |          
|--------------------------------------------- | ------------------------------------- | ---------------------------- | --------- | ---------------------------- | ---------
|REVENUE:                                      |                                       |                              |           |                              |          
|                                              | Sales                                 |                              | $         | 12,013,543                   |          
|                                              | Faire operating costs                 |                              |           | 3,441,250                    |          
|                                              |                                       |                              |           |                              |          
|                                              |                                       | Gross Profit                 |           |                              | 8,572,293
|                                              |                                       |                              |           |                              |          
|OPERATING EXPENSES:                           |                                       |                              |           |                              |          
|                                              | Salaries and wages                    |                              |           | 3,537,193                    |          
|                                              | Depreciation and amortization         |                              |           | 322,767                      |          
|                                              | Advertising                           |                              |           | 1,590,999                    |          
|                                              | Other operating expenses              |                              |           | 3,236,246                    |          
|                                              |                                       |                              |           |                              |          
|                                              |                                       | Total Operating Expenses     |           |                              | 8,687,205
|                                              |                                       |                              |           |                              |          
|Net Operating Income (Loss)                   |                                       |                              | (114,912  | )                            |          
|                                              |                                       |                              |           |                              |          
|Other Income (Expenses):                      |                                       |                              |           |                              |          
|                                              | Interest income                       |                              |           | 40,153                       |          
|                                              | Interest (expense)                    |                              |           | (524,750                     | )        
|                                              | Other income (expense)                |                              |           | 69,707                       |          
|                                              | Write-down of goodwill                |                              |           |                             |          
|                                              | Write-down of assets                  |                              |           |                             |          
|                                              | Write-down of Virginia site (Note 10) |                              |           |                             |          
|                                              |                                       |                              |           |                              |          
|                                              |                                       | Total Other (Expenses)       |           |                              | (414,890 
|                                              |                                       |                              |           |                              |          
|Net (Loss)                                    |                                       | $                            | (529,802  | )                            | $        
|                                              |                                       |                              |           |                              |          
|Net (Loss) per Common Share                   |                                       | $                            | (0.25     | )                            | $        
|                                              |                                       |                              |           |                              |          
|Weighted Average Number of Shares Outstanding |                                       |                              | 2,144,889 |                              |          
|                                              |                                       |                              |           |                              |          

The
accompanying notes are an integral part of the financial statements.





RENAISSANCE ENTERTAINMENT CORPORATION

STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)

From December 31, 2000 through December 31, 2002

|                                                |  | Common Stock |  |   |        |  |   |           | 
|----------------------------------------------- |  | ------------ |  | - | ------ |  | - | --------- | 
|
|
|Balance December 31, 2000                       |  | 2,144,889    |  | $ | 64,346 |  | $ | 9,430,827 | 
|Net loss for the year ended December 31, 2001   |  |             |  |   |       |  |   |          | 
|                                                |  |              |  |   |        |  |   |           | 
|Balance December 31, 2001                       |  | 2,144,889    |  |   | 64,346 |  |   | 9,430,827 | 
|Stock options extended                          |  |              |  |   |        |  |   | 5,000     | 
|Net income for the year ended December 31, 2002 |  |             |  |   |       |  |   |          | 
|                                                |  |              |  |   |        |  |   |           | 
|Balance December 31, 2002                       |  | 2,144,889    |  | $ | 64,346 |  | $ | 9,435,827 | 
|                                                |  |              |  |   |        |  |   |           | 

The
accompanying notes are an integral part of the financial statements.



RENAISSANCE ENTERTAINMENT CORPORATION        STATEMENTS OF CASH FLOWS

|                                                    |                                                                                   | Year Ended
December 31,
2002                                                                |                                       | Year Ended
December 31,
2001 |         
|--------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ------------------------------------- | ---------------------------- | --------
|Cash Flows from Operating Activities:               |                                                                                   |                                                                                             |                                       |                              |         
|                                                    | Net Income (loss)                                                                 |                                                                                             | $                                     | (529,802                     | )       
|                                                    | Adjustments to reconcile net income to net cash provided by operating activities: |                                                                                             |                                       |                              |         
|                                                    |                                                                                   | Depreciation and amortization                                                               |                                       |                              | 322,767 
|                                                    |                                                                                   | Write off of goodwill                                                                       |                                       |                              |        
|                                                    |                                                                                   | Write down of assets                                                                        |                                       |                              |        
|                                                    |                                                                                   | (Increase) decrease in:                                                                     |                                       |                              |         
|                                                    |                                                                                   |                                                                                             | Accounts receivable                   |                              |         
|                                                    |                                                                                   |                                                                                             | Inventory                             |                              |         
|                                                    |                                                                                   |                                                                                             | Prepaid expenses and other            |                              |         
|                                                    |                                                                                   | Increase (decrease) in:                                                                     |                                       |                              |         
|                                                    |                                                                                   |                                                                                             | Accounts payable and accrued expenses |                              |         
|                                                    |                                                                                   |                                                                                             | Unearned revenue and other            |                              |         
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|                                                    | Net Cash Provided by Operating Activities                                         |                                                                                             |                                       | 183,024                      |         
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|                                                    | Cash Flows from Investing Activities:                                             |                                                                                             |                                       |                              |         
|                                                    | (Repayments) of note receivable                                                   |                                                                                             |                                       | 37,816                       |         
|                                                    |                                                                                   | Net (acquisition) reduction of property and equipment, goodwill and covenant not to compete |                                       |                              | (488,630
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|Net Cash Provided by (used in) Investing Activities |                                                                                   |                                                                                             | (450,814                              | )                            |         
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|Cash Flows from Financing Activities:               |                                                                                   |                                                                                             |                                       |                              |         
|                                                    | Proceeds from (payments on) lease obligation payable                              |                                                                                             |                                       | (1,260                       | )       
|                                                    | Proceeds from notes payable                                                       |                                                                                             |                                       | 101,250                      |         
|                                                    | Principal payments on notes payable                                               |                                                                                             |                                       | (24,396                      | )       
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|Net Cash Provided by (Used in) Financing Activities |                                                                                   |                                                                                             | 75,594                                |                              |         
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|Net (Decrease) in Cash                              |                                                                                   |                                                                                             | (192,196                              | )                            |         
|Cash, beginning of period                           |                                                                                   |                                                                                             | 834,257                               |                              |         
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|Cash, end of period                                 |                                                                                   | $                                                                                           | 642,061                               |                              | $       
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|Interest paid                                       |                                                                                   | $                                                                                           | 524,750                               |                              | $       
|                                                    |                                                                                   |                                                                                             |                                       |                              |         
|Income tax paid                                     |                                                                                   | $                                                                                           |                                      |                              | $       
|                                                    |                                                                                   |                                                                                             |                                       |                              |         

The
accompanying notes are an integral part of the financial statements.





RENAISSANCE ENTERTAINMENT CORPORATION        NOTES TO FINANCIAL STATEMENTS        December 31, 2002 and 2001

(1)Summary of Significant Accounting Policies

This summary of significant accounting policies of Renaissance Entertainment Corporation (Company) (REC) is presented to assist in understanding the Company's
financial statements. The financial statements and notes are representations of the Company's management who is responsible for their integrity and objectivity. These accounting policies conform to
generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements.



(2)Common and Preferred Stock

The Articles of Incorporation of the Company authorize issuance of a maximum of 50,000,000 shares of $.03 par value common stock and 1,000,000 shares of $1.00 par
value preferred stock.

At
December 31, 2002, the Company had 1,239,433 warrants and options outstanding with expiration dates through 2006. The following is a summary of the options and warrants
outstanding at December 31, 2002:

During
the year ended December 31, 1998, 241,833 options were granted of which 33,000 have exercise prices of $.31 expiring in November 2003, 80,000 have exercise prices of
$.81 expiring in June 2005, 112,833 have exercise prices of $.81 expiring in June 2003, and 16,000 have exercise prices of $.81 expiring in December 2005. Also during the year ended
December 31, 1998, 99,600 warrants were granted which have exercise prices of $1.51 expiring in March 2003. During the year ended December 31, 1999, 350,000 options were granted
of which 267,000 have exercise prices of $.53 expiring in March 2004, 8,000 have exercise prices of $.53 expiring in December 2005 and 75,000 have exercise prices of $.81 expiring in
December 2005. Also during the year ended December 31, 1999, 100,000 warrants were granted which have exercise prices of $.52 expiring in March 2004, and the Company replaced a
warrant for 153,333 shares at $1.00 per share expiring November 2003, with a new warrant for 100,000 shares with an exercise price of $.30 expiring in November 2003. During the year
ended December 31, 2000, 180,000 options were granted which have exercise prices of $.16 expiring in October 2004 and 8,000 options were granted which have exercise prices of $.53
expiring in April, 2004. In addition, 958,333 convertible debentures were granted which have convertible prices of $.30 expiring in August 2003. During the year ended December 31, 2001,
the Company granted 150,000 incentive stock options to two officers of the Company, vesting one-third per year, beginning February 2002, exercisable at $.20 per share, and expiring
in February 2006. In addition, 10,000 options were granted to an officer, vesting in 2002, exercisable at $.20 per share, and expiring in March 2006. During the year ended
December 31, 2002, the Company granted 166,666 convertible debentures which have convertible prices of $.30 expiring in August 2003.

The
options granted during 2001 were principally granted to employees and directors of the Company. The exercise prices at the dates of grants approximated market value of the common
stock. Therefore, no compensation expense was recorded in the financial statements related to the options since the estimated fair value would not be material.

There
were no options granted in 2002. In December 2002, the Company agreed to extend the expiration dates on 24,000 options under three different agreements for a member of the
Board of Directors that resigned the previous September. Expiration dates on 16,000 options were extended from June 2003 to December 2005 and 8,000 options were extended from
March 2005 until December 2005. These extensions resulted in the recognition of consulting expense and additional paid-in-capital in the amount of $5,000.

The
following table summarizes the options and warrants outstanding at December 31, 2002:

Number

Exercise Price

Expiration Date99,600

$
1.51

March, 200333,000

$
.31

November, 2003112,833

$
.81

June, 2003100,000

$
.30

November, 2003100,000

$
.52

March, 2004267,000

$
.53

March, 20048,000

$
.53

April, 2004180,000

$
.16

October, 200475,000

$
.81

December, 2005150,000

$
.20

February, 200610,000

$
.20

March, 200680,000

$
.81

June, 200516,000

$
.81

December, 20058,000

$
.53

December, 20051,239,433


(3)Notes Payable

Notes payable at December 31, 2002 are summarized as follows:

|Notes payable to related parties, consisting of two promissory notes of equal value to each party, identical in nature except that one note is convertible to common stock at a price of $.30 per share.
Interest is payable quarterly at 12%, balance due in full on August 31, 2003. |  | $ | 100,000
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -------
|Notes payable of $237,500 to related parties and $50,000 to one non-related party all of which are convertible to common stock at a price of $.30 per share. Interest is payable quarterly at 12%, balance due in full on August 31,
2003.                                             |  | $ | 287,500
|Notes payable to equipment manufacturers collateralized by certain equipment, payable in monthly installments of principal and interest; final payments due in 2005, interest ranging from 9.776% to 22%.                                                                              |  |   | 40,293 
|                                                                                                                                                                                                                                                                                       |  |  
|Total                                                                                                                                                                                                                                                                                  |  |   | 427,793
|Less current portion                                                                                                                                                                                                                                                                   |  |   | 414,738
|                                                                                                                                                                                                                                                                                       |  |  
|Long-term portion                                                                                                                                                                                                                                                                      |  | $ | 13,055 
|                                                                                                                                                                                                                                                                                       |  |  

Principal payments due on notes payable for each of the next three fiscal years ending December 31 and in the aggregate thereafter, are as follows:

2003

$
414,7382004


9,2782005


3,777$
427,793


(4)Leases

The Company leases the New York site with terms expiring through the year 2022. Annual lease payments on the New York site are $425,000 for 2002 through 2007,
$435,000 for 2007 through 2017 and $450,000 for 2017 through the end of the lease.

The
Company leases the Wisconsin Faire site with terms expiring through the year 2017. Annual lease payments on the Wisconsin Faire site are $440,000 for 1999 through 2003, $486,667 for
2004 through 2006, $533,333 from 2007 through 2009 and $543,333 from 2010 through the end of the lease.

The
Company leases the Southern California Faire site with terms expiring through the year 2010. Annual lease payments on the Southern California Faire site are $249,500 for 2002,
$274,500 for 2003, and $299,500 for 2004, with annual increases through the end of the lease.

The
Company leases the Northern California Faire site with terms expiring through the year 2022 with rights to terminate the lease agreement at the end of the first, third, fifth, tenth
and fifteenth lease years. The landlord has the right to terminate the lease agreement at the end of the tenth lease year only. Annual lease payments on the Northern California Faire site are
the sum of $75,000 plus $1.00 per patron or a minimum of $150,000 per year with a 4% annual increase.

Effective
January 21, 1998, the Company entered into an operating lease at 275 Century Circle in Louisville, Colorado for office facilities which was to expire
April 14,2003. The lease was renewed on January 27, 2003 for an additional five year term. Initial monthly rental payments are $3,079.52 plus 27% of operating costs with annual increases
of 3% per year.

Future
minimum rentals under all operating leases with terms exceeding twelve months are as follows:

Year Ending
December 31,2003

$
1,326,4602004


1,405,2312005


1,437,6112006


1,470,2772007


1,549,904Thereafter


14,318,138Total

$
21,507,621


Rent
expense for the year ended December 31, 2002 and for the year ended December 31, 2001 totaled approximately $1,258,906 and $1,163,867, respectively.





(5)Goodwill and Covenant Not to Compete

The cost of the acquisition of the California Faire assets and business as described in Note 1 in excess of the fair value of assets acquired was recorded
as goodwill in the accompanying financial statements. Goodwill was being amortized on a straight-line basis over fifteen years. Management reviewed the carrying value of goodwill on
a periodic basis, at least annually, to determine if there was any impairment in value. If management determined that the carrying value was not recoverable over the remaining amortization term, the
excess balance, if any, was expensed. During the period ended December 31, 1996, the Company determined that the goodwill was impaired and wrote off $380,000 as a charge to other operating
expenses. During the year ended December 31, 2001, the Company determined that the goodwill was further impaired and wrote off the unamortized balance of $367,446 as a charge to other operating
expenses.

(6)Income Taxes

As of December 31, 2002, there are no current or deferred income taxes payable. As of December 31, 2002, the Company has total deferred tax assets
of approximately $1,500,000 due to operating loss carry forwards and the depreciation timing differences described above. However, because of the uncertainty of potential realization of these tax
assets, the Company has provided a valuation allowance for the entire $1,500,000. Thus, no tax assets have been recorded in the financial statements as of December 31, 2002.

The
Company has available at December 31, 2002, unused operating loss carry forwards of approximately $7,600,000 which may be applied against future taxable income, expiring in
various years through 2022. The available net operating loss carry forwards may be reduced if there is a 50% or more change in ownership.

(7)Property and Equipment

Land

$
1,085,283Buildings and Improvements


2,014,125Office Furniture and Equipment


152,774Costumes, Props and Other Assets


668,773Sub-total


3,920,955Less Accumulated Depreciation


(1,046,001
)Total

$
2,874,954


(8)Commitments

Effective December 16, 1994, the Company entered into an agreement with a consulting firm to provide to the Company certain promotional services for the
Company's fairs. The Company had agreed to pay commissions to the consulting firm of 17.65% of the actual net billings by advertisers for media placed pursuant to plans approved by the Company. In
December 2002 this agreement was terminated in lieu of a $210,000 settlement payable in three installments in the amount of $70,000 due on June 1, 2003 through 2005. A
three-year contract was executed in December of 2002 with a different consulting firm to provide promotional services for an annual fee of $105,000 per year plus a graduated commission on sponsorship revenue.

(9)Sale Lease Back Transaction

During November 1997, the Company sold its real property in Wisconsin to a related party for $4,000,000 and signed a twenty-year
non-cancelable lease back on this property with monthly lease payments in the initial amount of $33,333 increasing to $45,278 over the term of the lease. The Company has an option to
reacquire the property during the twenty-year lease period at fixed amounts as specified in the lease. Since the Company continues to have an economic interest in the property due to the
option, the Company treated the transaction as a financing arrangement. As of December 31, 2003, the outstanding balance on the finance obligation was $3,978,802 using an effective interest
rate of approximately 11%. The purchaser was deemed to be a related party as a relative of the Chairman of the Board of the Company was a minority interest investor in the company, which purchased
this property.

In
December 1999, the Company entered into a lease amendment with Faire Partners, the landlord for the Wisconsin property. The amendment provided for a restructuring of rental
payments for 1999. During the time periods between December 1 and May 31 the monthly base rent payable by the Company to the landlord was reduced from $36,667 per month to $21,667 per
month and during the period of time from June 1 through November 30, the monthly base rent payable was increased to $51,667 per month. As an inducement to the landlord to execute this
lease amendment in 1999 the Company agreed to terminate the existing warrant and issue a new warrant. The original warrant provided for 153,333 shares at $1.00 per share and expires
November 2003. The new warrant grants 100,000 shares at $.30 per share, the closing ask price on the date the lease amendment was signed. The new warrant is on the same terms and conditions as
contained in the original warrant.

(10)Write-down of Virginia Site

On October 27, 1999, the Board of Directors decided to discontinue operations at the Virginia site. The 2001 financial statements include a loss of $39,982
related to the write-down and sale of the property due to closure of the site. During the year ended December 31, 2001, the Company sold the Virginia property.

(11)Write-down of Assets

Because the Company did not have a lease for its Northern California Faire as of the audit date last year, the Company determined that the fixed assets at its
Northern California Faire were impaired and wrote off the net book value of $40,924 as a charge to other expenses in 2001.

(12)Retirement and Stock Plans

The Company sponsors, for all eligible employees, a salary deferral plan, whereby employees can elect to have a portion of their salary deferred. The Company
contributes a match based on a percentage, which is determined from year to year. Matching contributions totaled $2,162, and $2,922 for the years ended December 31, 2002 and 2001, respectively. The deferrals are not subject to income tax, and are held by a third-party trustee.

Effective
October 15, 2001, the Company established a non-qualified deferred compensation plan for the purpose of providing deferred compensation for a select group of
management or highly compensated employees. The Board of Directors has authority to determine the persons eligible for participation in this plan.

(13)Stock-Based Compensation



As
permitted by FASB Statement No. 123, Accounting for Stock-Based Compensation, the Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees (APB 25) and related interpretations in accounting for its employee option plans. Under APB 25, compensation expenses are recognized at the time of option grant if
the exercise price of the Company's employee stock option is below the fair market value of the underlying common stock on the date of the grant.

The
Company's Board of Directors has granted non-qualified stock options and warrants to officers and employees of the Company. The following is a table of outstanding
options and changes during 2002 and 2001:

|                                       |                   | Employee
Options |   | Non-
employee
Options |         | Weighted
Average
Exercise
Price |      
|-------------------------------------- | ----------------- | ---------------- | - | --------------------- | ------- | ------------------------------- | -----
|Options Outstanding, December 31, 2000 |                   | 552,500          |   | 144,333               |         | 0.50                            |      
|                                       | Options granted:  |                  |   |                       |         |                                 |      
|                                       |                   | Employees        |   | 160,000               |         |                                 |      
|                                       |                   | Non-employees    |   |                       |         |                                |      
|                                       | Options expired   |                  |  |                       |        |                                 |     
|                                       | Options exercised |                  |  |                       |        |                                 |     
|                                       |                   |                  |   |                       |         |                                 |      
|Options Outstanding, December 31, 2001 |                   | 712,500          |   | 144,333               |         | 0.45                            |      
|                                       | Options granted:  |                  |   |                       |         |                                 |      
|                                       |                   | Employees        |   |                      |         |                                |      
|                                       |                   | Non-employees    |   |                      |         | 24,000                          |      
|                                       | Options expired   |                  |  |                       | (24,000 | )                               | (0.72
|                                       | Options exercised |                  |  |                       |        |                                 |     
|                                       |                   |                  |   |                       |         |                                 |      
|Options Outstanding, December 31, 2002 |                   | 712,500          |   | 144,333               |         | 0.45                            |      
|                                       |                   |                  |   |                       |         |                                 |      



At
December 31, 2002, outstanding options vest as follows:

| |                  | Range of Exercise Prices |      |  |      |        
| | ---------------- | ------------------------ | ---- |  | ---- | -------
|
|
|
| | 2000 and earlier |                          | 0.81 |  | 0.16 |        
| | 2001             |                          | 0.53 |  | 0.16 |        
| | 2002             |                          | 0.81 |  | 0.20 |        
| | 2003             |                          | 0.81 |  | 0.20 |        
| | 2004             |                          | 0.81 |  | 0.20 |        
| |                  |                          |      |  |      |        
| |                  |                          |      |  |      | 856,833
| |                  |                          |      |  |      |        

If
not previously exercised or canceled, options outstanding at December 31, 2002 will expire as follows:

| |      | Range of Exercise Prices |      |  |      |        
| | ---- | ------------------------ | ---- |  | ---- | -------
|
|
|
| | 2003 |                          | 0.81 |  | 0.31 |        
| | 2004 |                          | 0.53 |  | 0.53 |        
| | 2005 |                          | 0.81 |  | 0.16 |        
| | 2006 |                          | 0.20 |  | 0.20 |        
| |      |                          |      |  |      |        
| |      |                          |      |  |      | 856,833
| |      |                          |      |  |      |        



The Company applies APB Opinion 25 and related interpretations in accounting for its stock options and warrants which are granted to employees. Accordingly, no
compensation cost has been recognized for grants of options to employees since the exercise prices were equal to the fair value of the Company's common stock on the grant dates. Had compensation cost
been determined based on an estimate of the fair value consistent with the method of SFAS No. 123 at the grant dates for awards under those plans, the Company's net loss and loss per share would have been increased to the pro forma amounts indicated below.

Year Ended December 31,2002

2001Net income (loss) applicable to common stockholdersAs reported

$
(529,802
)
$
(533,258
)Pro forma


(529,802
)

(555,240
)Net income (loss) per share applicable to common stockholdersAs reported

$
(.25
)
$
(.25
)Pro forma


(.25
)

(.26
)




Year and Type

Weighted
average fair
value at
grant
date

Weighted
average
exercise
priceYear ending December 31, 2001:Exercise price equals fair value:

0.18

0.2Year ending December 31, 2002:Exercise price exceeds fair value:

0.32

0.72


The
fair value of each option was computed using the Black-Scholes method using the following weighted-average assumptions:

Expected Volatility:

225
%Risk-free interest rate:

1.19
%Expected Dividends:

Expected Term in Years:

3


(14)Litigation

In 2002, a personal injury complaint was filed against the Company with the Supreme Court in Orange County New York. The case contains a demand for $35,000,000
and is in excess of policy limits that total $5,000,000. No provision has been made in the financial statements as of December 31,2002 since initial review of the claim by the Company's
insurance provider indicates their belief that the ultimate
loss in this matter will not exceed insurance policy limits. A contingency exists with respect to this matter, the ultimate resolution of which cannot presently be determined.

(15)Sterling Forest Ski Center

The Sterling Forest Ski Center is located on the same site as the New York Renaissance Faire in Tuxedo New York. The Company's landlord for the property has the
right under the lease to sell the property upon which the Ski Center is located. Because of this lease stipulation, all revenue collected prior to the opening of the Ski Center is deferred and costs of operations are expensed as
incurred. Although the Company operated the Ski Center for the 2002/2003 season, it is not obligated to do so under the terms of the lease. During calendar 2002, the Ski Center generated revenue and
expense in the amount of $194,374 and $608,683 respectively.

(16)Note Receivable

In April 2000 the Company entered into an Asset Purchase Agreement which conveyed the Company's interest in certain assets used in its food operation to an
outside vendor. The purchase price of the assets was $300,000, half of which was paid upon execution of the agreement and the balance was taken as a note. The note has a 7-year
amortization with a balloon payment on October 31, 2003.



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