<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended                                    Commission File No.
September 30, 2001                                                        0-8698

                           CONCORDE GAMING CORPORATION
                 (Name of small business issuer in its charter)

             Colorado                                                 84-0716683
(State or other jurisdiction of                                 (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                3290 Lien Street, Rapid City, South Dakota 57702
                    (Address of principal executive offices)

                    Issuer's telephone number: (605) 341-7738

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

         Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, $0.01 par value per share
                                (Title of Class)

         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 [X]
NO [ ]

         Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         State issuer's revenues for the most recent fiscal year.  $18,663,694

         The aggregate market value of the voting stock held by non-affiliates
of the issuer as of December 28, 2001 was approximately $74,773. This
calculation is based upon the price at which a share of voting stock was last
traded $.01 on December 27, 2001.

         The number of outstanding shares of the issuer's $.01 par value common
stock was 25,070,402 as of December 28, 2001.



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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

         Concorde Gaming Corporation was incorporated as a Colorado corporation
on September 1, 1976. Through our wholly owned subsidiary, Concorde Cripple
Creek, Inc., a Colorado corporation, we operate the Golden Gates Casino, a
limited stakes casino in Black Hawk, Colorado. In addition, through our wholly
owned subsidiaries, Concorde Cruises, Inc., a South Dakota corporation, and
Conami, Inc., a Florida corporation, we own 100% of Princesa Partners, a Florida
general partnership. Princesa Partners owns and operates an offshore gaming
vessel, the Princesa, from Bayfront Park, Miami, Florida. Conami owns 80% of
Princesa Partners with the remaining 20% owned by Concorde Cruises. As discussed
below, on March 31, 2000, Concorde Cruises purchased the remaining 20% interest
in Bayfront Ventures, a Florida general partnership, which conducted business
under the name Casino Princesa. By operation of law, Bayfront Ventures was
dissolved on March 31, 2000 when Concorde Cruises became its sole owner. At such
time, Concorde Cruises assumed all of the rights and obligations of Bayfront
Ventures and continues to operate the Princesa under the name Casino Princesa.
Princesa Partners owns the Princesa and pursuant to a charter agreement dated
October 2, 1998, charters the Princesa to Casino Princesa which operates the
Princesa. Construction of the Princesa was completed and the Princesa commenced
operations in October 1998.

BUSINESS DEVELOPMENTS

         CASINO PRINCESA

         Partnership Interest Purchase Agreement. In August 1997, we purchased
an 80% interest in Casino Princesa. Goldcoast Entertainment Cruises, Inc., an
unaffiliated corporation, owned the remaining 20% at such time. Pursuant to a
partnership interest purchase agreement, referred to as the "Purchase
Agreement," dated as of March 31, 2000, Concorde Cruises acquired the 20%
interest held by Goldcoast in each of Bayfront Ventures and Princesa Partners
for $1,500,000.

         Use Agreement. On June 25, 1997, Casino Princesa entered into a use
agreement, referred to as the "Use Agreement," with Bayfront Park Management
Trust, a limited agency and instrumentality of the City of Miami, Florida,
referred to as the "Trust." The Use Agreement grants Casino Princesa the
exclusive right to use the Trust's docking facilities at Bayfront Park for the
purpose of docking vessels, including an offshore gaming vessel. The initial
term of the Use Agreement, as amended, is for five years commencing October 1,
1997. Casino Princesa has the option to extend the Use Agreement for one
additional five-year term at the end of the initial term if there has been no
event of default under the Use Agreement. Casino Princesa also has a right of
first refusal to extend an additional five year term following the end of the
extension term provided the Trust, in its sole discretion, has determined to
permit the continued use of the Trust's docking facilities by a gaming vessel
and there has been no event of default under the Use Agreement Under the Use
Agreement, Casino Princesa currently pays the Trust an annual fee of $475,000.
During the extension term the annual fees increase by 4% over the previous year
and during the additional term the annual fees increase by 8% over the previous
year. We are also required throughout the term of the Use Agreement to provide
an irrevocable letter of credit on behalf of Casino Princesa for the benefit of
the Trust, in an amount equal to the next years' annual fees. We are currently
in default of this requirement for the year ending September 30, 2002. We are
currently in negotiations regarding amending the Use Agreement and we expect to
continue operations under an amended agreement, including our ability to extend
the term of the Use Agreement despite our current default.

         FINANCING

         Princesa Partners entered into a loan and security agreement with a
number of lenders, to obtain permanent financing for the Princesa. Proceeds of
the loan were used to pay in full the loan for construction financing with
respect to the Princesa, to acquire equipment (including gaming equipment)



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for the Princesa and for other project costs. The loan is secured by a first
preferred ship mortgage dated October 15, 1998. Also, Casino Princesa and
Princesa Partners granted to the lenders, pursuant to a security agreement dated
as of October 22, 1998, a security interest in all furniture, furnishings,
machinery and equipment (including gaming equipment) owned by Casino Princesa or
Princesa Partners and used in connection with or located on the Princesa. Casino
Princesa was in default under the vessel loans due to a failure to comply with
the debt service covenant up to December 27, 2001. On December 27, 2001 we
amended the debt service covenants and are no longer in default under the loan.

         Pursuant to the vessel loan, we, along with Casino Princesa, guaranteed
the obligations of Princesa Partners pursuant to a guaranty, subordination
agreement, security agreement and indemnity dated October 22, 1998 and a
guaranty dated October 22, 1998, respectively.

         GOLDEN GATES CASINO

         Parking Garage Agreement. Concorde Cripple Creek, Elevation E8000+,
LLC, referred to as E8000, and KMM Parking L.L.C., a Colorado limited liability
company, entered into an agreement dated October 22, 1997 to subject certain
property located in Black Hawk, Colorado to a condominium regime. Pursuant to
this agreement, the parties contributed parcels of land adjacent or near the
Golden Gates Casino for construction of a 450-stall parking garage. Concorde
Cripple Creek and KMM entered into a sublease dated December 30, 1998 under
which Concorde Cripple Creek leased at no cost 50 parking spaces from KMM for
use during construction of the Parking Garage. Pursuant to the parking garage
agreement, KMM obtained a loan for approximately $10,000,000 to finance
construction of the parking garage with the loan to be repaid solely by KMM.
Collateral for the loan includes the land each of the parties will contribute
under the parking garage agreement. Construction of the parking garage was
completed in March 2000. Pursuant to the agreement, the parties are currently
negotiating a condominium declaration whereby each party will grant title to a
proportionate share of the parking spaces based on each party's contribution of
property, under which Concorde Cripple Creek will own a minimum of 34 parking
spaces. Additionally, only KMM's property will secure the loan for the
construction of the parking garage after the condominium declaration is entered
into. Further, Concorde Cripple Creek is required to lease E8000's parking
spaces from E8000, leasing a minimum of 41 parking spaces.

COLORADO OPERATIONS

         Colorado law permits limited stakes casino gaming, $5.00 or less per
wager, in three historic mining towns, Black Hawk and Central City, adjacent
towns located approximately 40 miles west of Denver, and Cripple Creek,
approximately 90 miles south of Denver. Black Hawk and Central City form the
primary gaming market in Colorado, and competition within these markets is
intense.

         The Golden Gates Casino is located on Main Street in Black Hawk,
Colorado directly across from the Richman Street Bridge, which bridge provides
access onto Main Street from U.S. Highway 119. The Golden Gates Casino offers 3
blackjack tables, 1 poker table, and 260 gaming machines on approximately 4,300
square feet of gaming floor space and also features a full service liquor bar
and furnishes nightly valet parking.

         The Golden Gates Casino depends primarily upon "day-tripper" visitor
traffic from Denver metropolitan area residents for its customer base. Denver,
and its surrounding communities, have an approximate population of 2 million.
Approximately three million people live within a 100-mile radius of the Black
Hawk/Central City area.



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         COMPETITION

         The primary competition for the Golden Gates Casino is from other
casinos operating in Black Hawk and Central City, of which there were
approximately 20 as of September 30, 2001, and, secondarily, casinos operating
in Cripple Creek of which there were approximately 19 as of September 30, 2001.
We believe that the primary competitive factors in the Black Hawk-Central City
market are location, availability and convenience of parking, number of gaming
machines and tables, types and pricing of amenities, name recognition, and
overall atmosphere.

         In June 1998, the Lodge Casino at Black Hawk opened across the street
from Golden Gates Casino. In late December of 1998, a new casino, the Isle of
Capri, opened in Black Hawk and added approximately 1,100 gaming devices to the
Black Hawk gaming market. In November 2000, the Riviera opened approximately one
block from the Golden Gates Casino and in March 2000, The Black Hawk Mardi Gras
opened directly across Main Street from the Golden Gates Casino. Collectively,
the Riviera and The Black Hawk Mardi Gras added approximately 1,720 gaming
devices to the Black Hawk gaming market. In December 2001, the Black Hawk Casino
by Hyatt opened one block from the Golden Gates Casino. This casino has 1,550
parking spots, 1,332 gaming machines disbursed over 55,000 square feet and
brings Las Vegas style amenities to the area. In addition, other casino projects
are reported to be in various stages of planning or have commenced construction
in Black Hawk. Other experienced, nationally recognized casino operators from
other areas of the country have entered, or announced plans to enter, the
Colorado gaming market, including Anchor Gaming and Fitzgerald's, many of which
have substantially greater financial and marketing resources than us. Because
Colorado does not limit the total number of gaming licenses available for
issuance in Colorado and there are no minimum facility size requirements, we
expect the number of gaming facilities to continue to increase.

         While it is difficult to assess the development and timing of competing
projects and the likelihood of whether any or all of the announced projects will
eventually be built and at what size, it is reasonably likely that at least some
of the announced projects will be completed and opened to the public. We believe
the opening of the Lodge Casino at Black Hawk, the Riviera and the Black Hawk
Mardi Gras has increased the number of casino patrons and increased revenues
over prior years' results. The Black Hawk Casino by Hyatt is expected to offer
increased competition that may adversely affect the Golden Gates Casino's
operations.

         On November 4, 1999, Central City property owners approved a business
improvement district to seek financing for the construction of a southern access
road (commonly referred to as the South Access) to Interstate 70. This road, if
constructed, would provide a faster route for gamblers to drive to Central City
from I-70. If the South Access is built, it would likely have a negative impact
on the Golden Gates Casino. Central City is located adjacent to Black Hawk and
currently provides the primary competition to the gaming establishments in Black
Hawk, with 5 casinos and approximately 1,659 gaming devices. Black Hawk has
historically enjoyed an advantage over Central City in large part because access
to Central City by State Highway 119 (currently the only major access to either
Black Hawk or Central City from the Denver metropolitan area and Interstate 70)
requires customers to drive by and, in part, through Black Hawk to reach Central
City.

         A decline in the Denver economy, a decline in the Black Hawk gaming
market, or increased competition for Denver metropolitan area residents from
other gaming jurisdictions both inside and outside Colorado, could have a
material adverse effect on Golden Gate Casino's results of operations, financial
position and cash flows.

         In addition to competing with other gaming facilities in Colorado as
described above, the Golden Gates Casino competes, to a lesser degree, for
customers with gaming facilities nationwide, including



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casinos in Nevada and Atlantic City and casinos operated on Native American
lands in various Western states, including Colorado. Many of these competitors
have substantially greater financial resources and experience in the gaming
business. The Golden Gates Casino also competes with other forms of gaming on
both a local and national level, including state-sponsored lotteries, charitable
gaming and pari-mutuel wagering, among others, and competes for entertainment
dollars generally with other forms of entertainment. Further expansion of
legalized casino gaming to new jurisdictions throughout the United States may
also affect competitive conditions.

         SEASONAL FLUCTUATION AND INCLEMENT WEATHER

         Because the Golden Gates Casino is located in the Rocky Mountains,
sudden and severe winter storms may adversely affect Concorde Cripple Creek's
revenues. Access to Black Hawk, which is located ten miles from Interstate 70,
is via a two-lane secondary road. In bad weather, and in the winter months
generally, this access road is difficult to traverse, reducing the number of
patrons traveling to Black Hawk and negatively affecting our revenue during
these periods. In addition, bad weather can result in a loss of services to the
Golden Gates Casino which negatively affects Concorde Cripple Creek's
operations. As a result, the Golden Gates Casino's business tends to be
seasonal, with the highest level of activity occurring during the summer months.

         DIFFICULTY IN ATTRACTING AND RETAINING QUALIFIED EMPLOYEES

         The operation of the Golden Gates Casino requires qualified managers
and skilled employees with gaming industry experience and qualifications
necessary to obtain the requisite licenses. We believe that a shortage of
skilled labor exists in the gaming industry and that this shortage will make it
increasingly difficult and expensive for the Golden Gates Casino to attract and
retain qualified employees. Increasing competition in the Black Hawk market for
qualified employees may lead to higher costs in order to retain and attract
qualified employees. While we believe that the Golden Gates Casino will be able
to attract and retain qualified employees, there can be no assurance that it
will be able to do so. If the Golden Gates Casino is not able to attract and
retain qualified employees or if labor costs increase in connection therewith,
there could be an adverse impact on the Golden Gates Casino's results of
operation.

         LEGISLATIVE ISSUES

         Any new federal or state legislation could adversely affect the
business of the Golden Gates Casino.

         COLORADO GAMING REGULATIONS

         Under Colorado law and regulations, the ownership and operation of
casino facilities, including matters such as hours of operation and the square
footage of a casino that can be used for gaming activities, are subject to
regulation by the Colorado Division of Gaming, which is supervised by the
five-member Colorado Limited Gaming Control Commission, referred to as the
"Gaming Commission."

         The Gaming Commission requires that we maintain various licenses,
findings of suitability, registrations, permits and approvals. The Gaming
Commission may, among other things, limit, condition, suspend or revoke a
license to operate for any cause deemed reasonable. Substantial fines or
forfeiture of assets may be levied against Concorde Cripple Creek and the
persons involved for violations of Colorado law. In addition, the actions of
persons associated with Concorde Cripple Creek and its management employees,
over which Concorde Cripple Creek may have little or no control, could
jeopardize any licenses held by Concorde Cripple Creek in Colorado. The
suspension or revocation of any of Concorde



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Cripple Creek's licenses or the levy on Concorde Cripple Creek of substantial
fines or forfeiture of assets would have a material adverse effect on us.

         To date, Concorde Cripple Creek has obtained all governmental licenses,
findings of suitability, registrations, permits and approvals necessary for the
operation of the Golden Gates Casino. Gaming licenses and related approvals are
deemed to be privileges under Colorado law, however, no assurances can be given
that any new licenses, permits and approvals that may be required in the future
will be given or that existing licenses, permits or approvals will not be
revoked or not renewed. The current retail gaming license for Golden Gates
Casino expires in July 2002. Renewal is subject to, among other things,
continued satisfaction of suitability requirements. There can be no assurance
that we can successfully renew our licenses in a timely manner or at all.

         Under Colorado law, no person can have an "interest" in more than three
gaming retailer/operator licenses. Concorde Cripple Creek currently has one
license. Accordingly, our expansion opportunities in Colorado may be limited.

         Under Colorado law, the definition of an "interest" in a gaming license
excludes ownership of less than 5% of a "publicly traded" company such as us. In
order for us to comply with Colorado laws and secure and maintain the business
and other regulatory approvals necessary for operating a gaming-related business
in Colorado, our articles of incorporation provide that we may not issue voting
securities except in compliance with the rules of any applicable gaming
authority and that all transfers of voting securities must be in compliance with
applicable gaming authority rules. If any applicable gaming authority issues an
order disqualifying a person from owning voting securities, we may redeem the
securities of the disqualified holder unless the voting securities are
transferred to a person found by the Gaming Commission to be suitable within 60
days from the date of the finding of unsuitability.

         Any person or group of related persons that acquires beneficial
ownership of over 5% of our voting securities must report the acquisition to the
Gaming Commission within ten days of acquiring such interest and may be required
to provide additional information to the Gaming Commission and be found
suitable. Any person or group of related persons that acquire beneficial
ownership of 10% (or, with respect to qualifying institutional investors, 15%)
or more of our voting securities must apply to the Gaming Commission within 45
days after acquiring such interest and submit to investigation for suitability
by the Gaming Commission. Certain qualifying institutional investors, at the
Gaming Commission's discretion, may acquire up to 15% ownership before a finding
of suitability is required if such investors provide certain information to the
Gaming Commission regarding investment intent and other matters. In order to be
found suitable, a stockholder must be a person of good moral character, honesty,
integrity, and, in general terms, must be free from previous criminal or
unsavory convictions or similar acts. The Gaming Commission may require
substantial information in connection with a suitability investigation,
including personal background and financial information, source of funding
information, and a sworn statement that such person or entity is not holding the
stock for any other party.

         We may not make a public offering of our securities without notifying
the Gaming Commission. The notification must occur within 10 business days after
the initial filing of a registration statement with the Securities and Exchange
Commission or, if the offering will not be registered with the Securities and
Exchange Commission, 10 days prior to the public use or distribution of any
offering document. The notification procedures apply to any offering we make
where the proceeds will be used or intended for use: (1) in constructing gaming
facilities in Colorado; (2) financing the operation of Colorado gaming
facilities; (3) acquiring any direct or indirect interest in Colorado gaming
facilities; or (4) in retiring or extending obligations incurred for any of the
above purposes. The notification must disclose, among other things, a
description of the securities to be offered, the proposed terms of the offering,
its anticipated gross and net proceeds, and the use of the proceeds.



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         LIQUOR REGULATION

         The sale of alcoholic beverages is subject to licensing, control and
regulation by certain Colorado state and local agencies. Subject to certain
exceptions, all persons who directly or indirectly own 5% or more of Concorde
Cripple Creek must file applications with and are subject to investigation by
the applicable agencies. These agencies also may investigate persons who,
directly or indirectly, loan money to liquor licensees. All liquor licenses are
subject to renewal, are revocable and are not transferable. These agencies have
broad powers to limit, condition, suspend or revoke any liquor license. Any
disciplinary action could, and any failure to renew or other revocation of any
of Concorde Cripple Creek's liquor licenses would, have a material adverse
effect upon the operations of Concorde Cripple Creek.

         TAXATION

         Concorde Cripple Creek's operations are subject to taxes imposed upon
gaming operators by the Gaming Commission and Black Hawk. Taxes currently levied
on Concorde Cripple Creek's operations include taxes, payable monthly, on
adjusted gross proceeds ("AGP" is defined by Colorado law as amount wagered
minus the total amount paid out in prizes) and annual gaming device fees. Such
taxes and fees are subject to revision from time to time. The annual tax rates
in effect for the past 12 months were, .25% of the first $2.0 million of AGP, 2%
from $2.0 million to $4.0 million, 4% from $4.0 million to $5.0 million, 11%
from $5.0 million to $10.0 million, 16% from $10.0 million to $15.0 million, and
20% of amounts in excess of $15.0 million of AGP. Under the Colorado
Constitution, the Gaming Commission is authorized to increase the gaming tax
rate to as much as 40% of AGP.

         Black Hawk currently imposes an annual fee of $912 per device (i.e.,
each gaming machine and gaming table) and also imposes liquor licensing fees,
transportation fees and other fees per device. Significant increases in the
applicable fees, or the imposition of new taxes or fees, could have an adverse
effect on us, and there can be no assurance that such fees will not be increased
or additional taxes or fees be imposed, which could have an adverse impact on
our operations.

FLORIDA OPERATIONS

         Casino Princesa currently employs approximately 140 people and operates
the gaming vessel, the Princesa. Casino Princesa operates so-called "cruises to
nowhere" where passengers board the Princesa and travel into international
waters before gaming activities can commence. Each cruise to nowhere is
approximately four and one-half hours in length, including the travel time to
and from international waters. The Princesa departs from docks in Bayfront Park,
adjacent to Bayside Marketplace in Biscayne Bay, Miami, Florida.

         The Princesa was completed in early October 1998 and is a United States
registered vessel operating under a Certificate of Inspection from the United
States Coast Guard. The Princesa is approximately 100 gross registered tons in
size, 200 feet in length and 40 feet in width, and has four decks, three of
which are enclosed. It has a capacity for 600 passengers in addition to the
crew. The Princesa features over 10,000 square feet of gaming area with
approximately 450 gaming positions, including approximately 223 slot and video
gaming machines and 36 table games including blackjack, craps, roulette, stud
poker, pai gow, mini baccarat and other games. Other amenities include dining,
dancing and entertainment and cocktail lounges. The Princesa was designed
specifically for the offshore gaming industry and includes an internal
stabilization system for passenger comfort.



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         COMPETITION

         Casino Princesa competes primarily with one other cruise to nowhere
operator within the Miami market and, in Southern Florida, with numerous other
day-cruise vessels and pari-mutuel facilities, racetracks and Jai-Alai frontons.
Casino Princesa competes principally on the basis of location, range and pricing
of amenities, gaming mix, and overall atmosphere. Casino Princesa also faces
substantial competition with Native American casinos located in Southern
Florida. Casino Princesa must adjust its passenger fares to remain competitive.
The Princesa may be used for convention meetings, continuing education programs,
weddings and various other group gatherings.

         In addition, we compete with a variety of other non-gaming vacation
activities in the area where we operate our vessel. These include, but are not
limited to, short-term cruises, resort attractions, various sporting activities
and numerous other recreational activities.

         SEASONAL FLUCTUATIONS AND INCLEMENT WEATHER

         Casino Princesa's revenues are adversely affected by inclement weather,
which has a direct effect on the number of cruises conducted and on passenger
counts. In addition, passenger counts are historically lower immediately before
and immediately after inclement weather conditions. During fiscal 2001, Casino
Princesa conducted 780 cruises, carried a total of 171,847 passengers and
cancelled 40 cruises due to inclement weather and 12 cruises due to maintenance
and repair. The cruise to nowhere industry in Florida is also subject to
seasonal fluctuations with the highest levels of activities occurring during the
months of January through April.

         SALES AND MARKETING

         Casino Princesa focuses its sales and marketing efforts within a one
hundred mile radius of Miami. Casino Princesa must attract passengers from both
the local population and the tourist population to survive the seasonal
fluctuations that occur in the Florida tourist industry. Casino Princesa focuses
its efforts on local markets and on tourists visiting the local markets on
vacation and promotes its cruises through general advertising, direct mailings,
travel agents and its own sales force.

         REGULATORY

         The Princesa's operation as a United States registered cruise to
nowhere vessel was made possible by 1992 legislation that, for the first time,
allowed U.S. registered vessels to carry gambling equipment to and from U.S.
ports for use in international waters. Under Florida law no gambling may occur
while the ship is in Florida's waters, and, accordingly, gambling activities on
the Princesa are conducted solely in international waters.

         Various legislation has been proposed from time to time in Florida that
would have adversely impacted the cruise to nowhere industry. To date, no such
legislation has become law. There can be no assurance that further legislation
will be introduced and become law in the future that could adversely affect the
business of the Casino Princesa.

EMPLOYEES

         As of December 20, 2001, we and our subsidiaries, employed
approximately 245 people, with approximately 220 employed full time. No employee
is covered by a collective bargaining agreement. We believe that we have
satisfactory employee relations.



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ENVIRONMENTAL MATTERS

         Compliance with federal, state and local laws regarding the discharge
of materials into the environment or otherwise relating to the protection of the
environment has not had, and is not expected to have any adverse effect our upon
capital expenditures, earnings or competitive position. We are not presently a
party to any litigation or administrative proceeding with respect to our
compliance with such environmental standards.

         Certain areas within the Black Hawk/Central City region have been
designated superfund sites by the Environmental Protection Agency as a result of
contamination from historic mining activities in the area. We do not believe the
real estate owned or leased by Concorde Cripple Creek in Black Hawk has any
environmental contamination or other environmental issues associated with the
real estate.

ITEM 2. DESCRIPTION OF PROPERTY.

         We lease approximately 4,500 square feet of office space located in
Rapid City, South Dakota on a month-to-month basis from BHL Capital Corporation,
referred to as "BHL Capital", a corporation controlled by Brustuen "Bruce" H.
Lien, our majority shareholder and a director and chairman of our board.

         Casino Princesa has the right to use dock space in Biscayne Bay for the
Princesa pursuant to the terms of the Use Agreement. The term of the Use
Agreement is for five years commencing October 1997 with one option to renew the
agreement for an additional five years provided that no event of default has
occurred. Casino Princesa also has a right of first refusal to extend the Use
Agreement for an additional five years following the end of such period if the
Trust decides to continue the use of the docks for gaming vessels and no event
of default has occurred under the Use Agreement.

         Effective July 21, 1997, Concorde Cripple Creek and E8000 entered into
a lease for the Golden Gates Casino. The casino lease is for an initial term of
five years and Concorde Cripple Creek has two 5-year options to renew. The base
rent is $24,000 per month for the remainder of the initial term. The base rent
will increase in the event of any renewal of the lease. In addition to the base
rent, Concorde Cripple Creek is required to pay E8000 additional rent equal to a
percentage of the Golden Gates Casino's adjusted net gaming revenue ("ANGR").
The additional rent is payable to E8000 monthly based on annual ANGR as follows:
2% of the first $2,000,000 ANGR; plus 4% of the second $2,000,000 ANGR; plus 6%
of the third $2,000,000 ANGR; plus 8% of the ANGR in excess of $6,000,000.
During the third, fourth and fifth years of the initial term, Concorde Cripple
Creek has the option to purchase the Golden Gates Casino and E8000's 50%
interest in two adjacent properties (which includes the parking lot parcel) for
$5,941,500; $6,115,500; and $6,294,720, respectively.

         Concorde Cripple Creek owns an undivided 50% interest in two parcels of
land near, or adjacent to, the Golden Gates Casino. The first property is a
previously undeveloped small lot located behind the Golden Gates Casino. The
second property is a 50-space parking lot located adjacent to the Golden Gates
Casino on Main Street.

         E8000, Concorde Cripple Creek and KMM are parties to the agreement to
subject property to condominium regime dated October 22, 1997, as amended,
referred to as the "Condominium Agreement", with respect to a portion of the
Golden Gates Casino property, the parking lot, the vacant lot, and certain other
real property (on all of which the parking garage is constructed). On January 1,
1999, E8000 and Concorde Cripple Creek amended the casino lease and canceled the
parking lot lease and co-ownership agreement. Under the amendment, upon
completion of the parking garage, we



                                       9
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are required to contribute land with a book value of $1,097,080 to a condominium
regime as set forth in the Condominium Agreement. The parking garage is complete
and the successors in interest to E8000, Concorde Cripple Creek and KMM are
currently negotiating the condominium declaration required to be filed to
establish the condominium regime and are seeking the required approval from
Black Hawk. Once these actions are completed, we will contribute the land in
accordance with the condominium regime.

         We believe that the above facilities and equipment are well maintained
and in good operating condition and will satisfy our current needs.

ITEM 3. LEGAL PROCEEDINGS.

         Association for Disabled Americans, Inc., Coral Springs Advocacy
Committee for the Handicapped, Inc., Daniel Ruiz and Jorge Luis Rodriguez v.
Concorde Gaming Corporation and Goldcoast Entertainment Cruises, Inc. (United
States District Court for the Southern District of Florida, Miami Division,
Civil Action No. 99-1056). On April 15, 1999, the Association for Disabled
Americans, Inc., et. al (the "Plaintiffs"), sued us and Goldcoast (the
"Defendants") for injunctive relief pursuant to the Americans With Disabilities
Act. The Plaintiffs claimed, in part, that the Defendants have discriminated
against them by denying them access to and full and equal enjoyment of services,
facilities, accommodations, the Princesa and that the Defendants have failed to
remove architectural barriers and erect certain architecturally required
improvements. The Plaintiffs requested that the Court issue a permanent
injunction enjoining the Defendants from continuing its alleged discriminatory
practices, ordering the Defendants to alter the subject vessel and premises,
close the subject vessel and premises until the alleged required modifications
are completed and to award Plaintiffs attorneys' fees, costs and expenses
incurred. This matter was tried in August 2001 and we received a favorable
ruling. The parties have cross-claimed for attorney's fees, which has not yet
been ruled upon.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters were submitted to a vote of our security holders during the
quarter ended September 30, 2001.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         There is no established public trading market for our common stock. The
following market information is based upon the bid and asked price of our common
stock as reported by the OTC Bulletin Board. Such quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission, and may
not necessarily represent actual transactions.



                                       10
<PAGE>

<Table>
<Caption>
                                                                         High Bid         Low Bid
                                                                         --------         -------
<S>                                                                      <C>              <C>
Fiscal Year ended September 30, 2001
   First Quarter                                                           $0.18            $0.06
   Second Quarter                                                          $0.12            $0.01
   Third Quarter                                                           $0.01            $0.01
   Fourth Quarter                                                          $0.10            $0.01

Fiscal Year ended September 30, 2000
   First Quarter                                                           $0.88            $0.29
   Second Quarter                                                          $0.25            $0.14
   Third Quarter                                                           $0.17            $0.13
   Fourth Quarter                                                          $0.25            $0.17
</Table>

         As of December 28, 2001, there were approximately 142 record holders of
our common stock.

DIVIDENDS

         We currently anticipate that we will retain all available funds for use
in the operation of the business and do not anticipate paying any dividends in
the foreseeable future.

RECENT UNREGISTERED STOCK SALES

         On December 24, 2001, we sold 1,000,000 shares of our common stock to
Gary R. Fish for an aggregate purchase price of $50,000, or $.05 per share. The
sale was made in connection with Mr. Fish's acceptance of employment as our
Chief Financial Officer. The purchase price per share represented the fair
market value of our common stock on the date of purchase, as determined by our
Board of Directors. We sold the shares to Mr. Fish in reliance upon the
exemption from the registration requirements provided by Section 4(2) of the
Securities Act of 1933.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

         The following discussion should be read in conjunction with the
financial statements and notes thereto filed with this report. As used herein,
the term "Fiscal 2001" refers to the fiscal year ending September 30, 2001, and
the term "Fiscal 2000" refers to the fiscal year ending September 30, 2000.

         The statements contained in this Report, if not historical, are forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995, and involve risks and uncertainties that could cause actual
results to differ materially from the financial results described in such
forward looking statements. These risks and uncertainties include, but are not
limited to, changes in gaming regulations and tax rates in Colorado, Florida,
and other jurisdictions that could impact our operations, changes in economic
conditions, declining popularity of gaming, competition in Colorado and Florida
and other jurisdictions, and the level and rate of growth in our operations. The
success of our business operations is dependent on factors such as access to
capital, the effectiveness of our marketing strategies to grow our customer base
and improve customer response rates, general competitive conditions within the
gaming industry and general economic conditions as set forth under "Factors
Affecting Our Business and Prospects" below. Further, any forward looking
statement or statements speak only as of the date on which such statement was
made, and we undertake no obligation to update



                                       11
<PAGE>

any forward looking statement or statements to reflect events or circumstances
after the date on which such statement is made or to reflect the occurrence of
unanticipated events. Therefore, forward-looking statements should not be relied
upon as a prediction of actual future results.

OVERVIEW

         Through our wholly owned subsidiary, Concorde Cripple Creek, we own and
operate the Golden Gates Casino, a limited stakes casino in Black Hawk,
Colorado. In addition, through our wholly owned subsidiaries, Concorde Cruises
and Conami, we own 100% of Princesa Partners, which owns and operates the
offshore gaming vessel the "Princesa" from Bayfront Park, Miami, Florida. Conami
owns 80% of Princesa Partners with the remaining 20% owned by Concorde Cruises.
On March 31, 2000, Concorde Cruises purchased the remaining 20% interest in
Bayfront Ventures, a Florida general partnership, which conducted business under
the name Casino Princesa. By operation of law, Bayfront Ventures was dissolved
on March 31, 2000 when Concorde Cruises became its sole owner. At such time,
Concorde Cruises assumed all of the rights and obligations of Bayfront Ventures
and continues to operate the Princesa under the name Casino Princesa. Princesa
Partners owns the Princesa and, pursuant to a charter agreement, charters the
Princesa to Casino Princesa which operates the Princesa.

RESULTS OF OPERATIONS

         Year Ended September 30, 2001 Compared to Year Ended September 30, 2000

         REVENUES

         Net revenues were $18,663,694 for Fiscal 2001 compared to $17,375,232
for Fiscal 2000, an increase of 7.4%. The increase was primarily related to a
74.5% increase in net revenues at the Golden Gates Casino.

         CASINO PRINCESA

         Casino Princesa net revenues were $11,905,699 for Fiscal 2001 compared
to $13,501,984 for Fiscal 2000, a decrease of 11.8%. The decrease in net
revenues of 11.8% was primarily due to reduced cruises, passenger counts and
food and beverage revenue offset by a 41.7% decrease in promotional allowances.

         Total passenger count for Casino Princesa decreased 1.2% in Fiscal year
2001 from Fiscal year 2000 and total cruises decreased 4.7% in Fiscal year 2001
from Fiscal year 2000. The decrease in cruises was primarily related to poor
weather, high seas, and the fact the vessel was in dry dock for repairs for
seven days in Fiscal 2001. Food and beverage revenues were $1,572,999 for Fiscal
2001 compared to $2,358,161 for Fiscal 2000, a decrease of 33.3%. The decrease
was primarily due to a change in the manner in which we charged for food
services. Specifically, in Fiscal 2001 we no longer included food and beverage
as a part of the admission price; rather food and beverages were sold separately
or given to customers on a complementary basis. In fiscal 2000, when a customer
was sold or given admission, $5.95 was allocated to food and beverage revenues
regardless of actual passenger consumption.

         Promotional allowance expenses were $2,915,538 for Fiscal 2001, as
compared to $5,004,694 for Fiscal 2000, a decrease of 41.7%. The decrease was
primarily due to reduced use of "buy-in" promotions on table games (for example,
if a customer purchases $1,000 in chips the customer may receive a coupon for an
additional $100 in chips). Table games promotion expenses were $597,308 for
Fiscal 2001 and $1,742,409 for Fiscal 2000, a decrease of 65.7%. This decrease
was primarily due to management refocusing promotional efforts and improved
control of promotional costs.



                                       12
<PAGE>

         GOLDEN GATES CASINO

         Golden Gates Casino net revenues were $6,757,995 for Fiscal 2001
compared to net revenues of $3,873,248 for Fiscal 2000, an increase of 74.5%.
The increase in revenues was primarily due to increased customer traffic
resulting from the customers increased access to the casino from the parking
garage. During a portion of Fiscal 2000, the parking garage was under
construction and customers had limited access to the casino. Gaming devices in
operation at the Golden Gates Casino increased 13.8% in Fiscal 2001 and the
daily net win per device in Fiscal 2001 increased 48.1% from Fiscal 2000.

         COSTS AND EXPENSES

         Total costs and expenses were $18,217,706 for Fiscal 2001, compared to
$18,999,128 for Fiscal 2000, a decrease of
4.1%

         CASINO PRINCESA

         Total costs and expenses for Casino Princesa were $13,115,305 for
Fiscal 2001, compared to $15,336,918 for Fiscal 2000, a decrease of 14.5%. The
decrease in total operating expenses was primarily related to an $1,282,488, or
19.2%, decrease in casino expenses; a $417,045, or 27.5%, decrease in food and
beverage expenses, as well as the elimination of management fees paid to a
former partner in the property in Fiscal 2000. Casino expenses decreased because
of reduced payroll and operating supplies expense. Selling, general, and
administrative expenses also decreased $294,153, or 5.6%, primarily due to a
reduction in payroll, supplies and marketing expenses. Depreciation and
amortization expenses increased $75,818, or 10.0%, primarily due to the
acquisition of additional property and equipment in Fiscal 2000.

         GOLDEN GATES CASINO

         Total costs and expenses for the Golden Gates Casino were $5,137,700
for Fiscal 2001, compared to $3,654,171 for Fiscal 2000, an increase of 40.6%.
This increase was primarily due to increased customer traffic, which increased
variable costs based on gaming volume, such as rent, gaming taxes, maintenance
and payroll expenses. Food and beverage expenses also increased $47,049, or
33.7%, primarily as a result of increased customer traffic. Selling, general and
administrative expenses increased $184,766, or 36.0%, primarily as a result of
increased marketing expense. Depreciation and amortization expense increased
$41,215, or 14.1%, primarily due to a full year of depreciation on property and
equipment acquired in Fiscal 2000.

         OTHER INCOME AND EXPENSE

         Other income was $321,375 for Fiscal 2001 compared to an expense of
$18,757 for Fiscal 2000, primarily as a result of the receipt of $375,000 from
the settlement of the Golden Gates Casino parking facility lawsuit.

         Total interest expense was $1,757,692 for Fiscal 2001 compared to
$2,094,786 for Fiscal 2000, a decrease of 16.1%. The decrease primarily was due
to BHL Capital reducing the interest rate applicable to loans from BHL Capital
from 18% to 0.75% over the prime rate. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS."

         FEDERAL AND STATE INCOME TAXES

         We recorded no federal or state income tax benefit for Fiscal 2001 or
Fiscal 2000. We record an income tax benefit using the estimated effective tax
rate for the fiscal year if the amount of loss incurred is reasonably expected
to be offset by future income or is available for carry back to previous years.
The



                                       13
<PAGE>

income tax benefit for Fiscal 2001 of $338,691, and for Fiscal 2000 of
$1,297,503 were offset by similar valuation allowances in the respective fiscal
year. As of September 30, 2001 we had approximately $5,200,000 of loss carry
forwards available to offset future income. The realization of these benefits is
contingent upon our future profitability.

LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2001, we had cash and cash equivalents of
$1,787,765, compared to $1,118,773 at September 30, 2000, an increase of 59.8%.

         CASH FLOW FROM OPERATIONS

         During Fiscal 2001, we provided cash flows in operating activities of
$1,725,255, compared to using $224,639 in Fiscal 2000. The reduction in the net
loss to $967,688 in Fiscal 2001 from $3,707,152 in Fiscal 2000 was the primary
factor in the change in cash flows from operations.

         CASH FLOW FROM INVESTING ACTIVITIES

         Cash used in investing activities declined to $450,857 in Fiscal 2001,
compared to $2,086,768 in Fiscal 2000, primarily due to the buyout of our
partner in the Casino Princesa and Princesa Partners in Fiscal 2000.

         CASH FLOW FROM FINANCING ACTIVITIES

         Financing activities used cash of $605,406 in Fiscal 2001, compared to
providing cash of $1,363,340 in Fiscal 2000. Long-term borrowings from related
parties provided $1,105,000 in cash in Fiscal 2001, compared to $2,500,000 in
Fiscal 2000, while principal payments on related party debt decreased from
$519,704 in Fiscal 2000 to $75,000 in Fiscal 2001. Principal payments on other
long-term borrowings increased to $1,570,996 in Fiscal 2001 from $914,557 in
Fiscal 2000. The large increase in principal payments on other long-term
borrowings relates to the payment in full in Fiscal 2001 of a loan related to
equipment at the Golden Gates Casino.

         BANK FINANCING. In accordance with the Use Agreement in September 2000,
we provided the Trust with a letter of credit in the principal amount of
$475,000 to secure payment of the annual fees for the fourth year of the Use
Agreement. In September 2001, the $475,000 letter of credit expired and we
elected not to provide a letter of credit for annual fees for the fifth year of
the Use Agreement. We are currently renegotiating the terms of an extended Use
Agreement with the Trust. The $475,000 letter of credit was secured by the
personal guaranty of Mr. Lien and a mortgage on certain real estate owned by BHL
Capital, a company owned by Mr. Lien. We are required to pay BHL Capital an
annual fee of $14,250 for so long as the real estate is collateral for the
letter of credit. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

         In October, 1998, Princesa Partners entered into a loan agreement with
a group of lenders which provided $8,400,000 in financing for the Princesa,
related equipment and working capital. This loan is secured by a ship mortgage
and all related furniture, furnishings, machinery and equipment (including
gaming equipment) owned by Casino Princesa or Princesa Partners. In addition,
we, as well as Casino Princesa, Goldcoast and certain individuals, including Mr.
Lien, guaranteed this loan. The loan bears interest at 10.375% per annum.
Monthly payments of $130,258, including interest, commenced February 1999 and
will continue for sixty consecutive months from such date, with the remaining
balance due January 2004. The loan also requires mandatory prepayment of
principal in an amount equal to 12% of the amount of Excess Revenue (as defined
below) for each fiscal year, commencing January 2000.



                                       14
<PAGE>


Excess Revenue as defined in the loan agreements as the excess of (1) the
combined earnings of Princesa Partners and Casino Princesa before taxes,
depreciation and amortization minus the principal and interest paid on the loan
during the fiscal year, over (2) $4,000,000. There were no Excess Revenues in
Fiscal 2001 or 2000. The loan also contains typical covenants with respect to
Princesa Partners and Casino Princesa, including net worth restrictions, debt
service requirements and limitations on the amount of debt that can be incurred.
As of September 30, 2001 and 2000, we were not in compliance with the debt
service covenants. On December 27, 2001, we amended the debt service covenants
contained in the loan agreements. The combination of improved cash flow from
Casino Princesa's operations and less stringent debt service covenants in the
amended loan agreements eliminated the default as of December 27, 2001.

         In May 1999, Concorde Cripple Creek, entered into a loan agreement with
BNC National Bank that provided for a term loan of up to $850,000. This loan was
evidenced by a promissory note payable in 35 monthly installments of $10,119
plus interest, commencing on May 31, 1999, with a final installment of $566,000
due and payable in April 2002. The assets of Concorde Cripple Creek secured its
obligations under the loan and we also guaranteed the obligations of Concorde
Cripple Creek. This loan was paid in full in July 2001.

         RELATED PARTY FINANCING. We have relied upon loans from Mr. Brustuen
"Bruce" H. Lien and BHL Capital in order to obtain the necessary capital to
purchase the interests in Casino Princesa and Princesa Partners from Goldcoast
and to fund working capital shortages. In addition, Mr. Lien has been required
to provide personal guarantees in order for us to obtain financing, including
the vessel loan.

         In Fiscal 2001, we signed seven demand notes with BHL Capital for
advances of up to an aggregate amount of $1,105,000, which amounts bore interest
at a rate equal to 18% per annum. Effective October 1, 2000, we aggregated the
various promissory notes with BHL Capital into two promissory notes in the
aggregate principal amounts of $8,498,465 and $1,105,000, respectively. The
interest rate payable on these notes decreased to the prime rate plus 0.75% and
BHL Capital waived its right to demand payment on such notes until October 1,
2001. Effective October 2001, we aggregated the two promissory notes with BHL
Capital into one promissory note in the aggregate principal amount of
$10,398,272, which amount included accrued but unpaid interest under the
previous notes. The interest rate payable on the note is the prime rate plus
1.00% and the note matures November 1, 2002. See "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS."

ACCOUNTING DEVELOPMENTS

         In July 2001, the Financial Accounting Standards Board issued two
statements--Statement 141, Business Combinations, and Statement 142, Goodwill
and Other Intangible Assets, which will potentially impact our accounting of
reported goodwill and other intangible assets.

         Statement 141: (1) eliminates the pooling method for accounting for
business combinations; (2) requires that intangible assets that meet certain
criteria be reported separately from goodwill; and (3) requires negative
goodwill arising from a business combination to be recorded as an extraordinary
gain.

         Statement 142: (1) eliminates the amortization of goodwill and other
intangibles that are determined to have an indefinite life; and (2) requires, at
a minimum, annual impairment testing for goodwill and other intangible assets
that are determined to have an indefinite life.



                                       15
<PAGE>


         As a result of the adoption of these statements, we are required to
re-evaluate goodwill and other intangible assets that arose from business
combinations entered into before July 1, 2001. If the recorded other intangible
assets do not meet the criteria for recognition, they should be reclassified to
goodwill. Similarly, if there are other intangible assets that meet the criteria
for recognition but were not separately recorded from goodwill, they should be
reclassified from goodwill. Also, we must reassess the useful lives of
intangible assets, adjust the remaining amortization periods accordingly, and
write-off any remaining negative goodwill.

         We have not yet completed our full assessment of the effects of these
new pronouncements on our financial statements and so we are uncertain as to the
impact of such pronouncements. In general, we are required to implement these
standards in our financial statements for the fiscal year ending September 30,
2003.

FUTURE OPERATIONS

         Prior to Fiscal 2001, our cash flow from operations for the Princesa
and the Golden Gates Casino had not been sufficient to meet our current working
capital and debt service requirements and may not be sufficient to meet these
needs in the future. We intend to continue to increase cash flow from operations
by further reducing expenses through (1) continuing our revised marketing
strategy for the Princesa of using direct mail versus the more expensive
marketing methods previously used and (2) by continuing to charge a reduced
admission fee coupled with charging for food and beverages on an as ordered
basis, rather than as part of the admission price, which change was implemented
in January 2001. We reduced promotional allowances by 41.7%, or $2,089,156, from
Fiscal 2001 from Fiscal 2000. We believe that such strategies should increase
the profitability of the Princesa.

         There is no assurance that Mr. Lien or BHL Capital has the intent or
the ability to fund future cash shortages, if any, to the extent funded in
Fiscal years 2000 and 2001. The segment results for the Casino Princesa improved
from a loss of $1,209,000 in Fiscal 2001 from a loss of $1,834,000 in Fiscal
2000. Segment results from Golden Gates improved significantly to a profit of
$1,619,000 in Fiscal 2001 from a profit of $219,000 in Fiscal 2000 primarily
from increased customer traffic due to customers having access to the casino
from an adjacent parking facility. If management is unable to effectuate our
operational plan, or if our majority shareholder or BHL Capital is unwilling or
unable to provide additional funding, we may be unable to satisfy our cash flow
requirements and service our debt obligations, and may have to discontinue
operations.

FACTORS AFFECTING OUR BUSINESS AND PROSPECTS

         There are many factors that affect our business and the results of its
operations, some of which are beyond our control. The following is a description
of some of the important factors that may cause our results of operations in
future periods to differ from those currently expected or desired.

o        We have incurred a significant amount of indebtedness, and, prior to
         Fiscal 2001, our past cash flow from operations had not been sufficient
         to fund our operations and debt service obligations. We have in the
         past funded our operations and debt service obligations through
         borrowings from Mr. Lien and BHL Capital. There is no assurance that
         Mr. Lien or BHL Capital would have the intent or the ability to fund
         future cash shortages, if any, as they have previously.

o        Due to the current indebtedness, our ability to obtain additional
         financing in the future and our flexibility in reacting to changes in
         the industry and economic conditions generally may be limited.



                                       16
<PAGE>


o        Princesa Partners was in default of the vessel loan due to a failure to
         comply with the debt service covenants contained in the vessel loan
         agreements up until December 27, 2001. There is no guarantee that
         Princesa Partners may not violate the terms of the vessel loan
         agreements in the future.

o        Our success is partially dependent on our ability to anticipate
         changing products and amenities and to efficiently develop and
         introduce new products and amenities that will gain customer
         acceptance. If we are unable to anticipate and introduce such products
         and amenities, such inability may have an adverse effect on our
         business. Specifically, the opening of the Black Hawk Casino by Hyatt
         has brought Las Vegas style amenities to Black Hawk and may increase
         our costs of operations if customers expect all casinos to offer
         similar types of products and amenities.

o        We operate in a very competitive environment, particularly in Colorado.
         With the opening of the Black Hawk Casino by Hyatt, the number of slot
         machines in Black Hawk, Colorado, has materially increased, which could
         negatively affect our operating results.

o        Our gaming operations in Colorado are highly regulated by governmental
         authorities. We will also be subject to regulation in Florida if it
         decides to regulate the day-cruise industry. In such an event, Native
         American gaming would also become more competitive. If we conduct
         gaming activities in any other jurisdiction, the authorities in that
         jurisdiction may also subject us to regulation. Changes in applicable
         laws or regulations governing the gaming industry could have a
         significant effect on our operations.

o        Our business is affected by changes in local, national and
         international general economic and market conditions in the locations
         where we operate and where our customers live. The Casino Princesa is
         particularly affected by the economic situation in Latin America and
         South America. Changes in economic conditions could have a material
         adverse effect on our business.

o        From time to time, various state and federal legislators and officials
         have proposed changes in tax laws, or in the administration of the law,
         affecting the gaming industry. It is not possible to determine with
         certainty the likelihood of possible changes in the tax laws or their
         administration. These changes, if adopted, could have a material
         negative effect on our operating results.

o        Our success is partially dependent on attracting and retaining highly
         qualified management and gaming personnel. Our inability to recruit or
         retain such personnel could adversely affect our business.

o        The weather in Florida is a daily risk consideration. Air temperature,
         rain, high seas caused by winds, hurricanes and tropical storms affect
         daily passenger counts and may cause the cancellation of cruises.

o        We are currently in default under the Use Agreement. Under the current
         terms of the Use Agreement we no longer have the absolute right to
         extend the Use Agreement for an additional term of five years.
         Accordingly, if we are unable to amend the Use Agreement on terms
         satisfactory to us or if the Trust does not otherwise allow us to
         extend the term of the Use Agreement despite our current default, the
         Use Agreement will expire on September 30, 2002, which would likely
         have a material adverse effect on our operations.

ITEM 7. FINANCIAL STATEMENTS.

         Our financial statements are attached to this Report. Reference is made
to page F-1 of this Report for an index to the financial statements and
financial statement schedules.



                                       17
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.

         Our directors and executive officers and their ages are as follows:

<Table>
<Caption>
             Name                       Age                    Position
             ----                       ---                    --------
<S>                                     <C>    <C>
Brustuen "Bruce" H. Lien(1)(2)(3)        74    Chairman of the Board of Directors
Jerry L. Baum(2)                         52    President, Chief Executive Officer, Chief Operating
                                               Officer and Director
Deanna B. Lien(1)(2)(3)                  58    Director, Secretary
Gary R. Fish                             43    Chief Financial Officer
</Table>

(1) Member of the Compensation Committee.

(2) Member of the Executive Committee.

(3) Member of the Stock Option Committee.

         At each annual meeting of shareholders, each director is elected to
hold office until the next succeeding annual meeting or until their successor is
duly elected and qualified. Two of the directors, Brustuen "Bruce" H. Lien and
Deanna B. Lien are husband and wife. No other familial relationships exist
between our other directors or officers.

         BRUSTUEN "BRUCE" H. LIEN. Chairman of the Board of Directors since
August 10, 1990. Mr. Lien previously served as our Chief Executive Officer and
President. Mr. Lien is also a principal and director of BHL Capital Corporation,
a private investment company, and a director of Pete Lien & Sons, Inc., a
private company that is a regional leader in the construction materials industry
in the upper Midwest.

         JERRY L. BAUM. Chief Executive Officer since March 1997, President
since June 1995 and Chief Operating Officer since April 1995. Mr. Baum was
elected a director in November 1995. From October 1, 1993 to February 1995, Mr.
Baum served as Project Director of the 4 Bears Casino. Mr. Baum was Manager of
Operations from March through October 1993 at the Royal River Casino, an Indian
casino owned by the Flandreau Santee Sioux Tribe. Previously, Mr. Baum was
Director of Criminal Investigation for the State of South Dakota from February
1987 to 1991.

         DEANNA B. LIEN. Director since August 10, 1990. Secretary since March
28, 2000. Ms. Lien previously served as our Vice President and Treasurer.

         GARY R. FISH. Chief Financial Officer since December 2001. From 1997 to
October 2001, Mr. Fish served in several executive positions with the Black
Hills Corporation, an energy company listed on the New York Stock Exchange.
These executive positions included the President and Chief Operating Officer of
Black Hills Independent Energy business unit, from October 1999 to October 2001,
Vice President of Development from May 1997 to October 1999 and Corporate
Controller from 1988 to 1997. Mr. Fish is a Certified Public Accountant.



                                       18
<PAGE>

SECTION 16(a) BENEFICIAL OWNERSHIP

Reporting Compliance

         Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require our officers and directors, and persons who beneficially own
more than ten percent of a registered class of our equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish us with copies.

         Based on our review of the copies of the Section 16(a) forms we
received, or written representations from certain reporting persons, we believe
that, during the last fiscal year, all Section 16(a) filing requirements
applicable to our officers, directors and greater than ten-percent beneficial
owners were complied with.

ITEM 10. EXECUTIVE COMPENSATION.

CASH COMPENSATION

         The following table sets forth certain information concerning
compensation we paid to the Chief Executive Officer and any executive officer
whose total annual salary and bonus exceeded $100,000 for the last fiscal year.

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                         ANNUAL                             LONG-TERM
                                                      COMPENSATION                     COMPENSATION AWARDS

                                                                                      Securities Underlying
            Name and                                                                     Options/SARs (#)
       Principal Position            Year       Salary ($)      Bonus ($)                  Options (#)
       ------------------            ----       ----------      ---------             ---------------------
<S>                                  <C>        <C>             <C>                   <C>

   Jerry L. Baum                     2001         120,000            -0-                          -0-
   President and Chief               2000         120,000            -0-                          -0-
   Executive Officer                 1999         120,000       100,000-                      100,000
</Table>

         The foregoing compensation tables do not include certain fringe
benefits made available on a nondiscriminatory basis to all of our employees
such as group health insurance, dental insurance, long-term disability
insurance, vacation and sick leave. In addition, some benefits that are made
available only to certain of our officers, such as the use of a company vehicle,
are not described, as the monetary value of such benefits is less than 10
percent of each of the named executive officer's annual salary and bonus.



                                       19
<PAGE>

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

<Table>
<Caption>
                                                                                        Value of Unexercised
                                            Number of Securities Underlying             In-the-Money Options
                                           Unexercised Options at FY-End (#)              at FY-End ($)(1)
                 Name                          Exercisable/Unexercisable             Exercisable/Unexercisable
                 ----                      ---------------------------------         -------------------------

<S>                                        <C>                                       <C>
             Jerry L. Baum                          819,740/30,000                              $0/$0
</Table>

----------

(1)      Based on the bid price of our common stock on September 30, 2001.

COMPENSATION PURSUANT TO PLANS

         We have adopted, and our shareholders have approved, a performance
stock option plan for the benefit of our employees, officers and directors. We
have reserved 2,200,000 shares of our common stock for issuance under the plan.
The stock option committee of the board of directors selects the optionees and
determines the terms and conditions of the stock options granted pursuant to the
plan. No stock options were granted in Fiscal 2001. Options to purchase 100,000
shares of common stock were granted under the plan during Fiscal 2000. As of
September 30, 2001, options to purchase 1,149,740 shares of common stock were
outstanding under the plan, 1,101,740 of which were vested as of September 30,
2001.

         We have adopted, and our shareholders have approved, an employee stock
purchase plan for the benefit of certain of our employees and employees of our
designated subsidiaries. All employees, other than (1) employees whose annual
compensation exceeds the greater of $175,000 or such amount as is specified by
the Internal Revenue Code of 1986, as amended, and (2) employees subject to laws
of foreign jurisdictions prohibiting participation in the plan, are eligible to
participate in this plan. This plan provides employees the opportunity to
purchase shares of our common stock at 85% of the fair market value of such
stock on the applicable measurement date. The total number of shares available
for purchase under the plan is 2,000,000. As of September 30, 2001, no shares
had been purchased under the plan.

COMPENSATION OF DIRECTORS

         We do not compensate our directors for their services as directors or
pursuant to any other arrangements. We reimburse our directors for expenses
incurred related to their services as directors.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table sets forth certain information regarding beneficial
ownership of outstanding shares of common stock as of December 28, 2001 by (1)
each person who is known by us to own beneficially more than 5% of our
outstanding shares of common stock; (2) our directors; (iii) all executive
officers named in the Summary Compensation Table; and (iv) all directors and
executive officers as a group.



                                       20
<PAGE>

<Table>
<Caption>
                                                             Shares
                       Name                            Beneficially Owned(1)    Percent of Class
                       ----                            ---------------------    ----------------
<S>                                                    <C>                      <C>

Brustuen "Bruce" H. Lien .........................       18,482,500(2)(4)             68.3%
3290 Lien Street
Rapid City, SD 57702

Deanna B. Lien(2) ................................       18,482,500(3)(4)             68.3%
3290 Lien Street
Rapid City, SD 57702

University of Wyoming Foundation .................        1,800,000                    7.2%
P. O. Box 3963
Laramie, WY 82071

Gary R. Fish .....................................        1,006,400                    4.1%
3503 Gallery Lane
Rapid City, SD 57702

Jerry L. Baum ....................................          923,948(5)                 3.6%
3205 Idlewild Ct.
Rapid City, SD 57702

All executive officers and directors
as a group (4 persons) ...........................       20,420,848(4)(5)             73.2%
</Table>

----------

(1)      Shares are considered beneficially owned, for purposes of this table,
         if held by the person indicated, if such person, directly or
         indirectly, through any contract, arrangement, understanding,
         relationship or otherwise has or shares the power to vote, to direct
         the voting of and/or to dispose of or to direct the disposition of,
         such securities, or if the person has the right to acquire beneficial
         ownership within sixty days, unless otherwise indicated.

(2)      This number includes the shares of common stock that are beneficially
         owned, or which may be deemed to be beneficially owned, by Brustuen
         "Bruce" H. Lien. For purposes of this table, the same shares may be
         deemed to be beneficially owned by Mr. Lien's wife, Deanna B. Lien.

(3)      For purposes of this table, Deanna B. Lien is deemed to be the
         beneficial owner of the shares of common stock that may be deemed to be
         beneficially owned by her husband, Brustuen "Bruce" H. Lien.

(4)      This number includes 2,000,000 shares of common stock that may be
         acquired pursuant to a currently exercisable warrant.

(5)      This number includes 819,740 shares of common stock that may be
         acquired pursuant to currently exercisable stock options.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         During Fiscal 2001 and 2000, Mr. Lien and BHL Capital loaned us money
under various promissory notes. The amounts loaned varied from month to month
and carried various interest rates. We incurred interest expense, including
interest that was capitalized, relating to such notes of $884,057 in Fiscal 2001
and $1,156,574 in Fiscal 2000. In November 1999, we signed a promissory note for
advances up to $1,000,000 with BHL Capital to meet our working capital needs.
This line of credit was superceded and replaced in March 2000 by a new
promissory note for $2,000,000 with BHL Capital that was payable on



                                       21
<PAGE>

demand and bore interest at 18% per annum. This line of credit was in addition
to the promissory note we signed in November 1998 with BHL Capital for advances
up to $5,000,000, which superceded and replaced previous borrowings from Mr.
Lien and BHL Capital. This promissory note was payable on demand with interest
paid monthly at the rate of 18% per annum. On September 28, 2000 BHL Capital
loaned us $600,000 pursuant to a demand promissory note at an interest rate of
18% per annum.

         In Fiscal 2001, we obtained additional loans from BHL Capital for an
aggregate amount of $1,105,000 pursuant to seven demand promissory notes, each
with an interest rate of 18% per annum. Effective October 1, 2000, our various
promissory notes with BHL Capital were aggregated into two promissory notes in
the aggregate principal amounts of $8,498,465.02 and $1,105,000, respectively.
The interest rate payable on these notes was decreased to the prime rate plus
0.75%. Subsequent to September 30, 2001 these promissory notes were aggregated
into one promissory note with a principal balance of $10,398,272, which amount
included accrued by unpaid interest under the previous notes, that matures
November 1, 2002. The interest rate payable on this note is the prime rate plus
1%.

         Mr. Lien has pledged assets and/or personally guaranteed loans in order
for us to obtain financing that otherwise may not have been available to us, as
follows:

                  o        On October 23, 1998, Mr. Lien personally guaranteed a
                           $8,400,000 note payable to a bank. The balance on
                           this note as of September 30, 2001 was $6,341,624.

                  o        On September 28, 2000, Mr. Lien personally guaranteed
                           a $475,000 letter of credit relating to the Use
                           Agreement. This letter of credit expired on September
                           30, 2001.

                  o        On September 28, 1999, Mr. Lien personally guaranteed
                           a $950,000 letter of credit relating to the Use
                           Agreement. This letter of credit expired on September
                           30, 2000.

         In consideration for previous pledges and guarantees, on January 26,
1994 we issued a warrant to Mr. Lien for 2,000,000 shares of our common stock at
an exercise price of $1.00 per share. This warrant expires in January 2004. In
addition, we entered into an indemnification agreement with Mr. Lien under which
we agreed to indemnify Mr. Lien from all losses, claims, damages and expenses
relating to any guarantees and/or pledges of collateral made by Mr. Lien on our
behalf.

         We currently lease approximately 4,500 square feet of office space
located in Rapid City, South Dakota from BHL Capital pursuant to a
month-to-month lease. The monthly lease payment, including real estate taxes and
utilities, is $2,597.

         In connection with Gary R. Fish's agreement to become our Chief
Financial Officer, on December 24, 2001 Mr. Fish purchased 1,000,000 shares of
our common stock for an aggregate purchase price of $50,000 or $.05 per share.
The price per share represented the fair market value of our common stock on the
date of purchase as determined by our board of directors. In connection with a
letter agreement dated November 28, 2001, we have agreed to pay Mr. Fish a base
salary of $60,000 per year, which amount increases to $75,000 per year after
completion of a 180 day probationary period.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits

         The following exhibits are filed as a part of this Report, with each
exhibit that consists of or includes a management contract or compensatory plan
or arrangement being identified with an asterisk.



                                       22
<PAGE>

EXHIBIT NO.          DESCRIPTION

3.1                  Amended and Restated Articles of Incorporation.(1)

3.2                  Fourth Amended and Restated Bylaws.(8)

10.1                 1992 Performance Stock Option Plan.(2)(*)

10.2                 2000 Employee Stock Purchase Agreement.(3)(*)

10.3                 Indemnification Agreement between us and Bruce H. Lien.(1)

10.4                 Lease between Elevation 8000+ and Concorde Cripple Creek,
                     Inc. dated July 21, 1997.(4)

10.5                 Use Agreement dated June 25, 1997, by and between Casino
                     Princesa and Bayfront Park Management Trust.(4)

10.8                 Loan Agreement between Princesa Partners and the lenders
                     named therein dated as of October 22, 1998.(5)

10.9                 Servicing and Intercreditor Agreement between Princesa
                     Partners, The National City Bank of Evansville, as
                     servicer, and the lenders set forth therein dated as of
                     October 22, 1998.(5)

10.10                Security Agreement between Princesa Partners, Casino
                     Princesa and the lenders named therein dated as of October
                     22, 1998.(5)

10.11                Guaranty, Subordination Agreement, Security Agreement and
                     Indemnity by Casino Princesa for the benefit of the lenders
                     named therein, dated as of October 22, 1998.(5)

10.12                First Preferred Ship Mortgage by Princesa Partners in favor
                     of The National City Bank of Evansville, individually and
                     as agent for certain lenders, dated as of October 15,
                     1998.(5)

10.13                Guaranty by us for the benefit of the lenders named therein
                     dated as of October 22, 1998.(5)

10.14                First Amendment to Lease between Concorde Cripple Creek and
                     Elevation 8000+ LLC, dated as of January 1, 1999. (6)



                                       23
<PAGE>

EXHIBIT NO.          DESCRIPTION

10.15                Promissory Note in the amount of $10,398,272 to the order
                     of BHL Capital Corporation dated October 1, 2001.(+)

10.16                Sublease between KMM Parking L.L.C. and us dated December
                     30, 1998.(8)

21                   Subsidiaries of the Registrant.(+)

23                   Consent of Independent Auditors'.(+)

----------

(+)  Filed herewith

(*)  Management contract or compensation plan.

(1)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Annual Report on Form 10-KSB for the year ended September 30, 1995
     (File No. 0-8698) and incorporated herein by this reference.

(2)  Previously filed with the Securities and Exchange Commission on
     September 24, 1992 as Exhibit 10 to our Registration Statement on Form S-8,
     (File No. 33-52388) and incorporated herein by this reference.

(3)  Previously filed with the Securities and Exchange Commission as an
     attachment to our Proxy Statement for the 1999 annual meeting on Schedule
     14A and incorporated herein by this reference.

(4)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Annual Report on Form 10-KSB for the year ended September 30, 1997
     (File No. 0-8698) and incorporated herein by this reference.

(5)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Annual Report on Form 10-KSB for the year ended September 30, 1998
     (File No. 0-8698) and incorporated herein by this reference.

(6)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Quarterly Report on Form 10-QSB for the quarter ended December 31,
     1998 (File No. 0-8698) and incorporated herein by this reference.

(7)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Quarterly Report on Form 10-QSB for the quarter ended June 30, 1999
     (File No. 0-8698) and incorporated herein by this reference.

(8)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Annual Report on Form 10-KSB for the year ended September 30, 2001
     (File No. 0-8698) and incorporated herein by this reference.

(b)      Reports on Form 8-K:

         No current reports on Form 8-K were filed during the last quarter of
the period covered by this report.




                                       24
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

<Table>
<Caption>
Financial Statements                                                                                        Page
<S>                                                                                                         <C>

Independent Auditors' Report.................................................................................F-2
Consolidated Balance Sheets at September 30, 2001 and 2000...................................................F-3
Consolidated Statements of Operations for the Years Ended
     September 30, 2001 and 2000.............................................................................F-5
Consolidated Statements of Stockholders' Equity (Deficit) for the
     Years Ended September 30, 2001 and 2000.................................................................F-6
Consolidated Statements of Cash Flows for the Years Ended
     September 30, 2001 and 2000.............................................................................F-7
Notes to Consolidated Financial Statements...................................................................F-8
</Table>




                                      F-1
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


The Board of Directors and Stockholders
CONCORDE GAMING CORPORATION
Rapid City, South Dakota


We have audited the accompanying consolidated balance sheets of CONCORDE GAMING
CORPORATION AND SUBSIDIARIES as of September 30, 2001 and 2000, and the related
consolidated statements of operations, stockholders' equity (deficit), and cash
flows for the years then ended. 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 the 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CONCORDE GAMING
CORPORATION AND SUBSIDIARIES as of September 30, 2001 and 2000, and the results
of their operations and their cash flows for the years then ended 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 discussed in Note 13 to the
consolidated financial statements, the Company has suffered recurring losses
from operations and its total liabilities exceed its total assets. This raises
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 13. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

McGladrey & Pullen, LLP


Rapid City, South Dakota
December 27, 2001





                                      F-2
<PAGE>

                  CONCORDE GAMING CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           September 30, 2001 and 2000

<Table>
<Caption>
ASSETS                                                                     2001             2000
------                                                                 ------------     ------------
<S>                                                                    <C>              <C>
Current assets
    Cash and cash equivalents                                          $  1,787,765     $  1,118,773
    Trade receivables - net of allowance for doubtful accounts
          of $265,975 in 2001 and $141,363 in 2000                          120,473          269,876
    Inventory                                                                71,021           37,382
    Prepaid expenses                                                        112,806          506,055
                                                                       ------------     ------------
          Total current assets                                            2,092,065        1,932,086
                                                                       ------------     ------------

Other assets                                                                148,274          169,492
                                                                       ------------     ------------

Property and equipment
    Land                                                                  1,097,080        1,097,080
    Vessel and improvements                                               9,482,339        9,479,674
    Gaming equipment, fixtures and furniture                              4,488,176        4,073,221
    Vehicles                                                                 51,265           51,265
    Leasehold improvements                                                  309,574          259,609
                                                                       ------------     ------------
                                                                         15,428,434       14,960,849
    Less accumulated depreciation and amortization                        2,893,710        1,958,979
                                                                       ------------     ------------
                                                                         12,534,724       13,001,870
                                                                       ------------     ------------

Intangibles
    Dock rights, net                                                        213,016          248,512
    Deferred financing costs, net                                           192,156          232,981
    Goodwill, net                                                         1,116,072        1,042,865
                                                                       ------------     ------------
                                                                          1,521,244        1,524,358
                                                                       ------------     ------------

                                                                       $ 16,296,307     $ 16,627,806
                                                                       ============     ============
</Table>

See Notes to Consolidated Financial Statements.



                                      F-3
<PAGE>

<Table>
<Caption>
LIABILITIES AND STOCKHOLDERS' EQUITY                                       2001              2000
------------------------------------                                   ------------      ------------
<S>                                                                    <C>               <C>
Current liabilities
    Notes payable - bank                                               $    179,796      $    244,206
    Current maturities of long-term debt                                    973,346         7,346,000
    Accounts payable                                                        675,596           664,709
    Accrued expenses
       Payroll and payroll taxes                                            238,335           164,333
       Accrued interest                                                     130,210            65,639
       Other                                                                895,013           721,316
                                                                       ------------      ------------
          Total current liabilities                                       3,092,296         9,206,203
                                                                       ------------      ------------

Long-term debt, less current maturities                                   5,483,256           633,559
                                                                       ------------      ------------

Notes payable to related party                                           10,398,272         8,497,873
                                                                       ------------      ------------

Commitments and contingencies

Stockholders' equity (deficit)
    Common stock,  par value $.01 per share, authorized
       500,000,000 shares; issued and outstanding 24,070,402                240,704           240,704
    Preferred stock, par value $.01 per share, 10,000 shares
       authorized; no shares issued and outstanding                              --                --
    Additional paid-in capital                                            3,899,576         3,899,576
    Accumulated deficit                                                  (6,817,797)       (5,850,109)
                                                                       ------------      ------------
                                                                         (2,677,517)       (1,709,829)
                                                                       ------------      ------------

                                                                       $ 16,296,307      $ 16,627,806
                                                                       ============      ============
</Table>


                                      F-4
<PAGE>

                  CONCORDE GAMING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     Years Ended September 30, 2001 and 2000

<Table>
<Caption>
                                                           2001              2000
                                                       ------------      ------------
<S>                                                    <C>               <C>
Revenues
    Casino                                             $ 18,343,921      $ 17,724,547
    Food and beverage                                     1,679,441         2,457,152
    Other                                                 1,656,594         2,490,842
                                                       ------------      ------------
           Gross revenues                                21,679,956        22,672,541
    Less promotional allowance                            3,016,262         5,297,309
                                                       ------------      ------------
           Net revenues                                  18,663,694        17,375,232
                                                       ------------      ------------

Costs and expenses
    Casino                                                9,203,389         9,265,821
    Food and beverage                                     1,285,061         1,655,057
    Management fees to minority partner                          --           275,368
    Selling, general and administrative                   6,449,194         6,655,197
    Depreciation and amortization                         1,227,831         1,110,727
    Loss on sale of equipment                                52,231            36,958
                                                       ------------      ------------
                                                         18,217,706        18,999,128
                                                       ------------      ------------

    Income (loss) from operations                           445,988        (1,623,896)
                                                       ------------      ------------

    Interest income                                          22,641            30,287
    Other income (expense)                                  321,375           (18,757)
    Interest expense and financing costs:
      Related party                                        (884,057)       (1,156,574)
      Other                                                (873,635)         (938,212)
                                                       ------------      ------------
                                                         (1,413,676)       (2,083,256)
                                                       ------------      ------------

           Loss before income taxes                        (967,688)       (3,707,152)

Income taxes                                                     --                --
                                                       ------------      ------------
           Net loss                                    $   (967,688)     $ (3,707,152)
                                                       ============      ============

Basic and diluted loss per share:                      $      (0.04)     $      (0.15)
                                                       ============      ============
</Table>

See Notes to Consolidated Financial Statements


                                      F-5
<PAGE>

                  CONCORDE GAMING CORPORATION AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000


<Table>
<Caption>
                                                                                         Additional
                                                             Number         Common         paid-in      Accumulated
                                                            of shares        stock         capital        deficit          Total
                                                           -----------    -----------    -----------    -----------     -----------
<S>                                                        <C>           <C>            <C>            <C>             <C>

Balance September 30, 1999                                  24,010,402    $   240,104    $ 3,887,176    $(2,142,957)    $ 1,984,323

     Issuance of 60,000 shares of common
         stock relating to stock options exercised              60,000            600         12,400             --          13,000
     Net loss                                                       --             --             --     (3,707,152)     (3,707,152)
                                                           -----------    -----------    -----------    -----------     -----------

Balance September 30, 2000                                  24,070,402    $   240,704    $ 3,899,576    $(5,850,109)    $(1,709,829)

     NET LOSS                                                       --             --             --       (967,688)       (967,688)
                                                           -----------    -----------    -----------    -----------     -----------

BALANCE SEPTEMBER 30, 2001                                  24,070,402    $   240,704    $ 3,899,576    $(6,817,797)    $(2,677,517)
                                                           ===========    ===========    ===========    ===========     ===========
</Table>


See Notes to Consolidated Financial Statements.


                                      F-6
<PAGE>

                  CONCORDE GAMING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED SEPTEMBER 30, 2001 AND 2000

<Table>
<Caption>
                                                                                         2001              2000
                                                                                     ------------      ------------
<S>                                                                                  <C>               <C>
Cash flow provided by (used in) operating activities:
   Net loss                                                                          $   (967,688)     $ (3,707,152)
   Adjustments to reconcile net (loss) to net cash flows provided by (used in)
    operating activities:
     Note payable to related party incurred for payment of interest expense               870,399           990,120
     Depreciation and amortization                                                      1,227,831         1,110,727
     Loss on disposal of property and equipment                                            52,231            36,958
     Provision for doubtful accounts                                                      124,612            38,618
     Deferred income taxes                                                                     --           139,000
     Change in assets and liabilities:
        Decrease  in trade receivables                                                     24,791           351,304
        Decrease in prepaid expenses and inventory                                        359,610           340,793
        Increase in accounts payable and accrued expenses                                  33,469           286,165
        Decrease in income tax refund claim                                                    --           188,828
                                                                                     ------------      ------------
           Net cash provided by (used in) operating activities                          1,725,255          (224,639)
                                                                                     ------------      ------------

Cash flows (used in) investing activities:
     Purchase of property and equipment                                                  (405,103)       (1,833,360)
     Purchase of intangibles                                                              (82,667)         (418,499)
     Proceeds from sale of property and equipment                                          15,695             7,950
     Reduction of loan receivable from related party                                           --            95,000
     Decrease in other assets                                                              21,218            62,141
                                                                                     ------------      ------------
              Net cash (used in) investing activities                                    (450,857)       (2,086,768)
                                                                                     ------------      ------------

Cash flows (used in) financing activities:
     Net change in short-term borrowings - other                                          (64,410)          244,206
     Proceeds from long term borrowings - related parties                               1,105,000         2,500,000
     Proceeds from long term borrowings - other                                                --            40,395
     Principal payments on long-term borrowings - related parties                         (75,000)         (519,704)
     Principal payments on long-term borrowings - other                                (1,570,996)         (914,557)
     Proceeds from sale of stock                                                               --            13,000
                                                                                     ------------      ------------
              Net cash provided by (used in) financing activities                        (605,406)        1,363,340
                                                                                     ------------      ------------

              NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        668,992          (948,067)
              Cash and cash equivalents:
              Beginning                                                                 1,118,773         2,066,840
                                                                                     ------------      ------------

              Ending                                                                 $  1,787,765      $  1,118,773
                                                                                     ============      ============
</Table>

See Notes to Consolidated Financial Statements


                                      F-7
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations:

Concorde Gaming Corporation and its subsidiaries (the "Company") operates the
Golden Gates Casino in Black Hawk, Colorado and owns and operates the Princesa,
an offshore gaming vessel in Miami, Florida.

Principles of Consolidation:

The consolidated financial statements include the accounts of Concorde Gaming
Corporation and its majority-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation. Significant
subsidiaries at September 30, 2001 include Concorde Cripple Creek, Inc.
("Concorde Cripple Creek") (100% owned), Concorde Cruises, Inc. (100% owned) and
Conami, Inc. (100% owned). Through March 31, 2000, the Company owned an 80%
interest in two joint ventures that owned and operated the offshore gaming
vessel in Miami, Florida. During Fiscal 2000, the Company acquired the remaining
20% interest in these joint ventures for $1,500,000.

Use of Estimates:

The preparation of consolidated financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses.
Actual results could differ from those estimates.

Significant Accounting Policies:

Cash and Cash Equivalents:

Cash and cash equivalents include cash on hand, demand deposits, and short-term
investments with maturities of three months or less.

Inventories:

Inventories are stated at the lower of cost (first-in, first-out method) or
market.

Allowance for Doubtful Accounts:

Casino Princesa extends credit to its customers, following an investigation of
creditworthiness, on terms that it establishes for each customer, primarily on
an unsecured basis. The allowance for doubtful accounts is maintained at a level
considered adequate to provide for possible future losses. Colorado state law
does not allow the granting of credit at the Golden Gates Casino.

Property and Equipment:

Property and equipment are recorded at cost. Assets are depreciated over their
estimated useful lives or amortized over their lease terms using the
straight-line or accelerated methods. Estimated useful lives for furniture,
gaming equipment, and vehicles are 5 to 7 years, for leasehold improvements the
life of the underlying lease, for vessel and improvements 10 to 30 years, and
for buildings and improvements 39 years.



                                      F-8
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

Long-Lived Assets:

The Company periodically evaluates the value of long-lived assets, including
goodwill, for potential impairment. If an impairment is indicated, based on
estimated undiscounted future cash flows that are less than the carrying value
of the asset, such impaired assets are written down to their estimated fair
value. As of September 30, 2001 management determined that there was no
impairment of the Company's long-lived assets. The Company's impairment estimate
related to long-lived assets may change in the near term depending on the future
operating results of the Casino Princesa, an offshore gaming vessel.

Intangible Assets:

Intangible assets, primarily goodwill and dock rights are amortized over
estimated useful lives of 10 to 15 years using the straight-line method.

Deferred Financing Costs:

Deferred financing costs are amortized over the term of the related loan using
the straight-line method.

Revenue Recognition:

The Company recognizes gaming revenues as the net win from gaming operations,
which is the difference between gaming wins and losses.

Promotional allowances consist primarily of player match betting incentives,
food and beverage items, and admission furnished without charge to customers.
The retail value of such items is included in the respective revenue
classification and is then deducted as promotional allowances.

Advertising Costs:

The Company follows the policy of charging the costs of advertising to expense
as incurred. Included in selling, general and administrative expenses is
$1,268,081 and $898,667 of advertising expense for the years ended September 30,
2001 and 2000 respectively.

Income Taxes:

The Company provides for income taxes under SFAS No. 109 Accounting for Income
Taxes. Deferred tax assets and liabilities are recognized for the future tax
effects attributable to temporary differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
amounts. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized.

Earnings (Loss) Per Share:

The Company follows the provisions of SFAS No. 128, Earnings per Share that
requires the reporting of basic earnings (loss) per share and diluted earnings
per share. Basic earnings (loss) per share is computed by dividing net earnings
(loss) for the period by the weighted average common shares outstanding for the
period. Diluted earnings (loss) per share amounts assume the conversion,
exercise or issuance of all potential common stock instruments unless the effect
is to reduce the loss or increase the income per



                                      F-9
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

common share. The provisions of SFAS No. 128 have been applied to all periods
presented in the accompanying financial statements. In Fiscal 2001 and 2000
basic and diluted losses per share were the same.

<Table>
<Caption>
                                   YEAR ENDED SEPTEMBER 30, 2001                       YEAR ENDED SEPTEMBER 30, 2000
                             LOSS             SHARES            LOSS              LOSS              SHARES           LOSS
                          (NUMERATOR)      (DENOMINATOR)      PER SHARE        (NUMERATOR)      (DENOMINATOR)      PER SHARE
                          ------------     -------------     ------------      ------------     -------------      ------------
<S>                       <C>              <C>               <C>               <C>              <C>              <C>
Basic and Diluted EPS
    Net loss              $   (967,688)       24,070,402     $      (0.04)     $ (3,707,152)      (24,045,224)     $      (0.15)
                          ============      ============     ============      ============       ===========      ============
</Table>

For Fiscal 2001 and 2000 options and warrants outstanding (note 7) are not
included in the computation of diluted EPS because the effect is anti-dilutive
or the exercise price was greater than the average market price of the common
shares.

NOTE 2. ACQUISITION OF REMAINING INTEREST IN CASINO PRINCESA

On March 31, 2000, the Company purchased the remaining 20% interest in two joint
ventures, which own and operate the Princesa. The acquisition was accounted for
as a purchase. The excess of the purchase price over the proportional
depreciated cost of net assets acquired was recorded on the financial statements
based on the respective fair market value of assets acquired as follows:

<Table>
<S>                                         <C>
         Goodwill                           $    137,252
         Vessel and Improvements               1,354,464
         Other                                     8,284
                                            ------------
                                            $  1,500,000
                                            ============
</Table>

NOTE 3. NOTES PAYABLE TO BANK

The Company has outstanding borrowings of $179,796 and $244,206 under a
revolving bank line of credit at September 30, 2001 and 2000 respectively. The
line, which matures on December 31, 2002, requires monthly interest payments
which accrue at the prime rate plus 1%. The loan is secured by substantially all
assets of the Casino Princesa and is personally guaranteed by the majority
shareholder. The loan contains restrictive covenants that are the same as those
for the Vessel loan. See Note 5 regarding loan covenants and related
amendment.

NOTE 4. NOTES PAYABLE TO RELATED PARTY

Notes payable to related party consist of:

<Table>
<Caption>
                                                                                    2001             2000
                                                                                ------------     ------------
<S>                                                                             <C>              <C>
Unsecured note payable to a company controlled by the Company's majority
    stockholder with interest at prime rate plus 3/4% (7% at September 30,
    2001) due November 1, 2002                                                  $ 10,398,272     $  8,497,873
                                                                                ============     ============
</Table>

As of October 1, 2001, the interest rate on this note was increased to the prime
rate plus 1.00%.



                                      F-10
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 5. LONG-TERM DEBT

Long-term debt consists of:

<Table>
<Caption>
                                                                                      2001              2000
                                                                                  ------------      ------------
<S>                                                                               <C>               <C>
10.375% note payable to a bank (Vessel Loan), monthly installments of             $  6,341,623      $  7,183,145
    $130,258 including interest, due January 2004, secured by first
    preferred ship mortgage, guaranteed by majority stockholder (A)

Note payable to a bank, paid in full during the year                                        --           688,095

Other notes, due in various monthly installments to March 2006, at
    various rates from 6.5% to 15.5%, secured in part by property and
    equipment                                                                          114,979           108,319
                                                                                  ------------      ------------
                                                                                     6,456,602         7,979,559
Less current maturities                                                               (973,346)       (7,346,000)
                                                                                  ------------      ------------
                                                                                  $  5,483,256           633,559
                                                                                  ============      ============
</Table>

         (A). This Vessel Loan requires mandatory prepayment of principal in
January of each year in an amount equal to 12% of the amount of Excess Revenue
for each fiscal year. Excess Revenue as defined in the Vessel Loan is the excess
of (i) the earnings of the Casino Princesa before taxes, depreciation and
amortization minus the principal and interest paid on the Vessel Loan during the
fiscal year, over (ii) $4,000,000. There was no Excess Revenue in Fiscal 2001
and 2000. The Vessel Loan contains typical covenants with respect to the Casino
Princesa, including net worth restrictions, debt service requirements and
limitations on the amount of debt that can be incurred. As of September 30, 2001
and 2000, the Company was in violation of the debt service covenant. However, on
December 27, 2001, the loan covenants were amended. The combination of improved
cash flow from the Casino Princesa operations and less stringent debt service
covenants in the amended vessel loan agreement eliminated the violation of the
amended debt service covenant. Therefore, only the scheduled principal payments
for the year ending September 30, 2002 are included in current maturities at
September 30, 2001.

The future aggregate annual maturities of long-term debt at September 30, 2001
are as follows:

<Table>
<S>                                                     <C>
Fiscal year ending:
2002                                                    $    973,346
2003                                                       1,071,583
2004                                                       4,395,142
2005                                                          12,300
2006                                                           4,231
                                                        ------------
                                                        $  6,456,602
                                                        ============
</Table>



                                      F-11
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 6. INCOME TAXES

The income tax provision (benefit) for the years ended September 30, 2001 and
2000 is as follows:

<Table>
<Caption>
                                                                2001             2000
                                                            ------------     ------------
<S>                                                         <C>              <C>
Current, Federal and State                                  $         --         (139,000)
Deferred                                                              --          139,000
                                                            ------------     ------------
                                                            $         --     $         --
                                                            ============     ============
</Table>

The income tax provision (benefit) differs from the amount of income tax
determined by applying the statutory tax rate of 35 % to pretax income (loss)
due to the following:

<Table>
<Caption>
                                                                2001             2000
                                                            ------------     ------------
<S>                                                         <C>              <C>
Computed "expected" tax expense (benefit)                   $   (338,691)      (1,297,503)
Valuation allowance                                              185,000        1,370,000
Minority interest loss recognized by parent company                   --           54,903
Other                                                            153,691         (127,400)
                                                            ------------     ------------
                                                            $         --     $         --
                                                            ============     ============
</Table>

Net deferred tax asset (liabilities) are as follows:

<Table>
<Caption>
                                                                2001             2000
                                                            ------------     ------------
<S>                                                         <C>              <C>
Deferred tax assets:
   Start-up costs                                           $    340,000     $    510,000
    Goodwill and other intangibles                               118,000          116,000
    Net operating loss                                         1,874,000        1,654,000
   Accrued interest                                              646,000          358,000
    Allowance for doubtful accounts and other                    169,000          108,000
                                                            ------------     ------------
                                                               3,147,000        2,746,000
   Valuation allowance                                        (2,492,000)      (2,307,000)
                                                            ------------     ------------
Deferred tax liabilities                                         655,000          439,000
   Property and equipment                                       (655,000)        (439,000)
                                                            ------------     ------------
          Net                                               $         --     $         --
                                                            ============     ============
</Table>

During the year ended September 30, 2001 the Company recorded a valuation
allowance of $185,000 on the deferred tax assets to reduce the total to an
amount that management believes will ultimately be realized. During the year
ended September 2000, the valuation allowance was increased by $1,675,000
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carry
forwards are expected to be available to reduce taxable income. There was no
other activity in the valuation allowance account during 2001 or 2000.

Loss carryforwards available for federal income tax purposes of approximately
$5,200,000 as of September 30, 2001 will begin to expire in the year ending
September 30, 2014.



                                      F-12
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 7. STOCK OPTION PLAN AND STOCK WARRANTS ISSUED AS COMPENSATION

The Company has reserved 2,200,000 shares of its common stock for issuance under
the 1992 Performance Stock Option Plan (the "Plan"). The Plan allows for the
issuance of incentive stock options and nonqualified stock options to certain
officers, directors, and employees of the Company. Incentive stock options may
be granted at prices not less than fair market value on the date of grant, while
nonqualified stock options may be granted at prices less than fair market value
on the date of grant. At September 30, 2001 1,149,740 incentive stock options
were issued and outstanding under the Plan. The options were granted at exercise
prices ranging from $0.15 to $0.42 per share and vest ratably over a five-year
period. Options for the purchase of 1,101,740 shares were vested at September
30, 2001. Options for the purchase of 60,000 shares were exercised during the
year ended September 30, 2000. Options for the purchase of 346,490 shares,
issued in years ended September 30 through 1999, were canceled in March 2000.

Summarized information for all options is as follows for the years ended
September 30:

<Table>
<Caption>
                                                       2001                              2000
                                           -----------------------------     ------------------------------
                                                              WEIGHTED                           WEIGHTED
                                                              AVERAGE                            AVERAGE
                                                              EXERCISE                           EXERCISE
     Outstanding                             OPTIONS           PRICE           OPTIONS            PRICE
                                           ------------     ------------     ------------      ------------
<S>                                        <C>              <C>              <C>               <C>
     Beginning of year                        1,149,740     $       0.27        1,456,230      $       0.27
     Granted                                         --     $       0.27          100,000      $       0.25
     Exercised                                       --     $       0.27          (60,000)     $       0.22
     Cancelled                                       --     $       0.27         (346,490)     $       0.28
                                           ------------                      ------------
     End of year                              1,149,740     $       0.27        1,149,740      $       0.27
                                           ============                      ============

     Exercisable at end of year               1,101,740     $       0.27          907,740      $       0.27
                                           ============                      ============

     Options available for grant                840,000                           840,000
                                           ============                      ============
</Table>

         The following table summarizes information about the options
outstanding at September 30, 2001:

<Table>
<Caption>
                                               Remaining      Average                       Average
               Range of          Number       Contractual     Exercise        Number        Exercise
           Exercise Prices    Outstanding        Life          Price        Exercisable       Price
           ---------------    -----------     -----------     --------      -----------     --------
<S>        <C>                <C>             <C>             <C>           <C>             <C>
           $ 0.15 - $ 0.25        710,000        4.9           $ 0.18           662,000      $0.18
           $ 0.40 - $ 0.42        439,740        4.3           $ 0.40           439,740      $0.40
                              -----------                                   -----------
                                1,149,740        4.7           $ 0.27         1,101,740      $0.27
                              ===========                                   ===========
</Table>

In January 1994, the Company granted its majority stockholder a warrant to
purchase 2,000,000 shares of the Company's common stock at $1 per share through
January 2004. The warrant was issued as consideration for the stockholder's
financial accommodations and guarantees of over $9,000,000 in Company debt.



                                      F-13
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 7. STOCK OPTION PLAN AND STOCK WARRANTS ISSUED AS COMPENSATION (CONTINUED)

In December 1993 through November 1995, the Company granted warrants to purchase
960,000 common shares in conjunction with the terms of a note payable to an
individual. Of these warrants 40,000 and 480,000 expired in December 1999 and
December 1998, respectively. The remaining warrants to purchase 440,000 common
shares at an exercise price of $0.75 per share expired in November 2000.

The Company has adopted the disclosures-only provision of SFAS No. 123,
Accounting for Stock-Based Compensation. The Company applies APB Opinion No. 25
and related interpretations in accounting for its stock options. Under APB 25,
no compensation cost has been recognized in the financial statements for the
Stock Option Plan. The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model. Had compensation cost for
the stock option grants been determined based on the fair value at the date of
grant for awards consistent with the provisions of SFAS 123, the Company's net
income per common and common equivalent share would have been decreased to the
Performa amounts below for the years ended September 30:

<Table>
<Caption>
                                                                         2001              2000
                                                                     ------------      ------------
<S>                                                                  <C>               <C>
         Net income (loss) - as reported                             $   (967,688)     $ (3,707,152)
         Net income (loss) - pro forma                               $   (980,120)     $ (3,712,268)

         Basic and diluted earnings per share - as reported          $      (0.04)     $      (0.15)
         Basic and diluted earnings per share - pro forma            $      (0.04)     $      (0.15)
</Table>

No options were granted in Fiscal 2001. During Fiscal year 2000, 100,000 options
were granted. The fair values of these options were not significant.

NOTE 8. RELATED PARTY TRANSACTIONS

Rent expense to a company controlled by the Company's majority stockholder
totaled $32,072 and $31,172 for 2001 and 2000, respectively, for an office space
lease that is leased month-to-month.

Interest expense and related financing costs on notes payable to the majority
stockholder and a company controlled by the majority stockholder was $884,057
and $1,156,574 for the Fiscal 2001 and 2000, respectively.

NOTE 9. CONCENTRATION OF CREDIT RISK

The Company maintains its cash in bank deposit accounts, which, at times, may
exceed federally insured limits. The Company has not experienced any losses in
such accounts. The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.

NOTE 10. COMMITMENTS

Use Agreement:

The Company has a Use Agreement ("Use Agreement") with Bayfront Park Management
Trust, a limited agency and instrumentality of the City of Miami, Florida (the
"Trust"). The Use Agreement grants the Company the exclusive right to use the
Trust's docking facilities at Bayfront Park for the purpose of docking vessels,
including an offshore gaming vessel. The initial term of the Use Agreement
expires on September 30, 2002, with the option to extend for one additional
five-year term ("Extension Term").



                                      F-14
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 10. COMMITMENTS (CONTINUED)

The Company has a right of first refusal to extend the Extension Term, if
exercised, for one additional five year term provided the Trust, in its sole
discretion, has determined to permit the continued use of its docking facilities
by a gaming vessel and there has been no event of default under the Use
Agreement Annual fees owing under the lease agreement are $475,000 for the
remaining year of the initial term. The Company had provided a $475,000
irrevocable bank letter of credit for the benefit of the Trust to secure the
payment of the annual fees through September 30, 2001.

The letter of credit was secured by the personal guarantee of the majority
stockholder and a mortgage on certain real estate owned by a company controlled
by the majority stockholder. Interest and financing costs included $14,250 to a
company controlled by the Company's majority stockholder and $28,500 to the
majority stockholder for the years ended September 30, 2001 and 2000,
respectively. The Company is required to provide a letter of credit throughout
the term of the Use Agreement, in an amount equal to the next year's annual
fees. The Company is currently in default of this requirement for the year
ending September 30, 2002. The Company and the Trust are currently in
negotiations regarding amending the Use Agreement and the Company expects to
continue operations under an amended agreement.

Leases:

The Company has several noncancelable operating leases, primarily for dock and
casino property, that expire over the next five years. These leases generally
contain renewal options for periods ranging one to ten years and require the
Company to pay all executory costs such as maintenance and insurance. The
Company also leases gaming equipment on a month-to-month basis. Rental expense
for operating leases during the years ended September 30, 2001 and 2000 was
$1,585,777 and $1,222,864, respectively.

The future aggregate minimum lease payments as of September 30, 2001 are as
follows:

<Table>
<S>                                              <C>
Fiscal year ending:
    2001                                            $    919,103
    2002                                                 796,883
    2003                                                 800,623
    2004                                                 819,323
    2005                                                 819,323
                                                    ------------
                                                    $  4,155,255
                                                    ============
</Table>

The casino lease also requires the Company to pay additional rent based on a
percentage of adjusted net gaming revenue of Golden Gates Casino as set forth in
the casino lease agreement which was approximately $230,000 and $106,000 for the
years ended September 30, 2001 and 2000, respectively. Base rental payments
under the agreement are included in the minimum lease payments above.

Retirement Plan:

The Company has a defined contribution 401(k) profit sharing plan covering
substantially all eligible employees. Employer contributions under the Plan are
discretionary and vest ratably over a six-year period. Employer contributions
totaled $34,418 and $26,975 during the years ended September 30, 2001 and 2000,
respectively.



                                      F-15
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 10. COMMITMENTS (CONTINUED)

2000 Employee Stock Purchase Plan:

In Fiscal 2000 the Company adopted the 2000 Employee Stock Purchase Plan (the
"Purchase Plan") under which certain employees who meet minimum employment
criteria are eligible to participate. Eligible employees may purchase common
stock of the Company at a purchase price of 85% of the fair market value of the
stock. Annual purchases are limited to $10,000 per employee. The Purchase Plan,
which has not been implemented as of September 30, 2001, will expire in 2011
unless terminated earlier by the Purchase Plan administrator. The total number
of shares reserved for purchase under the Purchase Plan is 2,000,000 shares.

NOTE 11. CONTINGENCIES

On April 15, 1999, the Association for Disabled Americans, Inc., et. al, filed
suit against the Company and Goldcoast (the "Defendants") for injunctive relief
pursuant to the Americans With Disabilities Act. The Plaintiffs claim, in part,
that the Defendants have discriminated against them by denying them access to
and full and equal enjoyment of services, facilities, accommodations, the
Princesa and that the Defendants have failed to remove architectural barriers
and erect certain architecturally required improvements. The Plaintiffs have
requested that the Court issue a permanent injunction enjoining the Defendants
from continuing its alleged discriminatory practices, ordering the Defendants to
alter the subject vessel and premises, close the subject vessel and premises
until the alleged required modifications are completed and to award Plaintiffs
attorney's fees, costs and expenses incurred. The Company vigorously defended
the claim and received a favorable ruling in 2001. The parties have
cross-claimed for attorney's fees which has not yet been ruled upon.

In August 1997, the Company acquired an 80% interest in a Florida joint venture.
This acquisition was accounted for as a purchase and the operating results of
the business have been included in the Company's consolidated financial
statements since the date of acquisition. The purchase price of this 80%
interest was an initial payment of $650,000 and future consideration equal to 2%
of Casino Princesa's gaming win per operating year for each of the first three
years. The final payment was due in October 2001. Payments under this agreement
were recorded as goodwill and amortized using the straight-line method over the
remaining term of the dock lease. In 2001 and 2000 additional goodwill of
$181,539 and $276,414 respectively, was recorded.

In October 1997, the Company entered into a parking garage agreement for the
purpose of constructing a parking garage adjacent to Golden Gates Casino. This
agreement requires the Company to contribute land with a book value of
$1,097,080 to a third party. The Company has no additional commitments relating
to the construction of the parking garage. The parking garage was completed
during Fiscal year 2000. Contribution of this land was contingent upon
performance of contractual obligations by the third party as set forth in the
parking garage agreement. The parties to the parking garage agreement have
agreed to enter into a Condominium Declaration whereby each will receive parking
spaces in said condominium. The Company received $375,000 in the year ended
September 30, 2001 as a result of a lawsuit settlement related to the parking
facility. The settlement was recognized as other income.

The Company is also involved in routine litigation arising in the ordinary
course of business. These matters are believed by the Company to be covered by
insurance or are not expected to have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.



                                      F-16
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 12. DISCLOSURES ABOUT FAIR MARKET VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practical to estimate that
value:

         The carrying amount of cash equivalents approximates fair value because
         of the short maturity of those instruments.

         The carrying amounts of trade accounts receivable, accounts payable and
         accrued liabilities approximate fair value because of the short
         maturity of those instruments.

         Management estimates that long-term debt approximates fair value as it
         generally includes variable interest rates and/or because of the
         short-term nature of the notes payable.

It was not practicable to estimate the fair value of the note payable to the
Company's majority stockholder.

NOTE 13. GOING CONCERN ISSUES AND MANAGEMENT PLANS

The accompanying financial statements have been prepared in conformity with
accounting principles generally in the United States of America, which
contemplate continuation of the Company as a going concern and realization of
assets and settlement of liabilities and commitments in the normal course of
business.

As shown in the accompanying financial statements, the Company has incurred net
losses of $967,688 and $3,707,152 for the years ending September 30, 2001 and
2000, respectively, and has accumulated deficit since inception of $6,817,797.
In addition, the Company has liabilities due within one year of $3,092,296, and
current assets of $2,092,065. Management's plans to address these conditions are
discussed in the following paragraphs.

Management is focusing its operational improvement efforts on the Casino
Princesa. As part of the plan to improve profitability, management has
significantly reduced the direct costs of food services and substantially
reduced the casino's payroll commitments. Also, match play incentives and
promotional allowances to customers have been substantially reduced or
eliminated. Passenger counts have been stabilized by reducing admissions charges
and by changing the marketing focus to an increased direct mail solicitation.
Segment loss from the Casino Princesa improved to a loss of $1,209,606 in the
year ended September 30, 2001 from a loss of $1,834,934 in the year ended
September 30, 2000.

The Company enjoyed higher customer counts and revenues at the Golden Gates
Casino due to the completion of a parking facility adjacent to the casino in the
fourth quarter of the year ended September 30, 2000. Due to construction and the
lack of alternative parking, the Golden Gates Casino suffered a substantial
reduction in customer traffic during most of the year ended September 30, 2000.
Segment profit from the Golden Gates Casino improved to a profit of $1,620,292
in the year ended September 30, 2001 from a profit of $219,077 in the year ended
September 30, 2000.

There is no assurance that the Company's majority shareholder would have the
intent or the ability to fund future cash shortages (if any) to the extent done
in the years ended September 30, 2001 and 2000.



                                      F-17
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 13. GOING CONCERN ISSUES AND MANAGEMENT PLANS (CONTINUED)

If management is unable to continue to effectuate its operational plan, and if
the Company's majority shareholder is unable to provide additional sources of
cash, the Company will be unable to satisfy its continuing debt obligations, and
may have to discontinue operations.

NOTE 14. SEGMENT INFORMATION

The Company's reportable segments are strategic business units that offer
similar products and services at separate geographical locations. They are
managed separately because each business requires different technology and
marketing strategies.

There are two reportable segments: the Casino Princesa and Golden Gates Casino.
The Casino Princesa operates an offshore gaming vessel, the Princesa, that sails
out of Miami, Florida. The Golden Gates Casino is located in Black Hawk,
Colorado.

The accounting policies applied to determine the segment information are the
same as those described in the summary of significant accounting policies. The
interest expense of each segment is specifically identifiable to debt directly
incurred to acquire the segment's assets. No intercompany allocations or
intersegment sales and transfers have been made.

Management evaluates the performance of each segment based on profit or loss
from operations before income taxes, exclusive of nonrecurring gains and losses.

Financial information in $1,000's with respect to the reportable segments is as
follows:

<Table>
<Caption>
                                      CASINO PRINCESA             GOLDEN GATES                 TOTAL
                                     2001         2000         2001         2000         2001         2000
                                   --------     --------     --------     --------     --------     --------
<S>                                <C>          <C>          <C>          <C>          <C>          <C>
Revenues
  Casino                           $ 11,665     $ 13,730     $  6,679     $  3,994     $ 18,344     $ 17,724
  Food and beverage                   1,573        2,358          106           99        1,679        2,457
  Other income                        1,583        2,418           74           73        1,657        2,491
                                   --------     --------     --------     --------     --------     --------
   Gross revenues                    14,821       18,506        6,859        4,166       21,680       22,672

  Less:
  Promotional
  allowances                          2,916        5,004          101          293        3,017        5,297
                                   --------     --------     --------     --------     --------     --------
   Net revenues                      11,905       13,502        6,758        3,873       18,663       17,375

Costs and expenses
  Casino                              5,389        6,672        3,814        2,594        9,203        9,266
  Food and beverage                   1,098        1,515          187          140        1,285        1,655
  Selling, general and
    administrative                    4,961        5,255          701          515        5,662        5,770
  Management fees                        --          275           --           --                       275
  Depreciation/amortization             832          756          333          292        1,165        1,048
  Loss on sale of equipment              --           --           52           34           52           34
  Interest expense                      835          863           51           79          886          942
    Total costs and expenses
                                     13,115       15,336        5,138        3,654       18,253       18,990
</Table>



                                      F-18
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 14. SEGMENT INFORMATION (CONTINUED)

<Table>
<S>                                <C>             <C>             <C>                   <C>     <C>            <C>
Segment profit (loss)              $   (1,210)     $   (1,834)     $    1,619            219     $      409     $   (1,615)
                                   ==========      ==========      ==========     ==========     ==========     ==========

Segment assets                     $   12,002      $   12,711      $    3,758     $    3,353     $   15,760     $   16,064
                                   ==========      ==========      ==========     ==========     ==========     ==========

Expenditures for segment
assets                             $      234      $    1,447      $      370     $      375     $      604     $    1,822
                                   ==========      ==========      ==========     ==========     ==========     ==========
</Table>

The following schedules are presented to reconcile amounts in the foregoing
segment information to the amounts reported in the Company's consolidated
financial statements.

<Table>
<Caption>
                                                          2001            2000
                                                       ----------      ----------
<S>                                                    <C>             <C>
PROFIT

Total profit (loss) of reportable segments             $      410      $   (1,615)
                                                       ----------      ----------
  Unallocated amounts:
    Income
         Interest income                                       23              30
         Other                                                321              --
                                                       ----------      ----------
             Total income items                               344              30
                                                       ----------      ----------
    Expense
         General and administrative                           787             885
         Depreciation and amortization                         63              63
         Corporate interest                                   872           1,153
         Other                                                 --              21
                                                       ----------      ----------
             Total expense items                            1,722           2,122
                                                       ----------      ----------

Consolidated net (loss) before income taxes            $     (968)     $   (3,707)
                                                       ==========      ==========
ASSETS

Assets of reportable segments                          $   15,760      $   16,064
Unallocated intangibles                                       213             249
Corporate cash and other                                       39              12
Corporate property and equipment                              284             303
                                                       ----------      ----------
  Consolidated assets                                  $   16,296      $   16,628
                                                       ==========      ==========
</Table>

NOTE 15. SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION

<Table>
<Caption>
Cash payments for:                                                               2001             2000
                                                                             ------------     ------------
<S>                                                                          <C>              <C>
       Interest                                                              $    822,722     $  1,256,327
 Supplemental Schedule of Non-cash Investing and Financing Activities
       Accounts payable incurred for purchase of equipment                        159,397               --
       Long-term debt incurred for purchase of equipment                           48,039               --
       Accrued expenses incurred for purchase of intangibles                      130,291               --
</Table>



                                      F-19
<PAGE>

CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------


NOTE 16. PRONOUNCEMENTS ISSUED NOT YET ADOPTED

In July 2001, the Financial Accounting Standards Board issued two
statements-Statement 141, Business Combinations and Statement 142, Goodwill and
Other Intangible Assets, which will potentially impact the Company's accounting
for its reported goodwill and other intangible assets.

Statement 141:

     o    Eliminates the pooling method for accounting for business
          combinations.

     o    Requires that intangible assets that meet certain criteria be reported
          separately from goodwill.

     o    Requires negative goodwill arising from a business combination to be
          recorded as an extraordinary gain.

Statement 142:

     o    Eliminates the amortization of goodwill and other intangibles that are
          determined to have an indefinite life.

     o    Requires, at a minimum, annual impairment test for goodwill and other
          intangible assets that are determined to have an indefinite life.

Upon adoption of these Statements, the Company is required to:

     o    Re-evaluate goodwill and other intangible assets that arose from
          business combinations entered into before July 1, 2001. If the
          recorded other intangible assets do not meet the criteria for
          recognition, they should be reclassified to goodwill. Similarly, if
          there are other intangible assets that meet the criteria for
          recognition but were not separately recorded from goodwill, they
          should be reclassified from goodwill.

     o    Reassess the useful lives of intangible assets and adjust the
          remaining amortization periods accordingly.

     o    Write-off any remaining negative goodwill.

The Company has not yet completed its full assessment of the effects of these
new pronouncements on its financial statements and so is uncertain as to the
impact. The standards generally are required to be implemented by the Company in
its financial statements for the year ending September 30, 2003.




                                      F-20
<PAGE>

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

                                        CONCORDE GAMING CORPORATION

December 28,  2001                      By /s/ Jerry L. Baum
                                          --------------------------------------
                                                Jerry L. Baum, President


         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
Company and in the capacities and on the dates indicated.



/s/ Brustuen H. Lien                              Chairman of the Board
--------------------------------------------      of Directors
Brustuen "Bruce" H. Lien

/s/ Jerry L. Baum                                 President, Chief Executive
--------------------------------------------      Officer and Director
Jerry L. Baum

/s/ Deanna B. Lien                                Director
--------------------------------------------
Deanna B. Lien

/s/ Gary R. Fish                                  Chief Financial Officer
--------------------------------------------
Gary R. Fish

/s/ Thomas Goodrich                               Principal Accounting Officer
--------------------------------------------
Thomas Goodrich



<PAGE>
                                EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT NO.          DESCRIPTION
-----------          -----------
<S>                  <C>
3.1                  Amended and Restated Articles of Incorporation.(1)

3.2                  Fourth Amended and Restated Bylaws.(8)

10.1                 1992 Performance Stock Option Plan.(2)(*)

10.2                 2000 Employee Stock Purchase Agreement.(3)(*)

10.3                 Indemnification Agreement between us and Bruce H. Lien.(1)

10.4                 Lease between Elevation 8000+ and Concorde Cripple Creek,
                     Inc. dated July 21, 1997.(4)

10.5                 Use Agreement dated June 25, 1997, by and between Casino
                     Princesa and Bayfront Park Management Trust.(4)

10.8                 Loan Agreement between Princesa Partners and the lenders
                     named therein dated as of October 22, 1998.(5)

10.9                 Servicing and Intercreditor Agreement between Princesa
                     Partners, The National City Bank of Evansville, as
                     servicer, and the lenders set forth therein dated as of
                     October 22, 1998.(5)

10.10                Security Agreement between Princesa Partners, Casino
                     Princesa and the lenders named therein dated as of October
                     22, 1998.(5)

10.11                Guaranty, Subordination Agreement, Security Agreement and
                     Indemnity by Casino Princesa for the benefit of the lenders
                     named therein, dated as of October 22, 1998.(5)

10.12                First Preferred Ship Mortgage by Princesa Partners in favor
                     of The National City Bank of Evansville, individually and
                     as agent for certain lenders, dated as of October 15,
                     1998.(5)

10.13                Guaranty by us for the benefit of the lenders named therein
                     dated as of October 22, 1998.(5)

10.14                First Amendment to Lease between Concorde Cripple Creek and
                     Elevation 8000+ LLC, dated as of January 1, 1999. (6)
</Table>



<PAGE>

<Table>
<Caption>
EXHIBIT NO.          DESCRIPTION
-----------          -----------
<S>                  <C>
10.15                Promissory Note in the amount of $10,398,272 to the order
                     of BHL Capital Corporation dated October 1, 2001.(+)

10.16                Sublease between KMM Parking L.L.C. and us dated December
                     30, 1998.(8)

21                   Subsidiaries of the Registrant.(+)

23                   Consent of Independent Auditors'.(+)
</Table>

----------

(+)  Filed herewith

(*)  Management contract or compensation plan.

(1)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Annual Report on Form 10-KSB for the year ended September 30, 1995
     (File No. 0-8698) and incorporated herein by this reference.

(2)  Previously filed with the Securities and Exchange Commission on
     September 24, 1992 as Exhibit 10 to our Registration Statement on Form S-8,
     (File No. 33-52388) and incorporated herein by this reference.

(3)  Previously filed with the Securities and Exchange Commission as an
     attachment to our Proxy Statement for the 1999 annual meeting on Schedule
     14A and incorporated herein by this reference.

(4)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Annual Report on Form 10-KSB for the year ended September 30, 1997
     (File No. 0-8698) and incorporated herein by this reference.

(5)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Annual Report on Form 10-KSB for the year ended September 30, 1998
     (File No. 0-8698) and incorporated herein by this reference.

(6)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Quarterly Report on Form 10-QSB for the quarter ended December 31,
     1998 (File No. 0-8698) and incorporated herein by this reference.

(7)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Quarterly Report on Form 10-QSB for the quarter ended June 30, 1999
     (File No. 0-8698) and incorporated herein by this reference.

(8)  Previously filed with the Securities and Exchange Commission as an exhibit
     to our Annual Report on Form 10-KSB for the year ended September 30, 2001
     (File No. 0-8698) and incorporated herein by this reference.