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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

For the Fiscal year ended                                    Commission File No.
September 30, 2002                                                        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) (Zip Code)

                    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. $23,829,226

         The aggregate market value of the voting stock held by non-affiliates
of the registrant as of December 20, 2002 was $1,295,138. This calculation is
based upon the price at which a share of voting stock was last traded ($0.20) on
December 20, 2002.

         The number of outstanding shares of the issuer's $.01 par value common
stock was 25,070,402 as of December 20, 2002.

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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 subsidiaries, Concorde Cripple
Creek, Inc. and Concorde Blackhawk Corporation, each a Colorado corporation, we
operate the Golden Gates Casino, and intend to operate the Golden Gulch Casino,
respectively, each 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.
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

         RECENT DEVELOPMENTS.

         Purchase of Jazz Alley Casino Property. In December 2002, Concorde
Blackhawk purchased the Jazz Alley Casino property located in Black Hawk,
Colorado, for approximately $1.6 million. We believe that the purchase of the
Jazz Alley Casino property will enable us to leverage our existing operations at
the Golden Gates Casino in Black Hawk and take advantage of operational
efficiencies to improve our financial results. Concorde Blackhawk has obtained a
gaming license and is in the process of obtaining all governmental licenses,
findings of suitability, registrations, permits and approvals necessary for the
operation of the Golden Gulch Casino. We plan to operate the casino under the
name "Golden Gulch Casino." We currently anticipate commencing gaming operations
at the Golden Gulch Casino in January 2003 at which time we expect to have
completed all necessary renovations and improvements to the casino property.

         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, was for a period of five years ending October 1,
2002. We amended the Use Agreement on June 27, 2002. Under the amendment, the
term was extended through October 1, 2007 and past payment defaults under the
Use Agreement were cured or waived. Casino Princesa also has a right of first
refusal to extend an additional five year term following the end of the current
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. During the current term the
annual fees increase by four percent (4%) over


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the previous year and during the additional term the annual fees increase by
eight percent (8%) over the previous year. Casino Princesa currently pays the
Trust an annual fee of $475,000.

         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) 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 is currently in default under the loan agreement due to its
non-compliance with certain debt service loan covenants. We have received a
waiver of the debt service covenants until January 31, 2003.

         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, which was
completed in 2000.

         On June 11, 2002 Concorde Cripple Creek, together with KMM Parking,
LLC, Scott Bradley, Seymour Sundell and Terry Grossman, entered into a
Condominium Declaration. Under the Condominium Declaration, Concorde Cripple
Creek's real property located in Blackhawk, Colorado, property owned by the
other parties to the Condominium Declaration and a seven story parking garage
located on such property were subjected to a condominium regime. Under the
Condominium Declaration, Concorde Cripple Creek owns 1 of 5 units in the
condominium, which unit consists of 35 parking spaces, the limited common
elements associated with such unit and an undivided interest in the general
common elements of the condominium. Pursuant to a lease dated on or about July
21, 1997, as amended on January 1, 1999 between Concorde Cripple Creek and
Elevation 8000+, LLC, Concorde Cripple Creek will lease an additional unit in
the condominium, consisting of 40 parking spaces, from the successors in
interest to Elevation.

         In connection with the Condominium Declaration, the parties entered
into a cross easement agreement. Pursuant to the Cross Easement Agreement, among
other things, the owners of the condominium units granted the owners of the
Golden Gates Casino, located adjacent to the garage and leased to and operated
by Concorde Cripple Creek, easements to allow for the remodeling and expansion
of the Golden Gates Casino. The parties also entered into an agreement to settle
various disputes that arose over the construction of the garage and agreed to
payments with respect to expenses incurred in connection with the operation of
the garage since its completion in 2000.

         Acquisition of Golden Gates Casino Property. On July 31, 2002, we
completed the acquisition of the Golden Gates Casino. The acquisition included
the purchase of the Golden Gates Casino building, land and a unit (consisting of
40 spaces) in the parking garage attached to the Casino. We previously leased
the Golden Gates Casino under a long-term lease with an



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unrelated third party. We also closed a $7.6 million long-term debt financing,
the proceeds of which were used to acquire the Golden Gates Casino, finance the
future renovation and expansion thereof and pay certain closing fees. The
long-term debt is payable to a bank in monthly installments of $74,268 and is
guaranteed by us and our majority stockholder. The note evidencing the loan has
a variable interest rate between 8% and 12%. The interest rate at September 30,
2002 was 8%.

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 4
blackjack tables and 265 gaming machines on approximately 4300 square feet of
gaming floor space and also features a full service liquor bar and furnishes
nightly valet parking.

         We plan to open our Golden Gulch Casino in January 2003. It is located
on Main Street in Black Hawk next to the Golden Gates Casino. The Golden Gulch
Casino plans to start with 115 gaming machines and add machines throughout the
year to end up with 200 gaming machines on approximately 4,000 square feet of
gaming floor space. We also plan to offer a full service liquor bar and onsite
parking.

         The Golden Gates and Golden Gulch Casinos depend 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.

         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 17 as of September 30, 2002, and, secondarily, casinos operating
in Cripple Creek of which there were approximately 5 as of September 30, 2002.
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 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.


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         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 new casinos in the area has increased the number of casino
patrons and increased revenues over prior years' results.

         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 1,595 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 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 and the Golden Gulch Casino are located
in the Rocky Mountains, sudden and severe winter storms may adversely affect our
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
casinos which negatively affects our operations. As a result, the Golden Gates
Casino's business tends to be, and the business of the Golden Gulch Casino is
excepted to be, seasonal, with the highest level of activity occurring during
the summer months.

         DIFFICULTY IN ATTRACTING AND RETAINING QUALIFIED EMPLOYEES

         The operation of our 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




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increasingly difficult and expensive for the Golden Gates Casino and the Golden
Gulch 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 each of
our Black Hawk casinos will be able to attract and retain qualified employees,
there can be no assurance that it will be able to do so. If our Black Hawk
casinos are not able to attract and retain qualified employees or if labor costs
increase in connection therewith, there could be an adverse impact on our
results of operation.

         LEGISLATIVE ISSUES

         Any new federal or state legislation could adversely affect the
business of our Black Hawk casinos.

         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 us and the persons involved for
violations of Colorado law. In addition, the actions of persons associated with
Concorde Cripple Creek and/or Concorde Blackhawk and its management employees,
over which they may have little or no control, could jeopardize any licenses
held by them in Colorado. The suspension or revocation of any of our licenses or
the levy on us 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. Concorde Blackhawk has obtained a gaming
license and is in the process of obtaining all other governmental licenses,
findings of suitability, registrations, permits and approvals necessary for the
operation of the Golden Gulch 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 licenses for Golden Gates
Casino and the Golden Gulch Casino will expire in July 2003. 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. We currently have two licenses. 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


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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.

         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 and Concorde Blackhawk 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 our liquor licenses would, have a material adverse effect
upon the operations of our Black Hawk casinos.

         TAXATION

         Our Black Hawk casino operations are subject to taxes imposed upon our
gaming operators by the Gaming Commission and Black Hawk. Taxes currently levied
operations include taxes, payable monthly, on adjusted gross proceeds ("AGP" is
defined


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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.

         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.



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         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 2002, Casino
Princesa conducted 759 cruises, carried a total of 201,546 passengers and
cancelled 19 cruises due to inclement weather and 2 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, 2002, 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.

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.



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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
("BHL Capital"), a corporation controlled by Brustuen "Bruce" H. Lien, the
majority shareholder, director and chairman of the board of the Company.

         Casino Princesa has the right to use dock space in Biscayne Bay with
respect to the Princesa from the Trust pursuant to the terms of the Use
Agreement. The current term of the Use Agreement will expire October 2007.
Casino Princesa also has a right of first refusal to extend the Use Agreement
for an additional five years following the end of the current term 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

         On July 31, 2002, we completed the acquisition of the Golden Gates
Casino property. The acquisition included the purchase of the Golden Gates
Casino building, land and a unit (consisting of 40 spaces) in the parking garage
attached to the casino. We previously leased the Golden Gates Casino under a
long-term lease with an unrelated third party. We also closed a $7.6 million
long-term debt financing, the proceeds of which were used to acquire the Golden
Gates Casino, $6,400,000, finance the future renovation and expansion thereof,
$800,000, and pay certain closing and debt services fees, $400,000. The
long-term debt is payable to a bank in monthly installments of $74,268 and is
guaranteed by us, our majority stockholder and is secured by a deed of trust on
the Golden Gates Casino property. The note evidencing the loan has a variable
interest rate between 8% and 12%. The interest rate at September 30, 2002 was
8%. In July 2002, we also exchanged our interest in land and parking lot
improvements in the amount of $1,177,085 for a parking garage condominium unit
containing 45 parking spots.

         In December 2002, Concorde Blackhawk purchased the Jazz Alley Casino
property for approximately $1.6 million, including buildings, improvements and
other fixtures, furniture and equipment located on the property. In conjunction
with this acquisition, we entered into a loan agreement in the amount of
$2,080,000, which amount is guaranteed by us, our majority stockholder and is
secured by a deed of trust on the Jazz Alley Casino property. The note
evidencing the loan has an interest rate of 10%, with interest payable monthly
until the note matures in December 2003. We plan to rename the casino the
"Golden Gulch Casino" and commence operations in January 2003.

ITEM 3. LEGAL PROCEEDINGS.

         We are involved in routine litigation arising in the ordinary course of
our business, which matters are not believed to be material in nature.

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, 2002.



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                                     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.

<Table>
<Caption>
                                                                         High Bid         Low Bid
                                                                         --------         -------
<S>                                                                      <C>              <C>
Fiscal Year ended September 30, 2002
   First Quarter                                                           $0.01            $0.01
   Second Quarter                                                          $0.25            $0.03
   Third Quarter                                                           $0.25            $0.10
   Fourth Quarter                                                          $0.40            $0.10

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
</Table>

         As of December 30, 2002, there were approximately 145 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 does not anticipate paying any dividends in
the foreseeable future.

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 2002 refers to the Fiscal year ending September 30, 2002, and
the term "Fiscal 2001" refers to the Fiscal year ending September 30, 2001.

         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 any forward looking statement


                                       10
<PAGE>
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 and Golden Gates Casino, a limited stakes casino in Black Hawk,
Colorado. Through our wholly owned subsidiary, Concorde Blackhawk Corporation,
in December 2002 we purchased the Jazz Alley Casino property located in Black
Hawk, Colorado, for approximately $1.6 million. We believe that the purchase of
the Jazz Alley Casino will enable us to leverage our existing operations at the
Golden Gates Casino in Black Hawk and take advantage of operational efficiencies
to improve our financial results. Concorde Blackhawk has obtained a gaming
license and is in the process of obtaining all governmental licenses, findings
of suitability, registrations, permits and approvals necessary for the operation
of the Golden Gulch Casino. We plan to operate the casino under the name "Golden
Gulch Casino." We currently anticipate commencing gaming operations at the
Golden Gulch Casino in January 2003 at which time we expect to have obtained the
required gaming license and to have completed all necessary renovations and
improvements to the casino property.

         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 gaming 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.

CRITICAL ACCOUNTING POLICIES

         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. Areas in which
estimates are and/or may prove more critical are as follows:

         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. To the extent historical estimates of the allowance
for doubtful accounts prove in accurate, our current receivables and could be
overvalued. 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 30 to 39 years.


                                       11
<PAGE>

         Long-Lived Assets. We periodically evaluate 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, 2002 management determined that there
was no impairment of our long-lived assets.

         Revenue Recognition. We recognize 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.

RESULTS OF OPERATIONS

         Year Ended September 30, 2002 Compared to Year Ended September 30, 2001

REVENUES

         Net revenues were $20,993,752 for Fiscal 2002, compared to $18,663,694
for Fiscal 2001, an increase of 12.5%. The increase was primarily related to
significant increases in net revenues at the Golden Gates Casino.

     Casino Princesa

         Casino Princesa net revenues were $13,303,119 for Fiscal 2002, compared
to $11,905,699 for Fiscal 2001, an increase of 11.7%. The increase in net
revenues of 11.7% was primarily due to increase in cruises, passenger counts,
food and beverage revenues and a decrease in promotional allowances. Total
passenger count increased 18.7% in Fiscal 2002 over Fiscal 2001 and the number
of cruises increased 1.8% in Fiscal 2002 from Fiscal 2001. The increase in
cruises was due to the boat being in dry dock for 7 days in Fiscal 2001. Food
and beverage revenues were $1,672,247 for Fiscal 2002, as compared to $1,572,999
for Fiscal 2001, an increase of 6.3%.

         Promotional allowance expenses were $2,664,901 for Fiscal 2002, as
compared to $2,915,538 for Fiscal 2001, a decrease of 8.6%. The decrease was
primarily due to reduced use of "buy-in" promotions on table games and reduced
complimentary admissions. Table games promotion expenses were $466,134 for
Fiscal 2002 and $597,308 for Fiscal 2001, a decrease of 22.0%. This decrease was
primarily due to management continuing their focus on controlling the costs
associated with promotions.

     Golden Gates Casino

         Golden Gates Casino net revenues were $7,690,633 for Fiscal 2002,
compared to $6,757,990 for Fiscal 2001, an increase of 13.8%. The increase was
to due to a 3.5% increase in gaming devices as well as increased customer
traffic.


                                       12
<PAGE>

COSTS AND EXPENSES

         Total costs and expenses were $19,033,960 for Fiscal 2002, compared to
$18,217,706 for Fiscal 2001, an increase of 4.5%.

     Casino Princesa

         Total operating expenses for Casino Princesa were $13,407,729 for
Fiscal 2002, compared to $13,115,305 for Fiscal 2001, an increase of 2.2%. The
increase in total operating expenses was primarily related to a $318,234, or
5.9%, increase in casino expenses and $59,468, or 5.4%, decrease in food and
beverage expenses. Depreciation and amortization expenses increased $138,029 or
16.6%, primarily due to the acquisition of property and equipment in Fiscal
2002.

     Golden Gates Casino

         Total operating expenses for the Golden Gates Casino were $5,308,778
for Fiscal 2002, compared to $5,137,700 for Fiscal 2001, an increase of $171,078
or 3.3%. This increase was primarily due to increased customer traffic, which
increased variable costs that are based on gaming volume, such as rent, gaming
taxes, maintenance, and payroll expenses. Food and beverage expenses decreased
$40,539, or 21.7%. Selling, general and administrative expenses increased
$9,697, or 1.7%, from Fiscal 2002 to Fiscal 2001. Depreciation and amortization
expense increased $60,634, or 18.2%, primarily due to the acquisition of
property and equipment in Fiscal 2002.

OTHER INCOME AND EXPENSE

         Other income was $70,490 for Fiscal 2002, compared to $321,225 for
Fiscal 2001, a decrease of 78.1%. This decrease was primarily the result of the
receipt of $375,000 in Fiscal 2001 from the settlement of the Golden Gates
parking facility lawsuit.

         Total interest expense was $1,413,452 for Fiscal 2002, compared to
$1,757,692 for Fiscal 2001, a decrease of 19.6%. The decrease primarily was due
to the reduced prime rate and the exchange of $3,500,000 of related party debt
for preferred stock and a warrant. See "Certain Relationships And Related
Transactions."

     Federal and State Income Taxes

         We recorded no federal or state income tax benefit for Fiscal 2002 or
Fiscal 2001. 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 income tax expense for Fiscal 2002 of $217,047 was primarily offset by our
net operating loss carryforward. The income tax benefit for Fiscal 2001 of
$338,691 was offset by a valuation allowance. As of September 30, 2002 we had
approximately $4,978,000 of loss carry forwards available to offset future
income. The realization of these benefits is contingent upon our future
profitability.

LIQUIDITY AND CAPITAL RESOURCES

         We had cash and cash equivalents of $1,230,915 at September 30, 2002,
compared to $1,787,765 at September 30, 2001, a decrease of 31.1%. The decrease
was primarily attributable to the purchase of the Golden Gates Casino real
estate.

         OPERATING CASH FLOW. During Fiscal 2002, we had cash flows in operating
activities of $1,704,380 compared to $1,725,255 in Fiscal 2001. The primary
factor in the change in cash flows from operations was the $1,541,154 increase
in net income to $573,466 in Fiscal 2002 from a net loss of $967,688 in Fiscal
2001 that was offset by the increase in the note payable to related party of
$870,339 incurred for payment of interest expense in Fiscal 2001 and other
increases in current assets in Fiscal 2002.


                                       13
<PAGE>
         INVESTING ACTIVITIES. Cash used in investing activities increased to
$8,941,115 in Fiscal 2002, compared to $450,857 in Fiscal 2001, primarily due to
the purchases of the Golden Gates property in Fiscal 2002.

         FINANCING ACTIVITIES. Financing activities provided cash of $6,679,885
in Fiscal 2002, compared to a use of cash of $605,406 in Fiscal 2001. Long-term
borrowings from related parties were $0 in Fiscal 2002, compared to $1,105,000
in Fiscal 2001 while the principal payments on related party debt increased from
$75,000 in Fiscal 2001 to $342,252 in Fiscal 2002. Principal payments on other
long term borrowings decreased to $1,022,326 in Fiscal 2002 from $1,570,996 in
Fiscal 2001. The decrease in principal payments on other long-term borrowings
relates to BNC Bank Note being paid off in Fiscal 2001.

         In October, 1998, Princesa Partners entered into the Vessel Loan, a
Loan Agreement and Security Agreement with a group of lenders which provided
$8,400,000 in financing for the Princesa, related equipment and working capital.
The Vessel 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, Casino Princesa, the Company,
Goldcoast and certain individuals, including Mr. Lien, guaranteed the Vessel
Loan. The Vessel Loan bears interest at 10.375% per annum with interest only
payments through January 1999. Monthly payments of $130,258, including interest,
commenced February 1999 for sixty consecutive months, with the remaining balance
due January 2004. The Vessel 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. Excess Revenue as defined
in the Vessel Loan is the excess of (i) the combined earnings of Princesa
Partners and 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 were no Excess Revenues in Fiscal 2002 and 2001. The
Vessel Loan 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 and as of September 30,
2002 and 2001 the Company was not in compliance with the debt service covenants.
On November 27, 2002, the Company received a waiver of the vessel loan's debt
service covenants until January 2003 dependant on the following conditions:

         o        No event of default during the suspension period (September
                  30, 2002 until January 31, 2003),

         o        Planned renovations to the vessel must be completed by March
                  31, 2003,

         o        The interest rate will be 14.5% during the suspension period,

         o        $200,000 of the subsidiary's inter-company debt owed to the
                  Parent must be converted to non-redeemable common equity of
                  the subsidiary.

         In July 2002, Concorde Cripple Creek entered into a loan agreement with
First National Bank for the purchase of Golden Gates Casino property in Black
Hawk, Colorado in the amount of $7,600,000. The allocation of the debt proceeds
was as follows: $400,000 restricted cash reserved for debt service, $800,000
restricted cash for property improvements, and $6,400,000 for the purchase of
the real estate.


                                       14
<PAGE>

         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 the Company to obtain financing,
including the Vessel Loan. See "Certain Relations And Related Transactions".

         During fiscal year ended September 30, 2002, we designated 3,500,000
shares of preferred stock as Series A Preferred shares, with a par value of $1
per share. Holders of Series A Preferred shares are entitled to receive
cumulative dividends at a rate of 8% per annum. See "Certain Relations And
Related Transactions".

Future Operations

         We have significantly improved our cash flow during Fiscal 2002. We
attained a $1,541,154 increase in net income to $573,466 in Fiscal 2002 from a
net loss of $967,688 in Fiscal 2001. The segment results for the Casino Princesa
improved from a loss of $1,209,000 in Fiscal 2001 to a loss of $105,000 in
Fiscal 2002. We intend to continue this growth trend at the Casino Princesa by
upgrading and purchasing new slot machines and redirecting our marketing and
promotions strategy from the table games to the slot machine player. We believe
this strategy will increase the profitability of the Princesa as expenses
associated with slot machines are significantly lower than table games.

         Segment results from Golden Gates improved to a profit of $2,381,000 in
Fiscal 2002, from a profit of $1,620,000 in Fiscal 2001. We are currently
engaging in a renovation of the Golden Gates Casino, which is expected to
increase the number of slot machines by 30%. In addition we expect to open the
Golden Gulch Casino in January. With the two casinos in Black Hawk, we plan to
take advantage of operational efficiencies to improve financial results.

         Following is a schedule of our required future payments (excluding
dividends on preferred stock) under our contractual obligations, including debt
related to the purchase of the Jazz Alley Casino property:

<Table>
<Caption>
                                                                             Payments Due by Period
                                                 -----------------------------------------------------------------------------
        Contractual                                  Less than          One to three         Four to Five       Five years
        Obligations                Total             one year              years                years         and thereafter
--------------------------   -----------------   -----------------   -----------------   -----------------   -----------------
<S>                          <C>                 <C>                 <C>                 <C>                 <C>
Jazz Alley Casino property
  and other long-term debt   $      15,402,538   $       3,032,314   $       5,563,312   $       1,341,399   $       5,465,513
Notes Payable to Related
  Party                              6,556,020                  --           6,556,020                  --                  --
Operating leases                     3,285,911             698,195           1,303,028           1,284,688                  --

Total Contractual Cash
  Obligations                $      25,194,469   $       3,730,509   $      13,422,360   $       2,626,087   $       5,465,513
</Table>

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      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.

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 at September 30, 2002. The vessel loan agreement requires a
       balloon payment of approximately $4,000,000 in January 2004. 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


                                       15
<PAGE>

       an adverse effect on our business.

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.

ITEM 7. FINANCIAL STATEMENTS.

         The financial statements of the Company required by Regulation S-B 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.

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

         None.


                                       16
<PAGE>

                                    PART III

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

         Information is set forth below regarding each of our directors and
executive officers, including the name and age of each executive officer, his or
her principal occupation and business experience during the last five years and
the date each first became an executive officer.

<Table>
<Caption>
                                                             Principal Occupation or Employment
Name                              Age                            During the Past Five Years
----                              ---                        ----------------------------------
<S>                               <C>    <C>
Brustuen "Bruce" H. Lien          75     Chairman of the Board of Directors since August  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                     53     Chief Executive Officer since March 1997, President since June 1995,
                                         Chief Operating Officer since April 1995 and director since 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                    59     Secretary since March 28, 2000 and a director since August 1990. Ms. Lien
                                         previously served as our Vice President and Treasurer.
</Table>

         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. None of our other directors or officers
bears any family relationship to any other director or officer. Each of our
executive officers is elected for a term of one year and serves until a
successor is elected and qualified.

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


                                       17
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

         The following table sets forth certain information concerning
compensation paid by the Company 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                     2002            120,000            -0-                    -0-
   President and Chief               2001            120,000            -0-                    -0-
   Executive Officer                 2000            120,000            -0-                    -0-
</Table>

         The foregoing compensation tables do not include certain fringe
benefits made available on a nondiscriminatory basis to all Company employees
such as group health insurance, dental insurance, long-term disability
insurance, vacation and sick leave. In addition, some benefits which are made
available only to certain of the Company's 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.

                 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                          829,740/ 20,000                            $0/$0
</Table>

-----------------

(1)  Based on the bid price of the Common Stock on September 30, 2002.

COMPENSATION OF DIRECTORS

         The Company does not compensate its directors for their services as
directors or pursuant to any other arrangements. The Company reimburses its
directors for expenses incurred related to their services as directors.


                                       18
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

         The following table sets forth certain information regarding beneficial
ownership of outstanding shares of common stock as of the record date, by (1)
each person who is known by us to own beneficially more than 5% of our
outstanding shares of common stock, (2) each of our directors, (3) our Chief
Executive Officer and each of the named executive officers, and (4) all
directors and executive officers as a group.

<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

Jerry L. Baum.................................                    941,948(5)                         3.6%
3290 Lien Street
Rapid City, SD  57702

All executive officers and directors as a
group (3 persons).............................                 20,430,848(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 which 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 829,740 shares of common stock that may be
         acquired pursuant to currently exercisable stock options.


                                       19
<PAGE>

EQUITY COMPENSATION PLAN INFORMATION

         The following table provides information about shares of our common
stock that we may issued upon the exercise of options, warrants and rights under
all of our existing compensation plans as of September 30, 2002.

<Table>
<Caption>
                                                                                              NUMBER OF SECURITIES
                                                                                            REMAINING AVAILABLE FOR
                                                                                             FUTURE ISSUANCE UNDER
                                      Number of securities to        Weighted-average         EQUITY COMPENSATION
                                      be issued upon exercise       exercise price of           PLANS (EXCLUDING
                                      of outstanding options,      outstanding options,     SECURITIES REFLECTED IN
                                        warrants and rights        warrants and rights             COLUMN (a))
               PLAN CATEGORY                    (a)                        (b)                         (c)
               -------------          -----------------------      --------------------     -----------------------
<S>                                   <C>                          <C>                      <C>
        Equity compensation plans              849,740                    $0.27                      2,840,000
        approved by the security
        holders(1)

        Equity compensation plans
        not approved by security             2,000,000                    $0.20                            -0-
        holders(2)

        Total                                2,849,740                    $0.22                      2,840,000
</Table>

(1)      Represents options and shares issuable under our 1992 Performance Stock
         Option Plan and our 2000 Employee Stock Purchase Plan.

(2)      In connection the exchange agreement, we cancelled the existing warrant
         to purchase 2,000,000 shares of common stock held by Bruce Lien and
         issued a new warrant to BHL Capital, at a decreased exercise price per
         share of $0.20 versus $1.00, and an extended maturity date of January
         30, 2009 versus January 30, 2004. See "Certain Relationships and
         Related Transactions" below.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         On July 30, 2002 we entered into an exchange agreement with BHL Capital
Corporation, a privately owned investment company owned by our majority
shareholder Bruce Lien. Under the exchange agreement, we issued BHL Capital
3,500,000 shares of our newly created Series A Preferred Stock in partial
exchange for the cancellation of $3,500,000 of indebtedness payable to BHL
Capital under a promissory note in the aggregate principal amount of
$10,118,127, referred to as the "Old Note." The Series A Preferred Stock has a
liquidation preference of $1.00 per share and accrues dividends at 8% per annum
on a cumulative basis, when and if declared by our board of directors. In
conjunction with this exchange, the Old Note was cancelled and reissued in the
principal amount of $6,618,127, with a maturity date of July 30, 2004 and an
interest rate of 8% for one year. After one year, the interest rate becomes
variable at 3% per annum above the prime rate. In connection with the exchange
agreement, we cancelled the existing warrant to purchase 2,000,000 shares of
common stock held by Bruce Lien and issued a new warrant to BHL Capital, at a
decreased exercise price per share of $0.20 versus $1.00, and an extended
maturity date of January 30, 2009 versus January 30, 2004.

         Mr. Lien has personally guaranteed the following company debt:

(1)      Note payable to a bank in the amount of $5,409,124 at September 30,
         2002.

(2)      Note payable to a bank in the amount of $7,581,149 at September 30,
         2002.

(3)      Note payable to banks in the amount of $2,080,000 related to the
         purchase of the Jazz Alley Casino property in December 2002.

         We 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 $2,697.


                                       20
<PAGE>

         During fiscal years 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. 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%.

         We have 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.

         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 agreed to pay Mr. Fish a base
salary of $60,000 per year, which amount was increased to $75,000 per year after
completion of a 180 day probationary period. Mr. Fish resigned as our Chief
Financial Officer in late November 2002.

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

(a)      Exhibits

         Reference is made to the Exhibit Index attached hereto and incorporated
         herein by reference.

(b)      Reports on Form 8-K:

         No current reports on Form 8-K were filed during the quarter ending
         September 30, 2002.


                                       21
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

<Table>
<Caption>
Financial Statements                                                                                        Page
<S>                                                                                                         <C>
Independent Auditors' Report.................................................................................F-2
Consolidated Balance Sheets at September 30, 2002 and 2001...................................................F-3
Consolidated Statements of Operations for the Years Ended
     September 30, 2002 and 2001.............................................................................F-5
Consolidated Statements of Stockholders' Equity (Deficit) for the
     Years Ended September 30, 2002 and 2001.................................................................F-6
Consolidated Statements of Cash Flows for the Years Ended
     September 30, 2002 and 2001.............................................................................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, 2002 and 2001, 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, 2002 and 2001, 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.

McGladrey & Pullen, LLP


Rapid City, South Dakota
November 19, 2002, except for Notes 4 and 14
as to which the date is November 27, 2002.


                                      F-2
<PAGE>

                  CONCORDE GAMING CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           September 30, 2002 and 2001

<Table>
<Caption>
ASSETS                                                                 2002            2001
------                                                             ------------    ------------
<S>                                                                <C>             <C>
Current assets
      Cash and cash equivalents                                    $  1,230,915    $  1,787,765
      Restricted Cash (note 9)                                          400,000              --
      Trade receivables - net of allowance for doubtful accounts
                     $154,288 in 2002 and $265,975 in 2001              168,823         120,473
      Inventory                                                          47,933          71,021
      Prepaid expenses
           Dock lease                                                   179,875          11,250
           Other                                                        233,541         101,556
                                                                   ------------    ------------
                TOTAL CURRENT ASSETS                                  2,261,087       2,092,065
                                                                   ------------    ------------

Other assets
      Other                                                             151,373         148,274
                                                                   ------------    ------------
Property and equipment
      Land                                                            2,103,668       1,097,080
      Parking lots                                                    2,560,027              --
      Vessel and improvements                                         9,772,658       9,482,339
      Gaming equipment, fixtures and furniture                        4,863,945       4,488,176
      Vehicles                                                          169,185          51,265
      Buildings and improvements                                      3,226,042              --
      Leasehold improvements                                            251,292         309,574
      Restricted Cash (note 9)                                          633,891              --
                                                                   ------------    ------------
                                                                     23,580,708      15,428,434
      Less accumulated depreciation and amortization                 (4,040,470)     (2,893,710)
                                                                   ------------    ------------
                                                                     19,540,238      12,534,724
                                                                   ------------    ------------

Intangibles
      Dock rights, net                                                  177,520         213,016
      Deferred financing costs, net                                     502,779         192,156
      Goodwill, net                                                   1,091,111       1,116,072
                                                                   ------------    ------------
                                                                      1,771,410       1,521,244
                                                                   ------------    ------------

                                                                   $ 23,724,108    $ 16,296,307
                                                                   ============    ============
</Table>

See Notes to Consolidated Financial Statements.


                                      F-3
<PAGE>

<Table>
<Caption>
LIABILITIES AND STOCKHOLDERS' EQUITY                                       2002            2001
------------------------------------                                   ------------    ------------
<S>                                                                    <C>             <C>
Current liabilities
       Notes payable - bank (note 2)                                   $    546,210    $    179,796
       Current maturities of long-term debt                               1,386,529         973,346
       Accounts payable                                                     421,517         675,596
       Accrued expenses
             Payroll and payroll taxes                                      445,811         238,335
             Accrued interest                                               145,779         130,210
             Other                                                          930,997         895,013
       Dividends payable                                                     23,667              --
                                                                       ------------    ------------
                   Total current liabilities                              3,900,510       3,092,296
                                                                       ------------    ------------


Long-term debt, less current maturities (note 4)                         11,821,629       5,483,256
                                                                       ------------    ------------

Notes payable to related party (note 3)                                   6,556,020      10,398,272
                                                                       ------------    ------------


Commitments and contingencies (note 11)


Stockholders' equity (deficit)
       Preferred stock,  par value $1.00 per share, authorized
             issued and outstanding 3,500,000 shares net of discount      3,425,000              --
       Common stock, par value $.01 per share, issued and
             outstanding 2002 - 25,070,402; 2001 - 24,070,402               250,704         240,704
       Additional paid-in capital (note 5)                                4,014,576       3,899,576
       Accumulated deficit                                               (6,244,331)     (6,817,797)
                                                                       ------------    ------------
                                                                          1,445,949      (2,677,517)
                                                                       ------------    ------------

                                                                       $ 23,724,108    $ 16,296,307
                                                                       ============    ============
</Table>


                                      F-4
<PAGE>

                  CONCORDE GAMING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     Years Ended September 30, 2002 and 2001

<Table>
<Caption>
                                                           2002            2001
                                                      ------------    ------------
<S>                                                   <C>             <C>
Revenues
      Casino                                          $ 20,543,636    $ 18,343,921
      Food and beverage                                  1,855,529       1,679,441
      Other                                              1,430,061       1,656,594
                                                      ------------    ------------
                  Gross revenues                        23,829,226      21,679,956
      Less promotional allowance                         2,835,474       3,016,262
                                                      ------------    ------------
                  Net revenues                          20,993,752      18,663,694
                                                      ------------    ------------

Costs and expenses
      Casino                                             9,757,964       9,203,389
      Food and beverage                                  1,185,054       1,285,061
      Selling, general and administrative                6,653,189       6,449,194
      Depreciation and amortization                      1,429,938       1,227,831
      Loss on sale of equipment                              7,815          52,231
                                                      ------------    ------------
                                                        19,033,960      18,217,706
                                                      ------------    ------------

      Income from operations                             1,959,792         445,988
                                                      ------------    ------------
Other income (expense)
      Interest income                                        3,303          22,641
      Other income                                          70,490         321,375
      Interest expense and financing costs:
          Related party                                   (595,301)       (884,057)
          Other                                           (818,151)       (873,635)
                                                      ------------    ------------
                                                        (1,339,659)     (1,413,676)
                                                      ------------    ------------

                  Income (loss) before income taxes        620,133        (967,688)

Income taxes                                                    --              --
                                                      ------------    ------------
                  Net income (loss)                   $    620,133    $   (967,688)
                                                      ============    ============

                  Preferred stock dividends                 46,667              --
                                                      ------------    ------------

                  Net income (loss) available for
                        common stockholders           $    573,466    $   (967,688)
                                                      ============    ============

Basic and diluted income (loss) per share             $       0.02    $      (0.04)
                                                      ============    ============
</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, 2002 AND 2001

<Table>
<Caption>
                                                                          Additional
                                              Preferred       Common        paid-in       Accumulated
                                                stock          stock        capital         deficit          Total
                                             -----------    -----------   -----------     -----------     -----------
<S>                                          <C>            <C>           <C>             <C>             <C>
Balance September 30, 2000                   $        --    $   240,704   $ 3,899,576     $(5,850,109)    $(1,709,829)

       Net (loss)                                     --             --            --        (967,688)       (967,688)
                                             -----------    -----------   -----------     -----------     -----------

Balance September 30, 2001                            --        240,704     3,899,576      (6,817,797)     (2,677,517)
       Issuance of 1,000,000 shares of
              common stock                            --         10,000        40,000              --          50,000
       Issuance of 3,500,000 shares of
              preferred stock, net of
              $75,000 discount                 3,425,000             --            --              --       3,425,000
       Issuance of warrant                            --             --        75,000              --          75,000
       Net income                                     --             --            --         620,133         620,133
       Preferred stock dividends                      --             --            --         (46,667)        (46,667)
                                             -----------    -----------   -----------     -----------     -----------

BALANCE SEPTEMBER 30, 2002                   $ 3,425,000    $   250,704   $ 4,014,576     $(6,244,331)    $ 1,445,949
                                             ===========    ===========   ===========     ===========     ===========
</Table>

See Notes to Consolidated Financial Statements.


                                      F-6
<PAGE>

                       CONCORDE GAMING CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                          YEARS ENDED SEPTEMBER 30, 2002 AND 2001

<Table>
<Caption>
                                                                                                   2002             2001
                                                                                               -----------      -----------
<S>                                                                                            <C>              <C>
Cash flow provided by  operating activities:
    Net income (loss)                                                                          $   620,133      $  (967,688)
    Adjustments to reconcile net income (loss) to net cash
        flows provided by operating activities:
        Note payable to related party incurred for payment of interest expense                          --          870,399
        Depreciation and amortization                                                            1,429,938        1,227,831
        Loss on disposal of property and equipment                                                   7,815           52,231
        Provision for doubtful accounts                                                           (111,687)         124,612
        Change in assets and liabilities:
            Decrease  in trade receivables                                                          63,337           24,791
            (Increase) decrease in prepaid expenses and inventory                                 (277,522)         359,610
            Increase (decrease) in accounts payable and accrued expenses                           (27,634)          33,469
                                                                                               -----------      -----------
               Net cash provided by operating activities                                         1,704,380        1,725,255
                                                                                               -----------      -----------

Cash flows (used in) investing activities:
        Purchase of property and equipment                                                      (7,382,443)        (405,103)
        Purchase of intangibles                                                                   (527,129)         (82,667)
        Proceeds from sale of property and equipment                                                 5,447           15,695
        (Increase) in restricted cash                                                           (1,033,891)              --
        (Increase) decrease in other assets                                                         (3,099)          21,218
                                                                                               -----------      -----------
                   Net cash (used in) investing activities                                      (8,941,115)        (450,857)
                                                                                               -----------      -----------

Cash flows (used in) financing activities:
        Net change in short-term borrowings - other                                                366,414          (64,410)
        Proceeds from long term borrowings - related parties                                            --        1,105,000
        Proceeds from long term borrowings - other                                               7,651,049               --
        Principal payments on long-term borrowings - related parties                              (342,252)         (75,000)
        Principal payments on long-term borrowings - other                                      (1,022,326)      (1,570,996)
        Proceeds from sale of common stock                                                          50,000               --
        Preferred dividends paid                                                                   (23,000)
                                                                                               -----------      -----------
                   Net cash provided by (used in) financing activities                           6,679,885         (605,406)
                                                                                               -----------      -----------

                   NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           (556,850)         668,992
                   Cash and cash equivalents:
                   Beginning                                                                     1,787,765        1,118,773
                                                                                               -----------      -----------

                   Ending                                                                      $ 1,230,915      $ 1,787,765
                                                                                               ===========      ===========
</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") owns and
operates the Golden Gates Casino in Black Hawk, Colorado and Casino 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
wholly-owned subsidiaries at September 30, 2002 include Concorde Cripple Creek,
Inc. ("Concorde Cripple Creek"), Concorde Cruises, Inc., Conami Inc. and
Bayfront Valet.

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 30 to 39 years.


                                      F-8
<PAGE>

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

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, 2002 management determined that there was no
impairment of the Company's long-lived assets.

Intangible Assets:

Intangible assets, primarily goodwill and dock rights (excess of purchase price
over net assets acquired) are amortized over estimated useful lives of 5 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 are
$1,574,856 and $1,268,081 of advertising expense for the years ended
September 30, 2002 and 2001 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 common share. The provisions of
SFAS No. 128 have been applied to all periods presented in the accompanying
financial statements. In Fiscal 2002 and 2001 basic net income (loss) per share
was the same as diluted income (loss) per share.


                                      F-9
<PAGE>

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

<Table>
<Caption>
                                        YEAR ENDED SEPTEMBER 30, 2002                        YEAR ENDED SEPTEMBER 30, 2001
                                  INCOME              SHARES         INCOME            (LOSS)            SHARES           (LOSS)
                                (NUMERATOR)        (DENOMINATOR)    PER SHARE        (NUMERATOR)      (DENOMINATOR)      PER SHARE
                                -----------        ------------     ---------        -----------      -------------      ---------
<S>                             <C>                <C>              <C>              <C>              <C>                <C>
 Basic and Diluted EPS
     Net income (loss)           $ 573,466          25,070,402        $ 0.02         $ (967,688)        24,070,402        $ (0.04)
                                 =========          ==========        ======         ==========         ==========        =======
</Table>

For Fiscal 2002 and 2001 options and warrants outstanding (notes 5 and 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. NOTES PAYABLE TO BANK

The Company has outstanding borrowings of $546,210 and $179,796 under a $650,000
revolving bank line of credit at September 30, 2002 and 2001 respectively. The
line, which matures on January 1, 2004, requires monthly interest payments that
accrue at the prime rate plus 1.375% to 2.75%, and decreases in availability at
the rate of $20,000 per month beginning in March 2003. 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
substantially the same as those for the Vessel loan.

NOTE 3.  NOTES PAYABLE TO RELATED PARTY

Notes payable to related party consist of:

<Table>
<Caption>
                                                                                       2002               2001
                                                                                ----------------   ----------------
<S>                                                                             <C>                <C>
Unsecured note payable to a company controlled by the Company's
    majority stockholder with interest of 8% to July 31, 2003
    and then interest at the prime rate plus 3.0% for the balance
    of the term of the note that is due July 31, 2004                           $      6,556,020   $     10,398,272
                                                                                ================   ================
</Table>

NOTE 4. LONG-TERM DEBT

Long-term debt consists of:

<Table>
<Caption>
                                                                                    2002              2001
                                                                                ------------      ------------
<S>                                                                             <C>               <C>
10.625% note payable to a bank (Vessel Loan), monthly installments of           $  5,409,124      $  6,341,623
    $130,258 including interest, due January 2004, secured by first
    preferred ship mortgage, guaranteed by majority stockholder (A)
Notes payable to a bank, monthly installments of $74,267 including interest
    at a prime rate plus 3.0%, due August 2009, secured by a mortgage on land
    and building, and guaranteed by majority stockholder                           7,581,149                --
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              217,885           114,979
                                                                                ------------      ------------
                                                                                  13,208,158         6,456,602
Less current maturities                                                           (1,386,529)         (973,346)
                                                                                ------------      ------------
                                                                                $ 11,821,629      $  5,483,256
                                                                                ============      ============
</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)


                                      F-10
<PAGE>
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

$4,000,000. There was no Excess Revenue in Fiscal 2002 and 2001. 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, 2002, the Company was in
violation of the debt service covenant. On November 27, 2002, the Company
received a waiver of the vessel loan's debt service covenants until January
2003. The company believes it is probable that it will be in compliance with the
debt service requirements commencing with the quarter ending March 31, 2003;
therefore, only the scheduled principal payments for the year ending September
30, 2003 are included in current maturities at September 30, 2003.

The future aggregate annual maturities of long-term debt at September 30, 2002
are as follows:

<Table>
<S>                                                    <C>
Fiscal year ending:
2003                                                   $      1,386,529
2004                                                          4,687,003
2005                                                            327,714
2006                                                            312,370
2007                                                          6,494,542
                                                       ----------------
                                                       $     13,208,158
                                                       ================
</Table>

NOTE 5. PREFERRED STOCK AND WARRANTS TRANSACTION

During fiscal year ended September 30, 2002, the Company's Board of Directors
designated 3,500,000 shares of preferred stock as Series A Preferred shares,
with a par value of $1 per share. Holders of Series A Preferred shares are
entitled to receive cumulative dividends at a rate of 8% per annum.

On July 30, 2002, the Company entered into an exchange agreement with a company
controlled by the Company's majority stockholder (the related party). Per the
agreement, the related party agreed to exchange an existing loan payable by the
Company, in the amount of $10,118,128, for the following: 1) a promissory note
payable by the Company in the amount of $6,618,128, (2) 3.5 million shares of
the Company's Series A Preferred Stock, and, (3) a warrant to purchase 2 million
shares of the Company's common stock at an exercise price of twenty cents ($.20)
per share through January 30, 2009. The fair market value of the warrant to
purchase 2 million shares was estimated using the Black-Scholes pricing model.
Also, per the agreement, the Company cancelled the existing warrant granted to
the Company's majority stockholder to purchase 2 million shares of the Company's
common stock a $1.00 per share through January 2004.

6. INCOME TAXES

The income tax provision (benefit) for the years ended September 30, 2002 and
2001 is as follows:

<Table>
<Caption>
                                                          2002           2001
                                                         -----          -----
<S>                                                      <C>            <C>
Current, Federal and State                               $  --          $  --
Deferred                                                    --             --
                                                         -----          -----
                                                         $  --          $  --
                                                         =====          =====
</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>
                                                        2002           2001
                                                     ---------      ---------
<S>                                                  <C>             <C>
Computed "expected" tax expense (benefit)            $ 217,047      $(338,691)
Valuation allowance                                         --        185,000
Tax benefit from net operating loss carryforward      (200,000)             0
Other                                                  (17,047)       153,691
                                                     ---------      ---------
                                                     $      --      $      --
                                                     =========      =========
</Table>


                                      F-11
<PAGE>

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

Net deferred tax asset (liabilities) are as follows:

<Table>
<Caption>
                                                    2002             2001
                                                 -----------      -----------
<S>                                              <C>              <C>
Deferred tax assets:
   Intangibles                                   $   302,000      $   458,000
   Net operating loss                              1,802,000        1,874,000
   Accrued interest                                  840,000          646,000
   Allowance for doubtful accounts and other         118,000          169,000
                                                 -----------      -----------
                                                   3,062,000        3,147,000
   Valuation allowance                            (2,297,000)      (2,492,000)
                                                 -----------      -----------
   Deferred tax liabilities                          765,000          655,000
   Property and equipment                           (765,000)        (655,000)
                                                 -----------      -----------
          Net                                    $        --      $        --
                                                 ===========      ===========
</Table>

During the year ended September 30, 2002 the Company reduced the valuation
allowance by $195,000 as a result of utilizing a net operating loss
carryforward. During the year ended September 2001, the Company increased the
valuation allowance by $185,000 on the deferred tax assets to reduce the total
to an amount that management believes will ultimately be realized. Realization
of deferred tax assets is dependent upon sufficient future taxable income during
the period that deductible temporary differences and carryforwards are expected
to be available to reduce taxable income.

Net operating loss carryforwards available for federal income tax purposes of
approximately $4,978,000 as of September 30, 2002 will expire in the year ending
September 30, 2014.


NOTE 7. STOCK OPTION PLAN

The Company has reserved 1,689,700 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, 2002, 849,740 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 829,740 shares were vested at September 30,
2002. Options for the purchase of 300,000 shares, issued in years ended
September 30, 1995 through 2000, were cancelled during the year ended September
30, 2002.

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


                                      F-12
<PAGE>

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

<Table>
<Caption>
                                           2002                           2001
                                ---------------------------     ---------------------------
                                                 WEIGHTED                        WEIGHTED
                                                 AVERAGE                          AVERAGE
                                                 EXERCISE                        EXERCISE
Outstanding                       OPTIONS         PRICE           OPTIONS          PRICE
                                -----------     -----------     -----------     -----------
<S>                             <C>             <C>             <C>             <C>
Beginning of year                 1,149,740     $      0.27       1,149,740     $      0.27
Granted                                  --              --              --     $        --
Exercised                                --              --              --     $        --
Cancelled                           300,000     $      0.27              --     $        --
                                -----------                     -----------
End of year                         849,740     $      0.27       1,149,740     $      0.27
                                ===========                     ===========

Exercisable at end of year          829,740     $      0.27       1,101,740     $      0.27
                                ===========                     ===========

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

The following table summarizes information about the options outstanding at
September 30, 1997:

<Table>
<Caption>
      Range of                                            Remaining        Average                     Average
      Exercise                              Number       Contractual      Exercise         Number      Exercise
      Prices                             Outstanding        Life            Price       Exercisable     Price
      --------                           -----------     -----------      --------      -----------    --------
<S>                                      <C>             <C>              <C>           <C>            <C>
  $ 0.15 - $ 0.25                          490,000           4.7           $ 0.18         490,000       $ 0.18
  $ 0.40 - $ 0.42                          359,740           3.4           $ 0.40         339,740       $ 0.40
                                          --------                                       --------
                                           849,740           4.1           $ 0.27         829,740       $ 0.27
                                          ========                                       ========
</Table>

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
pro forma amounts below for the years ended September 30:

<Table>
<Caption>
                                                           2002            2001
                                                       -----------     -----------
<S>                                                    <C>             <C>
Net income (loss) - as reported                        $   620,133     $  (967,688)
Net income (loss) - pro forma                          $   618,773     $  (980,120)
Basic and diluted earnings per share - as reported     $      0.02     $     (0.04)
Basic and diluted earnings per share - pro forma       $      0.02     $     (0.04)
</Table>


                                      F-13
<PAGE>
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

No options were granted in Fiscal 2002 and 2001.

NOTE 8. RELATED PARTY TRANSACTIONS

Rent expense to a company controlled by the Company's majority stockholder
totaled $32,372 and $32,072 for 2002 and 2001, 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 $595,301
and $884,057 for the Fiscal 2002 and 2001, respectively.

NOTE 9. ASSET ACQUISITIONS

In September 2002, the Company purchased the Golden Gates Casino real estate.
Debt was incurred in the amount of $7,600,000 for the purchase. Per the debt
agreement, allocation of the debt proceeds was as follows: $400,000 restricted
cash reserved for debt service, $800,000 restricted cash for property
improvements, and $6,400,000 for purchase of the real estate.

In July 2002, the Company exchanged its interest in land and parking lot
improvements in the amount of $1,177,085 for a parking garage condominium unit
containing 45 parking spots. No gain or loss was recognized on the transaction.

The Company incurred a note payable for $60,000 for the purchase of the
remaining 20% interest in Bayfront Valet.

NOTE 10. 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 11. COMMITMENTS AND CONTINGENCIES

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
expired on August 31, 2002 and the Company extended the agreement for one
additional five-year term ("Extension Term"), expiring September 30, 2007.

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. Fees owing under the lease agreement are approximately $475,000 per
year.

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


                                      F-14
<PAGE>

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

Company also leases gaming equipment on a month-to-month basis. Rental expense
for operating leases during the years ended September 30, 2002 and 2001 was
$1,624,442 and $1,585,777 respectively.

The future aggregate minimum lease payments as of September 30, 2002 are as
follows:

<Table>
<S>                           <C>
Fiscal year ending:
   2003                       $   698,195
   2004                           656,889
   2005                           646,139
   2006                           647,388
   2007                           637,300
                              -----------
                              $ 3,285,911
                              ===========
</Table>

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 $35,609 and 34,418 during the years ended September 30, 2002 and 2001,
respectively.

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, 2002, 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.

Litigation:

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.

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 the notes payable - bank and 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 a
company controlled by the Company's majority stockholder.


                                      F-15
<PAGE>
CONCORDE GAMING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

NOTE 13. 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 is an offshore gaming vessel 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
                                    2002        2001        2002       2001       2002       2001
                                  --------    --------    --------   --------   --------   --------
<S>                               <C>         <C>         <C>        <C>        <C>        <C>
Revenues
  Casino                          $ 12,922    $ 11,665    $  7,621   $  6,679   $ 20,543   $ 18,344
  Food and beverage                  1,672       1,573         183        106      1,855      1,679
  Other income                       1,374       1,583          57         74      1,431      1,657
                                  --------    --------    --------   --------   --------   --------
   Gross revenues                   15,968      14,821       7,861      6,859     23,829     21,680
  Less:
  Promotional allowances             2,665       2,916         171        101      2,836      3,017
                                  --------    --------    --------   --------   --------   --------
   Net revenues                     13,303      11,905       7,690      6,758     20,993     18,663
                                  --------    --------    --------   --------   --------   --------

Costs and expenses

  Casino                             5,708       5,389       4,050      3,928      9,758      9,317
  Food and beverage                  1,039       1,098         146        187      1,185      1,285
  Selling, general
   and administrative                4,990       4,961         597        587      5,587      5,548
  Depreciation/amortization            970         832         394        333      1,364      1,165
  Loss on sale of equipment             --          --           8         52          8         52
  Interest expense                     701         835         113         51        814        886
                                  --------    --------    --------   --------   --------   --------
   Total costs and expenses         13,408      13,115       5,308      5,138     18,716     18,253
                                  --------    --------    --------   --------   --------   --------

Segment profit (loss)             $   (105)   $ (1,210)   $  2,382      1,619   $  2,277   $    410
                                  ========    ========    ========   ========   ========   ========
Segment assets                    $ 11,435    $ 12,002    $ 11,623   $  3,758   $ 23,058   $ 15,760
                                  ========    ========    ========   ========   ========   ========
Expenditures for segment assets   $    550    $    234    $  6,885   $    370   $  7,435   $    604
                                  ========    ========    ========   ========   ========   ========
</Table>


                                      F-16
<PAGE>

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

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>
                                                       2002       2001
                                                     --------   --------
<S>                                                  <C>        <C>
PROFIT

Total profit (loss) of reportable segments           $  2,277   $    410
                                                     --------   --------
  Unallocated amounts:
    Income
         Interest income                                    3         23
         Other                                             71        321
                                                     --------   --------
             Total income items                            74        344
                                                     --------   --------
    Expense
         General and administrative                     1,066        787
         Depreciation and amortization                     66         63
         Corporate interest                               599        872
         Other                                             --         --
                                                     --------   --------
             Total expense items                        1,731      1,722
                                                     --------   --------

Consolidated net income (loss) before income taxes   $    620   $   (968)
                                                     ========   ========
ASSETS

Assets of reportable segments                        $ 23,143   $ 15,760
Unallocated intangibles                                   178        213
Corporate cash and other                                  115         39
Corporate property and equipment                          288        284
                                                     --------   --------
  Consolidated assets                                $ 23,724   $ 16,296
                                                     ========   ========
</Table>

NOTE 14. SUBSEQUENT EVENTS

On November 6 and 22, 2002, the Company entered into agreements to purchase
certain real property, including buildings and improvements, and the sellers'
interests in fixtures, furniture and equipment located on or about the real
property, located in Black Hawk, Colorado. The total purchase price was
$1,575,000. In conjunction with this acquisition, the Company has secured a
letter of commitment from a bank for financing in an amount up to $2,080,000.

Princesa Partners was in default of the vessel loan due to a failure to comply
with the debt service covenant up to November 27, 2002. On November 27, 2002,
the Company received a waiver regarding the vessel loan's debt service covenants
(See Note 4).


                                      F-17
<PAGE>

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

NOTE 15. SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION

<Table>
<Caption>
Cash payments for:                                                        2002         2001
                                                                       ----------   ----------
<S>                                                                    <C>          <C>
         Interest                                                      $  892,027   $  822,722
Supplemental Schedule of Non-cash Investing and Financing Activities
         Accounts payable incurred for purchase of equipment               32,584      159,397
         Long-term debt incurred for purchase of equipment                122,833       48,039
         Accrued expenses incurred for purchase of intangibles                 --      130,291
         Debt exchanged for preferred stock and warrants (note 5)       3,500,000           --
         Property exchange (note 9)                                     1,177,085           --
</Table>

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 is in the process of completing its assessment of the effects of
these new pronouncements on its financial statements and believes that the
impact will not be significant. The standards generally are required to be
implemented by the Company in its financial statements for the year ending
September 30, 2003.


                                      F-18
<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

January 2, 2003                            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.

<Table>
<S>                                 <C>                                <C>
/s/ BRUSTUEN H. LIEN                Chairman of the Board              January 2, 2003
------------------------------      of Directors
Brustuen "Bruce" H. Lien

/s/ JERRY L. BAUM                   President, Chief Executive         January 2, 2003
------------------------------      Officer, Interim Chief
Jerry L. Baum                       Financial Officer and Director

/s/ DEANNA B. LIEN
------------------------------      Director                           January 2, 2003
Deanna B. Lien

/s/ THOMAS GOODRICH
------------------------------      Controller                         January 2, 2003
Thomas Goodrich
</Table>

<PAGE>

                                 CERTIFICATIONS

I, Jerry L. Baum, President, Chief Executive Officer and interim Chief Financial
Officer of Concorde Gaming Corporation, certify that:

1. I have reviewed this annual report on Form 10-KSB of Concorde Gaming
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

                  (a) designed such disclosure controls and procedures to ensure
         that material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
         date of this annual report (the "Evaluation Date"); and

                  (c) presented in this annual report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

                  (a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
         to record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

                  (b) any fraud, whether or not material, that involves
         management or other employees who have a significant role in the
         registrant's internal controls; and

<PAGE>

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: January 2, 2003

                            /s/ JERRY L. BAUM
                            ----------------------------------------------------
                            Jerry L. Baum
                            President, Chief Executive Officer and interim Chief
                            Financial Officer


<PAGE>

                                  EXHIBIT INDEX

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

3.2                  Articles of Amendment to Articles of Incorporation filed on
                     July 31, 2002(9)

3.3                  Fourth Amended and Restated Bylaws.(8)

4.1                  Warrant dated July 30, 2002 to Purchase 200,000 shares of
                     Common Stock in the name of BHL Capital Corporation.(9)

10.1                 1992 Performance Stock Option Plan.(2)

10.2                 2000 Employee Stock Purchase Agreement.(3)

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

10.4                 Lease between Elevation 8000+ and Concorde Cripple Creek,
                     Inc. dated July 21, 1997.(3)

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

10.6                 Third Amendment to Use Agreement dated June 27, 2002(+)

10.6A                Loan Agreement between Princesa Partners and the lenders
                     named therein dated October 22, 1995.(5)

10.7                 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)

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

10.9                 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)

10.10                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)

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

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

10.13                Promissory Note in the amount of $10,398,272 to the order
                     of BHL Capital Corporation dated October 1, 2001.(8)

10.14                Sublease between the Company and KMM Parking L.L.C. dated
                     December 30, 1998.(6)
</Table>

<PAGE>

<Table>
<Caption>
EXHIBIT NO.          DESCRIPTION
-----------          -----------
<S>                  <C>
10.15                Exchange Agreement dated July 30, 2002, by and among the
                     issuer, BHL Capital Corporation and Brustuen H. Lien.(10)

10.16                Promissory Note dated July 30, 2002 in the aggregate
                     principal amount of $6,618,127.68 payable to the order of
                     BHL Capital Corporation.(10)

10.17                Loan Agreement dated July 31, 2002 between Concorde Cripple
                     Creek, Inc. and First National Bank.(10)

10.18                Promissory Note dated July 31, 2002 payable to the order of
                     First National Bank.(10)

10.19                Deed of Trust, Assignment of Leases and Rents, Security
                     Agreement and Fixture Filing dated July 31, 29002 by and
                     among Concorde Cripple Creek, Inc., the Public Trustee of
                     Gilpin County, Colorado and First National Bank, Rapid
                     City, South Dakota.(10)

10.20                Guaranty dated July 31, 2002 by and among First National
                     Bank and the Company, as guarantor.(10)

10.21                Agreement by and among Princesa Partners and each of the
                     lenders named therein, dated December 1, 2001, as
                     subsequently amended.(9)

10.22                First Amendment to Loan Agreement by and among Princesa
                     Partners and the lenders named therein, dated December 1,
                     2001, as subsequently amended.(9)

10.23                First Amendment to Guaranty, Subordination Agreement,
                     Security Agreement and Indemnity by and among Concorde
                     Cruises, Inc. as successor in interest to Bayfront
                     Ventures, and each of the lenders named therein, dated
                     December 1, 2001, as subsequently amended.(9)

10.24                First Amendment to Servicing and Intercreditor Agreement,
                     by and among Integra Bank, as successor in interest to The
                     National City Bank of Evansville, Princesa Partners and
                     each of the lenders named therein, dated December 1,
                     2001(9)

10.25                Amendment to Loan Agreement by and among Integra Bank N.A.,
                     as successor in interest to The National City Bank of
                     Evansville, and Concorde Cruises, Inc., as successor in
                     interest to Bayfront Ventures, dated December 18, 2001(9)

10.26                Subordination Agreement dated July 31, 2002, between the
                     Company and First National Bank, Rapid City, South
                     Dakota.(9)

10.27                Guaranty dated June 27, 2002 between the Company, as
                     guarantor, and Bayfront Park Management Trust, guaranteeing
                     the obligations of Concorde Cruises Inc.(+)

10.28                Loan Agreement dated December 4, 2002 between Concorde
                     Blackhawk Corporation and First National Bank.(+)

10.29                Deed of Trust, Assignment of Leases and Rents, and Fixture
                     Filing dated December 4, 2002 by and among Concorde
                     Blackhawk Corporation, the Public Trustee of Gilpin County,
                     Colorado and First National Bank, Rapid City, South
                     Dakota.(+)
</Table>


<PAGE>

<Table>
<Caption>
EXHIBIT NO.          DESCRIPTION
-----------          -----------
<S>                  <C>
10.30                Promissory Note dated December 4, 2002 in the principal
                     amount of $2,080,000 payable to the order of First National
                     Bank.(+)

21                   Subsidiaries of the Registrant.(+)

23                   Consent of Independent Auditors'.(+)

99                   Certification of Chief Executive Officer and Chief
                     Financial Officer.(+)

23
</Table>

----------

(+)  Filed herewith

(1)  Previously filed with the Securities and Exchange Commission as an exhibit
     to the Company's 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 by the Company
     on September 24, 1992 as Exhibit 10 to the 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 by the Company
     as an attachment to the Company's 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 by the Company
     as an exhibit to its 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 by the Company
     as an exhibit to its 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 the Company's 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 the Company's Annual Report on Form 10-KSB for the year ended
     September 30, 2000 (File No. 0-8698) and incorporated herein by this
     reference.

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

(9)  Previously filed with the Securities and Exchange Commission as an exhibit
     to the Company's Quarterly Report on Form 10-QSB for the quarter ended
     December 31, 2001 (File No. 0-8698) and incorporated herein by this
     reference.

(10) Previously filed with the Securities and Exchange Commission as an exhibit
     to the Company's Quarterly Report on Form 10-QSB for the quarter ended
     June 30, 2002 (File No. 0-8698) and incorporated herein by this reference.