SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A

                                (Amendment No. 2)
(Mark One)

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

                   For the fiscal year ended December 31, 2002

                                       OR

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

              For the transition period from ________ to _________

                           Commission File No. 1-13638

                            MARVEL ENTERPRISES, INC.
             (Exact name of Registrant as specified in its charter)

        Delaware                                        13-3711775
(State of incorporation)                (I.R.S. employer identification number)

                              10 East 40th Street
                            New York, New York 10016
          (Address of principal executive offices, including zip code)

                                 (212) 576-4000
              (Registrant's telephone number, including area code)

          Securities registered pursuant to Section 12(b) of the Act:


        Title of each class            Name of each exchange on which registered
Common Stock, par value $.01 per share          New York Stock Exchange
Preferred Share Purchase Rights                 New York Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:

                            12% Senior Notes due 2009

     Indicate by check mark  whether the  Registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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 |_|

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

     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes |X| No |_|

     The approximate  aggregate market value of the voting and non-voting common
equity held by  non-affiliates  of the Registrant as of the last business day of
the Registrant's  most recently  completed second fiscal quarter (June 28, 2002)
was  $112,263,724  based on a price of $5.48 per share,  the closing sales price
for the  Registrant's  common  stock as reported in the New York Stock  Exchange
Composite  Transaction  Tape on that  date.  As of June  26,  2003,  there  were
67,016,839 outstanding shares of the Registrant's common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

     The  information  required  by  Part  III  (Items  10,  11,  12 and 13) was
incorporated by reference into the  Registrant's  Annual Report on Form 10-K for
the year  ended  December  31,  2002  from  the  Registrant's  definitive  proxy
statement, which the Registrant filed with the Commission on April 8, 2003.


<PAGE>




                                EXPLANATORY NOTE

     This  Amendment  on Form  10-K/A is being  filed  solely for the purpose of
filing  audited  financial  statements  of Spiderman  Merchandising,  L.P.  (the
"Partnership"),  a joint venture of affiliates of Marvel Enterprises,  Inc. (the
"Company")  and of Sony Pictures  Entertainment  Inc. As was stated on page 1 of
the Company's  Annual Report on Form 10-K for the fiscal year ended December 31,
2002, the  Partnership's  fiscal year ends on March 31. In accordance  with Rule
3-09 of  Regulation  S-X,  the Company is now  filing,  as an  amendment  to the
aforementioned  Annual Report on Form 10-K, audited financial  statements of the
Partnership for the fiscal year ended March 31, 2003.





<PAGE>
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)  Documents Filed with this Report

          1.   Financial Statements

               See the  accompanying  Index to Financial  Statements on page F-1
          for the financial  statements  filed with this Amendment No. 2 on Form
          10-K/A.

          2.   Financial Statement Schedule

               None filed with this Amendment No. 2 on Form 10-K/A.

          3.   Exhibits

               The  following  exhibits are filed with this  Amendment  No. 2 on
          Form 10-K/A:

Exhibit Number          Exhibit Description

99.3      Certification by Chief Executive  Officer  pursuant to  Sarbanes-Oxley
          Act,   with  respect  to  Amendment  No.  2  on  Form  10-K/A  to  the
          registrant's  Annual  Report on Form 10-K for the year ended  December
          31, 2002.*

99.4      Certification by Chief Financial  Officer  pursuant to  Sarbanes-Oxley
          Act,   with  respect  to  Amendment  No.  2  on  Form  10-K/A  to  the
          registrant's  Annual  Report on Form 10-K for the year ended  December
          31, 2002.*

          *Pursuant to Commission  Release No. 33-8212,  this certification will
          be treated as  "accompanying"  this Amendment No. 2 on Form 10-K/A and
          not "filed" as part of such Form 10-K/A for  purposes of Section 18 of
          the Exchange Act, or otherwise  subject to the liability of Section 18
          of the  Exchange Act and this  certification  will not be deemed to be
          incorporated  by reference into any filing under the Securities Act of
          1933, as amended,  or the Exchange Act,  except to the extent that the
          registrant specifically incorporates it by reference.


     (b)  Reports on Form 8-K.  During the first  quarter of 2003,  the  Company
          filed the following Current Report on Form 8-K:

          1.   Current  Report on Form 8-K dated  February 24,  2005,  reporting
               Item 5.

                                       1
<PAGE>

                                   SIGNATURES

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

                                   MARVEL ENTERPRISES, INC.

                                   By:/s/
                                      -----------------------------------------
                                   Allen S. Lipson
                                   President and Chief Executive Officer
                                   Date: June 30, 2003


<TABLE>

<S>                                                     <C>                            <C>
Signature                  Title                                                        Date

/s/                        President and Chief Executive Officer                        June 30, 2003
------------------
Allen S. Lipson            (principal executive officer)

         *                 Chief Financial Officer                                      June 30, 2003
-------------------
Kenneth P. West            (principal financial and accounting officer)

         *                 Chairman of the Board of Directors                           June 30, 2003
------------------
Morton E. Handel

         *                 Vice Chairman of the Board of Directors                      June 30, 2003
------------------
Isaac Perlmutter

         *                 Vice Chairman of the Board of Directors                      June 30, 2003
------------------
F. Peter Cuneo

         *                 Director                                                     June 30, 2003
------------------
Avi Arad

         *                 Director                                                     June 30, 2003
------------------
Sid Ganis

         *                 Director                                                     June 30, 2003
------------------
Richard Solar

         *                 Director                                                     June 30, 2003
------------------
James F. Halpin

         *                 Director                                                     June 30, 2003
------------------
Lawrence Mittman


*By: /s/
    -----------------------
      Allen S. Lipson
      Attorney-in-Fact

</TABLE>

                                       2
<PAGE>

                                  CERTIFICATION


I, Allen S. Lipson,  president and chief  executive  officer of the  registrant,
certify that:

1.   I have reviewed this annual report on Form 10-K/A,  of Marvel  Enterprises,
     Inc.;

2.   Based on my  knowledge,  this annual report on Form 10-K/A 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 the annual report, as amended;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included in the 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 the annual report,
     as amended;

4.   The  registrant's  other  certifying  officer  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 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 the annual report,
          as amended, 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
          the annual report, as amended (the "Evaluation Date"); and

     c)   presented in the 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

6.   The  registrant's  other  certifying  officer and I have  indicated  in the
     original annual report whether 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: June 30, 2003
                                           /s/
                                           -------------------------------------
                                           Allen S. Lipson
                                           President and Chief Executive Officer
                                           (principal executive officer)


                                       3
<PAGE>

                                  CERTIFICATION


I, Kenneth P. West, chief financial officer of the registrant, certify that:

1.   I have reviewed  this annual  report on Form 10-K/A of Marvel  Enterprises,
     Inc.;

2.   Based on my  knowledge,  this annual report on Form 10-K/A 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 the annual report, as amended;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included in the 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 the annual report,
     as amended;

4.   The  registrant's  other  certifying  officer  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 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,
          as amended 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
          the annual report, as amended (the "Evaluation Date"); and


     c)   presented in the 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  officer 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

6.   The  registrant's  other  certifying  officers and I have  indicated in the
     original annual report whether 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: June 30, 2003

                                                 /s/
                                                 ---------------------------
                                                 Kenneth P. West
                                                 Chief Financial Officer
                                                 (principal financial officer)


                                       4
<PAGE>


                          Spiderman Merchandising, L.P.

                          Index to Financial Statements

                            Year ended March 31, 2003



                                    Contents

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

Audited Financial Statements

Balance Sheets as of March 31, 2003 and 2002 (Unaudited).....................F-3
Statements of Operations for the Years Ended March 31, 2003,
   2002 (Unaudited) and 2001 (Unaudited).....................................F-4
Statements of Partners' Capital (Deficit) for the Years Ended
   March 31, 2003, 2002 (Unaudited) and 2001 (Unaudited).....................F-5
Statements of Cash Flows for the Years Ended March 31, 2003,
   2002 (Unaudited) and 2001 (Unaudited).....................................F-6
Notes to Financial Statements................................................F-7


                                      F-1
<PAGE>

                         Report of Independent Auditors

The Partners
Spiderman Merchandising, L.P.

We have audited the accompanying balance sheet of Spiderman Merchandising,  L.P.
(the  Partnership)  as  of  March  31,  2003,  and  the  related  statements  of
operations,  partners' capital (deficit) and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. 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 audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Spiderman  Merchandising,  L.P.
at March 31, 2003,  and the results of its operations and its cash flows for the
year then ended in conformity with accounting  principles  generally accepted in
the United States.


                                                          /s/  Ernst & Young LLP


Los Angeles, California
June 23, 2003



                                       F-2
<PAGE>



                          Spiderman Merchandising, L.P.

                                 Balance Sheets

<TABLE>
<S>                                              <C>             <C>
                                                          March 31
                                                     2003             2002
                                                -----------------------------
                                                                   (Unaudited)
  Assets
  Current assets:
     Cash and cash equivalents                   $ 11,387,555    $    438,105
     Accounts receivable                            4,885,313            --
     Due from Marvel                                    4,143            --
                                                 ------------    ------------
  Total current assets                             16,277,011         438,105
                                                 ------------    ------------
  Total assets                                   $ 16,277,011    $    438,105
                                                 ============    ============

  Liabilities and partners' capital (deficit)
  Current liabilities:
     Deferred revenues                           $  7,169,921    $  4,747,560
     Accrued liabilities                              458,647            --
     Accrued participations                           849,100            --
     Due to SPE                                        21,991         157,564
                                                 ------------    ------------
  Total current liabilities                         8,499,659       4,905,124

  Commitments and contingencies

  Partners' capital (deficit):
     Marvel                                         3,802,411      (2,233,837)
     SPE                                            3,974,941      (2,233,182)
                                                 ------------    ------------
  Total partner's capital (deficit)                 7,777,352      (4,467,019)
                                                 ------------    ------------
  Total liabilities
     and partners' capital (deficit)             $ 16,277,011    $    438,105
                                                 ============    ============

See accompanying notes.


</TABLE>


                                       F-3
<PAGE>



                          Spiderman Merchandising, L.P.

                            Statements of Operations

<TABLE>
<S>                              <C>                    <C>             <C>
                                               Year ended March 31
                                      2003          2002                2001
                                -----------------------------------------------
                                                  (Unaudited)       (Unaudited)


  Licensing income               $ 45,467,152    $       --      $       --
  Costs and expenses:
     Commissions                   (1,689,796)           --              --
     Withholding taxes               (633,762)           --              --
     Participations                  (849,100)           --              --
     Advertising and other           (764,635)       (585,338)       (758,207)
                                 ------------    ------------    ------------
                                   (3,937,293)       (585,338)       (758,207)

  Interest income                     100,713          33,514            --
                                 ------------    ------------    ------------
  Net income (loss)              $ 41,630,572    $   (551,824)   $   (758,207)
                                 ============    ============    ============

See accompanying notes.


</TABLE>


                                       F-4
<PAGE>



                          Spiderman Merchandising, L.P.

                    Statements of Partners' Capital (Deficit)

<TABLE>
<S>                                             <C>             <C>             <C>
                                               Marvel          SPE            Total
                                         -----------------------------------------------

  Balance at March 31, 2000 (unaudited)   $       --      $       --      $       --
     Net loss                                 (379,103)       (379,104)       (758,207)
                                         ---------------   -------------    ------------
  Balance at March 31, 2001 (unaudited)       (379,103)       (379,104)       (758,207)

     Net loss                                 (275,912)       (275,912)       (551,824)
     Distributions to partners              (1,578,822)     (1,578,166)     (3,156,988)
                                         ---------------   -------------    ------------
  Balance at March 31, 2002 (unaudited)     (2,233,837)     (2,233,182)     (4,467,019)

     Net income                             20,815,286      20,815,286      41,630,572
     Distributions to partners             (14,779,038)    (14,607,163)    (29,386,201)
                                         ---------------   -------------    ------------
  Balance at March 31, 2003               $  3,802,411    $  3,974,941    $  7,777,352
                                         ===============   =============    ============
See accompanying notes.


</TABLE>


                                       F-5
<PAGE>



                          Spiderman Merchandising, L.P.

                            Statements of Cash Flows

<TABLE>
<S>                                                            <C>             <C>                    <C>
                                                                              Year ended March 31
                                                                  2003               2002             2001
                                                           ---------------------------------------------------
                                                                                (Unaudited)       (Unaudited)
Operating activities
  Net income (loss)                                            $ 41,630,572    $   (551,824)   $   (758,207)
  Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
       Changes in operating assets and liabilities:
        (Increase) in accounts receivable                        (4,885,313)           --              --
        (Increase) in due from Marvel                                (4,143)           --              --
         Increase in deferred revenues                            2,422,361       3,242,560       1,505,000
         Increase (decrease) in accrued liabilities                 458,647            --              --
         Increase in accrued participations                         849,100            --              --
         Increase (decrease) in due to SPE                         (135,573)       (600,643)        758,207
                                                               ------------    ------------    ------------
  Net cash provided by operating activities                      40,335,651       2,090,093       1,505,000

Financing activities
  Amount paid to Marvel                                         (14,779,038)     (1,578,822)           --
  Amount paid to SPE                                            (14,607,163)     (1,578,166)           --
                                                               ------------    ------------    ------------
  Net cash used in financing activities                         (29,386,201)     (3,156,988)           --
                                                               ------------    ------------    ------------
  Net increase (decrease) in cash and cash equivalents           10,949,450      (1,066,895)      1,505,000
  Cash and cash equivalents at beginning of year                    438,105       1,505,000            --
                                                               ------------    ------------    ------------
  Cash and cash equivalents at end of year                     $ 11,387,555    $    438,105    $  1,505,000
                                                               ============    ============    ============

See accompanying notes.
</TABLE>


                                       F-6
<PAGE>



                          Spiderman Merchandising, L.P.

                          Notes to Financial Statements

                                 March 31, 2003


1.   Organization and Summary of Significant Accounting Policies

Organization

Spiderman   Merchandising,   L.P.  (the   Partnership)  is  a  Delaware  limited
partnership.  SPE  Spider-Man  GP Inc.  (SPE-GP)  and  Marvel  Characters,  Inc.
(Marvel) are general  partners and Sony Pictures  Entertainment  Inc.  (SPE) and
Marvel are limited  partners of the  Partnership.  The Partnership was formed on
February 22, 1999 in conjunction  with SPE and Marvel entering into the February
22, 1999 license agreement (License Agreement) to pursue licensing opportunities
relating  to  characters   based  upon  movies  or  television  shows  featuring
Spider-Man and produced by SPE.

The term of the partnership is perpetual and cannot be dissolved,  liquidated or
wound-up  without the  unanimous  written  consent of all of the  partners  (see
footnote 2). Marvel is entitled to an amount  (Marvel LP Share) equal to (A) the
total  of (1)  50% of LP Net  Receipts,  as  defined  (if LP Net  Receipts  is a
positive amount), plus (2) the Marvel LP Distribution Fees, as defined, plus (3)
the Marvel Third Party LP Costs if any, as defined,  less (B) the Unrecouped SPE
Merchandising  Participation,  as defined.  SPE is entitled to an amount (SPE LP
Share)  equal  to the  total of (A) 50% of LP Net  Receipts  plus (B) the SPE LP
Distribution Fees, as defined,  plus (C) the SPE Third Party LP Costs if any, as
defined, plus (D) the SPE Third Party Royalties, as defined, plus (E) the amount
of the  Unrecouped  SPE  Merchandising  Participation  which  is  deducted  from
Marvel's LP Share.

The Partnership  distributes the Marvel LP Share and SPE LP Share on a quarterly
basis.

The Partnership maintains a fiscal year end of March 31.

The accompanying  unaudited financial  statements of the Partnership as of March
31, 2002 and for the years  ended March 31, 2002 and 2001 have been  prepared in
accordance with accounting  principles  generally accepted in the United States.
In the  opinion  of  management,  all  adjustments  consisting  only  of  normal
recurring  accruals  necessary to present  fairly the financial  position of the
Partnership  at March 31, 2002 and the results of its  operations  for the years
ended March 31, 2002 and 2001 have been included.

Cash Equivalents

The Partnership considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.



                                       F-7
<PAGE>




                          Spiderman Merchandising, L.P.

                    Notes to Financial Statements (continued)

                                 March 31, 2003



1.   Organization and Summary of Significant Accounting Policies (continued)

Concentration of Credit Risk and Fair Value of Financial Instruments

Financial instruments which potentially subject the Partnership to concentration
of credit risk consist principally of cash equivalents and accounts receivables.
The Partnership places its cash equivalents with high credit,  quality financial
institutions.  The  Partnership  has not incurred  any losses  relating to these
investments.

Financial  instruments  are carried at historical cost which  approximates  fair
value due to their short term maturities.

The  Partnership  licenses  characters  based upon  movies or  television  shows
featuring  Spider-Man  worldwide.   The  Partnership  performs  periodic  credit
evaluations  of  its  customers'   financial  condition  and  does  not  require
collateral.  Substantially all amounts recorded as accounts  receivable at March
31, 2003 have been collected subsequent to March 31, 2003.

For the year ended March 31, 2003, the Partnership  earned licensing income from
one customer of $11,281,201 which represented 25% of the licensing income earned
by  the  Partnership.  As of  March  31,  2003,  accounts  receivable  from  the
Partnership's  top two  customers  represented  19% and  11%,  respectively,  of
accounts receivable.  The Partnership's  license agreements are primarily in the
software, toy and apparel industries.

Revenue Recognition

Licensing  income is  initially  recorded at an amount equal to the value of the
non-refundable  minimum  guaranteed  royalty  payments,  at  the  time  licensed
characters are available to the licensee,  collection is reasonably assured, and
the related movie or televsion show has been released for general  distribution.
Royalties earned in excess of the guaranteed minimums, if any, are recorded when
reported to the Partnership by licensees.

In the event that any of the above  conditions are not met, the Partnership will
defer the recognition of revenue,  including  amounts  received as nonrefundable
minimum guarantees, until all of the conditions for revenue recognition are met.
Deferred  revenues  recorded in the accompanying  balance sheets reflect amounts
received by the  Partnership  prior to the  conditions  for revenue  recognition
being met.

Income Taxes

The operation of the  Partnership  will be included in the taxable income of the
Partners;  accordingly,  no provision or credit for income taxes is reflected in
the financial statements.




                                       F-8
<PAGE>



1. Organization and Summary of Significant Accounting Policies (continued)

Related Party Transactions

The Partnership is provided office space and certain general and  administrative
services by SPE at no cost. The Partnership does not have any employees. Amounts
due to SPE represent  costs  incurred on behalf of the  Partnership.  During the
year ended March 31, 2003, the Partnership  earned  licensing  income of $66,156
from Marvel  Enterprises,  Inc.,  the parent of Marvel.  At March 31, 2003,  the
Partnership  is  owed  $4,143  from  Marvel  Enterprises,  Inc.  related  to the
licensing  income earned.  During the year ended March 31, 2002, the Partnership
was charged $50,000 by Marvel Enterprises, Inc. for advertising services.

Participations Expenses

Pursuant to the License Agreement,  the Partnership is obligated to make royalty
payments to various  participants  associated with the Spider-Man  movies.  Such
participation   obligations  are  expensed  when  related  licensing  income  is
recognized.

Advertising Expenses

Advertising  expenses are expensed in the period incurred.  Advertising expenses
were $754,908, $576,489 (unaudited) and $758,207 (unaudited) for the years ended
March 31, 2003, 2002 and 2001, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.





                                       F-9
<PAGE>



2. Legal Matter

During  February  2003,  Marvel filed a legal  complaint  concerning the License
Agreement  with SPE.  On April  21,  2003 SPE  filed a  cross-complaint.  In the
complaint and  cross-complaint  the parties'  allegations  include,  but are not
limited to,  breach of contract,  fraud,  and breach of fiduciary  duty.  Relief
sought  under  the  complaint  includes  rescission  of the  License  Agreement,
dissolution of the Partnership,  and  restructuring  of the License  Agreement's
financial  terms.  The  outcome  of these  legal  matters  and its impact on the
Partnership's financial statements cannot be determined at this time.

3. Subsequent Event

Subsequent to March 31, 2003,  the  Partnership  distributed  $11,054,542 to its
Partners.


                                       F-10
<PAGE>