<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM 10-Q

(Mark One)


         QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
  X      EXCHANGE ACT OF 1934
------

For the quarterly period ended September 30, 2000

                                       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 Number: 0-25098

                            Family Golf Centers, Inc.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

         Delaware                                       11-3223246
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                              538 Broadhollow Road
                            Melville, New York 11747
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (631) 694-1666
--------------------------------------------------------------------------------
                         (Registrant's telephone number)


--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if changed since last Report)

Check whether the registrant (1) has 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 report(s), and (2)
has been subject to such filing requirements for the past 90 days.
Yes  X     No
    ---       ---

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
                Class                      Outstanding as of  November 13, 2000
--------------------------------------     ------------------------------------
Common Stock, par value $.01 per share                  26,039,272

Transitional Small Business Disclosure Format (Check one):  Yes          No  X
                                                                ------      ---

<PAGE>


ITEM 1.


                   FAMILY GOLF CENTERS, INC. AND SUBSIDIARIES
              UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              INTRODUCTORY COMMENT

         The condensed consolidated financial statements included herein have
been prepared by Family Golf Centers, Inc. (the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
management of the Company believes that the disclosures are adequate to make the
information presented not misleading. These condensed consolidated financial
statements should be read in conjunction with the notes thereto. In the opinion
of the management of the Company, the condensed consolidated financial
statements include all adjustments, consisting of normal recurring adjustments,
necessary to fairly present the results for the interim periods to which these
financial statements relate.

The results of operations of the Company for the nine months ended September 30,
2000 are not necessarily indicative of the results to be expected for the full
year.








                                      -2-


<PAGE>


                   FAMILY GOLF CENTERS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (DOLLARS IN THOUSANDS, EXCEPT PAR VALUE)

<TABLE>
<CAPTION>
                                                                         SEPTEMBER 30,         DECEMBER 31,
                               ASSETS                                         2000                 1999
                                                                         -------------         ------------
                                                                          (UNAUDITED)
<S>                                                                      <C>                   <C>
Current assets:
  Cash and cash equivalents                                               $    1,016            $    2,852
  Restricted cash deposits                                                       309                   689
  Inventories                                                                  3,750                10,755
  Prepaid expenses and other current assets                                    5,132                 4,858
  Prepaid and refundable income taxes                                            131                 9,780
                                                                          ----------            ----------
          Total current assets                                                10,338                28,934
Property, plant and equipment, net                                           346,114               381,066
Assets held for sale                                                                                41,471
Loan acquisition costs, net                                                                          7,795
Other assets                                                                   4,866                 5,511
Excess of cost over fair value of assets acquired                             20,933                26,609
                                                                          ----------            ----------
          TOTAL                                                           $  382,251            $  491,386
                                                                          ==========            ==========


                             LIABILITIES
Current liabilities:
  Accounts payable, accrued expenses and other current liabilities        $    8,214            $   26,053
  Convertible subordinated notes                                                                   115,000
  Current portion of long-term obligations                                                         184,832
  Borrowings under DIP facility                                                3,500
                                                                          ----------            ----------
          Total current liabilities                                           11,714               325,885
Long-term obligations (less current portion)                                                         5,923
Liabilities Subject to Compromise                                            322,229
Deferred rent                                                                                        2,359
Other liabilities                                                                                    4,614
                                                                          ----------            ----------
         Total liabilities                                                   333,943               338,781
                                                                          ----------            ----------

Minority interest                                                                 22                    22
                                                                          ----------            ----------

Commitments and contingencies

                        STOCKHOLDERS' EQUITY
Preferred stock - authorized 2,000,000 shares, none outstanding
Common stock - authorized 50,000,000 shares, $.01 par value;
26,039,272 and 26,039,000 shares issued and outstanding at
September 30, 2000 and December 31, 1999, respectively                           260                   260
Additional paid-in capital                                                   291,671               291,671
Deficit                                                                     (243,287)             (138,838)
Accumulated other comprehensive income:
   Foreign currency translation adjustment                                      (247)                 (251)
Unearned compensation                                                            (64)                 (212)
Treasury shares                                                                  (47)                  (47)
                                                                          ----------            ----------
         Total stockholders' equity                                           48,286               152,583
                                                                          ----------            ----------

          TOTAL                                                           $  382,251            $  491,386
                                                                          ==========            ==========
</TABLE>


   The accompanying notes to financial statements are an integral part hereof.



                                      -3-

<PAGE>

                   FAMILY GOLF CENTERS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (Dollars in thousands, except par value)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED               THREE MONTHS ENDED
                                                                      SEPTEMBER  30,                  SEPTEMBER 30,
                                                                --------------------------       -------------------------
                                                                  2000              1999           2000             1999
                                                                --------          --------       --------         --------
<S>                                                            <C>               <C>            <C>              <C>
Operating revenues                                             $  89,546          $ 96,892       $ 31,201         $ 34,045
Merchandise sales                                                 14,207            29,902          4,830           10,102
                                                               ---------          --------       --------         --------
     Total revenue                                               103,753           126,794         36,031           44,147
Operating expenses                                                98,041            96,790         34,167           41,010
Cost of merchandise sold                                          10,938            29,320          3,669           15,601
Selling, general and
 Administrative expenses                                          11,065            11,638          3,734            4,057
Loss on sales or disposal of assets                               29,298            58,059         23,828           58,059
                                                               ---------          --------       --------         --------

Loss before, interest expense, other income, reorganization
items, income taxes and extraordinary item                       (45,589)          (69,013)       (29,367)         (74,580)
Interest expense                                                 (12,939)          (13,924)        (1,530)          (6,598)
Other income                                                         491               664             69              170
                                                               ---------          --------       --------         --------
Loss before reorganization items, income taxes and
extraordinary item                                               (58,037)          (82,273)       (30,828)         (81,008)
Reorganization items:
  Professional and bank fees                                       6,662                            1,189
  Provision for loss on assets under contract for sale            32,772
                                                               ---------          --------       --------         --------
Loss before income taxes and extraordinary item                  (97,471)          (82,273)       (32,017)         (81,008)
                                                               ---------          --------       --------         --------
Income tax expense (benefit)                                         539           (17,969)           354          (17,476)
                                                               ---------          --------       --------         --------
Loss before extraordinary item                                 $ (98,010)         $(64,304)      $(32,371)        $(63,532)
Extraordinary item - loss on disposition of
  Pre-Combination Facilities                                       6,439
                                                               ---------          --------       --------         --------
Net Loss                                                       $(104,449)         $(64,304)      $(32,371)        $(63,532)
                                                               =========          ========       ========         ========
Basic and diluted loss per share:
Loss before extraordiary item                                   $  (3.77)         $  (2.46)      $  (1.24)        $  (2.44)
Extraordinary item                                                  (.24)
                                                                --------          --------       --------         --------
Net loss                                                        $  (4.01)         $  (2.46)      $  (1.24)        $  (2.44)
                                                                ========          ========       ========         ========
Weighted average shares outstanding - Basic and Diluted
(in thousands)                                                    26,039            26,064         26,039           26,038
                                                                ========          ========       ========         ========
</TABLE>

    The accompany notes to financial statements are an integral part hereof.



                                      -4-

<PAGE>

                   FAMILY GOLF CENTERS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                             (Dollars in thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                           NINE MONTHS ENDED
                                                                                              SEPTEMBER 30,
                                                                                    -----------------------------
                                                                                       2000                1999
                                                                                    ---------            --------
 <S>                                                                               <C>                  <C>
  Cash flows from operating activities:
   Net loss                                                                         $(104,449)           ($64,304)
   Adjustments to reconcile net loss to net cash
    provided by operating activities:
   Depreciation and amortization                                                       15,357              15,743
   Non-cash asset impairment and disposition of assets                                 68,509              57,059
   Non-cash operating asset write down                                                                      3,915
   Inventory valuation write-down                                                                           3,485
   Issuance of stock for compensation                                                     148                 144
   Deferred tax benefit                                                                                    (3,217)
   Decrease in inventories                                                              5,389               5,737
   (Increase) in prepaid expenses and other current assets                               (853)             (3,594)
   Decrease (increase) in prepaid income taxes                                          9,649             (10,737)
   (Increase) decrease in other assets                                                   (101)              2,344
   Increase in accounts payable and accrued expenses                                    6,725               4,947
   Increase in other liabilities                                                                            2,118
   (Decrease) in income taxes payable                                                                      (2,590)
    Increase in deferred rent                                                                                 456
                                                                                    ---------            --------
       Net cash provided by operating activities                                          374              11,506
                                                                                    ---------            --------
  Cash flows from investing activities:
  Proceeds from assets sales                                                           10,003
  Acquisitions of property and equipment                                               (8,829)            (64,907)
  Acquisitions of goodwill                                                                                 (2,331)
  Restricted cash deposits                                                                380                 (17)
  Net proceeds from sale of short-term investments                                                         17,374
  Foreign currency translation adjustment                                                   4
                                                                                    ---------            --------
      Net cash provided by (used in) investing activities                               1,558             (49,881)
                                                                                    ---------            --------
  Cash flows from financing activities:
      (Increase) in loan acquisition costs                                             (2,185)               (493)
      Proceeds from loans, banks and others                                             9,969              54,551
      Repayment of bank loans                                                         (11,552)            (14,276)
                                                                                    ---------            --------
     Net cash provided by (used in) financing activities                               (3,768)             39,782
                                                                                    ---------            --------
  NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                 (1,836)              1,407
  Cash and cash equivalents - beginning of period                                       2,852               3,878
                                                                                    ---------            --------
  CASH AND CASH EQUIVALENTS - END OF PERIOD                                         $   1,016            $  5,285
                                                                                    =========            ========

  Supplemental and noncash disclosures:
     Acquisition of property in exchange for common stock                                                $    522
     Acquisition of goodwill in exchange for mortgages, notes, and common stock                             1,012
     Property additions accrued but not paid                                                                  821
     Interest paid                                                                  $   8,409               8,733
     Taxes paid                                                                           424                 383
</TABLE>


   The accompanying notes to financial statements are an integral part hereof.




                                      -5-

<PAGE>



                   FAMILY GOLF CENTERS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000

         (NOTE A) -  PROCEEDINGS UNDER CHAPTER 11 AND BASIS OF PRESENTATION:

         [1] THE COMPANY AND SUBSEQUENT EVENTS
         Family Golf Centers, Inc. (the "Parent") and its wholly owned
         subsidiaries (together with the Parent, "FGC" or the "Company")
         operates golf centers designed to provide a wide variety of practice
         opportunities, including facilities for driving, chipping, putting,
         pitching and sand play. In addition, FGC's golf centers typically
         offer golf lessons instructed by PGA-certified golf professionals, pro
         shops and other amenities to encourage family participation. As of
         September 30, 2000, FGC owned, leased or managed 103 golf facilities
         comprised of 79 golf centers and 24 combination golf center and golf
         course facilities located in 23 states and three Canadian provinces.

         In addition to its golf business, FGC operates sports and family
         entertainment facilities, including ice rinks and family sports
         supercenters. As of September 30, 2000, FGC owned, leased or managed 16
         ice rink facilities and family entertainment centers.

         On May 4, 2000 (the "Petition Date"), FGC, excluding its Canadian
         subsidiaries, (the "Debtors") filed voluntary petitions for relief
         under Chapter 11 of the United States Bankruptcy Code ("Chapter 11") in
         the United States Bankruptcy Courts for the Southern District of New
         York (the "Bankruptcy Court"). The Chapter 11 cases are being jointly
         administered for procedural purposes only. The Debtors are operating
         their respective businesses as debtors-in-possession. On May 12, 2000,
         the office of the United States Trustee for the Southern District of
         New York, appointed an Official Committee of Unsecured Creditors.

         On August 1, 2000, the parent and certain of its subsidiaries entered
         into an Agreement of Sale, as amended, (the "Agreement of Sale") to
         sell and assign its fee owned interests and the right to control the
         disposition of its leasehold interests in 35 golf properties to KLAK
         Golf, L.L.C. (the "Purchaser") for a purchase price of $16.2 million
         in cash. The Agreement of Sale was approved by the Bankruptcy Court at
         a hearing on August 14, 2000. The closing of this transaction occurred
         on October 5, 2000, despite the filing by ChinaTrust Bank (USA) of a
         notice of appeal from the order approving this transaction on
         September 15, 2000. Net proceeds from the sale of $14.8 million were
         deposited into an interest-bearing escrow account for the benefit of
         FGC's secured creditors. Of the 25 leased properties included in the
         transaction, the Purchaser elected to assume 10 leasehold interests
         and rejected 15. The Company may decide to reject the leases of all
         or certain of the properties rejected by the Purchaser.

         Included in the loss for the period ended September 30, 2000 is a
         provision for loss on assets under Agreement of Sale amounting to $39.2
         million, of which $32.8 million of the loss is included in
         reorganization items and $6.4 million is recorded as an extraordinary
         item. The 35 golf properties included in the sale to KLAK Golf, L.L.C.



                                      -6-

<PAGE>


         contributed $12.1 million to total revenue and a loss of $3.3 million
         to the net loss for the period ended September 30, 2000 and $17.5
         million to total revenue and a loss of $4.4 million for the period
         ended September 30, 1999.

         The accompanying unaudited financial statements have been prepared in
         accordance with generally accepted accounting principles applicable to
         a going concern, which principles, except as otherwise disclosed,
         assume continuity of operations, that assets will be realized and
         liabilities will be discharged in the normal course of business. As a
         result of the Chapter 11 case and circumstances relating to this
         event, including the Company's debt structure, its recurring losses,
         and current economic conditions, such realization of assets and
         liquidation of liabilities are subject to significant uncertainty.
         However, in connection with the Chapter 11 filing, the Company is
         required to report in accordance with Statement of Position 90-7
         ("Financial Reporting by Entities in Reorganization Under the
         Bankruptcy Code") for financial statements for the period beginning
         May 4, 2000 and thereafter. Due to the Company's Chapter 11 filing,
         the value of certain of the Company's property and equipment, as well
         as goodwill, may be impaired. Additionally, the amounts reported on
         the consolidated condensed balance sheet could materially change as a
         result of a plan of reorganization or liquidation of assets, since
         such reported amounts do not give effect to adjustments to the
         carrying value of the underlying assets or amounts of liabilities that
         may ultimately result.

         In connection with the Company's decision to reject certain leases, the
         Company recorded a loss on the disposal of assets in the amount of $7.7
         million and an impairment charge of $16.1 million during the period
         ended September 30, 2000.

         The interim financial statements, prepared in accordance with Statement
         of Position 90-7 ("Financial Reporting by Entities in Reorganization
         under the Bankruptcy Code") do not reflect adjustments that would be
         necessary if the going concern basis was not appropriate. If the going
         concern basis were not appropriate, significant adjustments would be
         necessary in the carrying value of assets and liabilities, the
         reported revenues and expenses and the balance sheet classifications
         used. Additionally, the amounts reported could materially change
         because of a plan of reorganization or liquidation of assets, since
         the reported amounts in these interim consolidated financial
         statements do not give effect to adjustments to the carrying value of
         the underlying assets or amounts of liabilities that may ultimately
         result. The appropriateness of the going concern basis is dependent
         upon, among other things, confirmation of a plan of reorganization,
         future profitable operations, the ability to comply with the
         provisions of the debtor-in-possession revolving credit agreements
         (the "DIP Facility") and the ability to generate sufficient cash from
         operations.

         In the Chapter 11 cases, the equity and liabilities of FGC as of the
         Petition Date are subject to compromise or other treatment under a plan
         of reorganization to be confirmed by the Bankruptcy Court after
         submission to any required vote by affected parties. Generally, all
         actions to enforce or otherwise effect repayment of pre-Chapter 11
         liabilities as well as all pending litigation against the Debtors are
         stayed while the Debtors continue their business operations as
         debtors-in-possession. The Debtors will notify all known claimants
         by the bar date, of their need to file a proof of claim with the
         Bankruptcy Court. A bar date is the date by which claims against the
         Company must be filed if the claimants wish to receive any distribution


                                      -7-

<PAGE>

         in the Chapter 11 cases. A bar date has not yet been established in
         the Chapter 11 cases. Differences between amounts shown by the Debtors
         and eventual claims filed by creditors will be investigated and will
         be either amicably resolved or adjudicated before the Bankruptcy
         Court. The ultimate amount of and settlement terms for such
         liabilities are subject to an approved plan of reorganization and
         accordingly, are not presently determinable.

         Under the Bankruptcy Code, the Debtors may elect to assume or reject
         real estate leases, personal property leases and other pre-petition
         executory contracts, subject to Bankruptcy Court approval. Claims for
         damages resulting from the rejection of any such leases and other
         executory contracts may be subject to a separate bar date.

         The amount of liabilities reported on the condensed consolidated
         balance sheet may vary significantly from the stated amount of proofs
         of claim filed with the Bankruptcy Court and may be
         subject to future adjustment depending on Bankruptcy Court action,
         developments with respect to potential disputed claims, determination
         as to the value of any collateral securing claims, or other events.

         Reorganization items include professional fees for accounting,
         legal and consulting services provided to the Debtors, certain
         creditors and the Official Committee of Unsecured Creditors in
         connection with the Chapter 11 filing. Reorganization items also
         include a provision for loss on assets under the Agreement of Sale in
         connection with the sale of up to 35 golf properties to KLAK Golf,
         L.L.C. The Company recorded a loss of $39.2 million in connection with
         the sale, $32.8 million included in reorganization items and $6.4
         million recorded as an extraordinary item.

         In the opinion of the Company's management, the accompanying unaudited
         consolidated condensed financial statements contain all adjustments
         consisting of normal recurring accruals necessary to present fairly the
         financial position of the Company as of September 30, 2000 and the
         results of its operations and cash flows for the nine-month periods
         ended September 30, 2000 and 1999, but are not necessarily indicative
         of the results to be expected for the full year.

         Certain reclassifications to the prior period's financial statements
         have been made to conform to classifications used in the current
         periods. For purposes of presentation, property, plant and equipment,
         including assets held for sale of $41,471 at December 31, 1999 have
         been combined at September 30, 2000, and expenses incurred through
         March 31, 2000 amounting to $1.8 million, in connection with the
         reorganization have been included with reorganization items through
         September 30, 2000.

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities, disclosure of contingent assets and liabilities as of the
         balance sheet date and revenues and expenses during the reporting
         period. Actual amounts could differ from those estimates.



                                      -8-

<PAGE>

         Certain information and footnote disclosures normally included in the
         Company's annual audited financial statements, prepared in accordance
         with generally accepted accounting principles have been omitted. It is
         suggested that these consolidated condensed financial statements be
         read in conjunction with the financial statements and notes thereto
         included in FGC's audited financial statements for the year ended
         December 31, 1999, which is included in its Annual Report on Form 10-K
         for the fiscal year ended December 31, 1999 filed in April 2000.


         [2] PRINCIPLES OF CONSOLIDATION:

         The consolidated financial statements include the accounts of Family
         Golf Centers, Inc. and its wholly owned and majority owned subsidiaries
         herein referred to as "FGC" and the "Company". All significant
         intercompany transactions and accounts have been eliminated. Minority
         interests in the FGC's operations were insignificant.

         (NOTE B) DEBTOR IN POSSESSION FACILITY:

         In connection with the Company's Chapter 11 filing, the Debtors entered
         into a debtor-in-possession ("DIP") credit facility, dated June 2, 2000
         (the "DIP Facility"), with The Chase Manhattan Bank acting for itself
         and as agent for a syndicate of banks. The DIP Facility, which has been
         approved by the Bankruptcy Court, provides for revolving credit loans
         up to a maximum of $15 million outstanding. The DIP Facility is
         available to the Debtors for working capital and to pay post-petition
         operating expenses. As of September 30, 2000, the Debtors borrowed $3.5
         million under the DIP Facility.

         Amounts outstanding under the DIP Facility bear interest at a rate of
         approximately prime plus 1 1/2% per annum. The terms of the DIP
         Facility contain certain restrictive covenants including: limitations
         on the incurrence of additional guarantees, liens and indebtedness, and
         limitations on the sale of assets and the making of capital
         expenditures. The DIP Facility also requires that the Company meet
         certain minimum earnings before taxes and other expenses as defined. As
         of September 30, 2000, the Company was not in compliance with the
         covenants under the DIP Facility. Notwithstanding such non-compliance,
         the lenders have permitted the Company to continue to draw down under
         the existing Agreement but have reserved their rights to assert their
         remedies at any time, including the right to accelerate all of the
         Company's obligations under the DIP Facility. The Company is currently
         negotiating an amendment to the DIP Facility.

         The DIP Facility matures on May 5, 2001, or earlier upon the
         occurrence of certain events, including confirmation of a Chapter 11
         plan of reorganization by the Bankruptcy Court. The DIP Facility
         provides for an automatic extension of the maturity date to November 7,
         2001 in the event the Company receives, on or prior to May 5, 2001, in
         excess of $50.0 million in net cash proceeds from the sale of assets.



                                      -9-

<PAGE>


         (NOTE C) INVENTORIES:

         Inventory consists of merchandise for sale in the pro shop at each
         facility and is valued at the lower of cost on a first-in, first-out
         (FIFO) basis or market.

         (NOTE D) ASSET DISPOSITIONS:

         On August 1, 2000, the Parent and certain of its subsidiaries entered
         into an Agreement of Sale, as amended, (the "Agreement of Sale") to
         sell and assign its fee owned interests and the right to control the
         disposition of its leasehold interests in 35 golf properties to KLAK
         Golf, L.L.C. (the "Purchaser") for a purchase price of $16.2 million
         in cash. The Agreement of Sale was approved by the Bankruptcy Court at
         a hearing on August 14, 2000. The closing of this transaction occurred
         on October 5, 2000, despite the filing by ChinaTrust Bank (USA) of a
         notice of appeal from the order approving this transaction on
         September 15, 2000. Net proceeds from the sale of $14.8 million were
         deposited into an interest-bearing escrow account for the benefit of
         FGC's secured creditors.

         In the first quarter of 2000, the Company sold the assets of three golf
         facilities in Tucson, Arizona, Mesa, Arizona and Olympia, Washington as
         well as one ice rink facility in Simsbury, Connecticut. The Company
         also sold a golf school located in Hilton Head, South Carolina. The
         aggregate proceeds for these transactions were $9.5 million. Also, the
         Company also terminated its lease agreements at Colorado Springs,
         Colorado, Olney, Maryland and New York, New York. As of December 31,
         1999 certain of these assets were classified as held for sale and the
         losses incurred in conjunction with their disposition were recorded in
         the year ended December 31, 1999.

         In March 2000, the Company wrote off $5.4 million in connection with
         the Woodbridge, New Jersey construction project, which is included in
         the loss on sale or disposal of assets. In April 1998, the Company
         entered into agreements with the Township of Woodbridge ("Township") to
         lease, construct and operate an ice rink facility with two sheets of
         ice and a family entertainment center. In February 2000, the Township
         served the Company with a Notice to Quit Termination of Tenancy and
         Demand for Possession based upon the Company's alleged breach of these
         agreements. The Company entered into a settlement agreement with the
         Township on April 21, 2000 whereby the 1998 agreements were terminated,
         the Company surrendered possession of the site to the Township, the
         Township released the Company from certain performance bonds and
         reimbursed the company for certain costs in connection with the
         settlement.



                                      -10-

<PAGE>


         (NOTE E) BUSINESS SEGMENT INFORMATION:

         Information concerning operations by industry segment is as follows
         (dollars in thousands):

<TABLE>
<CAPTION>
                                                        Golf        Non-Golf
                                                     Operations    Operations   Consolidated
                                                     ----------    ----------   ------------
        <S>                                          <C>          <C>           <C>
         Nine months ended September 30, 2000
         Total revenue                                  78,024       25,729        103,753
         Operating loss                                (42,633)      (2,956)       (45,589)
         Depreciation and amortization                  11,382        3,975         15,357
         Identifiable assets                           263,049      119,202        382,251
         Capital expenditures                            7,251        1,578          8,829



         Nine months ended September 30, 1999
         Total revenue                                $100,963     $ 25,831      $ 126,794
         Operating income (loss)                       (69,742)         729        (69,013)
         Depreciation and amortization                  12,283        3,460         15,743
         Identifiable assets                           419,148      131,748        550,896
         Capital expenditures                           30,304       36,934         67,238

         Three  months ended September 30, 2000
         Total revenue                                  29,028        7,003         36,031
         Operating loss                                (24,610)      (4,757)       (29,367)
         Depreciation and amortization                   3,539        1,314          4,853

         Three months ended September 30, 1999
         Total revenue                                 $36,263     $  7,884        $44,147
         Operating loss                                (73,741)        (839)       (74,580)
         Depreciation and amortization                   5,056        1,291          6,347
</TABLE>

         Non-golf operations relate to complementary sports and family
         entertainment facilities which includes ice rink facilities, soccer
         fields and other indoor family sports and amusements.

         NOTE F - LIABILITIES SUBJECT TO COMPROMISE

         The principal categories of obligations classified as liabilities
         subject to compromise under the reorganization proceeding are
         identified below. The amounts in total may vary significantly from the
         stated amounts of proofs of claims that ultimately will be filed with
         the Bankruptcy Court, and may be subject to future adjustments
         depending on Bankruptcy Court action, further developments with respect
         to potential disputed claims, and determination as to the value of any
         collateral securing claims or other events. Additional claims may arise
         from the rejection of executory contracts by the Debtors.



                                      -11-

<PAGE>


         To date, no bar date has been set, therefore, liabilities subject to
         compromise do not include rejection damages and other potential claims.
         At September 30, 2000, liabilities subject to compromise were comprised
         of the following:

                                                                    (dollars in
                                                                     thousands)

         Borrowing under revolving credit facilities                  $127,687
         5 3/4% Convertible Subordinated Notes                         115,000
         Mortgage and other notes                                       60,404
         Accrued interest                                                5,469
         Accounts payable, accrued interest and
           Expenses and other liabilities                               23,649
         Less: Debt discount and debt acquisition cost                  (9,980)
                                                                      --------
                                                                      $322,229
                                                                      ========

         (NOTE G) ASSET IMPAIRMENT AND OTHER CHARGES:

         As a result of operating losses, the Company's management performed a
         review of long-lived assets in accordance with Statement of Financial
         Accounting Standards No. 121 Accounting for the Impairment of
         Long-Lived Assets and for Long-Lived Assets to Be Disposed Of' ("SFAS
         No. 121") and determined that events and changes in circumstances have
         resulted in the carrying amount of certain long-lived assets exceeding
         the sum of the expected future cash flows associated with such assets.
         The measurement of the impairment losses recognized was based on the
         difference between the fair value, net of estimated disposal costs,
         and the carrying amounts of the assets.

         In connection with such review a decision was made to exit various
         areas of operations that were underperforming. As of September 30,
         2000, the Company identified 5 golf facilities where it intends to
         cease operations. The Company has recorded an impairment charge of $7.7
         million to write down the carrying amount of such assets to their
         estimated fair value. There can be no assurance that the estimates of
         fair value used by the Company will approximate the actual selling
         price of such assets upon their sale or disposition. Further, the
         Company has also identified 21 underperforming golf facilities whose
         undiscounted future cash flows are not expected to result in the
         recovery of the carrying amount of such assets, resulting in an
         impairment charge of $16.1 million. In the aggregate the Company
         recorded $23.8 million in charges for write-downs of long-lived assets
         and related costs in the third quarter.



                                      -12-

<PAGE>


         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following discussion and analysis should be read in conjunction
         with the Company's financial statements and the notes thereto appearing
         elsewhere in the Report. The Report contains statements which
         constitute forward-looking statements within the meaning of the Private
         Securities Litigation Reform Act of 1995. These statements appear in a
         number of places in the Report and include statements regarding the
         intent, belief or current expectations of the Company with respect to
         (i) the Company's acquisition and financing plans, (ii) trends
         affecting the Company's financial condition or results of operations,
         (iii) the impact of competition and (iv) the expansion and integration
         of certain operations. The Company cautions that forward-looking
         statements are not guarantees of future performance and involve risks
         and uncertainties, and that actual results may differ materially from
         those in the forward-looking statements as a result of various factors.
         The information contained in this Report, including, without
         limitation, the information under "Item 2. Management's Discussion and
         Analysis of Financial Condition and Results of Operations", and the
         information contained in the Company's Annual Report on Form 10-K for
         the year ended 1999 under "Risk Factors" and "Business" identifies
         important factors that could cause or contribute to such differences.


         CHAPTER 11 FILING, LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2000, we had cash, cash equivalents and short-term
         investments of $1.3 million, inclusive of restricted cash deposits
         compared to $3.5 million at December 31, 1999. The decrease of $2.2
         million was due principally to operating losses incurred in the nine
         months ended September 30, 2000.

         Our outstanding indebtedness as of September 30, 2000 including 5 3/4%
         Convertible Subordinated Notes and other indebtedness of $304.1
         million, bears interest at fixed and variable rates ranging from 5 3/4%
         to 11.5% per annum. However, as a result of the Chapter 11 filing, no
         principal or interest payments are being made on unsecured pre-petition
         debt. Interest on pre-petition unsecured obligations is not being
         accrued after the Petition Date. Such unaccrued interest amounts to
         $9.3 million through September 30, 2000. The Bankruptcy Court has
         authorized, and the Company has made, interest payments on certain
         secured debt from the Petition Date.

         On May 2, 2000 we received notices of default from our lenders under
         our $130 million credit facility and under our Bank of America loan
         agreement for our failure to make our monthly interest payments which
         were due on May 2, 2000. As a result of such defaults, the lenders
         declared all amounts under such loan facilities to be immediately due
         and payable. The lenders under of $130 million credit facility notified
         us that we were prohibited from making any payment to the holders of
         our 5 3/4% Convertible Subordinated Notes. Such defaults triggered
         cross-defaults under substantially all of the Company's senior
         indebtedness.



                                      -13-

<PAGE>


         On May 4, 2000, the Company, excluding its Canadian subsidiaries, filed
         petitions for relief under Chapter 11 of the United States
         Bankruptcy Code. The Company will continue to conduct business in the
         ordinary course as debtors-in-possession under the protection of the
         Bankruptcy Court while a plan of reorganization is developed.

         Requirements for the payment of debt, accounts payable and other
         liabilities that arose prior to the Chapter 11 filings are in most
         cases stayed while we are under the protection of the Bankruptcy Code.
         The Bankruptcy Court has issued an order authorizing the payment of
         certain pre-petition wages, employee benefits and other payments that
         are essential to our daily operations.

         On June 2, 2000 the Bankruptcy court approved a debtor-in-possession
         credit facility (the "DIP Facility") of $15 million from The Chase
         Manhattan Bank ("Chase") acting for itself and as agent for a syndicate
         of banks. Borrowings under the DIP Facility bear interest at a rate of
         approximately the prime rate plus 1 1/2% per annum. Borrowings under
         the DIP Facility are secured by a first perfected lien on all of our
         unencumbered assets, a senior priming lien on all of our pre-petition
         assets which were subject to existing liens under our $130 million
         credit facility with Chase and a junior lien on all of our assets
         which were subject to other existing perfected liens.

         The terms of the DIP Facility contain certain restrictive covenants
         including: limitations on the incurrence of additional guarantees,
         liens and indebtedness, and limitations on the sale of assets and the
         making of capital expenditures. The DIP Facility also requires that we
         meet certain minimum earnings before taxes and other expenses as
         defined. As of September 30, 2000, the Company was not in compliance
         with the covenants under the DIP Facility. Notwithstanding such
         non-compliance, the Lenders have permitted the Company to continue to
         draw down under the existing Agreement but have reserved their rights
         to assert their remedies at any time, including the right to accelerate
         all of the Company's obligations under the DIP Facility. The Company is
         currently negotiating an amendment to the DIP Facility.

         The DIP Facility is intended to provide the Company with cash and
         liquidity to ensure that it can conduct its operations and pay for
         goods and services in the normal course during the Chapter 11
         proceedings. The Company's primary sources of liquidity are cash flow
         from operations and the DIP Facility.

         The Company's current cash flow projections indicate that by the end
         of this year it will have utilized substantially all of its
         availability under the DIP Facility. The Company can give no assurance
         that it will be able to obtain the additional liquidity needed in the
         first quarter of 2001 to continue its operations. The Company's
         management also believes that it is unlikely that the holders of its
         publicly traded equity will realize any recovery in a plan of
         reorganization or liquidation.

         The Company's net cash provided by operations during the nine months
         ended September 30, 2000 decreased by $11.1 million over the same
         period of the prior year due to the increase in losses in the period.



                                      -14-

<PAGE>


         Inventory decreased by $5.4 million due to a shortage of cash to
         purchase merchandise and the slow-down in shipments by merchandise
         vendors prior to the Petition Date.

         Capital expenditures for the nine months ended September 30, 2000 were
         principally for the ongoing construction of our Fremont, California and
         San Bruno, California sites and the improvement of existing facilities.

         Net cash used in financing activities of $3.8 million included net
         borrowings under the DIP facility of $3.5 million and $11.5 million
         of principal payments on mortgages and notes payable.

         GENERAL

         We operate golf centers in North America. Our golf centers provide a
         wide variety of practice and play opportunities including facilities
         for driving, chipping, putting, pitching and sand play. Our golf
         centers typically offer  pro shops, golf lessons instructed by
         PGA-certified golf professionals and other amenities such as miniature
         golf and snack bars to encourage family participation. We have grown
         from one golf facility in 1992 to 103 as of September 30, 2000. In
         addition, in order to generate additional sources of revenue, attract a
         more diverse customer base and offset the seasonality of our core golf
         business, we also operate sports and family entertainment facilities,
         including ice rinks and "Family Sports Supercenters," which have two or
         more sports-related attractions, such as golf, ice rinks, bowling
         centers, soccer facilities and batting cages, as well as a variety of
         family entertainment activities. As of September 30, 2000, we owned,
         operated, managed or had under construction 103 golf facilities, and
         16 ice rink and family entertainment facilities in 23 states and three
         Canadian provinces.

         Most of the revenue from our golf centers are derived from selling
         tokens and debit cards for use in automated range-ball dispensing
         machines, pro shop merchandise sales, charging for rounds of miniature
         golf, golf lessons and management fees. We also derive revenue from our
         golf centers from food and beverage sales, video games and batting
         cages. We derive revenue from our golf courses from golf club
         membership fees, fees from rounds of golf and golf lessons, pro shop
         merchandise sales and from food and beverage sales at the clubhouses.
         We derive revenue from our ice rinks by renting the rinks to hockey
         leagues and teams and figure skaters, charging admission to our skating
         facilities for public skating, providing lessons through
         USFSA-certified instructors, skate equipment rentals and pro shop
         merchandise sales, as well as from food and beverage sales and video
         games. We derive revenue from our Family Sports Supercenters from
         substantially the same sources as described above. As a result of their
         greater size and number of attractions, our Family Sports Supercenters
         generate significantly more revenue than individual golf centers, and
         generate a majority of their revenue in the first and fourth quarters
         of each calendar year.




                                      -15-

<PAGE>


         RESULTS OF OPERATIONS

         The following table sets forth selected operations data of the Company
         expressed as a percentage of total revenue (except for operating
         expenses which is expressed as a percentage of operating revenue and
         cost of merchandise sold which is expressed as a percentage of
         merchandise sales) for the periods indicated below:

<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED          THREE MONTHS ENDED
                                                                       SEPTEMBER 30,               SEPTEMBER 30,
                                                                    -----------------          -------------------
                                                                    2000         1999          2000           1999
                                                                    ----         ----          ----           ----

        <S>                                                        <C>          <C>           <C>            <C>
         Operating revenues                                         86.3%        76.4%         86.6%          77.1%
         Merchandise sales                                          13.7         23.6          13.4           22.9
                                                                  ------       ------        ------         ------
         Total revenue                                             100.0        100.0         100.0          100.0

         Operating expenses                                        109.5        100.0         109.5          120.6
         Cost of merchandise sold                                   77.0         98.1          76.0          154.4
         Selling, general and administrative expenses               10.7          9.2          10.4            9.2
         Loss on sales or disposal of assets                        29.9         45.8          66.1          131.5
         Loss before interest expense, other income,               (43.9)       (54.4)        (81.5)        (168.9)
         reorganization item, income taxes and extraordinary
         item
         Interest expense                                           12.5         11.0           4.2           14.9
         Other income                                                 .5           .5            .2             .4

         Loss before reorganization charges, income taxes,         (55.9)       (64.9)        (85.6)        (183.5)
         and extraordinary item
         Reorganization items:
           Professional and bank fees                                6.4            -           3.3              -
           Provision for loss on assets under contract
           for sale                                                 31.6            -             -              -
         Loss before income taxes and extraordinary                (93.9)       (64.9)        (88.9)        (183.5)
           item
         Income tax expense (benefit)                                 .5        (14.2)           .9          (39.6)
         Loss before extraordinary item                            (94.4)       (50.7)        (89.8)        (143.9)
         Extraordinary item - loss on disposition of                 6.3            -             -              -
          Pre-Combination Facilities
         Net loss                                                 (100.7)%      (50.7)%       (89.8)%       (143.9)%
</TABLE>




                                      -16-

<PAGE>


         NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED
         SEPTEMBER 30, 1999

         We acquired and disposed of golf centers, ice rinks and family
         entertainment centers at varying times during the year, and as a result
         of the change in the number of facilities open from period to period,
         the comparison between 2000 and 1999 periods may not necessarily be
         meaningful.

         Total revenue for the nine months ended September 30, 2000 was $103.7
         million as compared to $126.8 million for the same period in 1999, a
         decrease of $23.1 million (18%). The overall decrease in revenue was
         primarily attributable to credit restrictions placed on us by vendors
         and the liquidity constraints we faced during the nine months ended
         September 30, 2000. For the 95 golf centers operating for the initial
         nine months ended September 30, 2000 and 1999, total revenues decreased
         16% to $69.2 million in the 2000 period from $86.8 million in the 1999
         period. Operating revenues decreased by 5% to $56.8 million while
         merchandise sales decreased by 52% to $12.4 million

         The liquidity constraints we encountered during the nine months ended
         September 30, 2000 negatively impacted revenues in the period as
         follows: the inability to obtain current product from vendors
         significantly affected merchandise sales and driving range sales; lack
         of funds for advertising contributed to lower sales, particularly at
         the Family Entertainment Centers and newly renovated golf centers; and
         customer concern resulting from negative publicity about our financial
         condition impacted reservations for parties and other functions at our
         Family Sports Supercenters.

         Operating revenue, consisting of all sales except merchandise sales,
         amounted to $89.5 million for the nine months ended September 30, 2000,
         as compared to $96.9 million for the comparable 1999 period, a
         decrease of $7.4 million (7%).

         Merchandise sales, consisting of golf clubs, balls, bags, gloves,
         videos, apparel and related accessories, amounted to $14.2 million for
         the nine months ended September 30, 2000 as compared to $29.9 million
         for the comparable 1999 period, an decrease of $15.7 million (52%). The
         decrease in merchandise sales was primarily due to the lower level of
         merchandise available for sale.

         Operating expenses, consisting of operating wages and employee costs,
         land, rent, depreciation of golf driving range facilities and
         equipment, utilities and facility operating costs, increased to $98.0
         million (109% of operating revenue) in the 2000 period from $96.8
         million (100% of operating revenue) in the 1999 period, an increase of
         $1.2 million (1.2%). The increase in operating expenses was primarily
         due to scheduled rent increases and operating expenses incurred in
         connection with a family entertainment center which opened during the
         third quarter of 1999.

         The cost of merchandise sold decreased to $10.9 million (77% of
         merchandise sales) in the 2000 period from $29.4 million (98% of
         merchandise sales) in the comparable 1999 period. The overall decrease
         in the cost of merchandise sold of $18.5 million (62%) was primarily
         due to the lower level of merchandise sales.

         Selling, general and administrative expenses for the nine months ended
         September 30, 2000 amounted to $11.1 million (10.6% of total
         revenue) compared to $11.6 million (9.7% of total revenue) in the


                                      -17-

<PAGE>

         comparable 1999 period, a decrease of $573,000 (5%). The decrease
         in selling, general and administrative expenses are primarily
         attributable to less liquidity available for advertising and promotion
         during the nine months ended September 30, 2000.

         Interest expenses decreased to $12.9 million for the nine months ended
         September 30, 2000 from $13.9 million in the comparable 1999 period.
         Other income, including interest income, decreased to $491,000 in the
         2000 period from $664,000 in the 1999 period, a decrease of $173,000.


         THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED
         SEPTEMBER 30, 1999

         We acquired and disposed of golf centers, ice rinks and family
         entertainment centers at varying times during the year, and as a result
         of the change in the number of facilities open from period to period,
         the comparison between the 2000 and 1999 periods may not necessarily be
         meaningful.

         Total revenue for the three months ended September 30, 2000 was $36.0
         million as compared to $44.1 million for the same period in 1999, a
         decrease of $8.1 million (18%). The overall decrease in revenue was
         primarily attributable to credit restrictions placed on us by vendors
         and the liquidity constraints we faced during the three months ended
         September 30, 2000. Total revenue for the 98 golf centers operating for
         the full three months ended September 30, 2000 and 1999 decreased 16%
         to $26.7 million in the 2000 period from $32.0 million in the 1999
         period. The decrease in revenues for these golf centers was primarily
         due to our liquidity constraints and credit restrictions placed on us
         by vendors during the three months ended September 30, 2000 and the
         sale or disposal of certain golf and ice facilities in the 2000 period.

         The liquidity crisis we encountered during the three months ended
         September 30, 2000 negatively impacted revenues in the period as
         follows: the inability to obtain current product from vendors
         significantly affected merchandise sales and driving range sales; lack
         of funds for advertising contributed to lower sales, particularly at
         the Family Entertainment Centers and newly renovated golf centers; and
         customer concern resulting from negative publicity about our financial
         condition impacted reservations for parties and other functions at the
         Family Entertainment Centers.



                                      -18-

<PAGE>


         Operating revenue, consisting of all sales except merchandise sales,
         amounted to $31.2 million for the three months ended September 30,
         2000, as compared to $34.0 million for the comparable 1999 period, a
         decrease of $2.8 million (8%). Total operating revenue for the 98 golf
         centers operating for the full three months ended September 30, 2000
         and 1999 decreased 4% to $22.3 million in the 2000 period from $23.1
         million in the 1999 period.

         Merchandise sales, consisting of golf clubs, balls, bags, gloves,
         videos, apparel and related accessories, amounted to $4.8 million for
         three months ended September 30, 2000 as compared to $10.1 million for
         the comparable 1999 period, a decrease of $5.3 million (52%). The
         decrease in merchandise sales was primarily due to the Company's
         inability to obtain sufficient fresh product at its pro shops due to
         its liquidity problems. Total merchandise sales for the 98 golf centers
         operating for the three months ended September 30, 2000 and 1999
         decreased 50% to $4.4 million in the 2000 period from $8.8 million in
         the 1999 period.

         Operating expenses, consisting of operating wages and employee costs,
         land rent, depreciation of golf driving ranges, skating and family
         entertainment facilities and equipment, utilities and all other
         facility operating costs, decreased to $34.1 million (109% of operating
         revenue) in the 2000 period from $41.1 million (121%) of operating
         revenue) in the 1999 period, a decrease of $7 million. The decrease in
         operating expenses was primarily due to the sale or disposal of certain
         golf and ice facilities in the 2000 period.

         The cost of merchandise sold decreased to $3.7 million (76% of
         merchandise sales) in the 2000 period from $15.6 million (154.4%) of
         merchandise sales) in the comparable 1999 period. The overall decrease
         in this cost of $11.9 million (77%) was primarily due to the lower
         level of merchandise sales, and a write down of inventory recorded by
         the Company in September 1999.

         Selling, general and administrative expenses for the three months ended
         September 30, 2000 amounted to $3.7 million (10.3% of total revenue)
         compared to $4 million (9.2% of total revenue) in the comparable 1999
         period. The decrease in selling, general and administrative expenses is
         primarily attributable to less liquidity available for advertising and
         promotion during the three months ended September 30, 2000.

         Interest expense decreased to $1.5 million for the three months ended
         September 30, 2000 from $6.6 million in the comparable 1999 period. The
         decrease in interest expense was due primarily to the Chapter 11 filing
         and the Bankruptcy courts decision not to pay interest on unsecured
         pre-petition debt. Other income, including interest income, decreased
         to $69,000 in the 2000 period as compared to $170,000 in the 1999
         period.

         TRENDS

         On May 4, 2000 (the Petition Date), FGC, excluding the Canadian
         subsidiaries, (the "Debtors") filed petitions for relief under Chapter
         11 of the United States Bankruptcy Code in the United States Bankruptcy




                                      -19-

<PAGE>


         Court for the Southern District of New York. The Debtors are presently
         operating their respective businesses as debtors-in-possession.

         We anticipate that we will continue to incur significant professional
         fees and other restructuring costs in connection with the Chapter 11
         proceeding and the ongoing restructuring of our business operations
         throughout fiscal year 2000. We also believe that revenues will be
         negatively impacted by reduced merchandise sales. Our ability to
         attract and retain personnel may also be negatively impacted by our
         current financial condition.

         Our current cash flow projections project that by the end of this year
         we will have utilized substantially all of our availability under the
         DIP Facility. The Company can give no assurance that it will be able to
         obtain the additional liquidity needed in the first quarter of next
         year.

         SEASONALITY

         Historically, the second and third quarters have accounted for a
         greater portion of the Company's revenues than have the first and
         fourth quarters of the year. This is primarily due to an outdoor
         playing season limited by inclement weather. Although most of the
         Company's facilities are designed to be all-weather, portions of the
         facilities, such as driving ranges and miniature golf courses that are
         outdoors, tend to be vulnerable to weather conditions. Also, golfers
         are less inclined to practice when weather conditions limit their
         ability to play golf on outdoor courses. The Company has acquired golf
         centers in various locations (Arizona, California, Florida, Georgia,
         North Carolina, South Carolina, Texas and Virginia) where inclement
         weather may not limit the outdoor season as much as weather limits the
         outdoor playing season at the Company's golf facilities in Northern
         states. In addition, the ice rink facilities and the Family Sports
         Supercenters are expected to generate a greater portion of their
         revenues in the first and fourth quarters of the years and accordingly,
         may partially offset such seasonality. The timing of new facility
         acquisitions and sales or dispositions may cause the Company's results
         of operations to vary significantly from quarter to quarter.
         Accordingly, period-to-period comparisons are not necessarily
         meaningful and should not be relied on as indicative of future results.

         INFLATION

         There was no significant impact on the Company's operations as a result
         of inflation during the nine months ended September 30, 2000.



                                      -20-

<PAGE>



         PART II - OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS

         As previously reported, during the first quarter of this year, several
         class action lawsuits were filed against the Company and certain of its
         executive officers alleging that federal securities laws were violated
         in connection with the sale of our common stock during July, 1998. On
         or about July 18, 2000, these class action lawsuits were consolidated
         into one and a consolidated amended class action complaint was filed in
         the United States District Court for the Eastern District of New York.
         The Company was not named as a defendant in the amended complaint
         because of its filing for protection under Chapter 11 of the Bankruptcy
         Code.

         On May 4, 2000, FGC excluding its Canadian subsidiaries, filed
         petitions for relief under Chapter 11 of the United States Bankruptcy
         Code in the United States Bankruptcy Court for the Southern District of
         New York. We are presently operating our business as
         debtors-in-possession.

         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                 NONE

         ITEM 3.  DEFAULT UPON SENIOR SECURITIES

         On May 2, 2000 we received notices of default from our lenders under
         our $130 million credit facility and under the Bank of America loan
         agreement for the Company's failure to make its monthly interest
         payments which were due on May 1, 2000. As a result of such defaults,
         the lenders accelerated the Company's obligations under such loan
         agreements and, accordingly, all amounts outstanding were declared
         immediately due and payable. In addition, the lenders under the $130
         million credit facility notified us that we were prohibited from making
         any payments to the holders of the 5 3/4% convertible subordinated
         notes. These defaults also triggered cross-defaults under substantially
         all of our senior indebtedness. On May 4, 2000, the Company, excluding
         its Canadian subsidiaries, filed voluntary petitions for protection
         under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court in
         the Southern District of New York. The filings were consolidated for
         joint administration.

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS       NONE

         ITEM 5.  OTHER INFORMATION

         The Company received notice from the NASDAQ Listing Qualifications
         Staff that it had determined that, given the Company's Chapter 11
         filing, the continued listing of the Company's securities on the NASDAQ
         Stock Market was no longer warranted and, accordingly, the Company's
         securities were de-listed on June 1, 2000.


                                      -21-

<PAGE>


         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      EXHIBITS

         27       FINANCIAL DATA SCHEDULE

         (B)      REPORTS  ON FORM 8-K

                  Current Report on Form 8-K, dated August 28, 2000 and filed on
         August 30, 2000, reporting an Item 5 event.

                  Current Report on Form 8-K, dated June 1, 2000 and filed on
         June 7, 2000, reporting an Item 5 event.




                                      -22-

<PAGE>


         SIGNATURE


                  In accordance with the requirements of the Securities Exchange
         Act of 1934, the registrant caused this report to be signed on its
         behalf by the undersigned, thereunto duly authorized.


         Dated:   __________, 2000
                  Melville, NY


                                         FAMILY GOLF CENTERS, INC.
                                               (Registrant)




                                         By:________________________
                                             Margaret M. Santorufo
                                             Vice President &
                                             Chief Accounting Officer






                                         By:________________________
                                             Pamela S. Charles
                                             Vice President and General Counsel

                                      -23-