SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

(Mark One)

     [X]  Annual report under Section 13 or 15(d) of the Securities Exchange Act
          of 1934 for the fiscal year ended September 30, 2002, or

     [ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934.

Commission File No. 0-29426


                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                    -----------------------------------------
                 (Name of small business issuer in its charter)

                      Florida                             91-1796903
                      -------                             ----------
          (State or other jurisdiction of              (I.R.S. Employer
          incorporation or organization)            Identification Number)

           4901 Vineland Road, Suite 150
                 Orlando, Florida                           32811
                 ----------------                           -----
     (Address of principal executive offices)             (Zip Code)

Issuer's telephone number: (407) 648-4444

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

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

                        No Par Value Class A Common Stock
                Redeemable Class A Common Stock Purchase Warrants
                -------------------------------------------------
                                (Title of Class)

     Check whether the Registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

                               Yes [X]   No [ ]

<PAGE>

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

     As of September 30, 2002, 7,394,840 shares of the Registrant's no par value
Class A Common Stock were outstanding. As of September 30, 2002, the market
value of the Registrant's no par value Class A Common Stock, excluding shares
held by affiliates, was $7,690,634 based upon the closing price of $1.04 per
share of Class A Common Stock on the Nasdaq SmallCap Market.

     The Registrant's revenues for its most recent fiscal year were $5,567,629.

     The following documents are incorporated by reference into Part III: None.



<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS
-------------------------------

     The following is a summary of certain information contained in this Report
and is qualified in its entirety by the detailed information and financial
statements that appear elsewhere herein. Except for the historical information
contained herein, the matters set forth in this Report include forward-looking
statements within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties are detailed in the "Risk Factors"
section of this Item 1 and throughout this Report and will be further discussed
from time to time in periodic reports filed with the Commission. The
forward-looking statements included in this Report speak only as of the date
hereof.

Introduction

     The Orlando Predators Entertainment, Inc. ("OPE", the "Company" or "we")
was organized as a Florida corporation in March 1997 and is in the sports and
entertainment business. OPE (i) owns and operates the Orlando Predators (the
"Predators"), a professional arena football team of the Arena Football League
(the "AFL" or the "League"), (ii) owns and operates two minor league teams of
the arenafootball2 League ("af2"), the Peoria Pirates which commenced play in
the 2001 season, and the Bayou Bears which are scheduled to commence play in the
2004 season; (iii) owns and operates the Louisiana IceGators of the East Coast
Hockey League ("ECHL"), and (iv) owns an additional approximately 9% net revenue
interest in the League (in addition to its approximately 4.5% League ownership
interest it holds through the Predators).

     In October 2000, we entered into an agreement with af2 Enterprises LLC
("af2"), which operates the arenafootball2 League to assist af2 in acquiring
substantially all of the assets of the Indoor Football League ("IFL") through
IFL Acquisition Company ("IFL Acq."), a wholly-owned subsidiary of af2. Under
the terms of our agreement with af2, we contributed (i) $1.1 million in cash
less credits of $251,165, (ii) a $1.75 million promissory note and (iii) 214,286
shares of Class A Common Stock (which we agreed to repurchase from the holders
at their election for $3.50 per share). In exchange, af2 granted us (i) three
af2 memberships in IFL markets, (ii) the first $1 million in expansion fees
earned by the af2 in IFL markets and (iii) all of the tangible personal property
assets of the IFL such as turf fields, football equipment and the like. In
February, 2002, the agreement was modified pursuant to which we issued an
additional 35,000 shares to eliminate our 214,286 share repurchase requirement
and paid $400,000 to cancel the $1.75 million promissory note we had issued.
With respect to the three af2 memberships, we operate the Peoria Pirates and
will operate the Bayou Bears and sold our rights to the Green Bay, Wisconsin
team in October 2002.

     We have incurred substantial and ongoing losses since our inception,
aggregating $15,056,442 through September 30, 2002. Moreover, recently our cash
resources have been reduced to the point that our ability to continue our
operations has been put into jeopardy. In order to generate cash, we have
decided to offer all four of our professional teams for sale and retaining our

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aggregate 9% net revenue interest in the League. Consistent with this strategy,
in December 2002 we entered into a nonbinding letter of intent to sell the
Predators to an investor group led by Brett L. Bouchy, one of our affiliates. We
are continuing to solicit other offers for the Predators from other interested
buyers. The letter of intent we signed is subject to a number of contingencies
including the execution of a definitive purchase agreement, receipt of a
fairness opinion concerning the transaction, improved offers from other
interested buyers and approvals from our Board of Directors and the League.

     Due to the urgency of our cash flow difficulties, we believe we may be
selling the Predators for less than that which we would receive had we the time
to properly market the Predators. Similarly, we believe we may also be required
to sell our other teams at prices below that which we would receive had we the
time to properly market the other teams.

     There can be no assurance that we will be successful in selling any of our
teams. However, if we are successful in selling all four teams, our revenue
would be reduced to the distributions, if any, we will receive generated by our
9% net revenue interest in the League. While our operating expenses would also
be substantially reduced, we can give no assurance that we would be able to
generate sufficient revenue following the team sales to maintain our operations.

Strategy

     Our strategy has been to participate through the operation of the
Predators, the other teams we own and through our League ownership in what we
believe will be the continued growth of the AFL, af2 and the ECHL which in turn
is expected to result in increased revenue to OPE generated from (i) national
(League) and regional (team) broadcast contracts, (ii) national League
sponsorship contracts, (iii) the sale of additional team memberships in the
League, and (iv) increased fan attendance for our teams, together with
appreciation in the value of the teams.

     In a broader sense, our strategy has been to acquire and consolidate the
operations of minor league professional sports teams in order to realize certain
economies of scale available through the operations of these sports franchises.
In this regard, we operate the Peoria Pirates and will operate the Bayou Bears
of the af2 and the Louisiana IceGators of the ECHL. As indicated above, however,
we are considering selling all of our teams due to cash flow difficulties.

     At the team level, our strategy has been to increase fan attendance at team
home games, expand the teams' advertising and sponsorship base, and contract
with additional local and regional broadcasters to broadcast team games.
Notwithstanding our efforts in these regards, we incurred operating losses of
$2,685,690 for the year ended September 30, 2001, $4,951,607 for the year ended
September 30, 2002, and an aggregate loss since inception of $15,056,442.

     We believe that fan attendance will increase based upon the game winning
success (if any) of our teams by increasing media exposure of the teams in their
local markets. Game winning success requires the ongoing recruitment of superior
players. In order to increase media exposure and expand our sponsorship base, we
call upon the media, corporate sponsors and other organizations in our teams'
market areas and we participate in charitable events as a part of a community
relations and recognition program. However, notwithstanding for instance, the
Predators' game winning success, including its victories in the 1998 and 2000
Arena Bowl, game attendance was less in the 2002 season than in the 2001.

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<PAGE>

     Our strategy also includes maintaining and building community support for,
and recognition of, our teams as an ongoing valuable entertainment institution.
We believe that the value of our teams will increase if community support and
recognition are maintained.

History of the AFL

     The AFL governs the arena football teams that comprise the League and sell
team memberships ("Memberships"). The AFL's first season commenced in 1987.
Between 1987 and 2002, the League grew from four teams to 16 teams. For the 2003
season, 16 teams will play including an expansion team in Denver, Colorado.
Since 1992, announced League attendance has grown from 736,000 to over 1,228,000
(including play-off games). Game broadcasts during this period have included
local, regional, ESPN, ESPN 2, TNN and ABC coverage. In the 2002 season, 25
games were broadcast on national cable television stations, including ABC's live
broadcast of Arena Bowl XVI. From 11 million television households in 1994, the
AFL reached over 27.5 million households in 2002.

     In March 2002, the League entered into a broadcasting agreement with NBC
under which NBC will broadcast 71 AFL games, including four regional games each
Sunday, the AFL playoff games and the Arena Bowl. NBC and the League will divide
the advertising revenue equally after payment to NBC of its production costs for
the broadcasts. Broadcast begins in the 2003 season, which the AFL agreed to
reschedule to run from February through June each year. NBC (i) became a revenue
sharing partner of the AFL, (ii) has the rights to renew the broadcasts in
perpetuity, and (iii) is entitled to share in any increased value from the sale
of an AFL team, including the Predators, for more than $12 million.

Arena Football and the Arena Football League

     In 1985, Jim Foster, a professional football marketing executive,
formulated a plan for an indoor professional football game that included a
50-yard playing field, an eight player single platoon system and the use of drop
kicks and rebound nets. The first Arena Football game was played in Rockford,
Illinois on April 26, 1986 with a second game played on February 26, 1987 in
Chicago, Illinois.

     In March 1987 the U.S. Patent Office issued a U.S. Patent ("Patent") to
Gridiron Enterprises, Inc. an Illinois corporation ("Gridiron") for the Arena
Football Game System and rules of play as well as trademarks for the logo and
names associated with Arena Football. In December 1991, the AFL was incorporated
as a nonprofit membership corporation in the state of Delaware. Also in 1991,
Gridiron entered into an exclusive licensing agreement with the AFL to organize,
operate and market Arena Football throughout the United States by selling team
memberships in major markets across the United States. Pursuant to the licensing
agreement, the AFL granted to Gridiron a per team royalty of $20,000 per year in
return for using the game system and rules of play of Arena Football. In August
1998 the AFL purchased all patent and other rights to the Arena Football Game
System from Gridiron for $4,000,000, and the teams were no longer required to
pay the $20,000 per year royalty.

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     Four teams were fielded for the League's inaugural 1987 season. By 1991,
the League had eight teams and had played exhibition games in London and Paris.
In 1992 and 1993, the League fielded 12 teams and 10 teams, respectively, with
some games televised on the ESPN cable network. For 2002, 16 teams played in the
League.

     AFL games are generally played in an indoor basketball/hockey sports arena
which offers fans climate-controlled conditions and a more intimate view of the
game. As a result of the smaller playing field, the rebound nets and a general
emphasis on offensive play, Arena Football games are generally high scoring,
fast-paced action contests.

     AFL game attendance has risen over the years with total fan attendance
exceeding 1,228,000 in the 2002 season. Per game announced attendance averaged
approximately 10,000 during the 2002 season. Announced game attendance
represents attendance figures provided by League teams to the League and the
media and is the industry standard for reporting. League research indicates that
approximately 66% of AFL viewers are male and 34% are female with 60% of such
viewers under the age of 35. In terms of education, we believe that 47% have
college or graduate degrees, 28% have some college attendance and 87% hold at
least high school diplomas.

     AFL player salaries are subject to a collective bargaining agreement
between the League, its member teams and the Arena Football League Players'
Association (AFLPA). See Collective Bargaining Agreement. For the 2002 season,
the Predators' players' total compensation was approximately $1,398,000 in the
aggregate.

     The Predators provide a $250,000 occupational health, accidental death and
disability insurance policy. Each team is required to pay the first $35,000 of
claims for an injured player up to an aggregate of $356,000 for the two Florida
based AFL teams provided through a carrier.

Rules of Arena Football

     Arena Football is played in an indoor arena on a field which consists of a
padded surface 85 feet wide and 50 yards long with eight-yard end zones. The
endzone goalposts are nine feet wide with a cross-bar height of 15 feet compared
to NFL goalposts which are 18 1/2 feet wide with a cross-bar height of 10 feet.
Eight feet above each endzone are goal-side rebound nets which are 30 feet wide
by 32 feet high.

     There are eight players on the field for each team as part of a 24-man
active roster. Players play both offense and defense with the exception of the
kicker, quarterback, an offensive specialist, two defensive specialists and a
kick returner.

     The game is played using an NFL-size football in four 15-minute quarters
with a 15-minute halftime. The game clock stops for out of bounds plays or
incomplete passes only in the last minute of each half, when necessary for
penalties, injuries and time-outs or following points after touchdowns, field
goals and safeties. Accordingly, the average AFL football game is played in
approximately two hours and 30 minutes compared to over three hours for an NFL
game.

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     Four downs are allowed to advance the ball ten yards for a first down or to
score. Scoring consists of six points for a touchdown, one point for a
conversion by placekicking after a touchdown, two points for a conversion by
dropkick and two points for a successful run or pass after a touchdown. Three
points are awarded for a field goal by placement or four points for a field goal
by dropkick, with two points for a safety. Punting is illegal. On fourth down a
team may attempt a first down, touchdown or field goal. The receiving team may
field any kickoff or missed field goal that rebounds off the rebound nets.

     Although passing rules for the AFL are similar to outdoor NCAA football, a
unique exception involves the rebound nets. A forward pass that rebounds off a
rebound net is a live ball and is in play until it touches the playing surface.

     Overtime periods are 15 minutes during the regular season and the playoffs.
Each team has one possession to score. If, after each team has had one
possession and one team is ahead, that team wins. If the teams are tied after
each has had a possession, the next team to score wins.

AFL Teams

     For the 2003 season, the AFL will consist of 16 teams, aligned into two
conferences, with two divisions in each conference:

                               American Conference

        Western Division                        Central Division
        ----------------                        ----------------
        Arizona Rattlers                        Chicago Rush
        San Jose SaberCats                      Dallas Desperados
        Los Angeles Avengers                    Grand Rapids Rampage
        Colorado Crush                          Indiana Firebirds

                               National Conference

        Eastern Division                      Southern Division
        ----------------                      -----------------
        Detroit Fury                          Georgia Force
        Buffalo Destroyers                    Orlando Predators
        New York Dragons                      Tampa Bay Storm
        Las Vegas Gladiators                  Carolina Cobras

                                       5
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Regular Season and Playoffs

     Prior to the 2003 season, following two pre-season games, the regular AFL
season extended from April to August, with each team playing a total of 14
regular season games against teams from both conferences. Half of the games are
played at home, and half are played away. At the end of the regular season, the
four division champions along with the eight teams with the best winning
records, qualify for the AFL playoffs to determine the AFL's Arena Bowl champion
for that season. Each playoff round is played in the home arena of the team with
the best winning record.

     NBC Sports and the Arena Football League have reached an agreement to
become revenue-sharing partners in a national television contract beginning with
the 2003 season. The AFL season will begin on January 31 and conclude with
ArenaBowl XVII on Sunday, June 22, 2003. NBC's regular season broadcasts will be
shown live on Sunday afternoons with up to four regional telecasts each week.
NBC will be the exclusive national broadcaster of AFL games. AFL teams' local
television agreements will continue on a non-conflicting basis. All Playoff
Games will be broadcast live on Saturdays and Sundays beginning with the AFL's
first round playoff games on the weekend of May 24-25, 2003 and culminating with
ArenaBowl XVII on June 22, 2003. The AFL will have a total of 22 broadcasts (15
regular season games with up to four regional exposures, plus seven postseason
games) on NBC encompassing a total of 71 games (including all playoff games and
ArenaBowl), resulting in over 55 hours of live programming each year. Preseason
games are eliminated allowing 16 regular season games per year.

Gate Receipts, AFL Assessments and Distributions

     AFL teams are entitled to keep all gate receipts from pre-season home
games, regular season home games and playoff home games. Teams do not receive
any gate receipts from away games except that visiting teams are reimbursed for
hotel expenses by the home team. Each team is required to pay an annual
assessment to the AFL which is generally equal to the team's share of the
League's annual operating costs and each team is contingently liable for other
team membership purchases, team repurchases by the League and League litigation.
During the 2002 and 2001 seasons, League assessments were $466,092 and $419,000,
respectively. OPE is not aware of any material League liabilities for which it
has contingent liability. Each team's assessment is generally funded by its
share of revenue derived from the League's national television contracts, from
the sale of AFL licensed merchandise and from revenues generated by the League's
sale of expansion team memberships. Each visiting team participating in the
playoffs is reimbursed for hotel expenses and receives a fixed payment of
$45,000 for each playoff game and $50,000 for the Arena Bowl.

AFL Licensing

     The AFL operates a League licensing program on behalf of its teams. Under
the program, product manufacturers sign agreements allowing them to use the
names and logos of all AFL teams, the AFL itself and AFL's special events
(including playoffs and the Arena Bowl) in exchange for royalty and guarantee
payments. OPE did not receive any licensing revenue in 2002. For the year ended
September 30, 2001, OPE's share of net revenues from licensing was $80,000. In

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2002 our share of net revenue from the League (the "Team Share") was equal to
1/24 of the AFL's net revenue. Our Team Share was equal to the AFL's net revenue
divided by the total number of League teams (16 in 2002), two Gridiron Team
Shares, two Team Shares owned by OPE and two expansion teams. League assessments
are also based upon the Team Share. Each team is also permitted to license its
club identified products locally for sale at its arena, at team owned and
operated stores and through team catalogs. We purchased two nonvoting equity
interests in 1998, and in 2002 our Team Share was 4% together with an
additional8% net revenue interest earned from our two nonvoting interests. Our
Team Share and net revenue interest for 2003 is 4.5% and 9%, respectively.

League Governance

     The AFL is generally responsible for regulating the conduct of its member
teams. The AFL establishes the regular season and playoff schedules of the
teams, and negotiates, on behalf of its members, the League's national and
network broadcast contracts. Each of the AFL's members is, in general, liable on
a pro rata basis for the AFL's liabilities and obligations and shares pro rata
in its profits. Under the Bylaws of the AFL, League approval is required to
complete a public offering of any team's securities and for the sale or
relocation of a team.

     The AFL is governed by a Board of Directors, which consists of one
representative from each team. The Board of Directors selects the AFL
Commissioner, who administers the daily affairs of the AFL including
interpretation of playing rules and arbitration of conflicts among member teams.
The Commissioner also has the power to impose sanctions, including fines and
suspensions, for violations of League rules. David Baker has been the
Commissioner of the AFL since 1996. OPE believes it is in compliance with all
League rules.

arenafootball2 League

     In August 1999 the AFL established the arenafootball2 League ("af2") to be
comprised of smaller market teams playing under an 18-week, 120-game schedule.
af2 teams are primarily located in the midwest and southeast and consist of 28
teams expected to play in the 2003 season, down from 34 teams in the 2002
season.

     In October 2000 the af2 acquired substantially all of the assets of the
Indoor Football League, and we acquired rights to operate three af2 teams
without payment of membership fees to the af2. We commenced operation of the
Peoria Pirates in the 2001 season, expect to operate the Bayou Bears of
Lafayette, Louisiana in the 2004 season and sold the rights to our third af2
team, located in Green Bay, Wisconsin, to one of our directors in a related
party transaction for $1,000,000.

Restrictions on Ownership

     The AFL Charter and Bylaws contain provisions which may prohibit a person
from acquiring the Common Stock and affect the value of the Common Stock. In
general, any acquisition of shares of Common Stock which will result in a person
or a group of persons holding 5% or more of our outstanding Common Stock will
require the prior approval of the AFL, which may be granted or withheld in the

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sole discretion of the AFL. The prospective purchaser would be required to
submit an AFL application, in form prescribed by the AFL, providing certain
information relating to that person's background. Upon receipt of such
application, the AFL has the right to conduct an investigation of the
prospective purchaser. In addition, the AFL may condition its approval upon the
execution, delivery and performance by the prospective purchaser of such
documents as the Charter or Bylaws shall prescribe. If a prospective purchaser
obtains the AFL's consent to acquire a 5% or more interest in OPE, such
prospective purchaser will be required to acknowledge that the purchaser will be
bound by the applicable provisions of the AFL Charter and Bylaws. AFL approval
is not required for private placements of our securities.

     In addition, no person who directly or indirectly owns any interest in an
AFL team, may own, directly or indirectly, a 5% or more interest in any other
team, without the prior approval of the AFL. The AFL Bylaws also contain
provisions which prohibit team owners from engaging in certain activities, such
as wagering on any game in which an AFL team participates. AFL players and
referees and employees of the AFL and its member clubs (other than OPE) are not
eligible to purchase or hold Common Stock. The AFL could in the future adopt
different or additional restrictions which could adversely affect the
shareholders.

     The grant of a security interest in any of the assets of OPE or the
Predators or any direct or indirect ownership interest in OPE, of 5% or more,
requires the prior approval of the AFL, which may be withheld in the AFL's sole
discretion. AFL rules limit the amount of debt that may be secured by the assets
of, or ownership interests in, an AFL team and require that the parties to any
secured loan that is approved execute an agreement limiting the rights of the
lenders and the team (or stockholder) under certain circumstances, including
upon an event of default or foreclosure. These limitations may adversely affect
the rights of the team (or stockholder) under certain circumstances.

     Failure by a holder of a 5% or more interest in OPE to comply with these
restrictions may result in a forced sale of such holder's interest in OPE or the
repurchase of such interests by OPE. Our Bylaws provide that we may redeem, at
the lower of fair market value or cost, shares held by any person or entity who
becomes the owner of 5% or more of our Common Stock without the approval of the
AFL. These restrictions are and will continue to be contained in a legend on
each certificate issued evidencing shares of Class A Common Stock.

     Neither the AFL, any of its affiliates or members nor any of their
respective officers, employees or representatives, other than OPE, assume any
responsibility for the accuracy of any representations made by OPE in this
Report.

     We have issued 1,000 shares of Class B Common Stock to our two controlling
shareholders, each share of which votes the equivalent of 10,000 shares of Class
A Common Stock.

Current Operations of OPE

     OPE derives its revenue and operating funds from the operations of the
Predators, the Pirates and the IceGators (the "Teams") and its aggregate 13.5%
Team Share and net revenue interest in the AFL. Revenue from the Teams'

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operations results from the sale of tickets to the Teams' home games, the sale
of advertising and promotions to sponsors, the sale of local and regional
broadcast rights to Predators' games, the sale of merchandise carrying the
Teams' logos, and concession sales at Predators' home games. Revenue from our
League ownership results from our share of all League revenue, primarily
consisting of League contracts with national media organizations, expansion team
Membership fees, national corporate sponsorships and League merchandising sales.

     In March 1998, we entered into an agreement with the AFL pursuant to which
we agreed to purchase two additional Team Shares in the League (which then
represented 2/19 of the League's revenue) for $6,000,000. Under the terms of the
agreement (which was amended in March 2000), we receive a minimum of $480,000
per year of distributions from the League including principal and interest until
total distributions reach $6,000,000. Distributions from our two additional Team
Shares are accounted as a reduction of debt until paid in full. When the debt is
repaid in full, then the Team Shares will be recognized as revenue.

     Ticket Sales. The Predators played seven home games and seven away games
during the 2002 AFL regular season together with one home and one away
pre-season exhibition game. Under the AFL Bylaws, OPE receives all revenue from
the sale of tickets to regular season and pre-season home games and no revenue
from the sale of tickets to regular season and pre-season away games. The
Pirates play eight home games and eight away games, with no preseason games.

     Predators. The Predators play all home games at the TD Waterhouse Center,
which holds approximately 16,000 spectators. Ticket prices for regular season
home games during the 2002 season at the TD Waterhouse Center ranged from $5 to
$200 per game. The following table sets forth certain information relating to
the Predators' pre-season and regular season revenue generated by the sale of
tickets for the 2001 and 2002 seasons:

            Number of      Average Per Game    Average Paid     Average Ticket
  Season  Season Tickets   Paid Attendance     Ticket Price    Revenue Per Game
  ------  --------------   ---------------     ------------    ----------------
   2001       7,398             9,004             $23.74           $213,000
   2002       6,819             8,620             $23.34           $201,000

     Peoria Pirates. Ticket sales for the Pirates in the 2002 season were
$490,549, with average game attendance of 6,753 and an average paid ticket price
of $9.08. The Pirates do not have local media contracts nor are there national
broadcasts of af2 teams. The Pirates play in the Peoria Civic Center, paying
$8,500 rental for each home game.

     Louisiana IceGators. As of September 30, 2002, the Icegators had season
ticket sales commitments of $458,818 for the 2002-03 season with a collected
balance $287,786. The Icegators play in the Cajundome Arena, paying
approximately $6,500 rental for each home game (exclusive of any rental rebates
as outlined by the agreement which is based on obtaining various attendance
levels).

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     Advertising and Promotion. OPE generates revenue from the sale of
advertising displayed on signs located throughout the arenas in which our teams
play, and through other promotions utilizing the teams' name or logos. In
addition, we market team sponsorships to local and regional businesses which
provide a combination of advertising rights, promotional rights and VIP ticket
privileges. Advertising rights include the use of corporate logos within the
arenas, commercials on radio and television, advertisements in fan magazines,
display of the sponsor's name on signs in the arena, public address
announcements, the inclusion of customer names on team posters and the like.
Promotional rights include banners displayed in the teams' VIP rooms at the
arenas, availability of blocks of seats for specific games, the use of the
teams' logos and autographed helmets. VIP privileges include high priority
seating selections, parking passes, VIP room passes and travel packages, which
include attendance at team away games.

     Local and Regional Television, Cable and Radio Broadcasts. We contract with
local and regional media to cover our teams' games. Most of the revenue we
receive from these contracts is in the form of barter credits and the amounts of
such revenue are negligible.

     National Television. In March 2002, the League entered into a broadcasting
agreement with NBC under which NBC will broadcast 71 AFL games, including four
regional games each Sunday, the AFL playoff games and the Arena Bowl. Broadcast
begins in the 2003 season which the AFL agreed to reschedule to run from
February through June each year. NBC (i) became a revenue sharing partner of the
AFL, (ii) has the rights to renew the broadcasts in perpetuity, and (iii) is
entitled to share in any increased value from the sale of an AFL team, including
the Predators, for more than $12 million. Our other teams have no national
broadcasting contracts.

     Sale of Merchandise. We generate a small amount of revenue from the sale of
merchandise carrying our teams' logos (primarily athletic clothing such as
sweatshirts, T-shirts, jackets and caps).

     Telemarketing. From time to time we use telemarketing techniques to improve
our teams' ticket sales.

Performance

     The following table describes the performance of the Predators during the
last three AFL seasons:

   Season    Record    Finish in Division            Playoff Results
   ------    ------    ------------------            ---------------
    2000      11-3            1st            Won the Arena Bowl Championship
    2001      8-6             3rd                Lost first playoff game
    2002      7-7             1st                Lost in the Semi-Finals


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Head Coach/Manager

     Fran Papasedero, who was an Assistant Coach for the Predators for four
years, was named Head Coach beginning in the 2002 season. A former Arena
Football League star lineman, Coach Papasedero played five seasons in the League
playing for Nashville, St. Louis, Massachusetts and Albany. He was a first team
All-Arena selection with the St. Louis Stampede in 1996. Coach Papasedero
lettered four years for Springfield College, where he was an All-America lineman
as a senior. During the off-season, he works in sponsorship sales and promotions
for the Predators. Coach Papasedero's staff includes one paid and three unpaid
assistant coaches.

     Bruce Cowdry, who was the head coach of the Pensacola Barracudas for the
2001 af2 season was named head coach of the Peoria Pirates in September 2001.
Coach Cowdry was the head coach of the Peoria Indoor Football League ("IFL")
team for the 1999 and 2000 seasons. He was undefeated as head coach of the IFL
team.

     Dave Farrish enters his third season as head coach of the Louisiana
IceGators after leading the team to the most victorious season in ECHL history
in 2000-01. Farrish has a two-year record of 98-36-10 with the IceGators for a
..715 winning percentage. Farrish holds a career 377-330-70-9 mark in 10
professional coaching seasons. Prior to coming to Louisiana, he spent three
seasons at AHL Springfield, accumulating a mark of 115-98-25. He began his
coaching career at AHL Moncton in 1989-90 and has also spent time as a head
coach in Salt Lake (IHL) and Fort Wayne (IHL). Farrish, whose teams have made
the playoffs in eight of 10 seasons of professional coaching, also served as an
assistant coach with the New Jersey Devils. The 46-year-old Farrish played
professionally from 1976-89, including 430 games in seven NHL seasons. He began
with the New York Rangers in 1976, and was on the Rangers' 1979 team that made
the Stanley Cup Finals. Farrish played briefly with Quebec before going to
Toronto.

Players

     In general, the rules of the AFL and af2 permit each team to maintain an
active roster of 24 and 18 players respectively, during the regular season. The
IceGators maintain an active roster of 18 players.

The Collective Bargaining Agreement

     In 2002 the League entered into a Collective Bargaining Agreement ("CBA")
with its players. Under the terms of the CBA, the League has agreed with the
NFLPA (the players' bargaining unit) to a salary cap equal to the greater of
$1,643,000 per team, or 50% of defined gross revenue ("DGR") as defined in the
CBA, increasing to the greater of $1,921,633 or 63% of DGR by 2007. Minimum per
player salaries are $1,484 per game.

     In February 2000 the ECHL and the Professional Hockey Players' Association
(PHPA), which represents the players of the ECHL, entered into a collective
bargaining agreement effective from August 1, 1999 to May 31, 2003. The
agreement has a "no strike" clause which prohibits strikes and walkouts
throughout the term of the agreement. The agreement provides for a standard
players contract and sets the active roster of member teams at a maximum of
twenty players.

                                       11
<PAGE>

     The agreement defines the maximum and minimum benefits and compensation
that the players may be paid during the term of the agreement. Total weekly club
salary will not exceed $10,000 for the 2002-2003 regular and post-season play
periods. The agreement also calls for health insurance for the players and their
families, short-term disability insurance, and severance pay. Players that do
not receive qualifying offers are deemed unrestricted free agents.

     The af2 does not have a collective bargaining agreement with its players.
af2 player payroll, which is paid through the league, is limited to $87,000 per
season.

TD Waterhouse Center

     The Predators have played in the TD Waterhouse Center, which has a seating
capacity of approximately 16,000, since 1991. In March 1998, OPE signed a
five-year lease (with an additional five-year option) with the TD Waterhouse
Center commencing in the 1998 season at approximately the same per game rental
(approximately $15,000 per game) as its previous lease, but which provides OPE
with an approximately 20% share of revenue generated from food and beverage
concessions in exchange for OPE reducing ticket prices by approximately 10% to
20%, depending upon seat location. OPE also receives a rebate against rent of $3
per person (up to $10,000) for games in which attendance exceeds 9,000 persons.

Peoria Civic Center

     The Pirates play their home games at the Peoria Civic Center, which has a
seating capacity of approximately 8,700. In September 2000, we signed a
five-year license agreement with SMG, for use of the Peoria Civic Center. The
agreement requires us to pay a fee of $8,500 per game for rent and game day
services. In September of 2002, we signed an addendum to the SMG agreement which
(i) extended the license agreement until 2007 (ii) allowed for attendance
incentives as follows: $.75 per person for attendance from 5,000 to 5,499, $1.00
per person for attendance from 5,500 to 5,999, and $1.25 per person for
attendance from 6,000 and above, and (iii) inclusion of various arena charges as
part of the basic rental fee.

Cajundome

     The Icegators play in the Cajundome arena which has a seating capacity of
approximately 13,000. In July of 2002, we signed a license agreement with the
Cajundome Commission. The agreement for the Icegators terminates May 31, 2007
and for the Bayou Bears at the end of the 2008 af2 football season. The
agreement requires us to pay a fee of $6,500 per game for rent. In addition, we
are charged a box office fee of no greater than $500 per game.

Competition

     Our teams compete for sports entertainment dollars with other professional
sports teams and with college athletics, high school athletics and other
sports-related entertainment. Our teams also compete for attendance and
advertising revenue with a wide range of other entertainment and recreational
activities available in their market areas.

                                       12
<PAGE>

Employees

     We have 3 employees at the corporate level along with 90 player, coaches
and other full-time employees at the teams' level.

Risk Factors

     The reader should consider carefully the following risk factors, together
with the other information contained in this prospectus, in evaluating our
securities.

We have a history of losses and uncertainty of future results.

     We incurred net losses of $3,218,503 for the year ended September 30, 2001
and $5,998,852 for the year ended September 30, 2002. Since our inception
through September 30, 2002, we have lost an aggregate of $15,056,442. We expect
that we will continue to lose money at least for the near future. In fact, there
can be no assurance that we will ever achieve a profitable level of operations
or that profitability, if achieved, can be sustained on an ongoing basis.

We have recently experienced significant cash flow difficulties and may sell the
Predators and our other three teams.

     We have recently experienced significant cash flow difficulties,
substantially reducing our available cash resources for at least the near
future. As a result, we have signed a nonbinding letter of intent with a related
party to sell the Predators and are seeking buyers for our other three teams. If
we are unable to reach an agreement for a team sale or generate cash from other
sources, we will be required to reduce our overhead expenses and curtail certain
of our operations.

     We have executed a nonbinding letter of intent to sell the Predators to an
investor group headed by Brett L. Bouchy, a former officer and director and a
current principal stockholder and employee. Our current cash flow difficulties
may not allow us to take the time to negotiate with all potentially interested
parties. Accordingly, a sale to this related party investor group as well as the
sale of our other teams may be upon terms less favorable than would be available
to us if we had additional time to negotiate with all potentially interested
parties and it may result in a loss on diposition.

                                       13
<PAGE>

The sale of our teams will substantially reduce our revenue.

     As indicated above, as a result of our cash flow difficulties we have
decided to offer all of our teams for sale although there can be no assurance
that any of our teams can be sold. The sale of the teams will reduce our revenue
and could therefore increase our losses.

The League's new game schedule may reduce our ticket sales and sponsorships.

     Under the terms of the League's new broadcast contract with NBC, most AFL
games will be played on Sunday afternoons rather than Friday or Saturday nights,
and the season will be played between February and May, rather than between
April and July. Arena football fans may prefer Friday and Saturday night games
to Sunday afternoon games, thereby reducing game attendance. Moreover, our
corporate sponsors may prefer the April to July schedule, rather than the new
February to May schedule which puts arena football games in direct competition
with NBA basketball games. In such event, corporate sponsors may reduce their
sponsorships and advertising expenditures.

We did not receive any League distributions in 2002 and may not receive any
distributions in the future.

     In 2002 we were entitled to receive an aggregate of 12% of all
distributions made by the League to its teams and other share owners. However,
due to increased League expense, and costs of litigation, the League did not
make any distribution in 2002 and may not make distributions in future years.

Our teams compete for sports entertainment dollars with other sports and
entertainment venues.

     Our teams compete for sports entertainment dollars with other professional
sports teams and with college teams and with other sports-related entertainment.

We are subject to League obligations.

     The membership agreements with the Arena Football League generally make the
Predators and other teams of the AFL liable on a pro rata basis for the debts
and obligations of the AFL. Any failure of other members of the AFL to pay their
pro rata share of any such debts or obligations could adversely affect the
Predators by requiring us to make additional payments on behalf of failing or
defaulting teams. To date, we have not been required to pay any material debts
or obligations of the AFL. The success of the AFL and its members depends in
part on the competitiveness of the teams in the AFL and their ability to
maintain fiscally sound operations. Certain AFL teams have encountered financial
difficulties in the past, and there can be no assurance that the AFL and its
teams will continue to operate. If the AFL is unable to continue operations, the
Predators and the other teams forming the AFL would be unable to continue their
own operations. In addition, the Predators and their personnel, as well as our
af2 teams, are bound by a number of rules, regulations and agreements imposed
upon them by their Leagues as well as by national television contracts. Any
change in these rules, regulations and agreements will be binding upon our teams
and their personnel, regardless of whether they agree with such changes, and it
is possible that any such change could adversely affect them.

                                       14
<PAGE>

We will be subject to increased competition as a result of AFL and af2
expansion.

     The AFL and af2 may add additional teams in the future. While such
expansion affords the AFL the opportunity to enter new markets and increase
revenue, it also increases the competition for talented players among AFL teams.
Expansion teams are permitted to select in an expansion draft designated
unprotected players playing for existing AFL teams. There can be no assurance
that the teams will be able to retain all of the team's key players during an
expansion draft or that the rules regarding the expansion draft will not change
to the detriment of the teams. In addition, we may receive less revenue from the
AFL as the result of League expansion since AFL teams share equally in the
revenue generated from national television contracts and sale of AFL
merchandise.

We may need additional capital in the future which could dilute the ownership of
current stockholders or make our cash flow vulnerable to debt repayment
requirements.

     Historically, we have raised equity and debt capital to support our
operations. To the extent that we raise additional equity capital, existing
stockholders will experience a dilution in the voting power and ownership of
their common stock, and earnings per share, if any, would be negatively
impacted. Our inability to use our equity securities to finance our operations
could materially limit our growth.

     Any borrowings made to finance operations could make us more vulnerable to
a downturn in our operating results, a downturn in economic conditions, or
increases in interest rates on borrowings that are subject to interest rate
fluctuations. If our cash flow from operations is insufficient to meet our debt
service requirements, we could be required to sell additional equity securities,
refinance our obligations, or dispose of assets in order to meet debt service
requirements. There can be no assurance that any financing will be available to
us when needed or will be available on terms acceptable to us. Our failure to
obtain sufficient financing on favorable terms and conditions could have a
material adverse effect on our growth prospects and our business, financial
condition and results of operations.

We depend upon the competitive success of our teams for ticket and merchandise
sales.

     Our financial results depend in part upon our teams achieving game winning
success. By achieving and maintaining such success, we expect to (1) generate
greater fan enthusiasm, resulting in higher ticket and merchandise sales
throughout the regular season and (2) capture a greater share of local
television and radio audiences. Failure to participate in the playoff games
would deprive our teams of additional revenue that may result from sales of
tickets for home playoff games and from media contracts. Revenue is, therefore,
significantly adversely affected by a poor game winning performance, especially
involving losses of home games.

We depend upon attracting talented players to achieve game winning success.

     The success of our teams depends, in part, upon the teams' ability to
attract and retain talented players. There can be no assurance that our teams
will be able to retain players upon expiration of their contracts or obtain new

                                       15
<PAGE>

players of adequate talent to replace players who retire or are injured, traded
or released. Even if our teams are able to obtain and retain players who have
had previously successful football careers, there can be no assurance of the
quality of their future performance.

Our players' salaries may increase in the future, thereby increasing our
operating expenses.

     Although our player salaries are low compared to salaries currently paid by
some other professional sports teams, there can be no assurance that salaries
payable by us will not increase significantly in the future, thereby increasing
our operating expenses and adversely affecting our financial condition and
results of operations. However, the AFL CBA limits the maximum player payroll
salaries each year.

Player injuries could adversely affect our financial condition.

     Our player contracts entitle players to receive their salary even if unable
to play as a result of injuries sustained from team-related activities during
the course of employment. Although we carry occupational health, accidental
death and disability insurance on our players, we must pay deductible portions
of the insurance. Payment of insurance premiums, insurance deductibles and
salary payments that must be made directly to injured players could have an
adverse effect upon our financial condition and results of operations.

There are League restrictions on the purchase of our securities.

     The AFL Charter and Bylaws contain provisions that may restrict a person
from acquiring our common stock and affect the value of the common stock or the
value of any team, including the Predators. In general, any acquisition of
shares of common stock that will result in a person or group of persons holding
5% or more of our outstanding common stock requires the prior approval of the
AFL, which may be granted or withheld in the sole discretion of the AFL. Failure
by a holder of a 5% or more interest to comply with these restrictions may
result in a forced sale of such holder's interest or the repurchase of such
interests by us. Our Bylaws provide that we may redeem, at the lower of fair
market value or cost, shares held by any person or entity who becomes the owner
of 5% or more of our common stock without the approval of the AFL.

We may issue preferred stock, which could prevent a change in our control.

     Our Articles of Incorporation authorize the issuance of up to 1,500,000
shares of preferred stock with such rights and preferences as may be determined
from time to time by our Board of Directors. Accordingly, under the Articles of
Incorporation, the Board of Directors, without shareholder approval, may issue
preferred stock with dividend, liquidation, conversion, voting, redemption or
other rights that could adversely affect the voting power or other rights of the
holders of our common stock. The issuance of any shares of preferred stock,
having rights superior to our common stock, may result in a decrease in the
value or market price of our common stock and could prevent a change in our
control. We have no other anti-takeover provisions in our Articles of
Incorporation or Bylaws. Holders of the preferred stock may also have the right
to receive dividends, certain preferences in liquidation and conversion rights.

                                       16
<PAGE>

One holder of our Class B common stock can elect all of our directors and
control our operations.

     Our 1,000 shares of Class B common stock is voted 925 shares by Eric
Margenau, our Chief Executive Officer and 75 shares by Alan Gagleard. Each share
of Class B common stock votes the equivalent of 10,000 shares of Class A Common
Stock. Accordingly, Mr. Margenau can elect all of our directors and control our
operations.

We do not pay dividends on our common stock.

     We have not paid any dividends on our common stock since our inception and
do not anticipate paying dividends in the foreseeable future. We plan to retain
earnings, if any, to finance the development and expansion of our business.

All of our shares of common stock are freely tradeable.

     There are currently outstanding 7,454,425 shares of our Class A Common
Stock, all of which are freely tradeable as of this date. Sale of substantial
amounts of Class A Common Stock, or the perception that such sales could occur,
could adversely affect prevailing market prices of the Class A Common Stock.

Investors hold options and warrants to acquire a large number of our shares.

     A total of 3,000,000 shares of Class A Common Stock have been reserved for
issuance upon the exercise of options granted or which may be granted under our
1997 Employee Stock Option Plan. Additionally, there are outstanding options to
acquire 1,633,737 shares of Class A Common Stock at exercise prices ranging from
$.72 to $3.00 per share. In addition, there are outstanding (1) warrants to
purchase 160,000 shares of Class A Common Stock at $4.50 per share at any time
until December 31, 2002, (2) other warrants to purchase up to 450,000 shares at
prices ranging from $2.50 to $5.00 per share, and (3) warrants to purchase
786,343 shares of Class A Common Stock at an average price of $2.67 per share.
During the terms of these options and warrants, the holders will have the
opportunity to profit from an increase in the market price of the Class A Common
Stock. The existence of these options and warrants may adversely affect the
terms on which we can obtain additional financing, and the holders of such
options and warrants can be expected to exercise the options and warrants at a
time when we, in all likelihood, would be able to obtain additional capital by
offering shares of our capital stock on terms more favorable to us than those
provided by the exercise of such options and warrants.

There are limitations on the liability of our directors and officers.

     Our Bylaws substantially limit the liability of our directors and officers
to us and our stockholders for breach of fiduciary or other duties to us.

                                       17
<PAGE>

If we do not continue to be listed on the Nasdaq SmallCap Market, our stock will
become harder to purchase and sell.

     Our Class A Common Stock is currently listed on the Nasdaq SmallCap Market.
In order to continue to be included on the Nasdaq SmallCap Market, a company
must maintain (1) at least two market makers, (2) 300 holders of its common
stock, (3) a minimum bid price of $1.00 per share of common stock, (4) net
tangible assets of $2 million (unless a company had net income of $500,000 in
two of the last three years or a market capitalization of $35 million), (5)
500,000 shares in the public float and (6) a market value of the public float of
$1 million. On December 2, 2002 we received notification from Nasdaq that our
common stock had closed below the $1.00 minimum for the last 30 consecutive
trading days, and therefore we were out of compliance with Marketplace Rule
4310(c)(4). Should the common stock close $1.00 per share or more for a minimum
of 10 consecutive trading days before June 2, 2003, we will regain compliance.
Failure to meet these maintenance criteria in the future may result in the
discontinuance of our securities on the Nasdaq SmallCap Market. As a result, an
investor may find it more difficult to purchase, sell or to obtain accurate
quotations as to the market value of our securities.

We can give no assurance as to our future results.

     Prospective purchasers of our securities should carefully consider the
information contained in this report before purchasing our securities.
Information contained in this prospectus contains "forward- looking statements,"
which can be identified by the use of forward-looking terminology such as
"believes," "expects," "may," "should" or "anticipates" or the negative thereof
or other variations thereon or comparable terminology, or by discussions of
strategy. As a result of many factors, including those discussed herein under
"Risk Factors," no assurance can be given that the future results discussed by
the forward-looking statements will be achieved.

ITEM 2. DESCRIPTION OF PROPERTY
-------------------------------

     OPE leases corporate and team offices at 4901 Vineland, Suite 150, in
Orlando, Florida, pursuant to a five-year lease covering approximately 4,500
square feet for approximately $10,000 per month, expiring January 2006. On
November 15, 2002, Peoria entered into a new office lease covering approximately
3,000 square feet for $2,000 per month, expiring on November 30, 2005.

     The Predators have played in the TD Waterhouse Center, 600 West Amelia
Street, Orlando, Florida 32801, which has a seating capacity of approximately
16,000, since 1991. In March 1998, OPE signed a five-year lease (with an
additional five-year option) with the TD Waterhouse Center commencing in the
1998 season at approximately the same per game rental (approximately $15,000 per
game) as its previous lease, but which provides OPE with an approximately 20%
share of revenue generated from food and beverage concessions in exchange for
OPE reducing ticket prices by approximately 10% to 20%, depending upon seat
location. OPE also receives a rebate against rent of $3 per person (up to
$10,000) for games in which attendance exceeds 9,000 persons.

                                       18
<PAGE>

     The Pirates play their home games at the Peoria Civic Center, which has a
seating capacity of approximately 8,700. In September 2000, we signed a
five-year license agreement with SMG, for use of the Peoria Civic Center. The
agreement requires us to pay a fee of $8,500 per game for rent and game day
services.. In September of 2002, we signed an addendum to the SMG agreement
which (i) extended the license agreement until 2007 (ii) allowed for attendance
incentives as follows: $.75 per person for attendance from 5,000 to 5,499, $1.00
per person for attendance from 5,500 to 5,999, and $1.25 per person for
attendance from 6,000 and above, and (iii) inclusion of various arena charges as
part of the basic rental fee.

     The Icegators play in the Cajundome arena which has a seating capacity of
approximately 13,000. In July of 2002, we signed a license agreement with the
Cajundome Commission. The agreement for the Icegators terminates May 31, 2007
and for the Bayou Bears at the end of the 2008 af2 football season. The
agreement requires us to pay a fee of $6,500 per game for rent. In addition, we
are charged a box office fee of no greater than $500 per game.

ITEM 3. LEGAL PROCEEDINGS
-------------------------

     In February 2000, the Arena Football League ("AFL") and all of its member
teams, including OPE, were joined as defendants in a civil action brought by
several AFL players (captioned James Guidry, et. al. vs. Arena Football League
L.L.C. et. al., United States District Court, District of New Jersey, Case
Number 00-533-HAA) in which plaintiffs sought damages for violation of federal
antitrust law, specifically Sections 1 and 2 of the Sherman Antitrust Act. The
complaint sought damages against the defendants in an amount to be determined
and trebled, plaintiffs' cost of litigation and further relief, as the court
deemed proper and equitable. On January 25, 2001, the League settled the
litigation. The League agreed to pay monetary damages of approximately $6.2
million as a part of the settlement. The Company's obligation is estimated to be
$270,000 and has been accrued for as of September 30, 2001.

     In August 2000 Game Tough filed a civil complaint against the Company
seeking damages of approximately $400,000. The plaintiff alleged that the
Company did not honor an advertising agreement with it to display the
Plaintiff's name on the Predators' jerseys during the Arena Bowl. A ruling in
favor of the Company was made in December 2001. We successfully defended this
action and do not expect any addition liability in the future related to this
case.

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

     Not applicable.

                                     PART II

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

     OPE's Class A Common Stock and Common Stock Purchase Warrants commenced
trading on the NASDAQ SmallCap Market under the symbols "PRED" and "PREDW,"
respectively, in December 1997. The following table sets forth for the quarters
indicated the range of high and low closing prices of OPE's Class A Common Stock
and Warrants as reported by NASDAQ but does not include retail markup, markdown
or commissions. On September 30, 2002, the closing price of OPE's Common Stock
was $1.04 per share.

                                       19
<PAGE>

                                Common Stock                   Warrants
                              -----------------            -----------------
By Quarter Ended:             High          Low            High          Low
-----------------             ----          ---            ----          ---

Calendar 2002
-------------
September 30, 2002           $1.98         $1.00           $.10         $.05
June 30, 2002                $2.15         $1.66           $.22         $.10
March 31, 2002               $3.60         $1.77           $.74         $.10

Calendar 2001
-------------
December 31, 2001            $3.04         $2.30           $.14         $.09
September 30, 2001           $3.55         $2.15           $.51         $.19
June 30, 2001                $3.10         $1.63           $.37         $.10
March 31, 2001               $3.75         $1.44           $.87         $.03


     The above quotations were reported by the Nasdaq SmallCap Market and
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not necessarily represent actual transactions. As of September 30, 2002, OPE
had approximately 1,300 record and beneficial stockholders.

Class A and Class B Common Stock

     OPE is authorized to issue 15,000,000 shares of no par value Common Stock
("Common Stock"), of which 7,394,840 shares of Class A Common Stock are
outstanding as of September 30, 2002. In addition, OPE has issued 1,000 shares
of no par value Class B Common Stock. The Class A Common Stock and Class B
Common Stock are identical in all respects except that each share of Class A
Common Stock is entitled to one vote and each share of Class B Common Stock is
entitled to 10,000 votes. The Class B Common Stock was issued to satisfy certain
control requirements of the AFL. See Arena Football-Restrictions on Ownership
and Item 12. Upon issuance, shares of Class A and Class B Common Stock are not
subject to further assessment or call. Subject to the prior rights of any series
of preferred stock which may be issued by OPE in the future, holders of Class A
and Class B Common Stock are entitled to receive ratably such dividends that may
be declared by the Board of Directors out of funds legally available therefore,
and, in the event of the liquidation, dissolution or winding up of OPE, are
entitled to share ratably in all assets remaining after payment of liabilities.
Holders of Class A and Class B Common Stock have no preemptive rights or rights
to convert their Class A and Class B Common Stock into any other securities. The
outstanding Class A and Class B Common Stock is validly issued, fully paid and
nonassessable. The holders of the Class B Common Stock are entitled to convert
each share of Class B Common Stock into one share of Class A Common Stock.

                                       20
<PAGE>

Common Stock Purchase Warrants

     Our outstanding common stock purchase warrants issued in connection with
our initial public offering expired on December 10, 2002.

Preferred Stock

     OPE is authorized to issue 1,500,000 shares of preferred stock, no par
value (the "Preferred Stock"). The Preferred Stock may, without action by the
stockholders of OPE, be issued by the Board of Directors from time to time in
one or more series for such consideration and with such relative rights,
privileges and preferences as the Board may determine. Accordingly, the Board
has the power to fix the dividend rate and to establish the provisions, if any,
relating to voting rights, redemption rate, sinking fund, liquidation
preferences and conversion rights for any series of Preferred Stock issued in
the future.

     It is not possible to state the actual effect of any other authorization of
Preferred Stock upon the rights of holders of Common Stock until the Board
determines the specific rights of the holders of any other series of Preferred
Stock. The Board's authority to issue Preferred Stock also provides a convenient
vehicle in connection with possible acquisitions and other corporate purposes,
but could have the effect of making it more difficult for a third party to
acquire a majority of the outstanding voting stock. Accordingly, the issuance of
Preferred Stock may be used as an anti-takeover device without further action on
the part of the stockholders of OPE, and may adversely affect the holders of the
common stock. OPE has not issued any Preferred Stock.

Transfer Agent and Warrant Agent

     Corporate Stock Transfer, Inc., 3200 Cherry Creek Drive, Suite 430, Denver,
Colorado 80209, is OPE's transfer agent and warrant agent.

Dividends

     OPE has not paid dividends on its Class A and Class B Common Stock since
inception and does not plan to pay dividends in the foreseeable future.
Earnings, if any, will be retained to finance growth.

Limitation on Liability

     OPE's bylaws provide that a director shall not be personally liable to OPE
or its stockholders for any action taken or any failure to act to the full
extent permitted by the Florida Business Corporation Act. The effect of this

                                       21
<PAGE>

provision in the bylaws is to eliminate the rights of OPE and its stockholders,
through stockholders' derivative suits on behalf of OPE, to recover monetary
damages from a director for breach of the fiduciary duty of care as a director
including breaches resulting from negligent or grossly negligent behavior. This
provision does not limit or eliminate the rights of OPE or any stockholder to
seek nonmonetary relief such as an injunction or rescission in the event of a
breach of a director's duty of care or to seek monetary damages for (i) a
violation of criminal law, (ii) unlawful payment of dividends or other
distribution under Florida law, (iii) a transaction in which a director derived
an improper personal benefit, (iv) willful misconduct, or (v) reckless,
malicious or wanton acts.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
-----------------------------------------------------------------

     The Orlando Predators Entertainment, Inc. ("OPE", the "Company" or "we")
was organized as a Florida corporation in March 1997 and is in the sports and
entertainment business. OPE (i) owns and operates the Orlando Predators (the
"Predators"), a professional arena football team of the Arena Football League
(the "AFL" or the "League"), (ii) owns and operates two minor league teams of
the arenafootball2 League ("af2"), the Peoria Pirates which commenced play in
the 2001 season, and the Bayou Bears which are scheduled to commence play in the
2004 season; (iii) owns and operates the Louisiana IceGators of the East Coast
Hockey League ("ECHL"), and (iv) owns an additional approximately 9% net revenue
interest in the League (in addition to its approximately 4.5% League ownership
interest it holds through the Predators).

     In October 2000, we entered into an agreement with af2 Enterprises LLC
("af2"), which operates the arenafootball2 League to assist af2 in acquiring
substantially all of the assets of the Indoor Football League ("IFL") through
IFL Acquisition Company ("IFL Acq."), a wholly-owned subsidiary of af2. Under
the terms of our agreement with af2, we contributed (i) $1.1 million in cash
less credits of $251,165, (ii) a $1.75 million promissory note and (iii) 214,286
shares of Class A Common Stock (which we agreed to repurchase from the holders
at their election for $3.50 per share). In exchange, af2 granted us (i) three
af2 memberships in IFL markets, (ii) the first $1 million in expansion fees
earned by the af2 in IFL markets and (iii) all of the tangible personal property
assets of the IFL such as turf fields, football equipment and the like. In
February 2002, the agreement was modified pursuant to which we issued an
additional 35,000 shares to eliminate our 214,286 share repurchase requirement
and paid $400,000 to cancel the $1.75 million promissory note we had issued.
With respect to the three af2 memberships, we operate the Peoria Pirates and
will operate the Bayou Bears (change this?) and sold our rights to the Green
Bay, Wisconsin team in October 2002.

     NBC Sports and the Arena Football League have reached an agreement to
become revenue-sharing partners in a national television contract beginning with
the 2003 season. The AFL season will begin on January 31 and conclude with
ArenaBowl XVII on Sunday, June 22, 2003. NBC's regular season broadcasts will be
shown live on Sunday afternoons with up to four regional telecasts each week.
NBC will be the exclusive national broadcaster of AFL games. AFL teams' local
television agreements will continue on a non-conflicting basis. All Playoff
Games will be broadcast live on Saturdays and Sundays beginning with the AFL's
Wild Card games on the weekend of May 24-25, 2003 and culminating with ArenaBowl
XVII on June 22, 2003. The AFL will have a total of 22 broadcasts (15 regular
season games with up to four regional exposures, plus seven postseason games) on
NBC encompassing a total of 71 games (including all playoff games and
ArenaBowl), resulting in over 55 hours of live programming each year.

                                       22
<PAGE>

     On July 31, 2002, the Company entered into an agreement to purchase the
East Coast Hockey League (ECHL) membership of the Louisiana Icegators (which
plays its games in Lafayette, Louisiana) and certain assets for $100,000 cash
and a $600,000 promissory note bearing interest 5% per year, payable in four
annual installments of $150,000 each. The Company has also assumed certain
contracts under the agreement.

     We have incurred substantial and ongoing losses since our inception,
aggregating $15,056,442 through September 30, 2002. Moreover, recently our cash
resources have been reduced to the point that our ability to continue our
operations has been put into jeopardy. In order to generate cash, we have
decided to offer all four of our professional teams for sale, retaining only our
aggregate 9% net revenue interest in the League. Consistent with this strategy,
in December 2002 we entered into a nonbinding letter of intent to sell the
Predators to an investor group led by Brett L. Bouchy, one of our affiliates. We
are continuing to solicit other offers for the Predators from other interested
buyers. The letter of intent we signed is subject to a number of contingencies
including the execution of a definitive purchase agreement, improved offers from
other interested buyers and approvals from our Board of Directors and the
League.

     Due to the urgency of our cash flow difficulties, we believe we may be
selling the Predators for less than that which we would receive had we the time
to properly market the Predators. Similarly, we believe we may also be required
to sell our other teams at prices below that which we would receive had we the
time to properly market the other teams.

     There can be no assurance that we will be successful in selling any of our
teams. However, if we are successful in selling all four teams, our revenue
would be reduced to the distributions, if any, we will receive generated by our
9% net revenue interest in the League. While our operating expenses would also
be substantially reduced, we can give no assurance that we would be able to
generate sufficient revenue following the team sales to maintain our operations.

     Except for the historical information contained herein, certain matters set
forth in this report are forward-looking statements within the meaning of the
safe habor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and uncertainties that may
cause actual results to differ materially. These risks are detailed from time to
time in the Company's periodic reports filed with the Securities and Exchange
Commission. These forward-looking statements speak only as of the date hereof.
The Company disclaims any intent or obligation to update these forward-looking
statements.

                                       23
<PAGE>

Results of Operations

For the Year Ended September 30, 2002 Compared to September 30, 2001.

Revenues

     The Company recognizes game revenues and expenses over the course of the
season (April through August).

     Revenues for the year ended September 30, 2002 were $5,567,629 compared to
$4,555,245 for the year ended September 30, 2001. The increase is due
principally to an increase in advertising and promotions revenues of $468,576,
an increase in trade revenues of $174,123, and increase in playoff revenues of
$338,938 due to the Peoria Pirates being the 2002 af2 Champions and the
Predators proceeding to the second round of the AFL playoffs. The increase is
also attributed to League revenues related to the AFL expansion memberships sold
during for the year ended September 30, 2002 of $419,092 compared to $164,167
for the year ended September 30, 2001. The Company also experienced a decline in
ticket revenues of $218,658 due primarily to inclement weather in Orlando on
days it hosted home games.

Operating Expenses

     Operating expenses, which include cash and trade transactions, $3,325,636
increased $341,536 or 11.4% for the year ended September 30, 2002 as compared to
$2,984,100 for the year ended September 30, 2001. Operating expenses consist
primarily of player and coaching staff salaries and benefits and game production
costs. The increase in operating expenses is a result of higher player salaries,
dance team expense and preseason expenses. Selling and Promotional Expenses

     Selling and promotional expenses, which include cash and trade
transactions, $1,836,593 represent an increase of $198,686 or 12% for the year
ended September 30, 2002 compared to $1,637,907 for the year ended September 30,
2001. The increase is due primarily to an increase in sales salaries,
sponsorship commissions and sponsorship costs which is a direct result of the
increase in advertising and promotional revenue.

League Assessments

     League assessments of $466,092 increased $47,092 or 11% for the year ended
September 30, 2002 as compared to $419,000 for the year ended September 30, 2001
due in part to an increase in monthly AFL league dues effective January 1, 2002.

General and Administrative Expenses

     General and administrative expenses, which include cash and trade
transactions, $2,295,771 increased $593,675 or 35% for the year ended September
30, 2002 compared to $1,702,096 for the year ended September 30, 2001. The
increase is due primarily to the legal fees associated with the Company's
successful defense of a law suit by a former sponsor of the Predators, as well
as increased rent expense, professional fees and insurance. The increase was
also due to the recording of the fair market value of options granted to USV for
the termination of its management contract with the Company of $259,000.

                                       24
<PAGE>

Loss on Write Down of Assets

     During the year ended September 30, 2002, the Company wrote off certain
assets available for sale to their estimated net realizable value, in the amount
of $133,634.

Playoffs

     Playoff expense of $535,905 increased $386,230 for the year ended September
30, 2002 compared to $149,675 for the year ended September 30, 2001. The
increase is due to the Peoria Pirates winning the 2002 af2 Championship and the
Predators proceeding to the second round of the AFL playoffs.

Impairment of AFL Membership

     The Company has evaluated its memberships in the AFL, af2 and the ECHL for
impairment and has determined as of September 30, 2002, that the fair value of
the AFL membership approximates $-0-. As a result the Company has recorded a
$1,745,271 impairment charge related to the AFL membership during the year ended
September 30, 2002.

Other Income/Expense

     Interest income and interest income, AFL were $6,554 and $246,705,
respectively for the year ended September 30, 2002 as compared to $12,374 and
$332,179, respectively for the year ended September 30, 2001. The decrease in
interest income is due to reduced cash balances during the year ended September
30, 2002 and payments on the principal balance of the note receivable from the
AFL.

     Interest expense during the year ended September 30, 2002 was $215,912 for
the year ended September 30, 2002 as compared to $149,985 for the year ended
September 30, 2001 due to increased borrowings. The interest expense is
primarily attributable to the notes payable assumed under the acquisition
agreement with the IFLA during the year ended September 30, 2001 and the bridge
loans that closed in March 2002.

Loan Fees

     The Company had loan fees that were paid in 84,778 shares of Class A Common
Stock valued at the fair market value on the date they were issuable of
$234,500. The loan fees were paid to the Company's Chief Executive Officer, a
former director of the Company and an employee/significant stockholder who is a
former officer and director of the Company for pledging collateral for the
Company's $700,000 bank note repaid in February 2002. In addition, the company
granted warrants to purchase 786,343 shares of the Company's Class A Common
Stock in connection with its bridge loan financing which were valued utilizing
the Black-Sholes model totaling $1,137,452. In addition, the Company has accrued
a finder's fee of $279,537 related to the bridge loan. For the year ended
September 30, 2002, the Company expensed $801,121 and is amortizing the loan
fees over the term of the loan.

                                       25
<PAGE>

For the Year Ended September 30, 2001 Compared To The Nine-Month Period Ended
September 30, 2000.

Revenues

     The Company recognizes game revenues and expenses over the course of the
season (April through August).

     Revenues for the year ended September 30, 2001 were $4,555,245, which
represented an increase of $685,379 or 18% as compared to revenues for the
period ended September 30, 2000 of $3,869,866. The increase for the year ended
September 30, 2001 was directly attributable to an increase in ticket revenue of
$609,591. Ticket revenues improved due to the addition of the Peoria Pirates,
with ticket revenues of $577,647, and an increase of $31,944 in ticket sales for
the Orlando Predators team. Ticket sales are recognized when the games are
played. The Orlando Predators team played the same number of home games in the
year as last period. The Company also had a $493,047 improvement in advertising
and promotions revenue due to the addition of the af2 franchise and an increase
of $187,191 at the Predator team level. The improvement at the Predator team
level was a direct result of a full selling season that was hindered in the
previous season by a labor dispute. The lease agreement with the Orlando Arena
(TD Waterhouse) generated $120,326 in concession income for the eight home games
played in this year, consistent with the prior period. League revenues dropped
$92,717 due to a decrease in AFL expansion revenues.

     The telemarketing division also generated revenue of $14,317 for the year
ended September 30, 2001 compared to $10,057 for the period ended September 30,
2000. The division produced revenue from selling season tickets for the Mobile
Bay Bears (AA) professional baseball club. The Company anticipates the expansion
of this division in the future with sales for additional teams in the AFL,
arenafootball2 and other minor league hockey and baseball teams.

Operating Expenses

     Operating expenses of $2,984,100 increased $923,197 or 45% for the year
ended September 30, 2001 as compared to $2,060,903 for the period ended
September 30, 2000. The primary reason for added costs is the addition of the
af2 franchise in Peoria, IL and an increase in player costs of $359,092 due to
the collective bargaining agreement. These costs are associated with the
operations of the football teams in Orlando and Peoria.

Selling and Promotional Expenses

     Selling and promotional expenses of $1,637,907 represent an increase of
$816,223 or 99% for the year ended September 30, 2001 compared to $821,684 for
the period ended September 30, 2000. This was due to the added selling costs of
$182,798 associated with the Peoria Pirates. There were also added costs for
producing the Orlando Predator games on TV of $130,000 and increases of $123,559
in advertising and $195,461 for sales salaries and commissions.

                                       26
<PAGE>

League Assessments

     League assessments of $419,000 increased $136,584 or 48% for the year ended
September 30, 2001 as compared to $282,416 for the period ended September 30,
2000 due to legal settlements of $299,000 in 2001 compared to $160,000 in 2000.

     The League is comprised of numerous teams who share in all league revenue
and expenses. League assessments are based upon the team's share of league
operating expenses and other league expenses such as legal settlements.

General and Administrative Expenses

     General and administrative expenses of $1,702,096 increased $426,515 or 33%
for the year ended September 30, 2001 compared to $1,275,581 for the period
ended September 30, 2000. This increase can be primarily attributed to $169,173
of expenses for running the Peoria Pirates administrative office and a full year
of expenses compared to nine months.

Loss on Write Down of Assets

     During the year ended September 30, 2001, the Company wrote off certain
assets not received in the IFL asset purchase, in the amount of $107,671.

Playoffs

     The Orlando Predators played one home playoff game in 2001 and played three
home playoff games in 2000. Playoff revenues for the year ended September 30,
2001 were $117,994 as compared to $653,902 for the period ended September 30,
2000 a decrease of $535,908.

     Playoff expenses for the year ended September 30, 2001 were $149,675 as
compared to $786,862 for the period ended September 30, 2000.

Other Income/Expense

     Interest income during the year ended September 30, 2001 was $344,553 as
compared to $333,552 for the period ended September 30, 2000. The interest
income related to the Arena Football League is due to the Nth Purchase Agreement
and decreased for the year compared to nine months as a result of the AFL paying
the note balance.

     Interest expense during the year ended September 30, 2001 was $149,985 as
compared to $14,419 for the period ended September 30, 2000 due to increased
borrowings.

     The Company incurred loan fees to collateralize the loan from HSBC for the
IFL purchase. The fees were paid in stock valued at market value, in the amount
of $707,381, to two directors of the Company and a majority stockholder who used
personal assets to secure this loan.

                                       27
<PAGE>

Liquidity and Capital Resources

     Historically, the Company has financed net operating losses primarily with
expansion and note receivable and interest payments from the AFL, the sale of
its securities and related party loans.

     In October 2000, we entered into an agreement with af2 Enterprises LLC
("af2"), which operates the arenafootball2 League to assist af2 in acquiring
substantially all of the assets of the Indoor Football League ("IFL") through
IFL Acquisition Company ("IFL Acq."), a wholly-owned subsidiary of af2. Under
the terms of our agreement with af2, we contributed (i) $1.1 million in cash
less credits of $251,165, (ii) a $1.75 million promissory note and (iii) 214,286
shares of Class A Common Stock (which we agreed to repurchase from the holders
at their election for $3.50 per share). In exchange, af2 granted us (i) three
af2 memberships in IFL markets, (ii) the first $1 million in expansion fees
earned by the af2 in IFL markets and (iii) all of the tangible personal property
assets of the IFL such as turf fields, football equipment and the like. In
February 2002, the agreement was modified pursuant to which we issued an
additional 35,000 shares to eliminate our 214,286 share repurchase requirement
and paid $400,000 to cancel the $1.75 million promissory note we had issued.
With respect to the three af2 memberships, we operate the Peoria Pirates and
will operate the Bayou Bears and sold our rights to the Green Bay, Wisconsin
team in October 2002.

     In January through September of 2001, the Company completed private
placements for the sale of 1,132,044 shares of the Company's Class A Common
Stock for net proceeds for $1,532,446.

     The Company completed a private placement of $2,500,372 in notes payable in
March 2002. During the third quarter 2002, the Company received an additional
$50,000. The notes bear interest at 9.5% and principal and interest are due 18
months after the note date. The Company granted warrants to the note holders to
purchase a total of 510,074 shares of the Company's Class A Common Stock for
$2.75 based upon 20,000 shares for each $100,000 in principal balance, which are
exercisable until February 1, 2006. As part of the private placement, an
employee/significant stockholder and former officer and director of the Company,
converted a note payable of $175,000 to a note payable in the private placement.
If the Company repays the loans within one year, warrants to purchase 10,000
shares (for each $100,000 of principal balance) of the Company's Class A Common
Stock will be cancelled. The Company computed the fair market value of the
warrants utilizing the Black-Scholes model and will amortize the cost over the
note period. The warrants have been valued at $902,950 and the significant
assumptions used in the calculation of the warrants were risk free interest
rates of 3.74% to 4.03% an average volatility of 82% and an average life of four
years. The notes are collateralized by the Company's two non-voting interests in
the Arena Football League.

     In July 2002, the Company's Board of Directors voted to increase the
maximum offering in the private placement to a total of $3,850,000 under the
same terms as the original agreement. In addition, the Company has agreed to
grant warrants to purchase an additional 5,000 shares of the Company's Class A
Common Stock for $2.50 for each $100,000 loaned to the existing note holders as
an incentive to increase the maximum offering size. All original note holders
signed a settlement agreement changing the loan date to February 15, 2002, with

                                       28
<PAGE>

a due date of August 14, 2003. An additional $595,000 was received as of
September 30, 2002, bringing the total outstanding bridge loans to $3,145,372.
An additional $46,000 was received subsequent to year-end. New note holders
received warrants to purchase 25,000 shares of the Company's Class A Common
Stock for each $100,000 loaned plus warrants to purchase 10,000 shares of the
Company's Class A Common Stock for each $100,000 loaned if the notes aren't paid
by February 15, 2003.

     We have incurred substantial and ongoing losses since our inception,
aggregating $15,056,442 through September 30, 2002. Moreover, recently our cash
resources have been reduced to the point that our ability to continue our
operations has been put into jeopardy. In order to generate cash, we have
decided to offer all four of our professional teams for sale, retaining only our
aggregate 9% net revenue interest in the League. Consistent with this strategy,
in December 2002 we entered into a nonbinding letter of intent to sell the
Predators to an investor group led by Brett L. Bouchy, one of our affiliates. We
are continuing to solicit other offers for the Predators from other interested
buyers. The letter of intent we signed is subject to a number of contingencies
including the execution of a definitive purchase agreement, improved offers from
other interested buyers and approvals from our Board of Directors and the
League.

     Due to the urgency of our cash flow difficulties, we believe we may be
selling the Predators for less than that which we would receive had we the time
to properly market the Predators. Similarly, we believe we may also be required
to sell our other teams at prices below that which we would receive had we the
time to properly market the other teams.

     There can be no assurance that we will be successful in selling any of our
teams. However, if we are successful in selling all four teams, our revenue
would be reduced to the distributions, if any, we will receive generated by our
9% net revenue interest in the League. While our operating expenses would also
be substantially reduced, we can give no assurance that we would be able to
generate sufficient revenue following the team sales to maintain our operations.

                                    PART III

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

     Information concerning each of OPE's executive officers and directors is
set forth below:


                                       29
<PAGE>
<TABLE>
<CAPTION>

                                                                         Officer/Director
        Name                 Age              Position                        Since
        ----                 ---              --------                        -----
<S>                          <C>   <C>                                        <C>
Eric A. Margenau (1)         62    Chairman of the Board of Directors         2000
                                   and Chief Executive Officer
David Berryman               52    President and Chief Operating Officer      2001
Keli Davis                   32    Chief Financial Officer                    2002
Lyle Reigel (1) (2)          63    Director                                   2001
Kenneth Levy (1) (2)         56    Director                                   2001
Michael A. Tatoian (1) (2)   42    Director                                   2001

(1) Member of Compensation Committee.
(2) Member of Audit Committee.

</TABLE>

     Directors are elected at the Company's annual meeting of shareholders and
serve a term of one year or until their successors are elected and qualified.
Officers are appointed by the Board of Directors and serve at the discretion of
the Board of Directors, subject to the bylaws of the Company. Jeffrey L. Bouchy
and James Ross resigned as directors in January 2002.

     The Audit Committee reviews the engagement and independence of the
Company's independent accountants, the audit and nonaudit fees of the
independent accountants and the adequacy of the Company's internal accounting
controls. The Compensation Committee considers the compensation and incentive
arrangements of the Company's executive officers.

     The principal occupation of each director and executive officer of the
Company, for at least the past five years, is as follows:

     Eric A. Margenau was appointed Chief Executive Officer of the Company in
January 2000. He has been President of United Sports Ventures ("USV") since June
1996. From January 2000 to November 2001, USV had a management agreement with
the Company under which USV provided the services of Dr. Margenau and USV's
management staff to manage the operations of the Company. Dr. Margenau has been
involved in the ownership and operation of minor league sports teams since 1986.
In that time he has owned, operated and/or managed seven minor league baseball
franchises and four minor league hockey franchises. From 1983 to 1988, he was
the executive director of the Center for Sports Psychology. As a sports
psychologist, he has been a consultant to several Major League Baseball teams.

     David Berryman was the President and Chief Executive Officer of Arkansas
Sports Entertainment, which owns the Arkansas River Blades East Coast Hockey
League franchise and the Arkansas Twisters arenafootball2 franchise, from 1998
until he joined the Company in November 2001. After a 20-year career in
professional tennis as a player, coach and promoter, he served as Director of
Off Ice Officials for the South Carolina Stingrays from 1993 to 1995 and was
General Manager of the Louisiana IceGators from 1995 to 1998. He earned a
Bachelor's degree in Business Administration from Memphis State University.

     Keli Davis was Vice President and Controller for JSM Enterprises, Inc. and
Controller of several other closely-held corporations and partnerships until she
joined the Company in October of 2002 as Chief Financial Officer. Prior to that,
she served as Chief Financial Officer for Arkansas Sports Entertainment, Inc.
She has worked for over ten years in the accounting and auditing fields,
starting her career as an auditor in public accounting. She graduated magna cum
laude in 1992 from the University of Arkansas with a Bachelor's of Science in
Business Administration (major accounting). She completed the Certified Public
Accountant's exam in the spring of 1994.

                                       30
<PAGE>

     Lyle Reigel has been the President of U.S. Paper Converters, Inc. (a paper
conversion company) since 1983, the President of Reigel Electric Corp. (a
provider of electric services for commercial construction projects) from 1978 to
2000, and the Vice President of Paget Equipment (a manufacturer of high pressure
vessels) since 1985. He has also owned and managed commercial real estate
properties since 1978.

     Kenneth Levy was President of Marshall, Alexander & Marshall, an investment
banking and brokerage firm, from October 1994 to March 1997. From March 1997 to
January 2000, he was Managing Director of Janssen/Meyers Associates, LLP, an
investment banking and brokerage firm. Since January 2000, he has been President
of United Network Marketing Systems, Inc., an Internet based marketing firm.

     Michael A. Tatoian is the Chief Executive Officer of Victory Sports Group,
LLC, a sports management and development company. He has been actively involved
in professional sports ownership/development/management since 1984 with
involvement in minor league baseball, minor league hockey and arena football





                                       31
<PAGE>
<TABLE>
<CAPTION>

ITEM 10. EXECUTIVE COMPENSATION
-------------------------------

     The following table indicates all compensation received the by Company's
Chief Executive Officer and the President for the nine months ended September
30, 2000 or the years ended September 30, 2001 and 2002.

                             Summary Compensation Table

                                                             Annual Compensation (1)
                                                             -----------------------
           (a)                 (b)      (c)        (d)        (e)          (f)
        Name and                                             Stock
   Principal Position         Year   Salary($)   Bonus($)   Options   Compensation($)
   ------------------         ----   ---------   --------   -------   ---------------
<S>                           <C>     <C>           <C>     <C>             <C>
Eric Margenau                 2000    68,000       -0-      150,000        -0-
Chief Executive Officer (1)   2001    39,000       -0-                     -0-
Dave Berryman                 2002    109,375      -0-       20,000        -0-

(1) Paid to United Sports Ventures, Inc., a company controlled by Dr. Margenau.

</TABLE>

     OPE's directors do not receive compensation for attending Board meetings
but are reimbursed for out-of-pocket expenses incurred in connection therewith.

1997 Employee Stock Option Plan

     In April 1997, OPE's stockholders adopted OPE's 1997 Employee Stock Option
Plan (the "Plan"), which provides for the grant of stock options intended to
qualify as incentive stock options and nonqualified stock options (collectively,
"stock options") within the meaning of Section 422 of the United States Internal
Revenue Code of 1986 (the "Code"). Stock options are issuable to any officer,
director, key employee or consultant of OPE.

     OPE's Board of Directors has reserved 3,000,000 shares of Class A Common
Stock for issuance under the Plan. The Plan is administered by the full Board of
Directors, which determines which individuals shall receive stock options, the
time period during which the stock options may be exercised, the number of
shares of Class A Common Stock that may be purchased under each stock option and
the stock option price.

     The per share exercise price of incentive stock options may not be less
than the fair market value of the Class A Common Stock on the date the option is
granted. The aggregate fair market value (determined as of the date the stock
option is granted) of the Class A Common Stock that any person may purchase
under an incentive stock option in any calendar year pursuant to the exercise of
incentive stock options may not exceed $100,000. No person who owns, directly or
indirectly, at the time of the granting of an incentive stock option, more than
10% of the total combined voting power of all classes of stock of OPE is
eligible to receive incentive stock options under the Plan unless the stock
option price is at least 110% of the fair market value of the Class A Common
Stock subject to the stock option on the date of grant.

                                       32
<PAGE>

     No incentive stock options may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the stock option may only be exercisable by the optionee. Stock
options may be exercised only if the stock option holder remains continuously
associated with OPE from the date of grant to the date of exercise. The exercise
date of a stock option granted under the Plan cannot be later than ten years
from the date of grant. Any stock options that expire unexercised or that
terminate upon an optionee's ceasing to be employed by OPE become available once
again for issuance. Shares issued upon exercise of a stock option will rank
equally with other shares then outstanding.

     As of the date of this Report, 1,633,737 stock options have been granted
under the Plan, exercisable at prices from $.72 to $3.00 per share.

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

     The following table sets forth certain information with respect to the
ownership of OPE's Class A and Class B Common Stock as of the date of this
Report, by (i) each person who is known by OPE to own of record or beneficially
more than 5% of OPE's Class A and Class B Common Stock, (ii) each of OPE's
directors and (iii) all directors and officers of OPE as a group. Unless
otherwise indicated, the stockholders listed in the table have sole voting and
investment powers with respect to the shares of Class A and Class B Common Stock
and their addresses are in care of OPE. Shareholdings include shares issuable
under stock options exercisable within 60 days from the date of this Report.

                                        Number of Shares       Percentage
        Name                           Beneficially Owned       of Class
        ----                           ------------------       --------

Eric A. Margenau (1) (2)                  1,146,617               13.9%
Lyle Reigel                                 164,561                2.2%
Kenneth Levy                                  6,666                 * %
Michael A. Tatoian                            6,666                 * %
Brett L. Bouchy (1) (2)                   1,061,071               12.9%
Dorothy Consulting, Inc.                    759,294               10.2%
Alan Gagleard (3)                                75                7.5%
All directors and officers
    as a group
    (four persons)                        1,324,510               16.3%

* Less than 1%

                                       33
<PAGE>

(1) Does not include (i) 462.5 shares of Class B Common Stock held by Brett L.
Bouchy which are subject to a voting trust in favor of Eric A. Margenau until
January 2010 or (ii) 462.5 shares of Class B Common Stock held by Dr. Margenau.
There are a total of 1,000 shares of Class B Common Stock outstanding, each
share of which votes the equivalent of 10,000 shares of Class A Common Stock.

(2) Includes stock options held by Brett L. Bouchy to purchase 787,080 shares at
$2.50 per share. Any shares purchased by Brett L. Bouchy under these options
will be subject to a voting trust in favor of Eric A. Margenau until January
2010.

(3) Represents shares of Class B Common Stock. Each share of Class B Common
Stock votes the equivalent of 10,000 shares of Class A Common Stock.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------

     In January 1999, the Company issued to Brett L. Bouchy, its then Chief
Executive Officer, nonqualified options to purchase 950,000 shares of its Class
A Common Stock at $4.44 per share until December 2001. The options were issued
in connection with a three year employment agreement executed by the Company and
Mr. Bouchy and provided that 1/3 of the options would vest yearly on the
anniversary date of the employment agreement. Mr. Bouchy terminated his
employment agreement with the Company in January 2000 and exchanged his 950,000
nonqualified options for 817,068 incentive stock options issued under the
Company's 1997 Stock Option Plan, exercisable at $2.50 per share. Any shares
issued upon exercise of the options will be subject to a voting trust in favor
of Eric A. Margenau until January 2010.

     From January 2000 to November 2001, USV had a management agreement with the
Company under which USV provided the services of Dr. Margenau and USV's staff
management to manage the operations of the Company for $3,000 per month. In
connection with the agreement, the Company issued to USV stock options to
purchase up to 150,000 shares of the Company's Class A Common Stock for $2.50
per share. The Company cancelled the initial stock option and reissued to USV
150,000 stock options exercisable at $2.70 per share when it terminated the
agreement in November 2001.

     In February 2000, New Era Growth and Venture Fund (formerly "The Monolith
Limited Partnership") agreed to sell its 925 shares of Class B Common Stock to
Brett L. Bouchy (462.5 shares) and Eric A. Margenau (462.5 shares). Dr. Margenau
has the right to vote Mr. Bouchy's shares until January 2010.

     In January 2001, the Company agreed to issue an aggregate of 100,000 shares
of its restricted Class A Common Stock to Jeffrey L. Bouchy and Eric A.
Margenau, then officers and directors of the Company, and Brett L. Bouchy, a
principal stockholder of the Company. The shares were issued in consideration of
Messrs. Bouchy, Margenau and Bouchy providing their assets as collateral to
assist the Company in borrowing $1 million to satisfy its obligation under the
IFL Acquisition agreement, which required the Company to advance $1.1 million to
af2 Enterprises, LLC. The Company subsequently reduced the loan to $700,000 and
agreed to issue one additional share of Class A Common Stock for each $10 of
loan balance, on a quarterly basis. A total of 415,444 shares were issued in the
aggregate to these three individuals prior to the loan being repaid in March
2002 comprised of 80,862 shares issued to Jeffrey L. Bouchy, 125,767 shares
issued to Eric A. Margenau and 208,815 shares issued to Brett L. Bouchy.

                                       34
<PAGE>

     In June 2001, Brett L. Bouchy loaned us $175,000. In February 2002, the
debt was converted by a promissory note due August 2003 and along with similar
notes aggregating approximately $3.2 million, is secured by our 9% (2 non-voting
interests) in the League.

     The Company completed a private placement of $2,500,372 in notes payable in
March 2002. Brett L. Bouchy is a note holder and holds a note due from the
Company in the amount of $400,000. Lyle Reigel, one of our directors, is also a
note holder and holds a note due from the Company in the amount of $500,000.

     In October 2002, we sold our membership rights to the Green Bay Wisconsin
af2 team to Lyle Reigel, one of our directors, for $1,000,000. Mr. Reigel also
agreed to pay us a management fee of $5,000 per month to operate the team.

     We have entered into a nonbinding letter of intent to sell the Predators to
an investment group headed by Brett L. Bouchy. The terms of the sale have not as
yet been fully negotiated and we continue to negotiate with other parties
interested in purchasing the Predators.

     The Company believes the terms of the above transactions were fair,
reasonable and consistent with terms that could be obtained from nonaffiliated
third parties. Transactions with affiliates of the Company require approval of a
majority of the disinterested members of the Company's Board of Directors. If a
material amount, the Company's securities (other than stock options under the
Company's 1997 Employee Stock Option Plan) may not be issued to management,
promoters or their respective associates or affiliates without obtaining a
fairness opinion from a qualified brokerage firm or appraiser.

     We have incurred substantial and ongoing losses since our inception,
aggregating $15,056,442 through September 30, 2002. Moreover, recently our cash
resources have been reduced to the point that our ability to continue our
operations has been put into jeopardy. In order to generate cash, we have
decided to offer all four of our professional teams for sale and retaining our
aggregate 9% net revenue interest in the League. Consistent with this strategy,
in December 2002 we entered into a nonbinding letter of intent to sell the
Predators to an investor group led by Brett L. Bouchy, one of our affiliates. We
are continuing to solicit other offers for the Predators from other interested
buyers. The letter of intent we signed is subject to a number of contingencies
including the execution of a definitive purchase agreement, improved offers from
other interested buyers and approvals from our Board of Directors and the
League.

                                       35
<PAGE>

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

     a. Exhibits:

        Exhibit No.

          10.03     Arena Football League Licensing Program Update-November 4,
                    1996 (1)

          10.04     Bylaws of the Arena Football League (1)

          10.05     Membership Agreement with the Arena Football League (1)

          10.12     Agreement between Arena football League and the Registrant
                    to acquire the Equity Interests (2)

          10.18     Voting Trust Agreement between Messrs. Bouchy and Margenau
                    (3)

          10.20     Civil Complaint: Guidry, et. al. vs. Arena Football League
                    LLC et. al. (4)

          10.21     Management Agreement (USV) (4)

          10.23     Amended Margenau Agreement with USV (4)

          99.1      Certification of Periodic Report

(1) Incorporated by reference to the Registrant's Registration Statement on Form
SB-2, file number 333-31671, declared effective on December 10, 1997.

(2) Incorporated by reference to the Registrant's Registration Statement on Form
SB-2, file number 333-53217, filed on May 21, 1998.

(3) Incorporated by reference to the Registrant's Annual Report on Form 10-KSB
for the year ended September 30, 2000.

(4) Incorporated by reference to the Registrant's previous filings on Forms
10-KSB, 10-QSB and 8-K.

     b. Reports on Form 8-K: The Registrant filed two reports on Form 8-K for
the quarter ended September 30, 2002, dated October 14, 2002 and November 5,
2002, (i) providing the required financial statements in connection with our
acquisition of the Louisiana IceGators, and (ii) reporting the resignation of
our Chief Financial Officer, John Pearce, respectively.


                                       36
<PAGE>


                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized, in Orlando, Florida, on January 14, 2003.

                                      THE ORLANDO PREDATORS ENTERTAINMENT, INC.

                                      By: /s/ Eric A. Margenau
                                      ------------------------------------------
                                      Eric A. Margenau and CEO

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on the dates
indicated.


        Signature                         Title                       Date
        ---------                         -----                       ----

/s/ Eric A. Margenau              Chairman of the Board of      January 14, 2003
------------------------          Directors and Chief
    Eric A. Margenau              Executive Officer


/s/ Lyle Reigel                   Director                      January 14, 2003
------------------------
    Lyle Reigel


/s/ Kenneth Levy                  Director                      January 14, 2003
------------------------
    Kenneth Levy


/s/ Michael A. Tatoian            Director                      January 14, 2003
------------------------
    Michael A. Tatoian




                                       37
<PAGE>

                        CERTIFICATION OF PERIODIC REPORT


I, Eric Margenau, certify that:

1.   I have reviewed this annual report on Form 10-KSB of The Orlando Predators
     Entertainment, Inc.;

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

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

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

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

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

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

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

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



Date:  January 14, 2003                         /s/ Eric Margenau
                                                -----------------
                                                Eric Margenau
                                                Chief Executive Officer

<PAGE>

                        CERTIFICATION OF PERIODIC REPORT


I, Keli Davis, certify that:

1.   I have reviewed this annual report on Form 10-KSB of The Orlando Predators
     Entertainment, Inc.;

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

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

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

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

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

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

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

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



Date:  January 14, 2003                         /s/ Keli Davis
                                                --------------
                                                Keli Davis
                                                Chief Financial Officer

<PAGE>


                                      INDEX

                                                                            Page
                                                                            ----

THE ORLANDO PREDATORS ENTERTAINMENT, INC.

     Independent Auditors' Report                                           F-2

     Consolidated Financial Statements:

         Balance Sheet                                                      F-3

         Statements of Operations                                           F-5

         Statement of Changes in Stockholders' Equity                       F-6

         Statements of Cash Flows                                           F-7

     Notes to Consolidated Financial Statements                             F-8





                                      F-1
<PAGE>


                                 AJ. ROBBINS, PC
                          CERTIFIED PUBLIC ACCOUNTANTS
                              3033 EAST 1ST AVENUE
                                    SUITE 201
                             DENVER, COLORADO 80206

                          INDEPENDENT AUDITORS' REPORT

To the Audit Committee
The Orlando Predators Entertainment, Inc.
Orlando, Florida

We have audited the accompanying consolidated balance sheet of The Orlando
Predators Entertainment, Inc. as of September 30, 2002, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for each of the years in the two year period then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above, present fairly, in
all material respects, the consolidated financial position of The Orlando
Predators Entertainment, Inc. as of September 30, 2002 and the results of its
operations and its cash flows for each of the years in the two year period then
ended, in conformity with generally accepted accounting principles in the United
States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and it has a significant working capital deficit that raise substantial doubt
about the entity's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

                                              /s/ AJ. ROBBINS, P.C.
                                              ---------------------
                                              AJ. ROBBINS, P.C.
                                              CERTIFIED PUBLIC ACCOUNTANTS

Denver, Colorado
November 17, 2002


                                      F-2
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2002

                                     ASSETS

CURRENT ASSETS:
     Cash                                                            $   337,224
     Accounts receivable                                                 774,241
     Accounts receivable, af2                                             23,065
     AFL receivable, current portion                                     308,000
     af2 expansion fees receivable                                       109,697
     Assets available for sale                                            25,000
     Inventory                                                            37,335
     Prepaid expenses                                                    869,891
     Other current assets                                                 28,493
                                                                     -----------

                  Total Current Assets                                 2,512,946


PROPERTY AND EQUIPMENT, at cost, net                                     482,174


INVESTMENT IN AFL                                                      4,032,650


AFL RECEIVABLE, net of current portion                                   576,136


MEMBERSHIP COST, net                                                   1,157,917


af2 TEAM INVESTMENTS                                                   1,135,411


OTHER ASSETS                                                             167,309
                                                                     -----------

                                                                     $10,064,543
                                                                     ===========


           SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-3
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                     CONSOLIDATED BALANCE SHEET (Continued)
                               SEPTEMBER 30, 2002

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable and accrued expenses                         $  1,055,956
     Note payable - acquisition, current portion                        150,000
     Bridge loans payable                                             3,145,372
     af2 expansion fees payable                                         200,000
     Deferred revenue                                                 1,189,594
     Due to AFL                                                          50,000
                                                                   ------------

                  Total Current Liabilities                           5,790,922


NOTE PAYABLE - ACQUISITION, net of current portion                      450,000


DEFERRED REVENUE, long term                                              71,936


DUE TO AFL, net of current portion                                      150,000
                                                                   ------------

                                                                      6,462,858
                                                                   ------------

COMMITMENTS AND CONTINGENCIES


MINORITY INTEREST                                                       243,742
                                                                   ------------


STOCKHOLDERS' EQUITY:
     Preferred stock, 1,500,000 shares authorized; none
         issued or outstanding                                             --
     Class A Common stock, 15,000,000 shares authorized;
         7,394,840 issued and outstanding                            13,910,031
     Class B Common Stock, 1,000 shares authorized,
         1,000 issued and outstanding                                     5,000
     Additional paid-in capital                                       4,499,354
     Accumulated (deficit)                                          (15,056,442)
                                                                   ------------

                  Total Stockholders' Equity                          3,357,943
                                                                   ------------

                                                                   $ 10,064,543
                                                                   ============


           SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-4
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                            STATEMENTS OF OPERATIONS

                                                For the Years Ended September 30
                                                --------------------------------
                                                      2002             2001
                                                  ------------     ------------
REVENUES:
   Ticket                                         $  2,009,553     $  2,228,211
   Concession                                          135,215          120,326
   Play-off                                            456,932          117,994
   Advertising and promotions                        1,124,628          656,052
   Sponsorship trade revenue                         1,371,721        1,197,598
   League                                              419,092          164,167
   Other                                                50,488           70,897
                                                  ------------     ------------

       Total Revenues                                5,567,629        4,555,245
                                                  ------------     ------------

COSTS AND EXPENSES:
   Operations                                        2,818,949        2,529,974
   Playoff expenses                                    535,905          149,675
   Selling and promotional expenses                  1,309,244        1,261,081
   Trade expenses                                    1,368,137        1,146,155
   League assessments                                  466,092          419,000
   General and administrative                        1,961,670        1,386,892
   Telemarketing expenses                                 --              3,064
   Amortization                                         19,312           74,955
   Depreciation                                        158,734          147,771
   Loss from disposal of equipment                       2,288              878
   Write down of assets available for sale             133,634          107,671
   Loss on litigation settlement                          --             25,000
   (Gain) on sale of assets                               --            (11,181)
   Impairment of AFL membership                      1,745,271             --
                                                  ------------     ------------

       Total Costs and Expenses                     10,519,236        7,240,935
                                                  ------------     ------------

OPERATING (LOSS)                                    (4,951,607)      (2,685,690)
                                                  ------------     ------------

OTHER INCOME (EXPENSE):
   Interest expense                                   (215,912)        (149,985)
   Interest income                                       6,554           12,374
   Interest income, AFL                                246,705          332,179
   Loan fees                                        (1,090,850)        (727,381)
                                                  ------------     ------------

       Net Other Income (Expense)                   (1,053,503)        (532,813)
                                                  ------------     ------------

NET (LOSS) BEFORE MINORITY INTEREST                 (6,005,110)      (3,218,503)

MINORITY INTEREST                                        6,258             --
                                                  ------------     ------------

NET (LOSS)                                        $ (5,998,852)    $ (3,218,503)
                                                  ============     ============

NET (LOSS) PER SHARE, Basic and Diluted           $       (.83)    $       (.55)
                                                  ============     ============

Weighted Average Number of Common Shares
  Outstanding, Basic and Diluted                     7,198,044        5,865,623
                                                  ============     ============


           SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-5
<PAGE>
<TABLE>
<CAPTION>

                                             THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                                           STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                          FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2002

                               Class A Common Stock          Class B Common Stock        Additional
                            ---------------------------   ---------------------------     Paid-In      Accumulated
                               Shares         Amount         Shares         Amount        Capital       (Deficit)         Total
                            ------------   ------------   ------------   ------------   ------------   ------------    ------------
<S>                            <C>         <C>            <C>            <C>            <C>            <C>             <C>
Balances, September 30,
   2000                        5,192,999   $ 10,136,400          1,000   $      5,000   $  3,096,653   $ (5,839,087)   $  7,398,966

Sale of Class A Common
   Stock, net of offering
   costs of $195,819           1,132,044      1,532,446           --             --             --             --         1,532,446

Class A Common Stock
   issued for exercise
   of stock options               65,000        150,000           --             --             --             --           150,000

Sale of Class A Common
   Stock warrants                   --             --             --             --            6,250           --             6,250

Class A Common Stock
   issued for loan fees          330,667        762,611           --             --             --             --           762,611

Net (loss)                          --             --             --             --             --       (3,218,503)     (3,218,503)
                            ------------   ------------   ------------   ------------   ------------   ------------    ------------

Balances, September 30,
   2001                        6,720,710     12,581,457          1,000          5,000      3,102,903     (9,057,590)      6,631,770

Sale of Class A Common
   Stock                         338,400        493,500           --             --             --             --           493,500

Class A Common Stock
   issued for exercise
   of stock options                1,666          2,499           --             --             --             --             2,499

Class A Common Stock
   issued for loan fees           84,778        234,500           --             --             --             --           234,500

Stock options granted
   for consulting fees              --             --             --             --          259,000           --           259,000

Stock options granted
   for loan fees                    --             --             --             --        1,137,451           --         1,137,451

Stock issued for
   acquisition of af2
   teams                         249,286        598,075           --             --             --             --           598,075

Net (loss)                          --             --             --             --             --       (5,998,852)     (5,998,852)
                            ------------   ------------   ------------   ------------   ------------   ------------    ------------

Balances, September 30,
   2002                        7,394,840   $ 13,910,031          1,000   $      5,000   $  4,499,354   $(15,056,442)   $  3,357,943
                            ============   ============   ============   ============   ============   ============    ============


                                    SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                F-6
<PAGE>

                           THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                                   STATEMENTS OF CASH FLOWS

                                                                 For the Years Ended September 30,
                                                                 ---------------------------------
                                                                        2002           2001
                                                                    -----------    -----------

CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
   Net (loss) before minority interest                              $(6,005,110)   $(3,218,503)
   Adjustments to reconcile net (loss) to net cash from operating
     activities:
     Loss from disposal of equipment                                      2,288            878
     Loss on assets available for sale                                  133,634        107,671
     Depreciation                                                       158,734        147,771
     Amortization                                                        19,312         74,955
     Impairment of AFL membership                                     1,745,271           --
     Stock based compensation                                         1,630,951        762,611
   Changes in assets and liabilities:
     Accounts receivable                                               (625,270)       (31,345)
     Accounts receivable, af2                                           (23,065)          --
     Inventory                                                            5,108        (27,926)
     Prepaid expenses                                                  (645,676)       (67,166)
     Other assets                                                        87,254         44,049
     Accounts payable and accrued expenses                              341,462        257,409
     Accounts payable and accrued expenses, related party               (36,000)       (13,765)
     Due to AFL                                                        (124,000)       299,000
     Deferred revenue                                                   641,887         67,627
                                                                    -----------    -----------

                Net Cash (Used) by Operating Activities              (2,693,220)    (1,596,734)
                                                                    -----------    -----------

CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
   Purchase of equipment                                                (84,278)      (324,828)
   Acquisition of af2 teams and assets available for sale                  --       (2,935,026)
   Acquisition of IceGators                                            (640,000)          --
   Proceeds from the sale of assets available for sale                    3,500        209,195
   Collection of AFL receivable                                         353,359        321,497
   Acquisition costs utilized                                              --            2,984
                                                                    -----------    -----------

                Net Cash (Used) by Investing Activities                (367,419)    (2,726,178)
                                                                    -----------    -----------

CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
   Proceeds from issuance of Class A Common Stock                       493,500      1,728,265
   Exercise of options                                                    2,499        150,000
   Proceeds from note payable - related party                              --          175,000
   Proceeds from note payable - bank                                       --        1,000,000
   Proceeds from note payable - acquisition                             600,000      1,750,000
   Proceeds from bridge loans                                         2,970,372           --
   Repayments of note payable - bank                                   (700,000)      (300,000)
   Repayment of notes payable - acquisition                            (400,000)          --
   Sale of warrants                                                        --            6,250
   Payment of offering costs                                               --         (195,819)
   Sale of minority interest                                            250,000           --
                                                                    -----------    -----------

               Net Cash Provided by Financing Activities              3,216,371      4,313,696
                                                                    -----------    -----------

INCREASE (DECREASE)  IN CASH                                            155,732         (9,216)

CASH, beginning of period                                               181,492        190,708
                                                                    -----------    -----------

CASH, end of period                                                 $   337,224    $   181,492
                                                                    ===========    ===========

Supplementary information:
See Note 7


                  SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                              F-7
</TABLE>
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Activity
--------
The Orlando Predators Entertainment, Inc. (the "Company") was formed on March
27, 1997, to acquire, own and operate the Orlando Predators (the "Predators"), a
professional Arena Football team and a member of the Arena Football League
("AFL").

Prior to October 18, 2000, the operations of the Company included only the
operations of Predators. Subsequently, the Company formed Predators as a
separate division and assigned the football operations to Predators. In 2000,
the Company formed Peoria Professional Football, Inc. ("Peoria") and acquired
the right to operate an arenafootball2 ("af2") (a minor league system of the
AFL) team in Peoria, Illinois. The accounting policies of Predators and Peoria
are identical to the prior policies of the Company. In addition to the rights to
Peoria, the Company acquired the rights to operate two additional teams in af2
markets formerly controlled by the Indoor Football League, Inc. ("IFL"), a
competing indoor football league. The Company also acquired assets of the IFL,
including indoor playing fields and office equipment. These assets have been
classified as available for sale. (See Note 14)

In July 2002, the Company formed Louisiana Sports, LLC ("LA Sports"), a wholly
owned subsidiary of the Company. LA Sports formed IceGators Professional Hockey,
LLC (the "IceGators") and Acadiana Bayou Bears Professional Football, LLC (the
"Bears"). LA Sports acquired certain assets of the Louisiana IceGators, a
professional hockey team that is a member of the East Coast Hockey League
("ECHL"), which plays its home games in Lafayette, Louisiana and assigned those
assets to the IceGators. The Company assigned the rights to an af2 membership to
LA Sports, which then assigned those rights to the Bears. (See Note 15) In
August 2002, the Company sold a 10% membership interest in LA Sports to a member
of its board of directors/significant stockholder for $250,000.

The Company selected Green Bay, Wisconsin and Lafayette, Louisiana as the home
territories for its two additional af2 teams. Subsequent to year end, the
Company reached an agreement to sell Bismarck Professional Football, Inc. its
wholly owned subsidiary, which owned the rights to the Green Bay af2 team to a
member of its board of directors/significant stockholder for $1,000,000. (See
Note 16).

Consolidation and Minority Interest
-----------------------------------
The consolidated financial statements of the Company include 100% of the assets,
liability, equity and operations of the subsidiaries. The 10% membership
interest in LA Sports owned by a member of the Company's board of
directors/significant stockholder has been recorded as a minority interest. All
significant intercompany balances and transactions have been eliminated in
consolidation.

                                      F-8
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Reclassification
----------------
Certain amounts reported in the Company's financial statements for the year
ended September 30, 2001 have been reclassified to conform to the current year
presentation.

Cash and Cash Equivalents
-------------------------
Cash and cash equivalents consist primarily of cash in banks and highly liquid
investments with original maturities of 90 days or less.

Inventory
---------
Inventory consists of team merchandise available for sale. Inventory is stated
at the lower of cost (first-in, first-out) or market.

Property and Equipment
----------------------
Property and equipment is recorded at cost. Depreciation expense is provided on
a straight-line basis using the estimated useful lives of 5-10 years.
Maintenance and repairs are charged to expense as incurred. When assets are
retired or otherwise disposed of, the property accounts are relieved of costs
and accumulated depreciation and any resulting gain or loss is credited or
charged to operations. Depreciation expense for the years ended September 30,
2002 and 2001 was $158,734 and $147,771, respectively.

Restricted Investment
---------------------
Restricted investment included in other assets consists of a $100,000 interest
bearing certificate of deposit with a financial institution, which also provides
a letter of credit to the AFL. The certificate of deposit is a requirement of
the AFL as security for the AFL's letter of credit.

The Company is also required to maintain a minimum cash balance of $91,000 as
collateral for the IceGators' workers' compensation insurance. This restricted
amount is included in the cash balance.

Membership Cost
---------------
The AFL membership was recorded at its cost of $1,989,860 and was being
amortized on a straight-line basis over 40 years. The Peoria af2 membership cost
was recorded at its cost of $550,000 and was being amortized on a straight-line
basis over 20 years. The ECHL membership was recorded at its cost of $640,000
and is not being amortized. Pursuant to SFAS 142 ("Goodwill and Other Intangible
Assets") and SFAS 144 ("Accounting for the Impairment or Disposal of Long-Lived
Assets"), the Company has evaluated its memberships in the AFL, af2 and the ECHL
for impairment and has determined as of September 30, 2002, that the fair value
of the AFL membership approximates $-0-. As a result the Company has recorded a
$1,745,271 impairment charge related to the AFL membership during the year ended
September 30, 2002. The Company believes that no impairment charge should be
recognized on the af2 and ECHL memberships at this time. Amortization expense
for the years ended September 30, 2002 and 2001 was $19,312 and $74,955,
respectively.

                                      F-9
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In July 2001 the Financial Accounting Standards Board ("FASB") issued SFAS No.
142 goodwill and other intangible assets (SFAS 142). Under SFAS 142, goodwill
and intangible assets with indefinite lives are no longer amortized but are
reviewed annually (or more frequently if impairment indicators arise) for
impairment. Separable intangible assets that are not deemed to have indefinite
lives will continue to be amortized over their useful lives (but with no maximum
life). With respect to goodwill and intangible assets acquired prior to July 1,
2001, the Company is required to adopt SFAS 142 effective September 30, 2001.
The adoption of SFAS 142 caused a decrease of $55,643 in amortization expense
for the year ended September 30, 2002 as compared to the same period in 2001.
The Company has determined that the fair value of its AFL membership
approximates $-0- and has recorded a $1,745,271 impairment charge related to the
AFL membership during the year ended September 30, 2002.

Advertising Expenses
--------------------
The Company utilizes direct-response advertising, eliciting sales to customers
who can be shown to have responded specifically to the advertising and resulting
in future economic benefits. Expenditures for advertising are capitalized and
then amortized over the course of the playing season. Advertising costs totaled
$283,428 and $261,376 for the years ended September 30, 2002 and 2001,
respectively. The Company has capitalized advertising costs of $3,680 as of
September 30, 2002.

Revenue Recognition
-------------------
The Company recognizes ticket, concession, play-off, and advertising and
promotions revenues as its home preseason, regular season and play-off (if any)
games are played. Generally, prior to each team's season, the Company begins
selling season tickets and sponsorship packages (advertising and promotions),
which are recorded as deferred revenues until each game is played. The Company
recognizes these revenues ratably over the course of the home games played.
Single game tickets are sold generally during each team's playing season. These
revenues are recognized as the applicable games are played. The Company receives
all ticket and advertising and promotion revenues for home play-off games (if
any) and receives play-off revenue sharing from other teams for away play-off
games (if any). The Company does not share in ticket or other revenues from any
preseason or regular season away games.

The playing seasons of each of the Company's teams are as follows for the year
ending September 30, 2003:

Team Name             League     Season     Total Games   Total Home Games
---------             ------     ------     -----------   ----------------

Orlando Predators      AFL    February-May      16               8
Peoria Pirates         af2    April- July       16               8
Bayou Bears            af2    April-July        16               8
Louisiana IceGators    ECHL   October-March     72              36

                                      F-10
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Predator's arena lease (Note 6) provides for the Company to share in
approximately 20% of the concession revenues generated at the arena in which it
plays its home games.

The Company recognizes its share of revenues from the leagues, when amounts are
deemed distributable by the leagues. The Company receives one share of league
revenues based upon the number of shares outstanding at the time the revenues
were earned by the leagues. League revenues (if any) generally consist of gross
expansion fees received by the league, any national sponsorship revenues and any
national television contract revenues. The Company may share in other league
revenues generated.

Football and Hockey Operations
------------------------------
Team, selling and promotional expenses (principally player and coaches salaries,
fringe benefits, insurance, game expenses, arena rentals and travel) are
recorded as expenses ratably over the course of the season. Accordingly,
expenses not yet incurred are recorded as prepaid expenses and are amortized
ratably as games are played. General and administrative expenses are charged to
operations as incurred.

Use of Estimates
----------------
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 and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

The Company sells sponsorships for cash, goods and services. In exchange, the
sponsor receives advertising and various benefits to games. The value of the
services has been estimated in the accompanying financial statements. Management
believes these estimates reasonably disclose the value of goods and services
received.

Income Taxes
------------
The Company accounts for income taxes under the asset and liability method.
Under this method, deferred income taxes are recorded to reflect the tax
consequences in future years of temporary differences between the tax basis of
assets and liabilities and their financial statement amounts at the end of each
reporting period. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized. Income tax expense
represents the tax payable for the current period and the change during the
period in deferred tax assets and liabilities. Deferred tax assets and
liabilities have been netted to reflect the tax impact of temporary differences.

Deferred tax assets arise primarily from the net operating loss carryforward and
amortization of the membership costs which are not deductible for tax purposes
until the membership is sold.

                                      F-11
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Deferred tax liabilities result when depreciation for tax purposes exceeds
depreciation for book purposes. A valuation allowance equal to the net deferred
tax asset has been recorded at September 30, 2002 since management of the
Company has determined that it is more likely than not that the tax asset will
not be realized. (See Note 12).

Concentrations of Risk
----------------------
Concentrations of credit risk associated with accounts receivable is limited due
to accounts receivable transactions arising from sponsorship contracts which
have a history of performance.

The supply of talented players is limited due to the competitive nature with
other professional football and hockey leagues.

The Company maintains all cash in deposit accounts, which at times may exceed
federally insured limits. The Company has not experienced a loss in such
accounts.

Fair Value of Financial Instruments
-----------------------------------
The carrying value of cash, accounts receivable, notes payable, accounts
payable, and accrued expenses approximate fair value because of the short
maturity of these items. The carrying value of non-current liabilities
approximates fair value based on references to interest rates on similar
instruments.

Earnings Per Common Share
-------------------------
The Company computes earnings per common share in accordance with Statement of
Financial Accounting Standards No. 128, Earnings Per Share (SFAS No. 128). This
Statement simplifies the standards for computing earnings per share (EPS)
previously found in Accounting Principles Board Opinion No. 15, Earnings Per
Share, and makes them more comparable to international EPS standards. SFAS No.
128 replaces the presentation of primary EPS with a presentation of basic EPS.
In addition, the Statement requires dual presentation of basic and diluted EPS
on the face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator and denominator of the diluted EPS
computation. (See Note 11)

Stock-Based Compensation
------------------------
The Company accounts for stock based compensation in accordance with the
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 123 "Accounting for Stock-Based Compensation" (SFAS No. 123). Under the
provisions of SFAS No. 123, companies can either measure the compensation cost
of equity instruments issued under employee compensation plans using a fair
value based method, or can continue to recognize compensation cost using the
intrinsic value method under the provisions of APB No. 25. However, if the
provisions of APB No. 25 are continued, proforma disclosures of net income or
loss and earnings or loss per share must be presented in the financial
statements as if the fair value method had been applied. The Company recognizes
compensation costs under the provisions of APB No. 25 and provides the expanded
disclosure required by SFAS No. 123. (See Note 8)

                                      F-12
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Issued Accounting Pronouncements
-----------------------------------------
In July 2001 the Financial Accounting Standards Board ("FASB") issued No. SFAS
141, Business Combinations. SFAS 141 requires all business combinations
initiated after June 30, 2001 to be accounted for using the purchase method. The
Company has implemented SFAS 141 and its adoption did not have a material effect
on its consolidated financial statements.

In July 2001 the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, which addresses accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the associated asset
retirement costs. SFAS No. 143 is effective for financial statements issued for
fiscal years beginning after June 15, 2002 and early adoption is encouraged.
SFAS No. 143 requires that the fair value of a liability for an asset's
retirement obligation be recorded in the period in which it is incurred and the
corresponding cost capitalized by increasing the carrying amount of the related
long-lived asset. The Company estimates that the new standard will not have a
material impact on its consolidated financial statements.

In August 2001 the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001, and interim periods within those fiscal
years, with early application encouraged. SFAS No. 144 addresses accounting and
reporting for the impairment or disposal of long-lived assets. SFAS No. 144
supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of and APB Opinion No. 30, Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business. SFAS No. 144 retains the fundamental provisions of SFAS No. 121 and
expands the reporting of discontinued operations to include all components of an
entity with operations that can be distinguished from the rest of the entity and
that will be eliminated from the ongoing operations of the entity in a disposal
transaction. The Company has implemented SFAS 144 and has determined that the
fair value of its AFL membership approximates $-0-. As a result, the Company
recorded a $1,745,271 impairment charge related to the AFL membership during the
year ended September 30, 2002.

In April 2002 the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of SFAS Statement No. 13, and Technical Corrections ("SFAS
145"). This statement rescinds the requirement in SFAS No. 4, Reporting Gains
and Losses from Extinguishment of Debt, that material gains and losses on the
extinguishment of debt be treated as extraordinary items. The statement also
amends SFAS No. 13, Accounting for Leases, to eliminate an inconsistency between
the accounting for sale-leaseback transactions and the accounting for certain
lease modifications that have economic effects that are similar to
sale-leaseback transactions. Finally the standard makes a number of
consequential and other technical corrections to other standards. The provisions
of the statement relating to the rescission of SFAS 4 are effective for fiscal
years beginning after May 15, 2002. Provisions of the statement relating to the
amendment of SFAS 13 are effective for transactions occurring after May 15, 2002
and the other provisions of the statement are effective for financial

                                      F-13
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

statements issued on or after May 15, 2002. The Company has reviewed SFAS 145
and its adoption is not expected to have a material effect on its consolidated
financial statements.

In July 2002 the FASB issued SFAS No. 146, Accounting for Exit or Disposal
Activities ("SFAS 146"). SFAS 146 applies to costs associated with an exit
activity (including restructuring) or with a disposal of long-lived assets.
Those activities can include eliminating or reducing product lines, terminating
employees and contracts, and relocating plant facilities or personnel. SFAS 146
will require a Company to disclose information about its exit and disposal
activities, the related costs, and changes in those costs in the notes to the
interim and annual financial statements that include the period in which an exit
activity is initiated and in any subsequent period until the activity is
completed. SFAS 146 supersedes Emerging Issues Task Force Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring), and
requires liabilities associated with exit and disposal activities to be expensed
as incurred and can be measured at fair value. SFAS 146 is effective
prospectively for exit or disposal activities initiated after December 31, 2002,
with earlier adoption encouraged. The Company has reviewed SFAS 146 and its
adoption may have a material effect on its consolidated financial statements.

NOTE 2 - GOING CONCERN AND MANAGEMENT'S PLANS

The Company's consolidated financial statements are prepared using accounting
principles generally accepted in the United States of America applicable to a
going concern, which contemplate the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has incurred net
losses from operations since inception, has an accumulated deficit of
$15,056,442 through September 30, 2002, a working capital deficit of $3,277,976
and continues to use significant amounts of cash in its operations. Management
and the Board of Directors have determined that it is in the best interest of
the Company to pursue the sales of its teams.

     The Company has entered into a non-binding letter of intent to sell the
assets of the Predators, excluding cash and deposits to a related party entity
that is owned in part by a significant stockholder/employee and a member of the
Board of Directors. The Company is also negotiating with other, unrelated
parties, for the sale of the team.

                                      F-14
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2 - GOING CONCERN AND MANAGEMENT'S PLANS (Continued)

The Company performed an impairment analysis of all long-lived assets and its
identifiable intangibles associated with the Predators. The fair value of the
long-lived assets and its identifiable intangibles was determined to approximate
$-0-. As a result, the Company recorded a $1,745,271 impairment charge relating
to the membership in the AFL. The sale of the Predators could result in a loss
on disposition. If the Company is unable to successfully negotiate the sale of
the Predators or is unable to agree to the terms of the non-binding letter of
intent, it may be necessary to seek out other buyers or seek protection under
bankruptcy laws.

In addition to negotiating the sale of the Predators, the Company is currently
seeking potential buyers of its Peoria af2 team and its Lafayette ECHL and af2
teams. The Company is also attempting to renegotiate the terms of its bridge
loans to extend the due date beyond August 2003.

Management of the Company and the Board of Directors continue to evaluate
alternatives for the Company, including further sale of assets, renegotiation of
its obligations, securing additional equity or financing. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

NOTE 3 - ARENA FOOTBALL LEAGUE AND af2

AFL
---
The AFL is a Limited Liability Company, which governs the rules and conduct of
each member team. As of September 30, 2002 there were 20 other team members and
two other non-team members. Each member owns an equal percentage of the AFL and
appoints one board member. A budget for AFL expenses is approved annually by the
board and expenses are shared equally. Revenues from expansion membership fees
are divided equally between all members, the Company's two additional,
non-voting interests (see Note 13) and the two interests owned by the inventor
(Gridiron) of the Arena Football Game. Revenues are recognized when
distributable by the AFL. Special assessments for litigation and other costs are
recognized in the same periods as incurred. The Arena Football League formed a
minor league system ("af2") beginning in the year 2000. The Company's minimum
share of the 2002 season budget for the AFL is estimated to be $150,000.

The Company continues to be contingently liable for its share of AFL expenses
which may exceed AFL revenues.

                                      F-15
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 - ARENA FOOTBALL LEAGUE AND af2 (Continued)

The AFL was defendant to claims for alleged damages which were settled during
the year ended September 30, 2001 and the Company has recorded a remaining
estimated liability of $200,000 as of September 30, 2002 for its share of the
settlements of which $150,000 is considered long term.

The AFL is also a party to a number of other lawsuits arising in the course of
business. In the opinion of the Company's management, the resolution of those
matters will not have a material adverse effect on the AFL's results of
operations, cash flows or financial position.

Outcomes and expenses of litigation will be divided equally between all members.
Management believes its share of the outcomes will not have a material adverse
effect on the Company's results of operations, cash flows or financial position.

af2
---
af2 is a Limited Liability Company, which governs the rules and conduct of each
af2 member team. As of September 30, 2002 there were 33 other team members and
the AFL's 50.1% ownership interest. Each member owns an equal percentage of the
remaining 49.9% and appoints one board member. A budget for af2 expenses is
approved annually by the board and expenses are shared equally. Revenues from
expansion membership fees are divided equally between all members based upon
their ownership percentages. The Company's af2 teams do not share in af2
expansion fees. Revenues are recognized when distributable by af2. Special
assessments for litigation and other costs are recognized in the same periods as
incurred. af2 players and coaches are employees of af2 and the Company's af2
teams pay these salaries directly to af2. The Company's share of the 2002 season
budget for af2 is estimated to be $40,000.

The Company continues to be contingently liable for its share of af2 expenses
which may exceed af2 revenues.

NOTE 4 - EAST COAST HOCKEY LEAGUE

The East Coast Hockey League (ECHL) is a nonstock, nonprofit corporation, which
governs the rules and conduct of each member team. Each member owns an equal
percentage of the ECHL and appoints one governor to the board. The board
approves a budget for ECHL expenses, including a provision for capital reserves,
annually. ECHL dues, which are paid monthly, are established each year without
regard for capital reserves and possible receipt of expansion and transfer fees.

                                      F-16
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4- EAST COAST HOCKEY LEAGUE (Continued)

Revenues from expansion and transfer fees are retained by the ECHL to fund the
ECHL's expenses and capital reserve requirements. At the discretion of the
board, expansion and transfer fees may be distributed equally to all eligible
members. Revenues are recognized when distributable by the ECHL. ECHL dues cover
expenses for ECHL officials and other assessments and are recognized over the
course of the season. Special assessments for litigation and other costs may
necessitate that the ECHL draw upon the letter of credit and are recognized in
the same periods as incurred.

ECHL Affiliations Agreement
---------------------------
The IceGators entered into an affiliation agreement with the governing board of
the ECHL. The ECHL controls and owns the territorial rights to grant member
teams the right to play hockey in each arena. The agreement terminates on July
1, 2004. The agreement includes a one year non-compete clause, in which, if the
team withdraws from the ECHL, it may not affiliate, join or become involved in
any other hockey league operating within home territory, which includes a 50
mile radius. Furthermore, if the team wishes to withdraw from the ECHL, they
must pay one third of the current membership fee.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                                  September 30,
                                                                      2002
                                                                    --------


Office equipment                                                    $139,202
Leasehold improvements                                                 6,358
Game equipment and system                                            706,776
                                                                    --------
                                                                     852,336
Less accumulated depreciation                                        370,162
                                                                    --------

                                                                    $482,174
                                                                    ========

The Company wrote off certain assets with a net book value of approximately
$2,288, due to obsolescence in 2002.


                                      F-17
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - COMMITMENTS AND CONTINGENCIES

A.) Employment Agreements
-------------------------
The Company has employment agreements with certain executives and coaches. The
Company is obligated to make certain minimum salary payments as follows:

     Year Ending September 30,
     -------------------------

     2003                                         $ 415,717
     2004                                           219,550
     2005                                           101,900
     2006                                             7,083
                                                  ---------

                                                  $ 744,250
                                                  =========

The Predators have signed agreements with 15 players. The following summarizes
player salary commitments for each of the upcoming years:

     September 30, 2003                           $ 658,400
     September 30, 2004                              62,400
                                                  ---------

                                                  $ 720,800
                                                  =========

B.) AFL and ECHL Agreements
---------------------------

AFL
---
In 2002 the AFL entered into a Collective Bargaining Agreement ("CBA") with its
players. Under the terms of the CBA, the AFL has agreed with the NFLPA (the
players' bargaining unit) to a salary cap equal to the greater of $1,643,000 per
team or 50% of Defined Gross Revenue ("DGR") as defined in the CBA, increasing
to the greater of $1,921,633 or 63% of DGR by 2007. Minimum per player salaries
are $1,484 per game.

The Company does not anticipate that it will reach the maximum player
compensation allowed during the 2003 season. The agreement also calls for year
round health insurance for the players and their families, full pay for inactive
players, short and long term disability insurance, a 401k pension plan and
unrestricted free agency after four years of service in the League.


                                      F-18
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)

ECHL
----
The ECHL and the Professional Hockey Players' Association (PHPA), which
represents the players of the ECHL, have entered into a collective bargaining
agreement effective from August 1, 1999 to May 31, 2003. The agreement has a "no
strike" clause which prohibits strikes and walkouts throughout the term of the
agreement. The agreement provides for a standard players contract and sets the
active roster of member teams at a maximum of twenty players.

The agreement defines the maximum and minimum benefits and compensation that the
players may be paid during the term of the agreement. Total weekly club salary
will not exceed $10,000 for the 2002-2003 regular and post-season play periods.
The agreement also calls for health insurance for the players and their
families, short-term disability insurance, and severance pay. Players that do
not receive qualifying offers are deemed unrestricted free agents.

C.) Lease Obligations
---------------------
In March 1998, the Company signed a five-year lease (with an additional
five-year option) with the TD Waterhouse Center. The agreement provides the
Company with an approximately 20% share of revenue generated from food and
beverage concessions. The Company receives a credit to be applied to the game
rental of $3 per person (up to $10,000) for games in which attendance exceeds
9,000 persons. The Company is currently negotiating a new lease.

The Company entered into a two year lease agreement for office space in Orlando
at a rate of $900 per month which expired in March 2001. In January 2001, the
Company signed a five-year lease (with an additional five-year option) for
office space at a base rent of $8,887 per month, increasing annually to $10,603.

On September 1, 2000, the Company signed a five-year license agreement with SMG,
for use of the Peoria Civic Center. The agreement requires the Company to pay a
minimum fee of $8,500 per game for rent and game day services. The Company
receives an incentive of $.50 per person for games in which attendance exceeds
7,000 attendees. On September 30, 2002 the lease agreement was amended to
provide for a concessions rebate of $.75 to $1.25 based on attendance of more
than 5,000. The lease was also extended through the 2007 season and base rent
will be capped at the 2003 rate, which will be determined January 1, 2003.

On May 1, 2001, the Company signed a one-year lease for office space in Peoria
at a rate of $550 per month. The lease also required that the Company furnish
the landlord with eight season tickets to Peoria Pirates home football games and
two sign boards for advertising at game events.

                                      F-19
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)

On July 1, 2002 the Company entered into a lease with the Cajundome Commission
for use of the Cajundome for IceGators and Bears games as well as for office
space. The agreement expires May 31, 2007 for ice hockey and August 31, 2008 for
football and calls for minimum rental payments of $6,500 per game. The Company
pays certain box office fees and receives a rental rebate of $0.40 per person
for every group of 250 attendees over 1,000. The agreement provides the Company
with an approximately 20% share of revenue generated from food and beverage
concessions, 25% share of net parking revenues, and 25% of suites and permanent
signage advertisement. Office space rental is included in the cost of the arena
rental. Under the terms of the agreement, the Cajundome collects cash from
season ticket sales and holds the funds in escrow until applicable games are
played at which time the Cajundome disburses the funds to the Company. The
amount due from the Cajundome as of September 30, 2002 was $287,786.

On November 15, 2002, the Company entered into a three year lease for office
space in Peoria, commencing December 1, 2002. Base rent is $2,000 per month
increasing annually to $2,400.

The minimum future lease payments under the lease agreements are as follows:

                                     Offices        Arenas         Total
                                    ---------    -----------    -----------

2003                                $ 138,910    $   328,000    $   466,910
2004                                  148,476        328,000        476,476
2005                                  154,552        328,000        482,552
2006                                   41,909        260,000        301,909
2007                                   -             260,000        260,000
                                    ---------    -----------    -----------

                                    $ 483,847    $ 1,504,000    $ 1,987,847
                                    =========    ===========    ===========

Rent expense for the years ended September 30, 2002 and 2001 was $328,432 and
$283,893, respectively.

D.) Workers' Compensation
-------------------------
The Predators provide a $250,000 occupational health, accidental death and
disability insurance policy to each player. Each team is required to pay the
first $35,000 of claims for an injured player up to an aggregate of $356,000 for
the two Florida based AFL teams provided through a carrier.

E.) Litigation
--------------
The Company is a party to a number of lawsuits arising in the normal course of
business. In the opinion of management, the resolution of these matters will not
have a material adverse effect on the Company's operations, cash flows or
financial position.


                                      F-20
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)

F.) Management Agreement with USV
---------------------------------
On January 28, 2000, the Company entered into an agreement, which was amended on
July 1, 2000, with United Sports Ventures, Inc. (USV) a related party, for
management services for the Company's Orlando Predators sports team and general
management services for operations of the Company. The agreement was for a term
of one year from the date of the amendment, and automatically renews each year,
unless cancelled as provided for under the terms of agreement. Fees for the
management services were $10,000 per month under the original agreement, reduced
to $3,000, per month with the amendment, effective January 1, 2001.

In conjunction with the amended agreement, the Company granted USV an option to
purchase 150,000 shares of the Company's Class A Common Stock, which vested
37,500 shares per quarter, commencing on October 1, 2000 and expired on
September 30, 2002. The options were exercisable at $2.50 per share and have
been valued at the fair market value of $63,000 using the Black-Scholes model
and were expensed ratably over the initial one year life of the contract.
Significant assumptions used in calculating the fair market value are a 2 year
option life, 71% volatility, and 6.13% risk-free interest rate. The Company has
expensed $-0- and $47,250 during the years ended September 30, 2002 and 2001.

The agreement was terminated in November 2001. As consideration for the
termination of the agreement, USV has agreed to the cancellation of its option
to purchase 150,000 shares of the Company's Class A Common Stock was granted a
new option to purchase 150,000 shares of the Company's Class A Common Stock for
$2.70 per share expiring on November 14, 2005. The options were valued at their
fair market value of $259,000 using the Black-Scholes model and were expensed on
the date of grant. Significant assumptions used in calculating the fair market
value are a 4 year option life, 86% volatility and 4.0% risk-free interest rate.

G.) Financial Consulting Agreement
----------------------------------
On July 1, 2000, the Company entered into a two year financial consulting and
investment banking agreement for stockholder public relations matters. The
agreement provided for fees of $60,000, payable $10,000 at the signing of the
agreement and $2,174 per month thereafter, until the balance is paid. The
Company also granted the consultant an option to purchase 350,000 shares of the
Company's Class A Common Stock, which was valued at the fair market value of
$113,000 using the Black-Scholes model, and is being expensed over the term of
the agreement. Significant assumptions used in calculating the fair market value
are a 2 year option life, 71% volatility and a 6.53% risk-free interest rate.
The options vest 87,500 shares on July 1, 2000 and 17,500 per month thereafter
and are exercisable at fixed prices ranging from $2.50 to $4.50 per share and
expire in 2006. The Company has recorded $-0- and $50,000 in expense during the
years ended September 30, 2002 and 2001, respectively.

                                      F-21
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7 - SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid $18,907 and $59,161 for interest expense during the years ended
September 30, 2002 and 2001, respectively.

NOTE 8 - COMMON STOCK

Stock Option Plan
-----------------
Effective April 1, 1997, the Company's board of directors adopted the Stock
Option Plan under which 150,000 shares of the Company's Class A Common Stock
were reserved for issuance at prices not less than fair market value on the date
of grant. During 1998 the Plan was amended to provide for 350,000 additional
option shares. During 1999 the Plan was amended to provide for 2,500,000
additional option shares. The board may grant options to key management
employees, officers, directors and consultants.

The following table summarizes the activity of options and warrants for the
years ended September 30, 2001 and 2002:

                                                          Weighted
                                                          Average
                                      Number of           Exercise    Exercise
                                 Options     Warrants      Price       Amount
                               ----------   ----------    -------- ------------

Outstanding,
     September 30, 2000         1,693,246      875,000    $  4.37  $ 11,218,290
Exercised                         (30,000)      -            2.50       (75,000)
Granted                           719,166       -            2.30     1,651,207
Expired                          (783,334)      -            2.47    (1,931,667)
                               ----------   ----------             ------------

Outstanding,
     September 30, 2001         1,599,078      875,000       4.39    10,862,830
Exercised                          (1,666)       -           1.50        (2,499)
Granted                           165,000      786,343       2.67     2,541,426
Expired                          (226,166)       -           2.39      (539,632)
                               ----------   ----------             ------------

Outstanding,
     September 30, 2002         1,536,246    1,661,343    $  4.02  $ 12,862,125
                               ==========   ==========             ============

Stock-Based Compensation
------------------------
The Company accounts for stock-based compensation under Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS No.
123). The standard requires the Company to adopt the fair value method with
respect to stock-based compensation of consultants and other non-employees.

                                      F-22
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - COMMON STOCK (Continued)

The Company did not change its method of accounting for employee stock options;
the Company continues to account for these under the intrinsic value method. Had
the Company adopted the fair value method for options issued to employees as
well, an additional charge to income of $224,151 would have been required in
2002; proforma net loss would have been $4,488,072 and loss per share would have
been $.62. An additional charge to income of $179,000 would have been required
in 2001; proforma net loss would have been $3,397,503 and loss per share would
have been $.58.

Issuance of Common Stock
------------------------
The Class A Common Stock and Class B Common Stock are identical in all respects
except that each share of Class A Common Stock is entitled to one vote while
each share of Class B Common Stock is entitled to 10,000 votes. The Class B
Common Stock was issued to satisfy certain control requirements of the AFL.

In connection with the Company's public offering of stock, there are
outstanding: (i) warrants to purchase 550,000 shares of Class A Common Stock at
an exercise price of $7.50 per share at any time until their expiration on
December 10, 2002 (the "Unit Warrants"), (ii) warrants to purchase 110,000
shares of Class A Common Stock and 55,000 Unit Warrants (the "1997 Underwriters'
Unit Warrants') at an exercise price of $12.00 per 1997 Underwriters' Unit
Warrants. There are also warrants to purchase 160,000 shares of Class A Common
Stock at $4.50 per share at any time until December 31, 2002 (the "1998
Warrants").

Warrants
--------
In June 2001, the Company sold a warrant for $6,250 to purchase 50,000 shares of
the Company's Class A Common Stock at an exercise price of $2.875 per share
expiring August 2006.

Private Placements
------------------
The Company completed private placements for the sale of 1,132,044 shares of the
Company's Class A Common Stock for net proceeds of $1,532,446 during the year
ended September 30, 2001.

In December 2001 and January 2002, the Company completed private placements for
the sale of 282,000 shares of Class A Common Stock for proceeds of $493,500 and
paid offering costs in the form of 56,400 shares of Class A Common Stock.


                                      F-23
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9 - BRIDGE LOANS

The Company completed a private placement of $2,500,372 in notes payable in
March 2002. During the third quarter 2002, the Company received an additional
$50,000. The notes bear interest at 9.5% and principal and interest are due 18
months after the note date. The Company granted warrants to the note holders to
purchase a total of 510,074 shares of the Company's Class A Common Stock for
$2.75 based upon 20,000 shares for each $100,000 in principal balance, which are
exercisable until February 1, 2006. As part of the private placement, an
employee/significant stockholder and former officer and director of the Company,
converted a note payable of $175,000 to a note payable in the private placement.
If the Company repays the loans within one year, warrants to purchase 10,000
shares (for each $100,000 of principal balance) of the Company's Class A Common
Stock will be cancelled. The Company computed the fair market value of the
warrants utilizing the Black-Scholes model and will amortize the cost over the
note period. The warrants have been valued at $902,950 and the significant
assumptions used in the calculation of the warrants were risk free interest
rates of 3.74% to 4.03% an average volatility of 82% and an average life of four
years. The notes are collateralized by the Company's two non-voting equity
interests in the Arena Football League.

In July 2002, the Company's Board of Directors voted to increase the maximum
offering in the private placement to a total of $3,850,000 under the same terms
as the original agreement. In addition, the Company has agreed to grant warrants
to purchase an additional 5,000 shares of the Company's Class A Common Stock for
$2.50 for each $100,000 loaned to the existing note holders as an incentive to
increase the maximum offering size. All original note holders signed a
settlement agreement changing the loan date to February 15, 2002, with a due
date of August 14, 2003. An additional $595,000 was received as of September 30,
2002, bringing the total outstanding bridge loans to $3,145,372. An additional
$46,000 was received subsequent to year-end. New note holders received warrants
to purchase 25,000 shares of the Company's Class A Common Stock for each
$100,000 loaned plus warrants to purchase 10,000 shares of the Company's Class A
Common Stock for each $100,000 loaned if the notes aren't paid by February 15,
2003.

NOTE 10 - NOTE PAYABLE RELATED PARTY

During June 2001, the Company borrowed $175,000 in the form of a 7% note payable
to an employee/significant stockholder and former officer and director of the
Company, due on October 31, 2001 and was verbally extended. The Company's af2
teams collateralized the note. In February 2002 this loan was converted to a
bridge loan. (See Note 9)


                                      F-24
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11 - EARNINGS PER SHARE

                                         For the Year Ended September 30, 2002
                                         -------------------------------------
                                                                        Per
                                            Income         Shares      Share
                                          (Numerator)   (Denominator)  Amount
                                          -----------    -----------   -------

Basic EPS
     (Loss) available to common
      stockholders                        $(5,998,852)     7,198,044   $  (.83)

Effect of Dilutive Securities
     Options and warrants                        --             --        --
                                          -----------    -----------   -------

Diluted EPS
     (Loss) available to common
      stockholders including assumed
      conversions                         $(5,998,852)     7,198,044   $  (.83)
                                          ===========    ===========   =======


As of September 30, 2002 there were 3,197,589 warrants and options outstanding
which were not included in the diluted earnings per share because their effect
was anti-dilutive for the period presented.

                                          For the Year Ended September 30, 2001
                                          -------------------------------------
                                                                        Per
                                            Income         Shares      Share
                                          (Numerator)   (Denominator)  Amount
                                          -----------    -----------   -------

Basic EPS
     (Loss) available to common
      stockholders                        $(3,218,503)     5,865,623   $  (.55)

Effect of Dilutive Securities
     Options and warrants                        --             --        --
                                          -----------    -----------   -------

Diluted EPS
     (Loss) available to common
      stockholders including assumed
      conversions                         $(3,218,503)     5,865,623   $  (.55)
                                          ===========    ===========   =======


As of September 30, 2001, there were 2,474,078 warrants and options outstanding
which were not included in the diluted earnings per share because their effect
was anti-dilutive for the period presented.


                                      F-25
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12 - INCOME TAXES

The components of deferred tax assets and (liabilities) were as follows:

Total deferred tax assets                                           $ 5,805,000
Less valuation allowance                                             (5,805,000)
                                                                    -----------

Net deferred tax asset                                              $      --
                                                                    ===========


The tax effects of temporary differences that give rise to deferred tax assets
and (liabilities) were as follows:

Temporary differences;
   Property and equipment                                           $   (60,000)
   Membership cost                                                      760,000
   Interest stockholders                                                 21,000
   Net operating loss carryforward                                    5,084,000
Less valuation allowance                                             (5,805,000)
                                                                    -----------

                                                                    $      --
                                                                    ===========

The components of deferred income tax expense (benefit) were as follows:

                                                         2002           2001
                                                     -----------    -----------
Temporary differences:
   Property and equipment                            $    30,000    $    24,000
   Intangible assets                                    (663,000)       (28,000)
   Interest stockholders                                 (21,000)         4,000
   Net operating loss carryforward                    (1,611,000)    (1,219,000)
Less valuation allowance                               2,265,000      1,219,000
                                                     -----------    -----------

                                                     $      --      $      --
                                                     ===========    ===========

The following is a reconciliation of the amount of income tax expense (benefit)
that would result from applying the statutory income tax rates to pre-tax loss
and the reported amount of income tax expense (benefit):

                                                         2002           2001
                                                     -----------    -----------
Tax expense (benefit) at statutory rates             $(2,040,000)   $(1,094,000)
AFL activity                                            (342,000)       (27,000)
Impairment allowance                                     593,000           --
Stock based compensation                                 301,000           --
Other                                                     31,000         18,000
Increase in valuation allowance                        1,457,000      1,103,000
                                                     -----------    -----------

                                                     $      --      $      --
                                                     ===========    ===========

                                      F-26
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12 - INCOME TAXES (Continued)

No provision for income taxes has been recorded for the years ended September
30, 2002 and 2001, since the Company has incurred losses during these periods.
Net operating loss carryovers of approximately $13,521,000 as of September 30,
2002 expire beginning in 2016. The Company is providing a full valuation
allowance in connection with the deferred tax assets because there is no
assurance that such amounts will be utilized in the future.

NOTE 13 - PURCHASE OF INTERESTS IN THE AFL

In August 1998, the Company acquired two non-voting interests in the AFL for
$6,000,000. Each similar interest entitles the Company to share equally with
each other member in AFL revenues. The AFL guarantees to pay the Company at
least $480,000 per year until the Company receives an aggregate of $6,000,000
through distribution. The AFL has the right to offset amounts due from Predators
and Peoria against the annual payment. Once the Company receives an aggregate of
$6,000,000, the Company will participate in AFL revenues, expenses and
liabilities with respect to the two interests, with the exception of team only
expenses.

Prior to March 2000, the Company accounted for its two non-voting interests in
the AFL under the terms of the agreement, which called for the Company to record
as expansion revenues (based upon its ownership share in the AFL) amounts
received from the AFL for sales of expansion memberships and other AFL revenues.
The Company did not share in AFL expenses.

The AFL disputed the terms of the agreement and in March 2000, the Company and
the AFL agreed to amend the terms of the agreement. The amended terms of the
agreement state that the Company shall receive its two shares of expansion
revenue received by the AFL but shall record these payments to reduce the
balance of the note receivable due from the AFL.

The purchase of the rights for the two non-voting interests in the AFL has been
allocated and recorded as 1) cost basis interest in the AFL and 2) an unsecured
receivable due from the AFL. The investment accounted for under the cost method
of accounting was recorded at an original cost of $4,071,437. The unsecured
receivable was originally recorded for $1,965,971 from the League, with a total
remaining balance as of September 30, 2002 of $884,136. The amounts were
computed using an imputed interest rate of 23%. The minimum payment of $480,000
is due annually on August 14.


                                      F-27
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 - ACQUISITION OF AF2 TEAMS

On October 18, 2000, the Company entered into an agreement with IFL Acquisition
Co., LLC ("IFLA"), a wholly owned subsidiary of af2 Enterprises, LLC. The
Company acquired the rights to three af2 memberships, all of the tangible assets
of the Indoor Football League (which were acquired by IFLA under a separate
agreement), and the first $1,000,000 in expansion revenues received by af2 for
memberships in former Indoor Football League ("IFL") markets. In addition, to
the extent that af2 licenses intellectual property acquired from the IFL to
third parties within 24 months of the date of the agreement, the Company will
receive a fee of $10,000. In exchange for the assets and rights acquired, the
Company paid $1,100,000 cash less a credit of $25,000 for a territory release
payment and a credit of $226,165 for cash received prior to the sale to IFLA,
issued 214,286 shares of redeemable Class A Common Stock valued at $750,000 and
a promissory note for $1,750,000 bearing interest at 6% per year, payable in
three annual installments of $583,333 beginning on October 18, 2001. The
Company's two interests in the League collateralized the note. The common stock
was redeemable at $3.50 per share at the option of the stockholder for a period
of six months beginning on April 18, 2002, and had been classified as redeemable
Class A Common Stock. The Company also paid $25,000 to the owner of the
Milwaukee AFL membership, a $50,000 fee for the first af2 team acquired and
$5,000 for each additional af2 team to af2.

The Company did not receive all of the tangible property from the IFLA and
therefore adjusted the value down by $107,671 during the year ended September
30, 2001.

In February 2002 the Company negotiated a reduced purchase price of the assets
acquired from IFLA. The following is the reallocation of the purchase based upon
the negotiated reduced purchase price:

Three af2 memberships                                               $ 1,500,000
Tangible property                                                       469,000
Receivable from IFL Acquisition Co for af2 expansion revenue            184,697
Forgiveness of accrued interest expense                                 144,375
                                                                    -----------
                                                                      2,298,072

Less:
Class A Common Stock                                                   (598,072)
Cash payment                                                           (400,000)
af2 expansion fees payable                                             (200,000)
Credit to buyer for territory release payment                           (25,000)
Credit to buyer for season ticket prepayments                          (226,165)
                                                                    -----------

Cash paid at original closing                                       $   848,835
                                                                    ===========


                                      F-28
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 - ACQUISITION OF AF2 TEAMS (Continued)

The reduced purchase price reflects a cash payment of $400,000 on February 15,
2002 in exchange for the cancellation of a $1,750,000 note payable to the former
owners of the IFL and the forgiveness of accrued interest payable of $144,375
under the note. The IFL also relinquished its option to return the 214,286
shares of the Company's Class A Common Stock in exchange for an additional
35,000 shares of the Company's Class A Common Stock. The 214,286 and 35,000
shares have been valued at their fair market values on the dates that they were
issuable. The Company has agreed to pay the IFL the first $200,000 it receives
in expansion fees distributed by af2 for expansion in former IFL territories and
the first $100,000 it might have received from an AFL/NFL transaction. The NFL
did not exercise its option to purchase up to 49.9% of the AFL and therefore, no
adjustment has been made to the purchase price. The Company has allocated the
revised purchase price to reflect $184,697 of expansion fees receivable from af2
for expansion in former IFL territories rather than purchase price in excess of
assets acquired.

The Company obtained financing for the acquisition of the af2 teams of
$1,000,000 from a bank, which was payable on February 28, 2001, bearing interest
at 1.75% above the LIBOR rate or 8.47% per year. The Company paid a facility fee
of $20,000 to the bank for the note which was amortized over the term of the
note. The note was secured by the Company's rights to $1,000,000 of af2
expansion fees and the pledge of $1,300,000 in securities and cash of the
Company's Chief Executive Officer, a director of the Company and an
employee/significant stockholder who is a former officer and director of the
Company. The Company has granted to the collateral holders a total of 100,000
shares of Class A Common Stock, valued at $156,250, which were recorded as loan
fees, based upon the market value of the Class A Common Stock on the date the
shares were granted. The loan fees were amortized over the term of the loan. The
financing was extended for one year at the same terms with the principal being
reduced to $700,000. An additional 230,667 shares of the Company's Class A
Common Stock were issued to the collateral holders valued at $606,361 during the
year ended September 30, 2001. The 230,667 shares of Class A Common Stock has
been recorded as loan fees and are being amortized over one year, the term of
the loan. During the year ended September 30, 2002, an additional 84,778 shares
of the Company's Class A Common Stock, valued at $234,500, were issued to the
collateral holders. The stock was recorded as loan fees and was amortized over
the remaining term of the loan. Loan fee expense related to this loan for years
ended September 30, 2002 and 2001 respectively was $289,730 and $707,381.

NOTE 15 - ACQUISITION OF ECHL TEAM

On July 31, 2002, the Company entered into an agreement to purchase the East
Coast Hockey League (ECHL) membership of the Louisiana IceGators (which plays
its games in Lafayette, Louisiana) and certain assets for $100,000 cash and a
$600,000 promissory note bearing interest at 5% per year, payable in four annual
installments of $150,000 each. The Company has also assumed certain contracts
under the agreement.

                                      F-29
<PAGE>

                    THE ORLANDO PREDATORS ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15 - ACQUISITION OF ECHL TEAM (Continued)

The IceGators season is from October through March. The IceGators have adopted
the accounting policies of the Company and are owned by Louisiana Sports, LLC.,
("LA Sports") which was a wholly owned subsidiary of the Company. The Company
sold 10% of LA Sports to a member of its board of directors/significant
stockholder for $250,000. The Company will be the manager of LA Sports.

The purchase price for the IceGators was allocated as follows:

Membership in ECHL                                                    $ 640,000
Property and equipment                                                   54,000
Other assets                                                              6,000
                                                                      ---------

         Total purchase price                                           700,000
Less:
     Note payable                                                      (600,000)
                                                                      ---------

Cash paid at closing                                                  $ 100,000
                                                                      =========

NOTE 16 - SUBSEQUENT EVENTS

During October 2002, the Company borrowed $750,000 in the form of a 9.5% note
payable to a member of its board of directors/significant stockholder, due on
January 21, 2003.

During October 2002, the Company reached an agreement to sell Bismarck
Professional Football, Inc. its wholly owned subsidiary, which owned the rights
to the Green Bay af2 team to a member of its board of directors/significant
stockholder for $1,000,000 paid by the cancellation of the $750,000 note payable
entered into during October 2002 and the return of the 10% membership ("minority
interest") sold in August 2002 for $250,000. The Company will recognize a gain
on the sale of Green Bay of approximately $425,000. The sale is pending final
approval by the AFL in December 2002.

The Company also entered into a management agreement with Green Bay for a term
of one year. The Company will provide management services to Green Bay and will
receive a $5,000 monthly fee. The Company's Chief Executive Officer will provide
the management services and will receive a monthly fee of $5,000 when paid by
Green Bay.


                                      F-30