UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

     For the Fiscal Year Ended December 31, 2002

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from _____________ to _____________

                         Commission File Number: 0-24592

                                Cinema Ride, Inc.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)
           Delaware                                 95-4417467
-------------------------------               ----------------------
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                Identification Number)

          12001 Ventura Place, Suite 340, Studio City, California 91604
         --------------------------------------------------------------
          (Address of principal executive offices, including zip code)

Issuer's telephone number, including area code:  (818) 761-1002

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

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

                          Common Stock, $0.08 Par Value
                          -----------------------------
                                (Title of class)

      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
                                 Yes [x] No [ ]

      Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of 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. [ ]

      The issuer's revenues for the fiscal year ended December 31, 2002 were
$2,225,456.

      The aggregate market value of the issuer's common stock held by
non-affiliates of the Company as of December 31, 2002 was $1,440,419.

      As of December 31, 2002, the issuer had 5,620,775 shares of common stock
issued and outstanding.

      Transitional Small Business Disclosure Format:  Yes [ ]  No [x]

      Documents incorporated by reference:  None.



                                      -1-
<PAGE>


Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:

      This Annual Report on Form 10-KSB for the fiscal year ended December 31,
2002 contains "forward-looking" statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, including statements that include the
words "believes", "expects", "anticipates", or similar expressions. These
forward-looking statements may include, among others, statements concerning the
Company's expectations regarding its business, growth prospects, revenue trends,
operating costs, working capital requirements, facility expansion plans,
competition, results of operations and other statements of expectations,
beliefs, future plans and strategies, anticipated events or trends, and similar
expressions concerning matters that are not historical facts. The
forward-looking statements in this Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2002 involve known and unknown risks, uncertainties and
other factors that could the cause actual results, performance or achievements
of the Company to differ materially from those expressed in or implied by the
forward-looking statements contained herein.



                                      -2-
<PAGE>


                                     PART I.


ITEM 1.   DESCRIPTION OF BUSINESS

Overview:

      Cinema Ride, Inc. (the "Company") was incorporated in Delaware in April
1993. Unless the context otherwise requires, references to the Company in this
document refer to Cinema Ride, Inc. and its subsidiaries. The Company is in the
business of developing and operating rides consisting of 3-D motion simulator
attractions and filmed entertainment that combines projected three-dimensional
action films of approximately four minutes in duration with computer-controlled,
hydraulically-mobilized capsules that are programmed to move in concert with the
on-screen action. Each attraction is designed to provide the viewer with a
realistic feeling of being a participant in the action on the screen.

      As of December 31, 2002, the Company had completed the construction and
installation of five ride facilities. The first facility (the "Las Vegas
Facility") commenced operations in October 1994 and is located in the Forum
Shops at Caesar's Palace Hotel and Casino (the "Forum Shops"), a high traffic
tourist mall located between Caesar's Palace Hotel and Casino and the Mirage
Hotel in Las Vegas, Nevada. The second facility (the "West Edmonton Mall
Facility") commenced operations in August 1995 and is located in the West
Edmonton Mall, Alberta, Canada. The third facility (the "Times Square Facility")
commenced operations in September 1996 at a location in Times Square in New York
City, New York, and was closed during January 1998. The fourth facility (the
"Atlanta Facility") commenced operations in September 1998 as a joint venture
with Dave & Buster's, Inc., was located near Atlanta, Georgia, and was closed in
February 2003 as a result of the expiration of the joint venture agreement (see
"Dave & Buster's, Inc. Joint Venture"). The fifth facility (the "New Jersey
Facility") commenced operations in January 2000 and was located in the Jersey
Gardens Mall in Elizabeth, New Jersey, near Newark Airport, and was closed in
June 2002, as a result of a dispute with the landlord (see "ITEM 3. LEGAL
PROCEEDINGS"). The Company's executive offices are located in Studio City,
California.

      The Forum Shops recently commenced construction on an expansion program,
which may negatively impact traffic at the Company's Las Vegas Facility. In
addition, the Forum Shops have requested that the Company relocate its ride
facility to a new location within the Forum Shops. The Company is continuing
discussions with the management of the Forum Shops, but is currently unable to
predict the ultimate resolution of this issue, or the impact that these matters
may have on the Company's financial position or results of operations.
New Las Vegas Business Venture:

      The Company owns 50% of a subsidiary named Tickets2Nite, LLC, a Nevada
limited liability company, which was formed on September 24, 2002 pursuant to an
Operating Agreement, with the other 50% owned by Entasis, LLC ("Entasis"), an
independent third party. The new business venture, which commenced operations
during November 2002, sells tickets to Las Vegas shows at 50% of the original
box office price, on the same day of the performance, from a ticket booth
located adjacent to the giant Coca-Cola bottle on the Las Vegas Strip, in front
of the MGM Grand Hotel, pursuant to a sub-lease through July 31, 2007. The
Operating Agreement specifies that the Company oversees the day-to-day
operations of the new business venture. The Coca-Cola Company has entered into a
Marketing Sponsorship Agreement with Tickets2Nite, LLC, beginning July 1, 2002
and ending June 30, 2007, as a result of which the operations of the new
business venture are being marketed as "Coca-Cola Tickets2Nite". As part of the
Marketing Sponsorship Agreement, Tickets2Nite, LLC has granted The Coca-Cola
Company warrants to purchase a 5% ownership interest in Tickets2Nite, LLC,
exercisable for a period of five years at 25% of the fair market value of such
5% ownership interest at the time the warrant is exercised, as determined by a
mutually acceptable investment banking firm.

                                      -3-
<PAGE>

      The concept of same day, half-price tickets is a successful,
well-established institution in New York City's Times Square. Based on initial
results, and subject to the resolution of management and funding issues, the
Company believes that the new business venture has the potential to make a
significant contribution to the Company's financial results in the future.

      The Company accounts for this investment under the equity method of
accounting, since it does not have majority voting control of Tickets2Nite, LLC.
Financial information with respect to the Company's investment in Tickets2Nite,
LLC and its results of operations and financial position as of and for the
period ended December 31, 2002 are provided at "ITEM 6. MANAGEMENT'S DISCUSSION
AND ANALYSIS OR PLAN OF OPERATION".

      On December 24, 2002, the Company filed a lawsuit against Entasis in the
Clark County, Nevada District Court. The lawsuit relates to matters concerning
the management and funding of the new business venture. Entasis funded only
$95,000 of its $200,000 equity commitment, and was impermissibly interfering
with the operations of the new business venture.

      On February 27, 2003, the Clark County, Nevada District Court granted the
Company's motion for a Preliminary Injunction against Entasis relating to the
operations of the business. The Preliminary Injunction prevents Entasis from
interfering with the day-to-day operations of the Tickets2Nite business or
having anything to do with Tickets2Nite's banking.

      Trial with respect to the Company's lawsuit against Entasis was held on
May 7 through 9, 2003. No decision had been issued by the Clark County, Nevada
District Court as of May 28, 2003. The Company does not believe that the
resolution of this legal proceeding will have a negative impact on the Company's
interest in Tickets2Nite, LLC, or on its consolidated results of operations or
financial position.

New Capital:

      During the year ended December 31, 2002, the Company raised $628,750 of
new capital through the sale of its securities. The private placement offering
consisted of units sold at $0.25 per unit. Each unit consisted of one share of
common stock and one common stock purchase warrant. The warrants are exercisable
at $0.50 per share for a period of 30 months (increased from 18 months
originally) from the date of issuance. Based on various factors, including the
exercise price and terms of the warrant and the trading range and volume of the
Company's common stock during 2002, the Company determined the value of the
warrants was nominal and therefore did not allocate any portion of the $0.25
unit sale price to the warrants. The Company is continuing its efforts to raise
new capital subsequent to December 31, 2002.

      Effective as of January 3, 2002, the Company entered into a two year
agreement with a financial advisory firm, Gang Consulting Inc., which provides
for the payment of monthly compensation, either in the form of a payment of
$10,000 or the issuance of 25,000 shares of common stock. During the year ended
December 31, 2002, the Company issued 280,000 shares of common stock to such
firm with a fair market value of $168,950, which was charged to operations as
general and administrative expense. The Company also paid $10,000 to such firm
during the year ended December 31, 2002.

      Effective as of July 1, 2002, the consulting agreement was amended to
provide for the Company to issue to such firm the following common stock
purchase warrants: an aggregate of 300,000 shares of common stock vesting on
July 1, 2002, exercisable for a period of five years from such date in equal
installments of 100,000 shares at $0.25, $0.50 and $1.00 per share; an aggregate
of 300,000 shares of common stock vesting on January 1, 2003, exercisable for a


                                      -4-
<PAGE>

period of five years from such date in equal installments of 100,000 shares at
$1.50, $2.00 and $2.50 per share; and an aggregate of 300,000 shares of common
stock vesting on July 1, 2003, exercisable for a period of five years from such
date in equal installments of 100,000 shares at $3.00, $3.50 and $4.00 per
share. The aggregate fair value of such warrants was calculated pursuant to the
Black-Scholes option pricing model as $496,000, which is being charged to
operations as general and administrative expense over the 18 month period
beginning July 1, 2002 and ending December 31, 2003. For the year ended December
31, 2002, $165,333 was charged to operations as general and administrative with
respect to such warrants.

      Effective as of July 1, 2002, the consulting agreement was amended to
provide for the Company to pay a finder's fee to such firm with respect to the
private placement of its equity securities by issuing shares of common stock
equivalent to 3% of the total equity capital raised, calculated at $0.50 per
share. During the year ended December 31, 2002, the Company issued 37,125 shares
of common stock to such firm, which were recorded at par value of $0.08 per
share (aggregate amount $2,970) and charged to additional paid-in capital.

Going Concern:

      The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal
course of business. The carrying amounts of assets and liabilities presented in
the accompanying consolidated financial statements do not purport to represent
the realizable or settlement values. The Company has experienced declining
revenues and recurring operating losses, and had a substantial working capital
deficit at December 31, 2002. As a result of these factors, the Company's
independent certified public accountants have expressed substantial doubt about
the Company's ability to continue as a going concern.

      The Company will require additional capital to fund operating and debt
service requirements, as well as to expand its new Las Vegas business venture,
Tickets2Nite. The Company has been exploring various alternatives to raise this
required capital, and has raised a portion of the required capital, but there
can be no assurances that the Company will ultimately be successful in this
regard.

      To the extent that the Company is unable to secure the capital necessary
to fund its future cash requirements on a timely basis and/or under acceptable
terms and conditions, the Company may not have sufficient cash resources to
maintain operations. In such event, the Company may be required to consider a
formal or informal restructuring or reorganization.

Equipment and Technology:

      Each of the Company's rides is comprised of two basic elements, a motion
simulator, which consists of an enclosed seating platform and related equipment
and computer programming, and the 3-D films viewed by audiences in the
simulator.

      Simulators:

      The Company utilizes a simulator that is both space and cost efficient.
Each simulator includes an enclosed capsule with 15 seats in which audiences are
seated during a given ride. Inside the capsule, each seat faces a screen at the
front of the capsule onto which the ride film is projected. Company attractions
consist of one or more capsules, the number of which varies depending on the
size and desired seating capacity of a particular location. The Las Vegas
Facility consists of four capsules and the West Edmonton Mall Facility consists
of one capsule.

      Capsules are mounted on top of a motion base consisting of six independent
hydraulic cylinders that control the movement of the attached capsule. The
motion base allows an audience to experience a full six degrees of motion
(pitch, roll, heave, yaw, surge and sway). Through the use of the motion base,
capsules have a maximum range of motion of approximately six feet. The motion


                                      -5-
<PAGE>

bases used by the Company were constructed by a manufacturer of military and
commercial flight simulators that is now out of business. However, to date this
has not been a problem for the Company, since replacement parts are available
from other sources.

      Each simulator combines the motion base and capsule with two video
projectors and audio systems which provide a visual and audio presentation
without the degeneration of picture and sound that is common to film formats
under heavy usage. In addition, the use of laser disk players enables the
Company to avoid delays associated with rewinding traditional film and enables
the Company to change entire presentations with the push of a single button. The
projection equipment used by the Company is capable of projecting both 3-D and
standard ride films.

      All of the mechanical equipment comprising the simulator is coordinated by
a computer system. A time code is added to each laser disk in order to enable
the film data to correspond with the movement of the motion base. As the
projectors receive the film and sound data from the laser disks, the simulator's
computer receives the time code, which enables the computer to synchronize the
filmed action with the movement of the motion base and the operation of the wind
machines.

      The equipment utilized by the Company contains relatively standard
hydraulic components that are readily available through various vendors and
suppliers. Should the need arise, the Company believes that other vendors are
available that could manufacture and maintain the equipment. In addition,
because each simulator is completely independent of the other simulators in a
given location, the Company is able to perform routine maintenance and make any
necessary repairs to simulator equipment without hindering the operation of the
entire attraction at a facility that has more than one capsule.

      3-D Films:

      Each of the Company's attractions utilize 3-D technology in the exhibition
of ride films. This 3-D technology creates the illusion of three-dimensional
images. The technology involves the filming and simultaneous projection of
images that are slightly offset from each other. When viewed with special
polarized glasses, this technology creates an illusion of depth and off-screen
effects that is not possible with traditional 2-D filmed entertainment. The
technology employed by the Company in its ride facilities includes Patent No.
5,857,917, which was granted to the Company on January 12, 1999 by the United
States Patent and Trademark Office for 3-D video projected motion simulator
rides.

      The Company has completed production of six ride films for exhibition in
its attractions. The Company produces ride films by contracting with independent
film production companies.

      A typical ride film lasts approximately four minutes. Each capsule is able
to feature approximately nine to twelve attractions per hour. Due to the high
throughput capability of the attractions, the Company's ride facilities do not
generally operate at or near maximum capacity.

Facility Operations:

      The Company currently generates virtually all of its revenues from the
sale of ride tickets. Ride tickets are sold to customers at a ticket booth.
Prior to the showing, ticket holders are led through an entry area where their
tickets are taken and they are handed 3-D glasses and led into a pre-show area.
While the previous audience is inside the capsule experiencing the show, ticket
holders in the pre-show area line up for the next show.

      Once the previous showing has been completed, ticket holders are led into
the capsule. Each seat in the capsule has a safety belt that audience members


                                      -6-
<PAGE>

are required to wear for the duration of the ride film. The audience and the
area surrounding the capsule are monitored via video cameras by the ride
operator during each showing for the safety of audience members. Upon completion
of the ride film, audiences exit back into the lobby area where the 3-D glasses
are deposited into a return basket for cleaning.

      The hours of operation for all of the Company's facilities are generally
from 11:00 a.m. to 11:30 p.m. The average price per show is generally less than
$5.00 due to the Company's practice of selling multiple features per ticket and
the use of coupons and other promotional discounts. However, the vast majority
of the Company's customers purchase approximately four tickets each.

Dave & Buster's, Inc. Joint Venture:

      On May 29, 1998, the Company entered into a three-year joint venture
agreement with Dave & Buster's, Inc. to install its 3-D motion simulation
theater at the Dave & Buster's, Inc. facility near Atlanta, Georgia. The theater
installation was completed and became operational on September 14, 1998. Each
party to the joint venture agreement shared the joint venture's revenues and
operating expenses equally. The joint venture agreement also required the
Company to be solely responsible for certain administrative expenses.

      Although the joint venture agreement was not formally extended subsequent
to its expiration, the operations of the joint venture continued on a
month-to-month basis until February 15, 2003, when the joint venture ceased
operations and was formally terminated.

Competition:

      The Company faces competition in the development and marketing of
attractions. Such competition includes gaining access to desirable locations for
attractions, as well as to selling or leasing simulators and ride films. Other
companies develop and market simulators that compete with the simulators and
related filmed entertainment developed and marketed by the Company. Many of
these corporations have greater financial and marketing resources than the
Company and have established reputations for success in the development and
marketing of products. In addition, there are no significant barriers to entry
that would prevent additional competitors from competing with the Company in the
development and operation of attractions on a site-by-site basis.

      The Company also competes with existing motion simulators on a
site-by-site basis. The Company is aware of several competing motion simulator
attractions currently existing in the vicinity of its facilities, including a
motion simulator attraction developed by Caesar's Palace Hotel and Casino with
IMAX Corporation that was opened during December 1997 in the expansion of the
Forum Shops. In addition, the Excalibur Hotel in Las Vegas has a simulator ride
facility that has been operational for many years. The Hilton Hotel and Casino,
the Luxor Hotel and Casino, and the Venetian Grand Canal Shopping Mall in Las
Vegas also offer motion simulator attractions. To a lesser extent, the Company
also competes for customers with theme parks, traditional motion pictures and
other forms of filmed or computer entertainment. Similarly, the West Edmonton
Mall Facility competes with existing motion simulators within the West Edmonton
Mall. The Company's attractions compete with other attractions and entertainment
alternatives in a given region on the basis of location, price and content of
its ride films.

      The Company believes that the real estate experience of its management
assists it in effectively competing in locating and acquiring favorable
locations for its attractions. In addition, the Company believes that the
compact size and realistic motion capabilities of its simulators, as well as the
unique and entertaining thematic elements and effects of its ride films, enable
it to compete effectively for customers in the marketing of its attractions.

                                      -7-
<PAGE>

Identification and Development of New Sites for Attractions:

      Subject to the availability of operating capital, the Company intends to
seek additional locations for attractions. The Company intends to target sites
for its attractions which are in large metropolitan areas or which are at
tourist destinations that attract more than three million persons per year. The
Company's objective is to lease high-profile, high-traffic space at a reasonable
cost in areas with a large number of permanent residents and which do not have
extreme seasonal attendance patterns, and which are at or near other
complementary tourist attractions.

Seasonality:

      Because of the seasonal nature of tourist traffic, attendance patterns at
attractions can vary. The degree of this seasonality varies among attractions
depending on the nature of tourist and local traffic patterns at a given
location, as well as the nature of entertainment alternatives available to
audiences. Attendance at the Company's facilities is highest during the height
of the tourist season, which runs from June through August, and lowest during
January and February. The West Edmonton Mall Facility is more affected by
seasonality as compared to the Las Vegas Facility due to the extreme weather
conditions during the winter months in Alberta, Canada. The revenues generated
during peak tourist periods have a significant impact on the Company's results
of operations.

Trademarks, Copyrights and Patents:

      On January 12, 1999, the Company was granted Patent No. 5,857,917 by the
United States Patent and Trademark Office for 3-D video projected motion
simulator rides. However, there can be no assurance that the Company will be
able to utilize this patent to prevent competitors from developing similar
simulator systems.

      During 1996, the Company obtained a trademark for "Cinema Ride" and a
trademark for "Ride Guy". In addition, the Company holds copyright protection
for each of the ride films owned by the Company. Although patent, trademark and
copyright protection is desirable, the Company believes that such legal
protection is less significant to the Company's success than factors such as the
location and marketing of attractions and the production or acquisition of
entertaining ride films.

Insurance:

      The Company maintains insurance coverage that it believes provides
adequate coverage for all of its current operations. The Company also maintains
$1,000,000 of "key-man" life insurance on the life of Mitchell J. Francis, its
President and Chief Executive Officer, as to which the Company is the sole
beneficiary.

Governmental Regulations:

      The Company is subject to certain governmental regulations that establish
standards for the design, construction, installation, alteration, maintenance,
operation and inspection of amusement rides such as the Company's attractions.
The Company is in compliance with all such standards and has obtained all
necessary permits and approvals.

Employees:

      As of March 31, 2003, the Company had three full-time employees at its
corporate offices, 20 employees at its Las Vegas Facility, and three employees
at its West Edmonton Mall Facility. Tickets2Nite, LLC had eight employees at
March 31, 2003. Employees at the ride locations consist of both full-time and


                                      -8-
<PAGE>

part-time employees. The Company's employees are not represented by any unions.
The Company believes that its relations with its employees are satisfactory.


ITEM 2.   DESCRIPTION OF PROPERTY

Las Vegas Facility:

      In October 1993, the Company entered into a lease agreement for a site
located at the Forum Shops at Caesar's Palace Hotel and Casino (the "Forum
Shops") that houses the Company's Las Vegas Facility. The Las Vegas Facility
lease has a term of 10 years through July 2004, with an option to extend the
term of the lease for one additional five-year period. The Forum Shops is a high
traffic tourist mall located between Caesar's Palace Hotel and Casino and the
Mirage Hotel in Las Vegas, Nevada.

      The Forum Shops recently commenced construction on an expansion program,
which may negatively impact traffic at the Company's Las Vegas Facility. In
addition, the Forum Shops have requested that the Company relocate its ride
facility to a new location within the Forum Shops. The Company is continuing
discussions with the management of the Forum Shops, but is currently unable to
predict the ultimate resolution of this issue, or the impact that these matters
may have on the Company's financial position or results of operations.
West Edmonton Mall Facility:

      During July 1995, the Company, through its wholly-owned Alberta, Canada
subsidiary, Cinema Ride Edmonton, Inc., entered into a lease agreement to
install and operate one capsule in the West Edmonton Mall, Alberta, Canada.
Effective July 1, 2000, the Company entered into a Renewal and Amending
Agreement for a term of five years through June 2005.

      The West Edmonton Mall consists of 5,200,000 square feet of rentable
space, combining recreation, entertainment and retail shops. The mall also
includes a 360 room hotel, a gambling casino, several restaurants, an ice
skating ring, a dolphin show, a water park, 20 aquariums, a miniature golf
course, a roller coaster, and two motion simulators. The Company's facility is
located within the food court of the mall, thus capitalizing on the traffic that
the food court generates, especially in the high tourist season. The West
Edmonton Mall completed an expansion project in 1999 that included an
entertainment center and an IMAX Theater.

Corporate Offices:

      The Company leases office space in Studio City, California as its
corporate headquarters. The lease is for a period of five years expiring June
2005, with an option to extend the term of the lease for one additional
five-year period. The monthly rent is currently $4,630.


ITEM 3.   LEGAL PROCEEDINGS

      At December 31, 2002, the Company was involved in the following legal
proceedings:

      a. The Company's former Chief Financial Officer, Toufic R. Bassil, has
asserted claims against the Company for breach of his employment agreement and
his wrongful termination as an officer of the Company without cause effective
March 1, 1999. These claims are being asserted pursuant to a binding arbitration
proceeding through the American Arbitration Association. In January 2002, the
arbitrator determined that the Company is liable for damages from breach of the
employment agreement, although damages have not yet been determined. The
wrongful termination claim is still in the discovery stage and the Company is
actively defending this matter. In the opinion of management, adequate provision


                                      -9-
<PAGE>

has been made in the consolidated financial statements with respect to the
foregoing claims.

      b. In late June 2002, the Company closed its New Jersey ride facility.
During July 2002, the Company and its wholly-owned subsidiary, Cinema Ride Times
Square, Inc., were named as defendants in a lawsuit initiated by the landlord of
the Company's former New Jersey ride facility, Elizabeth Metromall, LLC, in the
Superior Court of New Jersey. The lawsuit results from the contractual
relationship between the landlord and the Company. Management believes that it
has counterclaims against the landlord sufficient to offset any damages for
which the Company may ultimately be found liable. Management believes that it
will be successful in its defense of this lawsuit, and has therefore not accrued
for any expenses associated with this lawsuit in the consolidated financial
statements. The Company's consolidated financial statements do not include any
adjustments for recovery of claims against the landlord.

      c. The Company owns 50% of a subsidiary named Tickets2Nite, LLC, a Nevada
limited liability company, which was formed on September 24, 2002 pursuant to an
Operating Agreement, with the other 50% owned by Entasis, LLC ("Entasis"), an
independent third party. The new business venture, which commenced operations
during November 2002, sells tickets to Las Vegas shows at 50% of the original
box office price, on the same day of the performance, from a ticket booth
located adjacent to the giant Coca-Cola bottle on the Las Vegas Strip, in front
of the MGM Grand Hotel. The Operating Agreement specifies that the Company will
oversee the day-to-day operations of the new business venture.

      On December 24, 2002, the Company filed a lawsuit against Entasis in the
Clark County, Nevada District Court. The lawsuit relates to matters concerning
the management and funding of the new business venture. Entasis funded only
$95,000 of its $200,000 equity commitment, and was impermissibly interfering
with the operations of the new business venture.

      On February 27, 2003, the Clark County, Nevada District Court granted the
Company's motion for a Preliminary Injunction against Entasis relating to the
operations of the business. The Preliminary Injunction prevents Entasis from
interfering with the day-to-day operations of the Tickets2Nite business or
having anything to do with Tickets2Nite's banking.

      Trial with respect to the Company's lawsuit against Entasis was held on
May 7 through 9, 2003. No decision had been issued by the Clark County, Nevada
District Court as of May 28, 2003. The Company does not believe that the
resolution of this legal proceeding will have a negative impact on the Company's
interest in Tickets2Nite, LLC, or on its consolidated results of operations or
financial position.


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

      No matters were submitted to a vote of the Company's security holders
during the fourth quarter of the fiscal year ended December 31, 2002.


                                      -10-
<PAGE>

                                    PART II.


ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


      (a) Market Information

      Since March 12, 1998, the common stock of the Company has been traded on
the OTC Bulletin Board under the symbol "MOVE". The following table sets forth
the range of reported closing bid prices of the Company's common stock during
the periods indicated. Such quotations reflect prices between dealers in
securities and do not include any retail mark-up, mark-down or commission, and
may not necessarily represent actual transactions. Trading in the Company's
common stock has generally been limited and sporadic, and should not be deemed
to constitute an "established trading market". The information set forth below
was obtained from America Online.

<TABLE>

                                                      Low         High
                                                      ---         ----

      Fiscal Year Ended December 31, 2001:
      -----------------------------------

<S>                                                  <C>          <C>
      Three months ended -

      March 31, 2001                                 $0.26        $0.62
      June 30, 2001                                   0.15         1.01
      September 30, 2001                              0.28         0.65
      December 31, 2001                               0.23         0.45



      Fiscal Year Ended December 31, 2002:
      -----------------------------------

      Three months ended -

      March 31, 2002                                 $0.30        $0.75
      June 30, 2002                                   0.62         0.84
      September 30, 2002                              0.42         0.65
      December 31, 2002                               0.55         0.87

</TABLE>


      (b) Holders

      As of March 5, 2003, the Company had 241 common shareholders of record,
excluding 538,124 shares held in "street name" by brokerage firms and other
nominees who hold shares for multiple investors. The Company estimates that it
had approximately 1,100 beneficial common shareholders as of March 5, 2003.

      (c) Dividends

      Holders of common stock are entitled to receive dividends if, as and when
declared by the Board of Directors out of funds legally available for
distribution, subject to the dividend and liquidation rights of any preferred
stock that may be issued and outstanding. The Company has not paid cash
dividends on its common stock and has no present intention of paying cash
dividends in the foreseeable future. It is the present policy of the Board of
Directors to retain all earnings to provide for the future growth and
development of the Company's business operations.

      (d) Securities Authorized for Issuance under Equity Compensation Plans



                                      -11-
<PAGE>

      In June 1994, the Company adopted the Cinema Ride, Inc. Stock Option Plan
(the "Option Plan"), under which stock options to purchase a maximum of 112,500
shares of common stock of the Company may be issued pursuant to incentive and
non-qualified stock options granted to officers, employees, directors and
consultants of the Company. There were 14,312 options issuable under the Option
Plan at December 31, 2002.

      In December 1995, the Company adopted the 1995 Directors Stock Option Plan
(the "Directors Option Plan"), under which stock options to purchase a maximum
of 12,500 shares of common stock of the Company may be issued to non-employee
directors of the Company. There are no options issuable under the Directors
Option Plan at December 31, 2002.

      A more complete description of the Option Plan and the Directors Option
Plan is provided at "ITEM 10. EXECUTIVE COMPENSATION - Stock Option Plans".

      The Company has also periodically entered into equity-based individual
compensation arrangements with its officers, which are described at "ITEM 10.
EXECUTIVE COMPENSATION - Employment Agreements" and "- Issuance of Non-Plan
Stock Options, Warrants and Common Stock to Officers.

      None of these stock option plans or individual compensation arrangements
were approved by the shareholders of the Company.

<TABLE>
<CAPTION>
                                                      Number of securities
                                                      remaining available for
Number of securities        Weighted-average          future issuance under
to be issued upon           exercise price            equity compensation
exercise of                 of outstanding            plans (excluding
outstanding options,        options, warrants         securities reflected
warrants and rights(1)      and rights                in column (a)
----------------------      -----------------         -----------------------
       (a)                        (b)                            (c)
<S>                         <C>                       <C>
 3,423,572 shares                $1.56                    14,312 shares

</TABLE>

----------------------
(1) Includes both vested and unvested options and warrants.


Sales of Unregistered Securities

      On January 28, 2002, the Company issued to each of its two non-employee
directors 100,000 shares of common stock for services rendered which were valued
at an aggregate of $60,000.

      On January 28, 2002, the Company issued 75,000 shares of common stock to
its Vice President of Operations for services rendered which were valued at
$22,500.

      On February 4, 2002, as part of the Company's 2002 compensation agreement
with Kimberly Simon, the Company issued a warrant to purchase 50,000 shares of
common stock exercisable at $0.41 per share, which was the fair market value on
the date of grant, vesting if 2002 revenues from the Company's Las Vegas
Facility were at least equal to 2001 revenues. As of June 30, 2002, the Company
determined that it was likely that this warrant would vest. Accordingly, the
Company calculated the value of the warrant as $32,500 pursuant to the
Black-Scholes option pricing model, which was charged to operations during the
year ended December 31, 2002.

      During the year ended December 31, 2002, the Company issued to various
employees an aggregate of 220,000 shares of common stock for services rendered
which were valued at $66,000.

                                      -12-
<PAGE>

      During the year ended December 31, 2002, the Company issued to various
consultants an aggregate of 174,000 shares of common stock for services rendered
which were valued at $60,040.

      During the year ended December 31, 2002, the Company issued to various
consultants an aggregate of 10,000 shares of common stock for capital raising
services, which were recorded at par value of $0.08 per share (aggregate amount
$800) and charged to additional paid-in capital.

      During the year ended December 31, 2002, the Company issued 10,000 shares
of common stock to an individual as payment for the acquisition of office
equipment which were valued at $6,200.

      During the year ended December 31, 2002, the Company conducted a private
placement offering consisting of units comprised of four shares of common stock
and four common stock purchase warrants for each $1.00 invested. The warrants
are exercisable at $0.50 per share for a period of 30 months (increased from 18
months initially) from the date of issuance. The Company raised a total of
$628,750 and issued 2,515,000 shares of common stock and 2,515,000 common stock
purchase warrants. Based on various factors, including the exercise price and
terms of the warrant and the trading range and volume of the Company's common
stock during 2002, the Company determined the value of the warrants was nominal
and therefore did not allocate any portion of the $0.25 unit sale price to the
warrants.

      During the year ended December 31, 2002, the Company issued 123,750 shares
of common stock to its Chief Executive Officer as a bonus for capital raising
efforts pursuant to his employment agreement effective September 1, 2000, which
were valued at $82,570 (see "ITEM 10. EXECUTIVE COMPENSATION - Employment
Agreements").

      During the year ended December 31, 2002, the Company issued 30,000 shares
of common stock and warrants to purchase 50,000 shares of common stock
exercisable at $0.42 per share for three years to a consultant for assistance in
structuring the Company's new Las Vegas business venture. The aggregate value of
such securities was $43,100, with the shares valued at $18,600 and the warrants
valued at $24,500.

      During the year ended December 31, 2002, the Company issued to Gang
Consulting Inc. 280,000 shares of common stock and common stock purchase
warrants for 900,000 shares of common stock exercisable for five years at prices
ranging from $0.25 through $4.00 for financial advisory services. The aggregate
value of the warrants, calculated pursuant to the Black-Scholes option pricing
model, was $496,000, which is being charged to operations over the 18-month
period beginning July 1, 2002 and ending December 31, 2003. The aggregate value
of such securities charged to operations during the year ended December 31, 2002
was $334,283, with the shares valued at $168,950 and the portion of the warrants
charged to operations valued at $165,333. The Company also issued to Gang
Consulting Inc. 37,125 shares of common stock for capital raising services
during the year ended December 31, 2002, which were recorded at par value of
$0.08 per share (aggregate amount $2,970) and charged to additional paid-in
capital (see "ITEM 1. DESCRIPTION OF BUSINESS - New Capital").

      The shares of common stock, stock options and warrants were issued without
registration in reliance upon the exemption afforded by Section 4(2) of the
Securities Act of 1933, as amended, based on certain representations made to the
Company by the recipients.




                                      -13-
<PAGE>

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

Overview:

      The Company is in the business of developing and operating rides
consisting of 3-D motion simulator attractions and filmed entertainment that
combines projected three-dimensional action films of approximately four minutes
in duration with computer-controlled, hydraulically-mobilized capsules that are
programmed to move in concert with the on-screen action. The Company's ride
facilities are located in Las Vegas, Nevada and Edmonton, Alberta, Canada.

New Las Vegas Business Venture:

      The Company owns 50% of a subsidiary named Tickets2Nite, LLC, a Nevada
limited liability company, which was formed on September 24, 2002 pursuant to an
Operating Agreement, with the other 50% owned by Entasis, LLC ("Entasis"), an
independent third party. The new business venture, which commenced operations
during November 2002, sells tickets to Las Vegas shows at 50% of the original
box office price, on the same day of the performance, from a ticket booth
located adjacent to the giant Coca-Cola bottle on the Las Vegas Strip, in front
of the MGM Grand Hotel, pursuant to a sub-lease through July 31, 2007. The
Operating Agreement specifies that the Company oversees the day-to-day
operations of the new business venture. The Coca-Cola Company has entered into a
Marketing Sponsorship Agreement with Tickets2Nite, LLC, beginning July 1, 2002
and ending June 30, 2007, as a result of which the operations of the new
business venture are being marketed as "Coca-Cola Tickets2Nite". As part of the
Marketing Sponsorship Agreement, Tickets2Nite, LLC has granted The Coca-Cola
Company warrants to purchase a 5% ownership interest in Tickets2Nite, LLC,
exercisable for a period of five years at 25% of the fair market value of such
5% ownership interest at the time the warrant is exercised, as determined by a
mutually acceptable investment banking firm.

      The concept of same day, half-price tickets is a successful,
well-established institution in New York City's Times Square. Based on initial
results, and subject to the resolution of management and funding issues, the
Company believes that the new business venture has the potential to make a
significant contribution to the Company's financial results in the future.

      The Company accounts for this investment under the equity method of
accounting, since it does not have majority voting control of Tickets2Nite, LLC.
Financial information with respect to the Company's investment in Tickets2Nite,
LLC and its results of operations and financial position as of and for the
period ended December 31, 2002 are provided below at "Tickets2Nite Business
Venture".

      On December 24, 2002, the Company filed a lawsuit against Entasis in the
Clark County, Nevada District Court. The lawsuit relates to matters concerning
the management and funding of the new business venture. Entasis funded only
$95,000 of its $200,000 equity commitment, and was impermissibly interfering
with the operations of the new business venture.

      On February 27, 2003, the Clark County, Nevada District Court granted the
Company's motion for a Preliminary Injunction against Entasis relating to the
operations of the business. The Preliminary Injunction prevents Entasis from
interfering with the day-to-day operations of the Tickets2Nite business or
having anything to do with Tickets2Nite's banking.

      Trial with respect to the Company's lawsuit against Entasis was held on
May 7 through 9, 2003. No decision had been issued by the Clark County, Nevada
District Court as of May 28, 2003. The Company does not believe that the
resolution of this legal proceeding will have a negative impact on the Company's
interest in Tickets2Nite, LLC, or on its consolidated results of operations or
financial position.

                                      -14-
<PAGE>

New Capital:

      During the year ended December 31, 2002, the Company raised $628,750 of
new capital through the sale of its securities. The private placement offering
consisted of units sold at $0.25 per unit. Each unit consisted of one share of
common stock and one common stock purchase warrant. The warrants are exercisable
at $0.50 per share for a period of 30 months (increased from 18 months
originally) from the date of issuance. Based on various factors, including the
exercise price and terms of the warrant and the trading range and volume of the
Company's common stock during 2002, the Company determined the value of the
warrants was nominal and therefore did not allocate any portion of the $0.25
unit sale price to the warrants. The Company is continuing its efforts to raise
new capital subsequent to December 31, 2002.

      Effective as of January 3, 2002, the Company entered into a two year
agreement with a financial advisory firm, Gang Consulting Inc., which provides
for the payment of monthly compensation, either in the form of a payment of
$10,000 or the issuance of 25,000 shares of common stock. During the year ended
December 31, 2002, the Company issued 280,000 shares of common stock to such
firm with a fair market value of $168,950, which was charged to operations as
general and administrative expense. The Company also paid $10,000 to such firm
during the year ended December 31, 2002.

      Effective as of July 1, 2002, the consulting agreement was amended to
provide for the Company to issue to such firm the following common stock
purchase warrants: an aggregate of 300,000 shares of common stock vesting on
July 1, 2002, exercisable for a period of five years from such date in equal
installments of 100,000 shares at $0.25, $0.50 and $1.00 per share; an aggregate
of 300,000 shares of common stock vesting on January 1, 2003, exercisable for a
period of five years from such date in equal installments of 100,000 shares at
$1.50, $2.00 and $2.50 per share; and an aggregate of 300,000 shares of common
stock vesting on July 1, 2003, exercisable for a period of five years from such
date in equal installments of 100,000 shares at $3.00, $3.50 and $4.00 per
share. The aggregate fair value of such warrants was calculated pursuant to the
Black-Scholes option pricing model as $496,000, which is being charged to
operations as general and administrative expense over the 18 month period
beginning July 1, 2002 and ending December 31, 2003. For the year ended December
31, 2002, $165,333 was charged to operations as general and administrative with
respect to such warrants.

      Effective as of July 1, 2002, the consulting agreement was amended to
provide for the Company to pay a finder's fee to such firm with respect to the
private placement of its equity securities by issuing shares of common stock
equivalent to 3% of the total equity capital raised, calculated at $0.50 per
share. During the year ended December 31, 2002, the Company issued 37,125 shares
of common stock to such firm, which were recorded at par value of $0.08 per
share (aggregate amount $2,970) and charged to additional paid-in capital.

Going Concern:

      The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal
course of business. The carrying amounts of assets and liabilities presented in
the accompanying consolidated financial statements do not purport to represent
the realizable or settlement values. The Company has experienced declining
revenues and recurring operating losses, and had a substantial working capital
deficit at December 31, 2002. As a result of these factors, the Company's
independent certified public accountants have expressed substantial doubt about
the Company's ability to continue as a going concern.

      The Company will require additional capital to fund operating and debt
service requirements, as well as to expand its new Las Vegas business venture,
Tickets2Nite. The Company has been exploring various alternatives to raise this
required capital, and has raised a portion of the required capital, but there
can be no assurances that the Company will ultimately be successful in this
regard.

                                      -15-
<PAGE>

      To the extent that the Company is unable to secure the capital necessary
to fund its future cash requirements on a timely basis and/or under acceptable
terms and conditions, the Company may not have sufficient cash resources to
maintain operations. In such event, the Company may be required to consider a
formal or informal restructuring or reorganization.

Critical Accounting Policies:

      The Company prepared the consolidated financial statements in accordance
with accounting principles generally accepted in the United States of America.
The preparation of these financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Management periodically evaluates the estimates and judgments made.
Management bases its estimates and judgments on historical experience and on
various factors that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates as a result of different
assumptions or conditions.

      The following critical accounting policies affect the more significant
judgments and estimates used in the preparation of the Company's consolidated
financial statements.

Impairment of Long-Lived Assets:

      The Company's long-lived assets include property and equipment and the
visual effects library. At December 31, 2002, the net value of property and
equipment and the visual effects library was $545,149, which accounted for 61.8%
of the Company's total assets. In assessing the impairment of property and
equipment and the visual effects library, the Company makes assumptions
regarding the estimated future cash flows and other factors to determine the
fair value of the respective assets. If these estimates or the related
assumptions change in the future, the Company may be required to record
impairment charges for these assets.

Investment in New Las Vegas Business Venture:

      The Company owns 50% of a subsidiary named Tickets2Nite, LLC, a Nevada
limited liability company, which was formed on September 24, 2002 pursuant to an
Operating Agreement, with the other 50% owned by Entasis, LLC, an independent
third party. The new business venture, which commenced operations during
November 2002, sells tickets to Las Vegas shows at 50% of the original box
office price, on the same day of the performance, from a ticket booth located
adjacent to the giant Coca-Cola bottle on the Las Vegas Strip, in front of the
MGM Grand Hotel. The value of the Company's investment in the new Las Vegas
business venture, net of the Company's proportionate share of the business
venture's net loss for the period ended December 31, 2002, was $197,934 at
December 31, 2002, representing 22.5% of the Company's total assets.

      The Company periodically evaluates the recoverability of its investment in
this business venture based on its current and prospective operating
performance. If the Company determines that its investment in this business
venture is not recoverable, it will be required to recognize a loss in such
period.

Income Taxes:

      The Company records a valuation allowance to reduce its deferred tax
assets to the amount that is more likely than not to be realized. In the event
the Company was to determine that it would be able to realize its deferred tax
assets in the future in excess of its recorded amount, an adjustment to the
deferred tax assets would be credited to operations in the period such
determination was made. Likewise, should the Company determine that it would not


                                      -16-
<PAGE>

be able to realize all or part of its deferred tax assets in the future, an
adjustment to the deferred tax assets would be charged to operations in the
period such determination was made.

Results of Operations - Years Ended December 31, 2002 and 2001 -

Cinema Ride, Inc.:

      Revenues. Revenues decreased by $150,090 or 6.3%, to $2,225,456 in 2001,
as compared to $2,375,546 in 2001. The New Jersey Facility, which was closed in
late June 2002, generated revenues of $157,107 or 7.1% of consolidated revenues
for the six months ended June 30, 2002, as compared to revenues of $345,067 or
14.5% of consolidated revenues for the full year of 2001. Exclusive of revenues
from the New Jersey Facility, revenues increased by $37,870 or 1.9% in 2002 as
compared to 2001.

      Revenues from the Company's Las Vegas Facility increased sufficiently in
2002 to offset most of the impact from the absence of a full year's revenues
from the New Jersey Facility in 2001. The Company's Las Vegas Facility is
located at the Forum Shops at Caesar's Palace Hotel and Casino. The Forum Shops
recently commenced construction on an expansion program, which may negatively
impact traffic at the ride facility. In addition, the Forum Shops have requested
that the Company relocate its ride facility to a new location within the Forum
Shops. The Company is continuing discussions with the management of the Forum
Shops, but is currently unable to predict the ultimate resolution of this issue,
or the impact that these matters may have on the Company's financial position or
results of operations.

      Direct Costs of Revenues. Direct costs of revenues decreased by $38,496 or
3.0%, to $1,255,617 in 2002, as compared to $1,294,113 in 2001, primarily as a
result of the closure of the New Jersey Facility in late June 2002. Direct costs
of revenues in 2001 are net of the forgiveness of accrued rent payable of
$70,580, reflecting the restructuring of the lease for the Company's former ride
facility in Elizabeth, New Jersey in June 2001. Direct costs of revenues were
56.4% in 2002, as compared to 54.5% of revenues in 2001. Excluding the
previously noted non-recurring adjustment of $70,580 in 2001, direct costs of
revenues would have been 57.4% in 2001.

      Selling and Marketing Expenses. Selling and marketing expenses decreased
by $77,928 or 47.9%, to $84,880 in 2002, as compared to $162,808 in 2001,
primarily as a result of the Company's changing to a lower cost marketing
program.

      General and Administrative Expenses. General and administrative expenses
increased by $614,354 or 55.2%, to $1,728,167 in 2002, as compared to $1,113,813
in 2001, primarily as a result of an increase in costs related to the issuance
of common stock and common stock purchase warrants for services rendered.

      Included in general and administrative expenses in 2002 and 2001 was
non-cash compensation of $702,992 and $24,464, respectively, including $197,568
and $12,600 to officers and directors, respectively. Excluding such non-cash
compensation, general and administrative expenses decreased by $64,174 or 5.9%
in 2002 as compared to 2001.

      Depreciation and Amortization. Depreciation and amortization decreased by
$24,036 or 6.7%, to $335,150 in 2002, as compared to $359,186 in 2001, primarily
as a result of the retirement of certain property and equipment in 2001.

      Loss on Closure of Ride Facilities. During the year ended December 31,
2002, the Company incurred $413,499 of costs related to the closure of the New
Jersey Facility and the Atlanta Facility.

                                      -17-
<PAGE>

      During late June 2002, the Company closed its New Jersey ride facility, as
a result of unsatisfactory revenue production and a dispute with the landlord
over expense increases. As a result, the Company wrote off certain fixed assets
related to such ride facility and incurred certain direct costs related to such
closure, resulting in a charge to operations of $167,377 during the year ended
December 31, 2002.

      During February 2003, the Company's joint venture with Dave & Buster's,
Inc. was terminated and operations ceased. The Company determined that its
investment in Dave & Buster's, Inc. had been impaired at December 31, 2002.
Accordingly, the Company wrote off certain fixed assets related to such ride
facility and incurred certain direct costs related to such closure, resulting in
a charge to operations of $246,122 at December 31, 2002.

      Start-Up Costs of New Las Vegas Business Venture. The Company incurred
start-up costs with respect to the development of its new Las Vegas business
venture of $43,100 in 2002, which consisted of non-cash costs resulting from the
issuance of common stock and common stock purchase warrants, as compared to
$43,763 in 2001.

      Loss from Operations. The loss from operations was $1,634,957 for the year
ended December 31, 2002, as compared to $598,137 for the year ended December 31,
2001.

      Interest Expense. Interest expense decreased by $40,771 or 20.3%, to
$159,652 in 2002, as compared to $200,423 in 2001.

     Interest  Income.  Interest income was $461 in 2002, as compared to $733 in
2001.

      Equity in Net Income (Loss) of Joint Venture. The Company recognized
equity in net income (loss) of joint venture of $(37) in 2002, as compared to
$12,758 in 2001, with respect to the Atlanta Facility. The Atlanta Facility was
closed in February 2003 (see "ITEM 1. DESCRIPTION OF BUSINESS - Dave & Buster's,
Inc. Joint Venture").

      Equity in Net Loss of Las Vegas Business Venture. The Company recorded
equity in net loss of its new Las Vegas business venture of $87,724 during the
year ended December 31, 2002 (see "New Las Vegas Business Venture" above).

      Other Income. Other income was $18,305 in 2002. The Company did not have
any other income in 2001. The Company does not expect other income to be
significant in subsequent years.

      Net Loss. The net loss was $1,863,604 for the year ended December 31,
2002, as compared to $785,069 for the year ended December 31, 2001.

      As of December 31, 2002, the Company had Federal and California net
operating loss carryforwards of approximately $9,800,000 and $3,000,000,
respectively, available to offset future Federal and California taxable income.
The unused net operating loss carryforwards expire in various amounts through
2021 for Federal purposes and through 2011 for California state purposes.

      Net deferred tax assets of $3,332,000 at December 31, 2002 resulting from
net operating losses, tax credits and other temporary differences have been
offset by a 100% valuation allowance since management cannot determine whether
it is more likely than not that such assets will be realized.

Tickets2Nite Business Venture:

      The Company owns 50% of a subsidiary named Tickets2Nite, LLC, a Nevada
limited liability company. The new business venture, which commenced operations
during November 2002, sells tickets to Las Vegas shows at 50% of the original


                                      -18-
<PAGE>

box office price, on the same day of the performance, from a ticket booth
located adjacent to the giant Coca-Cola bottle on the Las Vegas Strip, in front
of the MGM Grand Hotel.

      The Company investment in this new business venture aggregated $285,657 at
December 31, 2002, all of which was invested during 2002, consisting of a cash
investment of $202,240, $55,352 in the form of a capital lease, $32,682 in the
form of equipment purchased by the Company and transferred to the new business
venture, less an adjustment of $4,617.

      The Company accounts for this investment under the equity method of
accounting, since it does not have majority voting control of Tickets2Nite, LLC.
Accordingly, the Company recorded $87,723 as its proportionate share of the net
loss from this business venture for the period ended December 31, 2002. The
Company did not receive any distributions from this business venture in 2002.
Accordingly, the value of the Company's investment in this business venture was
$197,934 at December 31, 2002.

      As part of its Marketing Sponsorship Agreement, Tickets2Nite, LLC has
granted The Coca-Cola Company warrants to purchase a 5% ownership interest in
Tickets2Nite, LLC, exercisable for a period of five years at 25% of the fair
market value of such 5% ownership interest at the time the warrant is exercised,
as determined by a mutually acceptable investment banking firm. The fair value
of these warrants was recorded as deferred marketing costs at December 31, 2002,
and are being amortized to operations over the five year life of the
Marketing Sponsorship Agreement.

      Depending on the growth and development of this new business venture,
additional capital may be required during 2003 to support its operations and
possible expansion plans, which the Company would attempt to provide either
through a debt or equity financing. However, there can be no assurances that the
Company would be successful in this regard.

      As of December 31, 2002, the new business venture did not have any capital
expenditure commitments outstanding.

      Condensed financial information with respect to the new business venture
as of and for the period ended December 31, 2002 is presented below.

<TABLE>
<CAPTION>

                                Tickets2Nite, LLC
                                  Balance Sheet
                                December 31, 2002

<S>                                                 <C>
Current assets                                      $ 132,904
Property and equipment, net                           315,013
Other assets                                          225,000
                                                      -------
      Total assets                                  $ 672,917
                                                      =======

Current liabilities                                 $  99,466
Long-term liabilities                                 118,241
Capital                                               455,210
                                                      -------
      Total liabilities and capital                 $ 672,917
                                                      =======

</TABLE>


                                      -19-
<PAGE>

<TABLE>
<CAPTION>


                                Tickets2Nite, LLC
                             Statement of Operations
                         Period Ended December 31, 2002

<S>                                                 <C>
Revenues                                            $ 115,681
Cost of revenues                                       50,068
                                                      -------
Gross margin                                           65,613
                                                      -------

Selling and marketing                                 119,836
General and administrative                            104,156
Depreciation and amortization                          10,264
                                                      -------
Total costs and expenses                              234,256
                                                      -------

Loss from operations                                 (168,643)
Interest expense                                        6,804
                                                      -------
Net loss                                            $(175,447)
                                                      =======

</TABLE>

Liquidity and Capital Resources - December 31, 2002:

      During the last few years, the Company has relied on the proceeds from
loans from both unrelated and related parties, capital leases and the sale of
its securities to provide the resources necessary to develop its ride
facilities, operate its business and invest in its new Las Vegas business
venture. During the year ended December 31, 2002, the Company raised $628,750 of
new capital through the sale of its securities. The Company is continuing its
efforts to raise new capital subsequent to December 31, 2002.

      Depending on the growth and development of the Company's new Las Vegas
business venture, additional capital may be required during 2003 to support its
operations and possible expansion plans, which the Company would attempt to
provide either through a debt or equity financing. However, there can be no
assurances that the Company would be successful in this regard.

      Operating Activities. Operating activities utilized cash of $398,114
during the year ended December 31, 2002, as compared to $68,017 during the year
ended December 31, 2001. The increase in cash utilized in operations in 2002 as
compared to 2001 was primarily a result of an increase in cash used to reduce
accounts payable and accrued expenses during the year ended December 31, 2002.

      At December 31, 2002, the Company's cash and cash equivalents had
decreased by $4,962, to $61,894, as compared to $66,856 at December 31, 2001.
The cash balance at December 31, 2002 included a short-term advance of $65,000
from the Company's Chief Executive Officer that was received during the three
months ended December 31, 2002. In addition, the Chief Executive Officer has
advanced an additional $15,000 during the three months ended March 31, 2003.

      The Company had a working capital deficit of $1,188,800 at December 31,
2002, as compared to $1,228,824 at December 31, 2001, an improvement of $40,024.
At December 31, 2002 and 2001, the Company's note payable to its primary secured
lender of $716,241 and $780,613, respectively, was classified as a current
liability (see "Transactions with Primary Secured Lender" below).

      Investing Activities. Investing activities utilized cash used of $159,809
in 2002, as compared to providing net cash of $77,464 in 2001. Dividends from
the Dave & Buster's, Inc. joint venture were $81,505 in 2002, as compared to
$80,661 in 2001. The Company generated $809 in 2002 from the sale of fixed


                                      -20-
<PAGE>

assets, as compared to expending $3,197 in 2001 for the purchase of fixed
assets. During the year ended December 31, 2002, the Company's net cash
investments in its Dave & Buster's, Inc. joint venture and its new Las Vegas
business venture were $39,883 and $202,240, respectively.

      Financing Activities. Financing activities provided cash of $552,961 in
2002, as compared to utilizing cash of $52,425 in 2001. Principal payments on
notes payable were $103,725 in 2002, as compared to $14,651 in 2001. Principal
payments on capital lease obligations were $37,064 in 2002, as compared to
$37,774 in 2001.

      During the years ended December 31, 2002 and 2001, the Company entered
into new capital lease obligations to acquire equipment totaling $13,257 and
$104,093, respectively, including approximately $55,352 in 2002 with respect to
the new Las Vegas business venture, which was included in the Company's
investment in new Las Vegas business venture.

      During the year ended December 31, 2002, the Company conducted a private
placement offering consisting of units comprised of four shares of common stock
and four common stock purchase warrants for each $1.00 invested. The warrants
are exercisable at $0.50 per share for a period of 30 months (increased from 18
months originally) from the date of issuance. The Company raised a total of
$628,750 and issued 2,515,000 shares of common stock and 2,515,000 common stock
purchase warrants. Based on various factors, including the exercise price and
terms of the warrant and the trading range and volume of the Company's common
stock during 2002, the Company determined the value of the warrants was nominal
and therefore did not allocate any portion of the $0.25 unit sale price to the
warrants. The Company is continuing its efforts to raise new capital subsequent
to December 31, 2002.

      During the three months ended December 31, 2002, the Company's Chief
Executive Officer made short-term advances to the Company aggregating $65,000
for working capital purposes. During the three months ended March 31, 2003, the
Company's Chief Executive Officer loaned the Company an additional $15,000 under
the same terms.

      As of December 31, 2002, the Company did not have any capital expenditure
commitments outstanding.

      Restructuring of Capital Lease Obligation. During July 2001, the Company
restructured a capital lease obligation in which it was in default by converting
it into a secured note payable. In conjunction with this transaction, the
Company exercised its option to acquire the related asset for $29,407. As a
result, the Company reclassified the capital lease obligation of $133,500 to
notes payable, and the Company reclassified the related asset of $139,474 from
equipment under capital lease to theater and film equipment.

      Transactions with Primary Secured Lender. On December 31, 1996, the
Company completed a financing agreement with Finova Technology Finance, Inc.,
which was structured as a sale leaseback transaction of certain equipment owned
by the Company. Based on the substance of this transaction, this financing
agreement was accounted for as a note payable for financial reporting purposes.
The gross loan amount was $1,575,027, repayable over a four year period at
$40,903 per month with a balloon payment of $157,503. On March 10, 1999, the
financing agreement was amended to reduce the monthly payments from $40,903 to
$21,789, and to extend the maturity date from January 1, 2001 to January 1,
2004, with no change in the balloon payment of $157,503. The loan bears interest
at 16.75% per annum. The financing agreement requires the Company to repurchase
the equipment at the end of the lease for $1.00. As a result of reduced cash
flows generated by operations during the year ended December 31, 2000, the
Company did not make the monthly payments due the lender during the latter part
of the year ended December 31, 2000 and the early part of the year ended
December 31, 2001. Accordingly, the Company was in default in its obligations to
the lender at December 31, 2000.

                                      -21-
<PAGE>

      Effective June 25, 2001, the Company completed a Second Modification
Agreement and Waiver of Defaults with the lender, which provided for: (1) the
waiver of all prior payment defaults; (2) the reduction of the monthly payment
from $21,789 to $10,674, which represents interest only payments at 16.75% per
annum; (3) the increase in the principal balance due the lender of accrued
interest payable of $50,083; (4) the acceleration of the due date of the loan
from January 1, 2004 to March 1, 2002; (5) the repricing of a common stock
purchase warrant previously issued to the lender to purchase 12,500 shares of
common stock exercisable through December 31, 2003, which reduced the exercise
price from $16.00 per share to $1.00 per share; (6) the issuance of common stock
purchase warrants to the lender to purchase 25,000 shares of common stock at
$0.50 per share and 25,000 shares of common stock at $1.00 per share exercisable
through June 25, 2011; (7) the revision of the lender's Warrant Holder Rights
Agreement to eliminate demand registration rights; and (8) the agreement by the
lender to enter into negotiations with the Company with respect to the
refinancing of the balloon payment on or about March 1, 2002, provided that no
events of default had occurred.

      The Company calculated the fair value of the warrants to purchase an
aggregate of 50,000 shares of common stock and the repricing of the warrant to
purchase 12,500 shares of common stock pursuant to the Black-Scholes option
pricing model. The aggregate fair value of $47,250 was recorded as deferred
financing costs, and was charged to operations as financing expense through
March 1, 2002. In addition, previously recorded deferred financing costs were
charged to operations as financing expense through the accelerated due date of
the loan of March 1, 2002.

      Effective April 17, 2002, the Company completed a Third Modification
Agreement and Waiver of Defaults with the secured lender, which provided for:
(1) the waiver of all prior payment defaults; (2) interest on the unpaid balance
at 16.64% per annum; (3) the payment of interest only for the months of March,
April and May 2002; and (4) commencing June 2002, monthly payments of principal
and interest of $18,955 for a period of five years.

      Required monthly payments on the loan were in arrears subsequent to
December 31, 2002. Required monthly payments on the loan were also in arrears at
December 31, 2001. The loan was due in full on March 1, 2002, and the Company
did not make this balloon payment. As a result, the balance of this loan of
$716,241 and $780,613 at December 31, 2002 and 2001, respectively, was
classified as a current liability in the consolidated financial statements at
such dates.

      During November 2002, the Company entered into an agreement with the
secured lender to settle this obligation for a cash payment of $200,000, of
which $50,000 was paid in November 2002, and $150,000 was payable by January 20,
2003. Although the $150,000 payment has not been made to date, the Company
believes that if it is successful in raising such funds, the lender will accept
such payment and settle the obligation in full, although there can be no
assurances in this regard. The $50,000 advance payment was applied to reduce the
loan balance at December 31, 2002. The Company has not made any payments on the
loan subsequent to December 31, 2002. Upon completion of this transaction, the
Company has agreed to reduce the exercise price of the common stock purchase
warrant previously issued to the lender to acquire 12,500 shares of common
stock, from $1.00 per share to $0.50 per share.

      Transactions with Chief Executive Officer. On June 5, 2001, the Company's
Chief Executive Officer exercised a portion of a warrant for 1,538,461 shares of
common stock, which had been issued as consideration for providing a $120,000
line of credit to the Company. The Chief Executive Officer exercised warrants
for 923,077 shares of common stock and paid the exercise consideration by
canceling his $120,000 loan to the Company. The unexercised portion of the
warrant for 615,384 shares of common stock was extended for an additional two
years and cashless exercise provisions were added. The exercise price of the
warrant was approximately equal to the fair market value of the Company's common
stock on the extension date. Accordingly, in accordance with accounting for such


                                      -22-
<PAGE>

warrants utilizing the intrinsic value method, no compensation expense was
recorded in the Company's consolidated financial statements.

      During the year ended December 31, 2002, the Company issued 123,750 shares
of common stock to its Chief Executive Officer as a bonus for capital raising
efforts pursuant to his employment agreement effective September 1, 2000, which
were valued at $82,570 (see "ITEM 10. EXECUTIVE COMPENSATION - Employment
Agreements").

      During the three months ended December 31, 2002, the Company's Chief
Executive Officer made short-term advances to the Company aggregating $65,000
for working capital purposes. Such advances are unsecured, interest-free and due
on demand.

New Accounting Pronouncements:

      In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". SFAS No. 143 addresses the diverse accounting practices
for obligations associated with the retirement of tangible long-lived assets and
the associated asset retirement costs. The Company will be required to adopt
SFAS No. 143 effective January 1, 2003. The Company does not expect that the
adoption of SFAS No. 143 will have a significant effect on the Company's
financial statement presentation or disclosures.

      In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". SFAS No. 145 rescinds the provisions of SFAS No. 4 that requires
companies to classify certain gains and losses from debt extinguishments as
extraordinary items, eliminates the provisions of SFAS No. 44 regarding
transition to the Motor Carrier Act of 1980 and amends the provisions of SFAS
No. 13 to require that certain lease modifications be treated as sale leaseback
transactions. The provisions of SFAS No. 145 related to classification of debt
extinguishments are effective for fiscal years beginning after May 15, 2002.
Earlier application is encouraged. The Company does not expect that the adoption
of SFAS No. 145 will have a significant effect on the Company's financial
statement presentation or disclosures.

      In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Such costs covered by SFAS No. 146 include lease termination costs and certain
employee severance costs that are associated with a restructuring, discontinued
operation, plant closing, or other exit or disposal activity. SFAS No. 146
replaces the previous accounting guidance provided by the EITF No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS
No. 146 is to be applied prospectively to exit or disposal activities initiated
after December 31, 2002. The Company does not expect that the adoption of SFAS
No. 146 will have a significant effect on the Company's financial statement
presentation or disclosures.

      In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure". SFAS No. 148 amends SFAS
No. 123, "Accounting for Stock-Based Compensation", to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS No. 148
amends the disclosure requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. SFAS No. 148 is effective for fiscal years beginning
after December 15, 2002. The interim disclosure provisions are effective for


                                      -23-
<PAGE>

financial reports containing financial statements for interim periods beginning
after December 15, 2002. The Company does not expect that the adoption of SFAS
No. 148 will have a significant effect on the Company's financial statement
presentation or disclosures.

      In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities". SFAS No. 149 amends and
clarifies under what circumstances a contract with initial investments meets the
characteristics of a derivative and when a derivative contains a financing
component. SFAS No. 149 is effective for contracts entered into or modified
after June 30, 2003. The Company does not expect that the adoption of SFAS No.
149 will have a significant effect on the Company's financial statement
presentation or disclosures.

      In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity". SFAS
No. 150 establishes standards for how an issuer classifies and measures in its
statement of financial position certain financial instruments with
characteristics of both liabilities and equity. SFAS No. 150 requires that an
issuer classify a financial instrument that is within its scope as a liability
(or an asset in some circumstances) because that financial instrument embodies
an obligation of the issuer. SFAS No. 150 is effective for financial instruments
entered into or modified after May 31, 2003 and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. SFAS No.
150 is to be implemented by reporting the cumulative effect of a change in
accounting principle for financial instruments created before the issuance date
of SFAS No. 150 and still existing at the beginning of the interim period of
adoption. Restatement is not permitted. The Company does not expect that the
adoption of SFAS No. 150 will have a significant effect on the Company's
financial statement presentation or disclosures.


ITEM 7.   FINANCIAL STATEMENTS

      The consolidated financial statements are listed at the "Index to
Consolidated Financial Statements" elsewhere in this document.


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

      Effective October 31, 2002, the Company retained the accounting firm of
Weinberg & Company, P.A. ("W&C"), Boca Raton, Florida, and terminated the
accounting firm of Good Swartz Brown & Berns LLP ("GSBB"), Los Angeles,
California, as its independent accountants. The Company changed accounting firms
as a result of one of GSBB's partners leaving GSBB and joining W&C. GSBB had
been retained by the Company as its independent accountants on March 29, 2001.
The retention of W&C and the termination of GSBB were approved by the Company's
Board of Directors.

      Prior to W&C becoming the independent accountants for the Company, neither
the Company, nor anyone on its behalf, consulted with W&C regarding either the
application of accounting principles to a specific completed or contemplated
transaction, or the type of audit opinion that might be rendered on the
Company's financial statements, and no written or oral advice was provided that
was an important factor considered by the Company in reaching a decision on an
accounting, auditing or financial reporting issue; or any matter that was the
subject of a disagreement or event as defined at Item 304 (a)(1)(iv) of
Regulation S-B.

      GSBB audited the Company's consolidated financial statements for the
fiscal years ended December 31, 2000 and 2001. GSBB's reports for these fiscal
years did not contain an adverse opinion or a disclaimer of opinion, nor were
they qualified as to audit scope or accounting principles. However, GSBB's
reports for these fiscal years were modified to reflect substantial doubt about
the Company's ability to continue as a going concern. During the period from


                                      -24-
<PAGE>

March 29, 2001 to October 31, 2002, there were no disagreements with GSBB any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of GSBB, would have caused it to make reference to the subject
matter of the disagreements in connection with its reports on the Company's
consolidated financial statements. In addition, there were no such events as
described under Item 304(a)(1)(iv)(B) of Regulation S-B during such periods.


                                      -25-
<PAGE>

                                    PART III.


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

      The following table and text set forth the names and ages of all directors
and executive officers of the Company as of May 20, 2003. The Board of Directors
is comprised of only one class. All of the directors will serve until the next
annual meeting of stockholders and until their successors are elected and
qualified, or until their earlier death, retirement, resignation or removal.
There are no family relationships among directors and executive officers. Also
provided herein is a brief description of the business experience of each
director and executive officer during the past five years and an indication of
directorships held by each director in other companies subject to the reporting
requirements under the Federal securities laws.

<TABLE>

Name                   Age     Position(s)
----                   ---     -----------
<S>                     <C>    <C>
Mitchell J. Francis     48     Chairman of the Board of Directors, President,
                               Chief Executive Officer and Chief Financial
                               Officer

Kimberly Simon          35     Vice President of Operations
Benjamin Frankel        67     Director

Norman Feirstein        54     Director

</TABLE>

Biographies of Directors and Executive Officers:

Mitchell J. Francis. Mr. Francis has been the Chairman of the Board of Directors
since June 1993, has been Chief Executive Officer and President since the
Company's inception in April 1993, and has been Chief Financial Officer since
March 1, 1999. Prior to founding the Company, Mr. Francis was involved in site
acquisition, analysis, architectural design, construction, management and
marketing of numerous residential and commercial real estate projects, and has
been the general partner of numerous real estate limited partnerships. Mr.
Francis is also the President and principal shareholder of Francis Development
Inc., a real estate development company that he founded in 1981.

Kimberly Simon. Ms. Simon has been employed by the Company for nearly six years.
Ms. Simon started her career with the Company in September 1997 as the general
manager of the Company's Las Vegas Facility. While retaining that capacity, she
assumed the responsibility for overseeing the management of all of the Company's
ride facilities and was promoted to Vice President of Operations effective May
1, 2001. Prior to joining the Company, Ms. Simon gained managerial experience
with several national companies. Ms. Simon is a graduate of Northern Illinois
University.

Benjamin Frankel. Mr. Frankel has been a director of the Company since March 17,
1995. Mr. Frankel is a certified public accountant and has been a partner in the
accounting firm of Frankel, Lodgen, Lacher, Golditch, Sardi & Howard and its
predecessors since 1965.

Norman Feirstein. Mr. Feirstein has been a director of the Company since March
17, 1995. Mr. Feirstein practiced law as a sole practitioner from 1978 until
July 1993. Since such time, Mr. Feirstein has practiced law as the Law Offices
of Norman Feirstein, P.C.

Compliance with Section 16(a) of the Securities Exchange Act of 1934, as
Amended:

                                      -26-
<PAGE>

      Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who own more than 10%
of a registered class of the Company's equity securities to file various reports
with the Securities and Exchange Commission concerning their holdings of, and
transactions in, securities of the Company. Copies of these filings must be
furnished to the Company.

      The Company believes that all individual filing requirements applicable to
the Company's directors and executive officers were complied with under Section
16(a) during 2002, except as follows:

      Kimberly Simon did not timely file Form 4's with respect to the issuance
of shares of common stock to her on January 28, 2002 and the granting of
warrants to her on February 4, 2002. Ms. Simon filed Form 4's covering such
transactions on July 23, 2002.

      Benjamin Frankel and Norman Feirstein did not file Form 4's with respect
to the issuance of shares of common stock to them on January 28, 2002. Mr.
Frankel and Mr. Feirstein filed form 4's covering such transactions on July 23,
2002.

      Mitchell J. Francis did not file Form 4's during 2002 with respect to the
issuance of shares of common stock to him during the year ended December 31,
2002.

      In addition, Gang Consulting Inc. did not file Form 3's and Form 4's
during 2002 with respect to the issuance of shares of common stock and common
stock purchase warrants to it during the year ended December 31, 2002.


ITEM 10.  EXECUTIVE COMPENSATION

      The following table and text sets forth information with respect to the
compensation paid to the Chief Executive Officer of the Company during the years
ended December 31, 2002, 2001 and 2000. No other executive officer had total
compensation exceeding $100,000 during the years ended December 31, 2002, 2001
and 2000.

<TABLE>
<CAPTION>

                           Summary Compensation Table
                           --------------------------

Name and
Principal                                        Other Annual     All Other
Positions                  Year      Salary      Compensation    Compensation
---------                  ----      ------      ------------    ------------
<S>                        <C>     <C>            <C>     <C>     <C>     <C>
Mitchell J. Francis (5)    2002    $275,000       $58,729 (1)     $82,570 (4)
Chairman of the            2001     275,000        52,631 (2)        -
Board of Directors,        2000     235,936        30,965 (3)        -
President and Chief
Executive Officer
</TABLE>

----------------------
(1) Includes $3,747 in disability insurance premiums, $17,065 in automobile
expense, $7,844 in life insurance premiums, $6,101 in long-term care insurance,
$11,157 in medical insurance premiums paid to or on behalf of Mr. Francis and
$12,815 in 401(k) contributions in 2002.

(2) Includes $5,019 in disability insurance premiums, $14,228 in automobile
expense, $7,562 in life insurance premiums, $4,982 in long-term care insurance,
$8,025 in medical insurance premiums paid to or on behalf of Mr. Francis and
$12,815 in 401(k) contributions in 2001.

(3) Includes $4,807 in disability insurance premiums, $13,387 in automobile


                                      -27-
<PAGE>

expense, $6,399 in life insurance premiums, and $6,372 in medical insurance
premiums paid to or on behalf of Mr. Francis in 2000.

(4) Represents the fair market value of 123,750 shares of common stock issued to
Mr. Francis as a bonus for capital raising efforts pursuant to his employment
agreement effective September 1, 2000 (see "Employment Agreements" below).

(5) Since November 1, 2001, compensation to Mr. Francis has been paid to Francis
Development Inc., a company founded and controlled by Mr. Francis. Board of
Directors:

      During the year ended December 31, 2002, the Company had one meeting of
the Board of Directors; all other board actions were taken by unanimous written
consent. For serving on the Board of Directors, directors who are not employees
of the Company receive $2,000 for each meeting of the Board of Directors, and
reimbursement for any expenses incurred in attending board meetings. Directors
who are employees of the Company receive no additional compensation for serving
on the Board of Directors. The non-employee directors are eligible to
participate in the 1995 Directors Stock Option Plan.

      On January 28, 2002, the Company issued 100,000 shares of common stock to
Benjamin Frankel and 100,000 shares of common stock to Norman Feirstein for
services rendered. The fair market value of such shares of $60,000 was charged
to operations during the year ended December 31, 2002.

      The Company does not have a nominating committee of the Board of
Directors, or any committee performing similar functions. Nominees for election
as a director are selected by the Board of Directors.

      The compensation committee of the Board of Directors consists of the three
directors of the Company, one of whom is an employee of the Company. The
compensation committee reviews the performance of the executive officers of the
Company and reviews the compensation programs for key employees, including
salary and bonus levels.

      The audit committee of the Board of Directors consists of Benjamin Frankel
and Norman Feirstein, neither of whom is an employee of the Company. The audit
committee reviews, acts on and reports to the Board of Directors with respect to
various auditing and accounting matters, including the selection of the
Company's independent public accountants, the scope of the annual audits, the
nature of non-audit services, the fees to be paid to the independent public
accountants, the performance of the independent public accountants, and the
accounting practices of the Company.

      The stock option committee of the Board of Directors consists of Benjamin
Frankel and Norman Feirstein, neither of whom is an employee of the Company. The
stock option committee is responsible for the operation and administration of
the Company's stock option plans, including the grants thereunder.

Independent Public Accountants:

      Services provided to the Company by Weinberg & Company, P.A. and Good
Swartz Brown & Berns LLP during the year ended December 31, 2002 included the
audit of the Company's consolidated financial statements and limited reviews of
quarterly reports. Services provided to the Company by Good Swartz Brown & Berns
LLP during the year ended December 31, 2001 included the audit of the Company's
consolidated financial statements and limited reviews of quarterly reports.
During the years ended December 31, 2002 and 2001, the Company paid $34,580 and
$33,350 for such audit and review services.

                                      -28-
<PAGE>


Employment Agreements:

     Effective  September  1,  2000,  the  Company  entered  into  a  three-year
employment  agreement  with Mitchell J. Francis to serve as Chairman,  President
and Chief Executive Officer.  The agreement provides for a base annual salary of
$275,000,  annual  increases  of 8% (which were not taken in 2001 or 2002),  and
annual bonuses based on 6% of the Company's  annual  earnings  before  interest,
taxes,  depreciation  and  amortization  in excess of  $500,000.  The  agreement
provided for the issuance of stock options to purchase  300,000 shares of common
stock,  with an  exercise  price of $0.50 per  share,  vesting  in equal  annual
increments on September 1, 2001,  2002 and 2003. The agreement also provides for
the granting of stock options to purchase up to 1,250,000 shares of common stock
if the Company's stock price for 20 consecutive days is as follows:  options for
100,000 shares  exercisable  at $1.00 per share if the Company's  stock price is
$1.00 per share;  options for 150,000  shares  exercisable at $1.50 per share if
the  Company's  stock  price is $1.50 per  share;  options  for  200,000  shares
exercisable at $2.00 per share if the Company's  stock price is $2.00 per share;
options for 200,000 shares exercisable at $3.00 per share if the Company's stock
price is $3.00 per share;  options for 300,000  shares  exercisable at $4.00 per
share if the  Company's  stock  price is $4.00 per share;  options  for  300,000
shares  exercisable at $5.00 per share if the Company's stock price is $5.00 per
share.  None of these  options had vested at December 31, 2002.  The  employment
agreement  also provides for stock options to purchase  100,000 shares of common
stock for the  opening of each new ride  facility,  exercisable  at fair  market
value on the date each new ride facility  opens.  In addition,  in the event the
Company  completes a new debt or equity  financing,  for each $1,000,000 of such
funding,  or fraction  thereof on a pro rata basis,  the Company is obligated to
issue to Mr.  Francis shares of common stock equal to 5% of the shares of common
stock issued in any such financing transaction.

      Pursuant to the Company's previous employment agreement with Mr. Francis
that expired on August 31, 2000, the Company granted Mr. Francis stock options
as a result of attaining certain objectives, as follows: (a) during September
1998, the Company granted Mr. Francis a bonus in the form of a stock option to
purchase 25,000 shares of common stock exercisable at the fair market value of
$0.25 per share for a period of five years, in conjunction with the opening of
the Company's facility near Atlanta, Georgia; and (b) during January 2000, the
Company granted Mr. Francis a bonus in the form of a stock option to purchase
25,000 shares of common stock exercisable at the fair market value of $0.25 per
share for a period of five years, in conjunction with the opening of the
Company's facility in Elizabeth, New Jersey.

      Effective May 13, 1998, the Company entered into a severance agreement
with Mr. Francis that provides for certain compensation to such executive
officer in the event of a change in control of the Company. The term of the
severance agreement was through June 30, 1999, at which time it was
automatically extended for one year periods commencing on July 1, 1999 and on
each subsequent July 1, unless the Company gives notice not later than December
31 of the preceding year that it does not wish to extend the severance
agreement. A change in control of the Company is defined as: (a) the acquisition
by any person or entity of 20% or more of the Company's voting equity
securities; (b) a change in control of the Board of Directors; or (c) a merger
or consolidation of the Company with any other entity, unless the shareholders
of the Company prior to the merger or consolidation continue to represent at
least 80% of the combined voting power of the merged entity. In the event of a
change in control, among other compensation and benefits, the severance
agreement entitles Mr. Francis to receive a severance payment of five times his
current annual salary upon his termination without cause.

Stock Option Plans:

      In June 1994, the Company adopted the Cinema Ride, Inc. Stock Option Plan
(the "Option Plan"), under which stock options to purchase a maximum of 112,500
shares of common stock of the Company may be issued pursuant to incentive and


                                      -29-
<PAGE>

non-qualified stock options granted to officers, employees, directors and
consultants of the Company. The Option Plan is administered by the Board of
Directors or, in the discretion of the Board of Directors, by a committee of not
less than two individuals with authority to determine employees to whom options
will be granted, the timing and manner of grants of options, the exercise
prices, the number of shares covered by the options, the terms of the options,
and all other determinations necessary or advisable for administration of the
Option Plan. There were 14,312 options issuable under the Option Plan at
December 31, 2002.

      The purchase price for the shares subject to any incentive stock option
granted under the Option Plan shall not be less than 100% of the fair market
value of the shares of common stock of the Company on the date the option is
granted (110% for stockholders who own in excess of 10% of the outstanding
common stock). No options shall be exercisable after the earliest of the
following: the expiration of 10 years after the date the option is granted;
three months after the date the optionee's employment with the Company
terminates if termination is for any reason other than permanent disability or
death; or one year after the date the optionee's employment terminates if
termination is a result of death or permanent disability. Unless sooner
terminated by the Board of Directors, the Option Plan expires on December 31,
2003.

      In December 1995, the Company adopted the 1995 Directors Stock Option Plan
(the "Directors Option Plan"), under which stock options to purchase a maximum
of 12,500 shares of common stock of the Company may be issued to non-employee
directors of the Company. The Directors Option Plan provides that on the fourth
business day following each annual meeting of stockholders, each director who is
not an employee of the Company automatically receives a non-statutory option to
purchase 1,250 shares of common stock at the fair market value on the date of
grant. The options are exercisable for a period of ten years, and vest one-third
in each of the three years following grant. The Company granted Mr. Frankel and
Mr. Feirstein options to purchase 1,250 shares each under the Directors Option
Plan during 1999. There are no options issuable under the Directors Option Plan
at December 31, 2002.

      All stock options shown below reflect the one-for-eight reverse stock
split effective May 29, 1998. On June 18, 1998, the Board of Directors cancelled
all issued and outstanding stock options at that time and reissued them based on
the then current fair market value of $0.39 per share, except for the Chief
Executive Officer's stock options, which were repriced at 110% of the then
current fair market value, or $0.43 per share.

      During the years ended December 31, 2000, 2001 and 2002, no stock options
under the Option Plan were granted to officers of the Company. During the years
ended December 31, 2000, 2001 and 2002, no stock options under the Directors
Option Plan were granted to directors.

Issuance of Non-Plan Stock Options, Warrants and Common Stock to Officers:

      On June 5, 2001, the Company issued 20,000 shares of common stock to
Kimberly Simon, the Company's Vice President of Operations. The fair market
value of such shares of $2,100 was charged to operations during the year ended
December 31, 2001.

      On January 28, 2002, the Company issued 75,000 shares of common stock to
Kimberly Simon. The fair market value of such shares of $22,500 was charged to
operations during the year ended December 31, 2002.

      On June 5, 2001, the Company granted a stock option to Kimberly Simon to
purchase 150,000 shares of common stock, exercisable through June 5, 2006 at
$0.15 per share, which was the fair market value on the date of grant, and
vesting in equal annual installments on June 5, 2001, 2002 and 2003.

                                      -30-
<PAGE>

      On February 4, 2002, as part of the Company's 2002 compensation agreement
with Kimberly Simon, the Company issued a warrant to purchase 50,000 shares of
common stock exercisable at $0.41 per share, which was the fair market value on
the date of grant, vesting if 2002 revenues from the Company's Las Vegas
Facility were at least equal to 2001 revenues. As of June 30, 2002, the Company
determined that it was likely that this warrant would vest. Accordingly, the
Company calculated the value of the warrant as $32,500 pursuant to the
Black-Scholes option pricing model, which was charged to operations during the
year ended December 31, 2002.

      On March 13, 2001, the Company granted to Mitchell J. Francis, its Chief
Executive Officer, a stock option to purchase an aggregate of 800,000 shares of
common stock expiring on the earlier to occur of three years from the date of
vesting or March 13, 2006. The stock option is exercisable in four equal
increments of 200,000 shares at exercise prices of $0.38, $1.00, $1.50 and $2.00
per share, respectively. The fair market value of the common stock on March 13,
2001 was $0.37 per share. The stock option vests in four equal increments of
200,000 shares based on: (a) the obtaining of $1,000,000 of new equity capital;
(b) the show ticket business reaching earnings before interest, taxes,
depreciation and amortization in any twelve month period of $500,000; (c) the
show ticket business generating earnings before interest, taxes, depreciation
and amortization in any twelve month period of $1,000,000; and (d) the show
ticket business generating earnings before interest, taxes, depreciation and
amortization in any twelve month period of $1,500,000. None of these milestones
had been reached as of December 31, 2002.

      On June 5, 2001, Mitchell J. Francis, the Company's Chief Executive
Officer, exercised a portion of a previously issued warrant to purchase
1,538,461 shares of common stock. Mr. Francis exercised a portion of the warrant
and acquired 923,077 shares of common stock and paid the exercise consideration
by canceling his $120,000 loan to the Company. The unexercised portion of the
warrant for 615,384 shares of common stock was extended for an additional two
years and cashless exercise provisions were added. The exercise price of the
warrant was approximately equal to the fair market value of the Company's common
stock on the extension date.

      A summary of stock options and warrants issued to officers, directors and
employees as of December 31, 2002 is presented below. No stock options under the
Option Plan or the Directors Option Plan were exercised during 2000, 2001 or
2002.

                                      -31-
<PAGE>

<TABLE>
<CAPTION>

                      Stock Option and Warrant Value Table
                      ------------------------------------

                                                             Value of
                             Number of                     Unexercised
                          Shares of Common                 in-the-Money
                          Stock Underlying                 Stock Options
                           Stock Options      Weighted    and Warrants at
                            and Warrants      Average    Fiscal Year-End (1)
                         ------------------   Exercise   -------------------
Name                     Unvested    Vested    Price     Unvested     Vested
----                     --------    ------    -----     --------     ------
<S>                      <C>         <C>       <C>        <C>        <C>
Option Plan:
Mitchell J. Francis         -        95,188    $0.43      $  -       $ 16,183

Kimberly Simon              -         1,000    $0.39      $  -       $    210
Employees                   -         2,000    $0.39      $  -       $    420


Directors Option Plan:

Benjamin Frankel            -         6,250    $0.39      $  -       $  1,312

Norman Feirstein            -         6,250    $0.39      $  -       $  1,312


Other Stock Options
  and Warrants:

Mitchell Francis
  Stock Options        2,250,000    187,500    $2.12      $  -           -
  Warrants                  -       615,384    $0.13      $  -       $289,230
Kimberly Simon
  Stock Options           50,000    100,000    $0.15      $22,500    $ 45,000
  Warrants                  -        50,000    $0.41         -          9,500

Employees
  Stock Options             -        60,000    $0.15      $  -       $ 27,000
</TABLE>

-------------------
(1) The dollar values are calculated by determining the difference between the
weighted average exercise price of the stock options and warrants and the market
price for the common stock of $0.60 per share at December 31, 2002.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      As used in this section, the term beneficial ownership with respect to a
security is defined by Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, as consisting of sole or shared voting power (including the power to
vote or direct the vote) and/or sole or shared investment power (including the
power to dispose of or direct the disposition of) with respect to the security
through any contract, arrangement, understanding, relationship or otherwise,
subject to community property laws where applicable.

      As of December 31, 2002, the Company had a total of 5,620,775 shares of
common stock issued and outstanding, which is the only issued and outstanding
voting equity security of the Company.

      The following table sets forth, as of December 31, 2002: (a) the names and
addresses of each beneficial owner of more than five percent (5%) of the


                                      -32-
<PAGE>

Company's common stock known to the Company, the number of shares of common
stock beneficially owned by each such person, and the percent of the Company's
common stock so owned; and (b) the names and addresses of each director and
executive officer, the number of shares of common stock beneficially owned, and
the percentage of the Company's common stock so owned, by each such person, and
by all directors and executive officers of the Company as a group. Each person
has sole voting and investment power with respect to the shares of common stock,
except as otherwise indicated. Beneficial ownership consists of a direct
interest in the shares of common stock, except as otherwise indicated.


                                      -33-
<PAGE>
<TABLE>

                                                           Percent of
Name and Address             Amount and Nature of       Shares of Common
of Beneficial Owner          Beneficial Ownership       Stock Outstanding (2)
-------------------          --------------------       -----------------
<S>                             <C>        <C>                 <C>
Mitchell J. Francis (1)          2,023,523 (3)                 31.0%

Kimberly Simon (1)                 256,000 (4)                  4.4%

Benjamin Frankel (1)               158,750 (5)                  2.8%

Norman Feirstein (1)               156,250 (6)                  2.8%

All directors and
executive officers
as a group (4 persons)           2,594,523 (7)                 38.8%

Division Eight Holdings            300,000 (8)                  5.2%
#306-204 Cayer Street
Coquitlam
British Columbia V3K 5B2
Canada

W. Alex Glasscock                  320,000 (8)                  5.5%
5828 Ramirez Canyon Road
Malibu, California 90265

Scot Terry Anderson                400,000 (8)                  6.9%
2232 South California Avenue
Duarte, California 91919

First National Bank                400,000 (8)                  6.9%
Hamra Street 1102-2040
P.O Box 113-5453
Lebanon

Brian Lloyd Bickerton              400,000 (8)                  6.9%
305 Joseph Street
Kitchener, Ontario N2G 4B6
Canada

Leo A. Beskar                      440,000 (8)                  7.5%
P.O. Box 138
River Falls, Wisconsin 54022

Blair Ferguson Stewart             480,000 (8)                  8.2%
4296 Shearwater Drive
Abbotsford
British Columbia V3G 1L5
Canada

Gang Consulting Inc.             1,217,125 (9)                 18.7%
1110 Bennet Drive
Port Coquitla
British Columbia V3C 6C5
Canada
</TABLE>

-------------------------
(1) The address of each such person is c/o the Company, 12001 Ventura Place,
Suite 340, Studio City, California 91604.
(2) The calculation is based on the number of shares of common stock outstanding
on December 31, 2002, plus, with respect to each named person, the number of
shares of common stock which the stockholder has the right to acquire upon
exercise of stock options and warrants exercisable within 60 days of December
31, 2002.


                                      -34-
<PAGE>

(3) Includes 1,125,451 shares of common stock owned by Mr. Francis and 898,072
shares of common stock issuable upon exercise of stock options and warrants
granted to Mitchell J. Francis, but excludes 2,250,000 shares of common stock
issuable upon exercise of stock options which will not vest within 60 days of
December 31, 2002 (see "ITEM 10. EXECUTIVE COMPENSATION - Employment Agreements"
and "- Other Stock Options and Warrants"). Excludes 4,688 shares of common stock
owned by Sandra Francis, the wife of Mitchell J. Francis, and 3,125 shares of
common stock issuable upon exercise of a warrant granted to Mrs. Francis in 1997
that expire on December 31, 2003, as to which Mr. Francis disclaims beneficial
ownership.
(4) Includes 105,000 shares of common stock owned by Ms. Simon and 151,000
shares of common stock issuable upon exercise of stock options and warrants to
Ms. Simon, but excludes 50,000 shares of common stock issuable upon exercise of
stock options and warrants which will not vest within 60 days of December 31,
2002.
(5) Includes 150,000 shares of common stock owned by Mr. Frankel and 6,250
shares of common stock issuable upon exercise of stock options granted to Mr.
Frankel. Also includes 2,500 shares of common stock that were issued to the
accounting firm of Frankel, Lodgen, Lacher, Golditch, Sardi & Howard in exchange
for services rendered in 1994. Mr. Frankel is a partner in such firm, but
disclaims beneficial ownership of such shares.
(6) Includes 150,000 shares of common stock owned by Mr. Feirstein and 6,250
shares of common stock issuable upon exercise of stock options granted to Mr.
Feirstein.
(7) Includes 1,532,951 shares of common stock owned by orattributable to
officers and directors and 1,061,572 shares of common stock issuable upon
exercise of stock options and warrants to officers and directors.
(8) Represents certain investors in the Company's private placement conducted
during the year ended December 31, 2002. The private placement offering
consisted of units comprised of four shares of common stock and four common
stock purchase warrants for each $1.00 invested. The warrants are exercisable at
$0.50 per share for a period of 30 months (increased from 18 months originally)
from the date of issuance. Each common share amount presented herein consists of
the shares of common stock sold to the investor, and assumes exercise of an
equal number of currently exercisable warrants.
(9) Includes 317,125 shares of common stock and 900,000 shares of common stock
issuable upon exercise of common stock purchase warrants to Gang Consulting Inc.
(see ITEM 1. DESCRIPTION OF BUSINESS - New Capital").

Changes in Control:

      The Company is unaware of any contract or other arrangement, the operation
of which may at a subsequent date result in a change in control of the Company.

      Information with respect to securities authorized for issuance under
equity compensation plans is provided at "ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS - Securities Authorized for Issuance Under Equity
Compensation Plans".


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Benjamin Frankel, a director of the Company, is a partner in the
accounting firm of Frankel, Lodgen, Lacher, Golditch, Sardi & Howard. During the
years ended December 31, 2002, 2001 and 2000, the Company incurred fees to
Frankel, Lodgen, Lacher, Golditch, Sardi & Howard of $56,061, $61,855 and
$55,550, respectively, for accounting and tax services.

      On June 5, 2001, the Company's Chief Executive Officer exercised a portion
of a warrant for 1,538,461 shares of common stock, which had been issued as
consideration for providing a $120,000 line of credit to the Company. The Chief
Executive Officer exercised warrants for 923,077 shares of common stock and paid
the exercise consideration by canceling his $120,000 loan to the Company. The
unexercised portion of the warrant for 615,384 shares of common stock was


                                      -35-
<PAGE>

extended for an additional two years and cashless exercise provisions were
added. The exercise price of the warrant was approximately equal to the fair
market value of the Company's common stock on the extension date. Accordingly,
in accordance with accounting for such warrants utilizing the intrinsic value
method, no compensation expense was recorded in the Company's consolidated
financial statements.

      During the year ended December 31, 2002, the Company issued 123,750 shares
of common stock to its Chief Executive Officer as a bonus for capital raising
efforts pursuant to his employment agreement effective September 1, 2000, which
were valued at $82,570 (see "ITEM 10. EXECUTIVE COMPENSATION - Employment
Agreements").

      During the three months ended December 31, 2002, the Company's Chief
Executive Officer made short-term advances to the Company aggregating $65,000
for working capital purposes. Such advances are unsecured, interest-free and due
on demand.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

      (a) Exhibits:

      A list of exhibits required to be filed as part of this report is set
forth in the Index to Exhibits, which immediately precedes such exhibits, and is
incorporated herein by reference.

      (b) Reports on Form 8-K:

      The Company filed a Current Report on Form 8-K on November 1, 2002 to
report that it changed its independent accountants.

      The Company filed a Current Report on Form 8-K on January 3, 2003 (date of
event reported: December 31, 2002) to file a press release with respect to
litigation that the Company had instituted on December 24, 2002 against its
business partner in its new Las Vegas business venture, Tickets2Nite.

ITEM 14.  CONTROLS AND PROCEDURES

      (a) Evaluation of Disclosure Controls and Procedures

      Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the Exchange
Act of 1934 is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Securities and Exchange
Commission. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in the reports filed under the Exchange Act of 1934 is accumulated and
communicated to management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.

      Within the 90 days prior to the filing of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based upon and as of the date of
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed in the reports the Company
files and submits under the Exchange Act of 1934 is recorded, processed,
summarized and reported as and when required.



                                      -36-
<PAGE>

      (b) Changes in Internal Controls

      There were no changes in the Company's internal controls or in other
factors that could have significantly affected those controls subsequent to the
date of the Company's most recent evaluation


                                      -37-
<PAGE>


                                   SIGNATURES



      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.


                                                   CINEMA RIDE, INC.
                                                   -----------------
                                                      (Registrant)



                                                   /s/ MITCHELL J. FRANCIS
Date:  June 2, 2003                           By:  ___________________________
                                                   Mitchell J. Francis
                                                   Chief Executive Officer



      In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.



                                                   /s/ MITCHELL J. FRANCIS
Date:  June 2, 2003                           By:  ___________________________
                                                   Mitchell J. Francis
                                                   Chief Executive Officer,
                                                   President, Chief Financial
                                                   Officer and Chairman of the
                                                   Board of Directors




                                                   /s/ BENJAMIN FRANKEL
Date:  June 2, 2003                           By:  ___________________________
                                                   Benjamin Frankel
                                                   Director





                                                   /s/ NORMAN FEIRSTEIN
Date:  June 2, 2003                           By:  ___________________________
                                                   Norman Feirstein
                                                   Director

                                      -38-
<PAGE>


                                  CERTIFICATION

      I, Mitchell J. Francis, certify that:

1. I have reviewed this annual report on Form 10-KSB of Cinema Ride, 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. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and I 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 me 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 my conclusions about the effectiveness
of the disclosure controls and procedures based on my evaluation as of the
Evaluation Date;

5. I have disclosed, based on my 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. 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 my most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.



                                                 /s/ MITCHELL J. FRANCIS
June 2, 2003                                By:  ___________________________
                                                 Mitchell J. Francis
                                                 Chief Executive Officer and
                                                 Chief Financial Officer

                                      -39-
<PAGE>
                       CINEMA RIDE, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 2002 AND 2001

                                    CONTENTS


                                                                      PAGE

Independent Auditors' Report                                           F-2

Independent Auditors' Report                                           F-3

Financial Statements:

     Consolidated Balance Sheets                                    F-4 - F-5

     Consolidated Statements of Operations                             F-6

     Consolidated Statement of Stockholders' Equity (Deficiency)       F-7

     Consolidated Statements of Cash Flows                             F-8

     Notes to Consolidated Financial Statements                    F-9 - F-23




                                     -F-1-
<PAGE>

                         INDEPENDENT AUDITORS' REPORT

Board of Directors
Cinema Ride, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Cinema Ride, Inc.
and Subsidiaries as of December 31, 2002 and the related consolidated statements
of operations,  stockholders'  equity  (deficiency)  and cash flows for the year
ended  December  31,  2002.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to  obtain  reasonable  assurance  about  whether  the  consolidated   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
consolidated  financial  statement  presentation.  We  believe  that  our  audit
provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above presents
fairly, in all material respects,  the consolidated financial position of Cinema
Ride, Inc. and  Subsidiaries  and the results of their operations and their cash
flows  for the year  ended  December  31,  2002 in  conformity  with  accounting
principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements,  the Company has a net loss from operations of $1,863,604,
a negative  cash flow from  operations  of  $398,114  and has a working  capital
deficiency  of  $1,188,800  and a  stockholders'  deficiency  of  $505,644 as of
December 31, 2002 that raise  substantial doubt about its ability to continue as
a going  concern.  Management's  plans  in  regard  to  these  matters  are also
described in Note 1. The  financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainty.

/s/ Weinberg & Company, P.A.

Weinberg & Company, P.A.
Los Angeles, California
May 19, 2003


                                     -F-2-
<PAGE>

                          Independent Auditors' Report





Board of Directors and Stockholders
Cinema Ride, Inc.
Studio City, California


We have audited the  accompanying  consolidated  balance  sheets of Cinema Ride,
Inc. and  Subsidiaries  as of December 31, 2001 and 2000 (not presented  herein)
and the related consolidated statements of operations,  stockholders' equity and
cash  flows  for the  years  then  ended  (2000  not  presented  herein).  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of Cinema Ride, Inc.
and  Subsidiaries as of December 31, 2001 and 2000 (not presented  herein),  and
the  results  of its  operations  and cash flows for the years  then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
the Company  will  continue as a going  concern.  As  discussed in Note 1 to the
consolidated financial statements,  the Company has suffered recurring operating
losses and has a low level of capital which raises  substantial  doubt about its
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also described in Note 1. The consolidated  financial  statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

/s/ Good Swartz Brown & Berns LLP

Good Swartz Brown & Berns LLP
Los Angeles, California
March 29, 2002




                                     -F-3-
<PAGE>


<TABLE>
<CAPTION>

                       CINEMA RIDE, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2002 AND 2001





                                                      ASSETS

                                                                                         2002             2001
                                                                                     ------------    -------------
<S>                                                                                  <C>             <C>
Current assets:
     Cash                                                                            $     61,894    $      66,856
     Prepaid expenses and other current assets                                             24,395           35,096
                                                                                     ------------    -------------
                  Total current assets                                                     86,289          101,952
                                                                                     ------------    -------------
Property and equipment:
     Office equipment and furniture                                                       113,128          111,180
     Equipment under capital lease                                                        100,014          172,854
     Leasehold improvements                                                             1,115,103        1,061,682
     Theater and film equipment                                                         1,658,329        1,868,804
                                                                                     ------------    -------------
                                                                                        2,986,574        3,214,520
                                                                                     ------------    -------------

     Less accumulated depreciation                                                      2,458,080        2,258,404
                                                                                     ------------    -------------
                  Total property and equipment, net                                       528,494          956,116
                                                                                     ------------    -------------

Other assets:
     Visual film library, net of accumulated amortization
       of $1,076,116 and $1,009,540 for 2002 and 2001, respectively                        16,655           83,230
     Investment in joint venture, D&B                                                      23,861          323,795
     Investment in joint venture, Tickets2Nite                                           197,934                -
     Consulting agreement                                                                       -            7,803
     Deferred lease costs and other assets                                                 28,299           53,291
                                                                                     ------------    -------------
                  Total other assets                                                      266,749          468,119
                                                                                     ------------    -------------
                                                                                     $    881,532    $   1,526,187
                                                                                     ============    =============

</TABLE>




                 See notes to consolidated financial statements.




                                     -F-4-
<PAGE>



<TABLE>
<CAPTION>
                       CINEMA RIDE, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2002 AND 2001







                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

                                                                                        2002              2001
                                                                                     ------------    -------------
<S>                                                                                 <C>              <C>
Current liabilities:
     Accounts payable and accrued expenses                                          $     432,869    $     456,454
     Current portion of capital lease obligations                                          37,243           46,414
     Current portion of notes payable                                                     739,977          827,908
     Loan payable, officer                                                                 65,000                -
                                                                                     ------------    -------------
         Total current liabilities                                                      1,275,089        1,330,776
                                                                                     ------------    -------------
Long-term debt:
     Obligations under capital lease, less current portion                                 65,165           79,801
     Notes payable, less current portion                                                   18,973           47,991
     Deferred rent                                                                         27,949           45,601
                                                                                     ------------    -------------
           Total long-term debt                                                           112,087          173,393
                                                                                     ------------    -------------

Stockholders equity (deficiency):
     Preferred stock, $.01 par value; 500,000 shares authorized;
        none issued                                                                             -                -
     Common stock, $.08 par value; 20,000,000 shares authorized;
        5,620,775 and 1,945,900 shares issued and outstanding as of
        December 31, 2002 and 2001, respectively                                          449,662          155,672
     Additional paid-in capital                                                        10,696,416        9,323,798
     Deferred compensation                                                               (330,666)
     Accumulated deficit                                                              (11,321,056)      (9,457,452)
                                                                                     ------------    -------------
Total stockholders equity (deficiency)                                                   (505,644)          22,018
                                                                                     ------------    -------------
                                                                                    $     881,532    $   1,526,187
                                                                                     ============    =============
</TABLE>


                 See notes to consolidated financial statements.


                                     -F-5-
<PAGE>


<TABLE>
<CAPTION>
                       CINEMA RIDE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 2002 AND 2001





                                                                                        2002              2001
                                                                                     ------------    -------------
<S>                                                                                  <C>             <C>
Revenues                                                                             $  2,225,456    $   2,375,546
                                                                                     ------------    -------------
Direct costs of revenues                                                                1,255,617        1,294,113

Selling and marketing expenses                                                             84,880          162,808

General and administrative expenses, including non-cash
   compensation expense of $702,992 in 2002 and
   $24,464 in 2001 ($197,568 in 2002 and
   $12,600 in 2001 to officers and directors)                                           1,728,167        1,113,813

Loss on closing down of facilities                                                        413,499                -

Depreciation and amortization                                                             335,150          359,186

Start up cost of new venture                                                               43,100           43,763
                                                                                     ------------    -------------
     Total costs and expenses                                                           3,860,413        2,973,683
                                                                                     ------------    -------------
Loss from operations                                                                   (1,634,957)        (598,137)
                                                                                     ------------    -------------
Other income (expense):
     Equity in net income (loss) of joint venture, D&B                                        (37)          12,758
     Equity in net loss of joint venture, Tickets 2Nite                                   (87,724)               -
     Interest income                                                                          461              733
     Interest expense                                                                    (159,652)        (200,423)
     Other income                                                                          18,305                -
                                                                                     ------------    -------------
     Total other (expense)                                                               (228,647)        (186,932)
                                                                                     ------------    -------------
Net loss                                                                             $ (1,863,604)   $    (785,069)
                                                                                     ============    =============

Basic and diluted loss per common share                                              $       (.42)   $       (.53)
                                                                                     ============    =============
Basic and diluted weighted average common shares outstanding                             4,532,622       1,464,202
                                                                                     ============    =============
</TABLE>

                 See notes to consolidated financial statements.



                                     -F-6-
<PAGE>


<TABLE>
<CAPTION>
                       CINEMA RIDE, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                     YEARS ENDED DECEMBER 31, 2002 AND 2001



                                         Common stock                                                                    Total
                                       -----------------         Additional                                           stockholders'
                                       No. of                     paid-in            Deferred       Accumulated          equity
                                       shares     Amount          capital          compensation       deficit         (deficiency)
                                       ------     ------         ----------        ------------     -----------      -------------
<S>                                     <C>       <C>          <C>              <C>               <C>                <C>
Balance, January 1, 2001                789,823   $  63,186    $   9,224,569    $             -   $  (8,672,383)     $    615,372

Issuance of common stock
    on exercise of warrants             923,077      73,846           46,154                                              120,000

Issuance of common stock
    for services rendered               233,000      18,640            5,825                                               24,465

Issuance of warrants to lender                                        47,250                                               47,250

Net loss                                                                                               (785,069)         (785,069)

Balance, December 31, 2001            1,945,900     155,672        9,323,798                   -     (9,457,452)           22,018

Issuance of common stock
    to officers, employees
    and directors for services          618,750      49,500          181,570                                              231,070

Sale of common stock                  2,515,000     201,200          427,550                                              628,750

Issuance of common stock
    to outside consultants              484,000      38,720          208,868                                              247,588

Issuance of warrants to
    officer/employee                                                  32,500                                               32,500

Issuance of warrants to
    outside consultants                                              520,500           (520,500)                                -

Amortization of deferred
 Compensation                                                                           189,834                           189,834

Issuance of common stock
    in capital raising                   47,125       3,770           (3,770)                                                   -

Issuance of common stock
    for fixed asset                      10,000         800            5,400                                                6,200

Net loss                                                                                             (1,863,604)       (1,863,604)
                                      ---------  ----------      -----------          ---------      ----------         ---------
Balance, December 31, 2002            5,620,775  $  449,662      $10,696,416          $(330,666)    (11,321,056)        $(505,644)
                                      =========  ==========      ===========          =========      ==========         =========
</TABLE>


                See notes to consolidated financial statements.



                                     -F-7-
<PAGE>


<TABLE>
<CAPTION>
                       CINEMA RIDE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 2002 AND 2001

                                                                                        2002              2001
                                                                                     ------------    -------------
<S>                                                                                  <C>              <C>
Cash flows from operating activities:
     Net loss                                                                        $ (1,863,604)    $   (785,069)
     Adjustments to reconcile net loss to cash used in
        operating activities:
           Deprecation and amortization                                                   335,150          359,186
           Common stock issued for services                                               702,992           24,465
           Loss on closing down of facilities                                             388,652                -
           (Income) loss in equity in joint venture, D&B                                       37          (12,758)
           Loss in equity in joint venture, Tickets2Nite                                   87,724                -
           Amortization of consulting agreement                                             7,803           10,404
           Amortization of deferred financing costs                                        19,574           64,930
           Changes in operating assets and liabilities:
              Increase in:
               Prepaid expenses and other current assets                                   10,701           22,695
              Increase (Decrease) in:
               Accounts payable and accrued expenses                                      (69,491)         265,783
               Deferred rent                                                              (17,652)         (17,653)
                                                                                     ------------    -------------
Net cash used in operating activities                                                    (398,114)         (68,017)
                                                                                     ------------    -------------

Cash flows from investing activities:
     Dividends received from joint venture, D&B                                            81,505           80,661
     Investment in joint venture, D&B                                                     (39,883)               -
     Investment in joint venture, Tickets 2Nite                                          (202,240)               -
     Purchase of property and equipment                                                         -           (3,197)
     Sale of fixed assets                                                                     809                -
                                                                                     ------------    -------------
Net cash provided by (used in) investing activities                                      (159,809)          77,464
                                                                                     ------------    -------------
Cash flows from financing activities:
     Payments on notes payable                                                           (103,725)         (14,651)
     Principal payments under capital lease obligations                                   (37,064)         (37,774)
     Sale of common stock                                                                 628,750                -
     Loan from officer                                                                     65,000                -
                                                                                     ------------    -------------
Net cash provided by (used in) financing activities                                       552,961          (52,425)
                                                                                     ------------    -------------

Net decrease in cash                                                                       (4,962)         (42,978)
Cash, beginning of year                                                                    66,856          109,834
                                                                                     ------------    -------------
Cash, end of year                                                                    $     61,894    $      66,856
Supplemental disclosures of cash flow information:                                   ============    =============

     Cash paid for:
       Income taxes                                                                  $      1,110    $       1,840
                                                                                     ============    =============
       Interest                                                                      $    148,779    $      84,141
                                                                                     ============    =============
</TABLE>
                 See notes to consolidated financial statements.



                                     -F-8-
<PAGE>


                       CINEMA RIDE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2002 AND 2001

1.   Summary of Significant Accounting Policies and Business Activity

        Business activity:
          Cinema Ride,  Inc. (the  "Company")  was  incorporated  in Delaware in
          April 1993. The Company is in the business of developing and operating
          rides consisting of motion  simulator  attractions  ("attractions"  or
          "rides")  and  filmed   entertainment  ("ride  films")  that  combines
          projected three  dimensional  ("3-D") action films,  of  approximately
          four minutes in  duration,  with  computer-controlled,  hydraulically-
          mobilized  capsules  that are  programmed  to move in concert with the
          on-screen  action.  The Company  opened its first  attractions  in Las
          Vegas in October, 1994. The Company's executive offices are located in
          Studio City, California.

          During 1995, the Company established a wholly owned subsidiary, Cinema
          Ride Edmonton,  Inc. a Canadian  corporation  that operates one motion
          simulator ride facility  located at the West Edmonton Mall in Alberta,
          Canada.  As of and during the years ended  December 31, 2002 and 2001,
          revenues and  long-lived  assets for Cinema Ride  Edmonton,  Inc. were
          $162,342 and $114,043 and $197,304 and $271,946, respectively.

          During 1996, the Company established a wholly owned subsidiary, Cinema
          Ride Times Square, Inc. a New York corporation. However, in June 2002,
          this  facility  was  closed  as a  result  of  unsatisfactory  revenue
          production and a dispute with the landlord over expense increases.  As
          a result,  the Company wrote off certain fixed assets  related to such
          ride  facility  and  incurred  certain  direct  costs  related to such
          closure,  resulting in a charge to operations  of $167,377  during the
          year ended December 31, 2002.

          All  significant  intercompany  transactions  and  balances  have been
          eliminated in consolidation.

        Basis of presentation, going concern:
          The accompanying financial statements have been prepared in conformity
          with  generally  accepted  accounting  principles,  which  contemplate
          continuation of the Company as a going concern.  However,  the Company
          had a net loss from  operations of  $1,863,604  and negative cash flow
          from  operations of $398,114 for the year ended December 31, 2002, and
          has a working  capital  deficiency of $1,188,800  and a  stockholders'
          deficiency  of $505,644 as of December 31, 2002.  These  factors raise
          substantial  doubt about the Company's  ability to continue as a going
          concern.  Without  realization  of  additional  capital,  it  would be
          unlikely  for  the  Company  to  continue  as a going  concern.  These
          financial  statements do not include any  adjustments  relating to the
          recoverability  and  classification  of  recorded  asset  amounts,  or
          amounts and  classification of liabilities that might result from this
          uncertainty.

          The Company will require additional capital to fund operating and debt
          service  requirements,  as well as to expand its new business venture.
          The  Company has been  exploring  various  alternatives  to raise this
          required  capital,  and has raised a portion of the required  capital,
          but there can be no  assurances  that the Company will  ultimately  be
          successful  in this regard.  During the year ended  December 31, 2002,
          the Company  raised  $628,750  of new capital  through the sale of its
          securities.  The private placement offering consisted of units sold at
          $0.25 per unit.  Each unit  consisted of one share of common stock and
          one common stock  purchase  warrant.  The warrants are  exercisable at
          $0.50 per share  for a period of 30 months  (increased  from 18 months



                                     -F-9-
<PAGE>


          originally)  from the date of issuance.  The Company is continuing its
          efforts to raise new capital subsequent to December 31, 2002.


          To the  extent  that the  Company  is  unable to  secure  the  capital
          necessary  to fund its  future  cash  requirements  on a timely  basis
          and/or under acceptable terms and conditions, the Company may not have
          sufficient cash resources to maintain  operations.  In such event, the
          Company may be required to consider a formal or informal restructuring
          or reorganization.

        Property and equipment:
          Property and equipment are stated at cost. Depreciation is provided at
          the time  property  and  equipment  is  placed  in  service  using the
          straight-line  method over the  estimated  useful lives of the assets,
          which range from four to ten years.

        Visual effects costs:
          Visual effects costs are stated at cost less accumulated amortization.
          Expected  useful lives are estimated at 5 years.  Visual effects costs
          consist of costs incurred to develop film used in the attractions.

        Deferred lease costs:
          Deferred  lease costs  represent  amounts paid in connection  with the
          successful negotiation of the Company's leases. Costs are amortized on
          a straight-line basis over the term of the lease.

        Income taxes:
          The Company  provides for income taxes in accordance with Statement of
          Financial  Accounting  Standards No. 109, Accounting for Income Taxes.
          Deferred  income  taxes are  provided  on the  difference  in earnings
          determined  for  tax  and  financial  reporting  purposes  and  result
          primarily  from  differences  in methods  used to amortize  production
          costs.

        Fair value of financial instruments:
          The  carrying  amounts  of  financial  instruments,   including  cash,
          accounts payable,  and short term loans approximate fair value because
          of their short  maturity.  The carrying  amounts of long-term debt and
          capital lease obligations  approximate fair value because the interest
          rates on these  instruments  approximate  the rate the  Company  could
          borrow at December 31, 2002.

        Foreign currency translation:
          Foreign currency  denominated assets and liabilities of the subsidiary
          where the United  States dollar is the  functional  currency and which
          have  certain  transactions   denominated  in  a  local  currency  are
          remeasured  as if the  functional  currency was the U.S.  dollar.  The
          remeasurement   of  local  currency  into  U.S.   dollars   creates  a
          translation  adjustment  that is included in income.  The  translation
          exchange income in 2002 and 2001 were $271 and $3,627.

        Revenue recognition:
          The  Company  recognizes  revenue at the time that  tickets  are sold.
          Accordingly,  the Company does not have accounts receivable associated
          with sales transactions.

        Stock-based compensation:
          Statements of Financial  Accounting Standards No. 123, "Accounting for
          Stock-Based  Compensation"  (SFAS No.  123)  establishes  a fair value
          method  of  accounting  for  stock-based  compensation  plans  and for
          transactions  in which an  entity  acquires  goods  or  services  from
          non-employees  in  exchange  for  equity  instruments.  SFAS  123 also
          encourages, but does not require companies to record compensation cost
          stock-based employee compensation.  The Company has chosen to continue
          to account for stock-based  compensation utilizing the intrinsic value
          method  prescribed  in  Accounting  Principles  Board  Opinion No. 25,



                                     -F-10-
<PAGE>

          "Accounting for Stock Issued to Employees" with pro forma  disclosures
          of  net  income  as  if  the  fair  value  method  had  been  applied.
          Accordingly,  compensation  cost for stock  options is measured as the
          excess, if any, of the fair market price of the Company's stock at the
          date of grant over the  amount an  employee  must pay to  acquire  the
          stock.

        Loss per share:
          SFAS No. 128, "Earnings Per Share" requires presentation of basic loss
          per share  ("Basic LPS") and diluted loss per share  ("Diluted  LPS").
          The  computation  of basic loss per share is computed by dividing loss
          available to common  stockholders  by the weighted  average  number of
          outstanding  common shares  during the period.  Diluted loss per share
          gives  effect to all  dilutive  potential  common  shares  outstanding
          during the period.  These  potentially  dilutive  securities  were not
          included  in the  calculation  of loss per share  for the years  ended
          December 31, 2002 and 2001 because the Company  incurred a loss during
          such  periods  and thus their  effect  would have been  anti-dilutive.
          Accordingly,  basic  and  diluted  loss per share are the same for the
          years ended December 31, 2002 and 2001. As December 31, 2002 and 2001,
          potentially  dilutive securities consisted of outstanding common stock
          purchase  warrants and stock options to acquire  4,904,197  shares and
          1,389,197 shares, respectively.

        Seasonality of business:
          Because of the seasonal nature of tourist traffic, attendance patterns
          at  attractions  may vary.  The nature and degree of this  seasonality
          varies among attractions  depending on the nature of tourist and local
          traffic  patterns  at a given  location,  as well as,  the  nature  of
          entertainment alternatives available to audiences. The Company expects
          that  attendance at its facilities will be the highest in June through
          August (the height of the tourist  season) and lowest  during  January
          and  February.  The West  Edmonton  Mall  Facility is more affected by
          seasonality  as compared to the Las Vegas  Facility due to the extreme
          weather  conditions during the winter months in Alberta,  Canada. As a
          result,  the Company's  results of operations at its  facilities  will
          depend  upon sales  generated  from the peak  tourist  periods and any
          significant  decrease in sales for such periods  could have a material
          adverse effect upon the Company operations.

        Accounting 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,  disclosure 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
          form those estimates.

        Advertising costs:
          Advertising  costs are charged to operations at the time the costs are
          incurred.  Advertising  costs charged to  operations  were $77,217 and
          $159,779 at December 31, 2002 and 2001, respectively.

        Impairment of long-lived assets:
          Statement  of   Financial   Accounting   Standards   (SFAS)  No.  144,
          "Accounting  for the  Impairment  or  Disposal of  Long-Lived  Assets"
          established  guidelines regarding when impairment losses on long-lived
          assets,  which include plant and equipment,  and certain  identifiable
          intangible  assets,  should be recognized  and how  impairment  losses
          should be measured.  This statement also provides a single  accounting
          model  for long  lived  assets  to be  disposed  of and  significantly
          changes the criteria that would have to be met to classify an asset as
          held-for-sale.  The  Company  periodically  reviews  such  assets  for
          possible   impairment  and  expected  losses,  if  any,  are  recorded
          currently.

        Recent accounting pronouncements:
          In August,  2001, the FASB issued SFAS No. 143  "Accounting  for Asset
          Retirement   Obligations".   This  statement   addresses  the  diverse



                                     -F-11-
<PAGE>

          accounting practices for obligations associated with the retirement of
          tangible  long-lived assets and the associated asset retirement costs.
          The Company will be required to adopt this statement effective January
          1, 2003. The Company does not expect that the adoption of SFAS No. 143
          will have any effect on the Company's financial statement presentation
          or disclosures.

          In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements
          No. 4, 44, and 64,  Amendment of FASB  Statement No. 13, and Technical
          Corrections.  SFAS  145  rescinds  the  provisions  of SFAS No. 4 that
          requires  companies  to  classify  certain  gains and losses from debt
          extinguishments as extraordinary  items,  eliminates the provisions of
          SFAS No. 44 regarding  transition to the Motor Carrier Act of 1980 and
          amends the  provisions  of SFAS No. 13 to require that  certain  lease
          modifications   be  treated  as  sale  leaseback   transactions.   The
          provisions   of  SFAS   145   related   to   classification   of  debt
          extinguishments are effective for fiscal years beginning after May 15,
          2002. Earlier application is encouraged.  The Company does not believe
          the  adoption  of  this  standard  will  have a  material  impact  the
          financial statements.

          In July 2002,  the FASB  issued SFAS No.  146,  "Accounting  for Costs
          Associated with Exit of Disposal Activities", which requires companies
          to recognize costs  associated  with exit or disposal  activities when
          they are incurred  rather than at the date of a commitment  to an exit
          or disposal  plan.  Such costs  covered by the standard  include lease
          termination  costs  and  certain  employee  severance  costs  that are
          associated with restructuring,  discontinued operations, plan closing,
          or other exit or disposal  activity.  SFAS No. 146 places the previous
          accounting  guidance  provided by the Emerging  Issues Task Fore 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)".  SFAS  No.  146  is  to  be  applied
          prospectively to exit or disposal activities  initiated after December
          31, 2002.  The Company does not  anticipate  that the adoption of SFAS
          No.  146 will have any  effect on the  Company's  financial  statement
          presentation or disclosures.

          In December 2002, the FASB issued SFAS No. 148,  "Accounting for Stock
          Based  Compensation  -  Transition  and  Disclosure",   which  amended
          Statement No. 123. "Accounting for Stock Based Compensation". SFAS No.
          148  provides for the use of  alternative  methods of  transition  for
          voluntary  change to the fair value  based  method of  accounting  for
          stock based compensation.  It also amends the disclosure  requirements
          of Statement No. 123 to require prominent  disclosure of the Company's
          method  of  accounting  for such  compensation  and the  effect of the
          method  used on  reported  results  in annual  and  interim  financial
          statements.  SFAS No. 148 is effective for annual periods ending after
          December 15, 2002 and interim  period  beginnings  after  December 15,
          2002. The Company does not expect the adoption of SFAS No. 148 to have
          a material effect on its financial position or results of operations.

2.   Consulting Agreement with Former Officer

          The Company was amortizing the balance of a consulting  agreement with
          a former  officer  over the  period of the  consulting  contract.  The
          balance of the remaining unamortized  consulting agreement at December
          31, 2002 and 2001 was $0 and $7,803, respectively.

3.   Investments in Joint Ventures

        Dave & Busters, Inc.:
          On May 29, 1998, the Company  entered into a three-year  joint venture
          operating  agreement  with  Dave  &  Buster's,  Inc.  to  install  the
          Company's  3-D  motion  simulation  theater at Dave &  Buster's,  Inc.
          Atlanta facility. Each party to the joint venture agreement shared the
          joint venture's  revenues and operating  expenses  equally.  The joint
          venture  agreement also required the Company to be solely  responsible
          for certain administrative  expenses. At inception of the venture, the
          Company was responsible for the transportation and installation of the
          theater.   The  Company   incurred  $95,924  in   transportation   and



                                     -F-12-
<PAGE>

          installation  costs  relating to this facility in addition to $367,683
          in  equipment  costs.  Dave and  Buster's,  Inc. was  responsible  for
          providing the space in its Atlanta facility and preparing the premises
          for  installation.  The  installation was completed and operational on
          September  14,  1998.  The  agreement  required the Company to own the
          theater.

          Summarized financial information for the joint venture is as follows:
<TABLE>

                                                Years Ended December 31,
                                                ------------------------
                                                 2002              2001
                                                -----              ----
<S>                                          <C>               <C>
               Sales                         $  188,308        $ 240,239
               Net income                    $  148,107        $ 178,989
</TABLE>

          After its share of the venture's  revenues and  expenses,  the Company
          incurred  certain  expenses  for which it was solely  responsible,  of
          approximately  $87,000 and $76,000  for the years ended  December  31,
          2002 and 2001, respectively,  resulting in equity in net income (loss)
          of joint  venture  of ($37) and  $12,758,  respectively.  The  Company
          received  distributions  from the joint venture of $81,505 and $80,661
          in 2002 and 2001, respectively.

          Although  the  joint  venture  agreement  was  not  formally  extended
          subsequent  to its  expiration,  the  operations  of the joint venture
          continued on a month-to-month  basis until February 15, 2003, when the
          joint venture ceased operations and was formally terminated.  The loss
          on closing down this  facility in the amount of $246,122  that related
          to the  impairment  of the  remaining  value of the  fixed  assets  is
          included in the 2002 consolidated statement of operations.

        Tickets2Nite, LLC:
          The Company owns 50% of a subsidiary named Tickets2Nite, LLC, a Nevada
          limited  liability  company,  which was formed on  September  24, 2002
          pursuant  to an  Operating  Agreement,  with the  other  50%  owned by
          Entasis, LLC ("Entasis"), an independent third party. The new business
          venture,  which  commenced  operations  during  November  2002,  sells
          tickets to Las Vegas shows at 50% of the original box office price, on
          the same day of the performance,  from a ticket booth located adjacent
          to the giant Coca-Cola  bottle on the Las Vegas Strip, in front of the
          MGM Grand Hotel,  pursuant to a sub-lease  through July 31, 2007.  The
          Operating Agreement specifies that the Company oversees the day-to-day
          operations  of the new business  venture.  The  Coca-Cola  Company has
          entered into a Marketing Sponsorship Agreement with Tickets2Nite, LLC,
          beginning  July 1, 2002 and ending June 30, 2007, as a result of which
          the  operations  of the new  business  venture  are being  marketed as
          "Coca-Cola  Tickets2Nite".   As  part  of  the  Marketing  Sponsorship
          Agreement,   Tickets2Nite,  LLC  has  granted  The  Coca-Cola  Company
          warrants  which the  Company  valued at fair  value to  purchase  a 5%
          ownership interest in Tickets2Nite,  LLC,  exercisable for a period of
          five  years  at 25% of the  fair  market  value  of such 5%  ownership
          interest  at the time the warrant is  exercised,  as  determined  by a
          mutually  acceptable  investment  banking firm.  The fair value of the
          warrants are being  amortized over the five year term of the marketing
          sponsorship agreement.

          The Company  accounts for this  investment  under the equity method of
          accounting,  since  it  does  not  have  majority  voting  control  of
          Tickets2Nite,  LLC.  Since its  inception,  the Company  has  invested
          $285,657 in the joint  venture and has  recorded a net loss of $87,724
          to reflect its pro-rata share of the venture's net loss for the period
          ending December 31, 2002. The Company did not receive any distribution
          from the joint venture in 2002.


                                     -F-13-
<PAGE>


Summarized condensed financial information for Tickets2Nite, LLC is as follows:

<TABLE>
<CAPTION>
                                  BALANCE SHEET
                                DECEMBER 31, 2002
<S>                                                             <C>
               Current assets                                   $   132,904
               Property and equipment, net                          315,013
               Other assets                                         225,000
                                                                -----------
                  Total assets                                  $   672,917
                                                                ===========
               Current liabilities                              $    99,466
               Long-term liabilities                                118,241
               Capital                                              455,210
                                                                -----------
                  Total liabilities and capital                 $   672,917
                                                                ===========
</TABLE>

<TABLE>
<CAPTION>
                             STATEMENT OF OPERATIONS
                         PERIOD ENDED DECEMBER 31, 2002

<S>                                                             <C>
           Revenues                                             $   115,681
           Cost of revenues                                          50,068
                                                                -----------
           Gross Profit                                              65,613
                                                                -----------

           Selling and Marketing                                    119,836
           General and Administrative                               104,156
           Depreciation and amortization                             10,264
                                                                -----------
           Total costs and expenses                                 234,256
                                                                ===========
           Loss from operations                                    (168,643)
           Interest expense                                           6,804
                                                                -----------
           Net loss                                             $ (175,447)
                                                                ===========
</TABLE>

4.   Obligations under Capital Leases

          The Company has entered into several capital leases for equipment with
          monthly  payments  ranging  between $213 to $970 per month,  including
          interest at rates  ranging  from 9.0% to 20.3% per annum.  At December
          31, 2002, the monthly payments under these leases  aggregated  $4,048.
          The leases expire at various dates through 2006. At December 31, 2002,
          equipment  included  assets under  capitalized  lease  obligations  of
          $100,014, less accumulated amortization of $29,060.

          Minimum  future lease  payments  under capital lease  obligations  for
          equipment are as follows:

<TABLE>
           Years Ended December 31:
<S>                                                              <C>
               2003                                              $     48,629
               2004                                                    45,430
               2005                                                    22,377
               2006                                                    11,059
                                                                  -----------
                                                                      127,495
               Amount representing interest                           (25,087)
                                                                  -----------

               Present value of minimum lease payments                102,408
               Less current portion                                    37,243
                                                                  -----------
                                                                 $     65,165
                                                                  ===========
</TABLE>


                                     -F-14-
<PAGE>

5.   Notes Payable

          Notes  payable  consisted of the following as of December 31, 2002 and
          2001:
<TABLE>

                                                        December 31,
                                                        ------------
                                                    2002                2001
                                                    ----                ----
<S>                               <C>       <C>             <C>
      Note payable, Finova         (a)            $716,682          $780,613
      Equipment note payable       (b)              42,268            58,238
      Other notes payable                                -            37,048
                                            --------------- -----------------

                                                   758,950           875,899
      Less current maturities                      739,977           827,908
                                            --------------- -----------------

                                                   $18,973           $47,991
                                            =============== =================

</TABLE>

     (a)  On December 31, 1996, the Company completed a financing agreement with
          Finova  Technology  Finance,  Inc.,  which  was  structured  as a sale
          leaseback transaction of certain equipment owned by the Company. Based
          on the substance of this  transaction,  this  financing  agreement was
          accounted for as a note payable for financial reporting purposes.  The
          gross loan amount was $1,575,027, repayable over a four year period at
          $40,903  per month with a balloon  payment of  $157,503.  On March 10,
          1999,  the  financing  agreement  was  amended to reduce  the  monthly
          payments from $40,903 to $21,789, and to extend the maturity date from
          January  1, 2001 to January  1,  2004,  with no change in the  balloon
          payment of $157,503.  The loan bears interest at 16.75% per annum. The
          financing  agreement  requires the Company to repurchase the equipment
          at the end of the lease for $1.00.  As a result of reduced  cash flows
          generated by operations  during the year ended  December 31, 2000, the
          Company did not make the monthly  payments  due the lender  during the
          latter part of the year ended  December 31, 2000 and the early part of
          the year ended  December  31,  2001.  Accordingly,  the Company was in
          default in its obligations to the lender at December 31, 2000.

          Effective June 25, 2001, the Company  completed a Second  Modification
          Agreement and Waiver of Defaults with the lender,  which provided for:
          (1) the waiver of all prior payment defaults; (2) the reduction of the
          monthly  payment from $21,789 to $10,674,  which  represents  interest
          only  payments at 16.75% per annum;  (3) the increase in the principal
          balance due the lender of accrued interest payable of $50,083; (4) the
          acceleration of the due date of the loan from January 1, 2004 to March
          1,  2002;  (5)  the  repricing  of a  common  stock  purchase  warrant
          previously  issued to the lender to purchase  12,500  shares of common
          stock  exercisable  through  December  31,  2003,  which  reduced  the
          exercise  price  from  $16.00  per share to $1.00 per  share;  (6) the
          issuance of common stock  purchase  warrants to the lender to purchase
          25,000  shares of common stock at $0.50 per share and 25,000 shares of
          common stock at $1.00 per share exercisable through June 25, 2011; (7)
          the  revision of the  lender's  Warrant  Holder  Rights  Agreement  to
          eliminate  demand  registration  rights;  and (8) the agreement by the
          lender to enter into negotiations with the Company with respect to the
          refinancing of the balloon payment on or about March 1, 2002, provided
          that no events of default had occurred.

          Effective April 17, 2002, the Company  completed a Third  Modification
          Agreement  and  Waiver of  Defaults  with the  secured  lender,  which
          provided  for:  (1) the  waiver of all  prior  payment  defaults;  (2)
          interest on the unpaid balance at 16.64% per annum; (3) the payment of
          interest  only for the  months of March,  April and May 2002;  and (4)
          commencing  June 2002,  monthly  payments of principal and interest of
          $18,955 for a period of five years.

          Required  monthly  payments on the loan were in arrears  subsequent to
          December 31, 2002.  Required monthly payments on the loan were also in
          arrears at  December  31,  2001.  The loan was due in full on March 1,
          2002,



                                     -F-15-
<PAGE>

          and the Company did not make this balloon  payment.  As a result,  the
          balance of this loan of $716,241 and $780,613 at December 31, 2002 and
          2001,  respectively,  was  classified  as a current  liability  in the
          consolidated financial statements at such dates.

          During  November 2002, the Company  entered into an agreement with the
          secured  lender  to  settle  this  obligation  for a cash  payment  of
          $200,000. Accordingly,  $50,000 of principal was paid in November 2002
          to reduce the outstanding  loan balance of that date, and $150,000 was
          payable by January 20, 2003.  Although  the  $150,000  payment has not
          been made to date,  the Company  believes  that if it is successful in
          raising such funds, the lender will accept such payment and settle the
          obligation  in  full,  although  there  can be no  assurances  in this
          regard.  The Company has not made any payments on the loan  subsequent
          to December 31, 2002. Upon completion of this transaction, the Company
          has agreed to reduce the exercise  price of the common stock  purchase
          warrant  previously  issued to the lender to acquire  12,500 shares of
          common stock, from $1.00 per share to $0.50 per share.

     (b)  On July 18, 2001, the Company  entered into an agreement to purchase a
          sign,  previously  recorded as a capital lease, from its manufacturer.
          The loan is  collateralized  by the sign and bears an annual  interest
          rate of 15%. The monthly payments are $2,466 and the loan matures June
          2004.

          The aggregate maturities of long-term debt as of December 31, 2002 are
          as follows:
<TABLE>

           Year ending December 31,:
<S>                                       <C>
               2003                       $739,977
               2004                         18,973
                                          --------
                                          $758,950
                                          ========
</TABLE>

6.   Related Party Transactions

          During the year ended December 31, 2002, the Company's Chief Executive
          Officer made short-term  advances to the Company  aggregating  $65,000
          for working  capital  purposes.  Such advances are  outstanding  as of
          December 31, 2002,  unsecured,  interest-free  and due on demand.  See
          Note  10 for  employment  agreement  with  Company's  Chief  Executive
          Officer.

          Benjamin  Frankel,  a  director  of the  Company,  is a partner in the
          accounting firm of Frankel,  Lodgen, Lacher, Golditch, Sardi & Howard.
          During  the  years  ended  December  31,  2002 and 2001,  the  Company
          incurred fees to Frankel,  Lodgen, Lacher, Golditch, Sardi & Howard of
          $56,061 and $61,855, respectively, for accounting and tax services.

7.   Income Taxes

          The income tax effect of temporary  differences  between financial and
          tax reporting gives rise to the deferred income tax assets as follows:

<TABLE>

                                                          2002          2001
                                                          ----          ----
<S>                                                 <C>            <C>
           Net operating loss carryforward          $  3,332,000   $  2,760,600
           Less valuation allowance                   (3,332,000)    (2,760,600)
                                                    ------------   ------------
                                                    $          -   $          -
                                                    ============   ============
</TABLE>

          The  Company  has  provided a 100%  valuation  allowance  as it cannot
          determine  that it is more  likely  that not that it will  realize the
          deferred tax assets.  As of December 31, 2002,  for Federal income tax
          purposes,  the Company has  approximately  $9,800,000 in net operating
          loss carryforwards expiring through 2022. As of December 31, 2002, for
          State tax purposes,  the Company has  approximately  $3,000,000 in net
          operating loss carryforwards expiring through 2011.


                                     -F-16-
<PAGE>

          Reconciliation of the effective income tax rate to the U. S. statutory
          rate is as follows:

<TABLE>
                                                       2002             2001
                                                       ----             ----
<S>                                                   <C>              <C>
           Tax expense at the U.S. statutory
             income tax rate                          (34.0)  %        (34.0)  %
           Increase in the valuation allowance         34.0             34.0
                                                       --------         --------
           Effective income tax rate                     -    %          -     %
                                                       ========         ========
</TABLE>

     The Company has determined  that there will be  significant  limitations on
     the future  utilization of the net operating loss  carryforward  due to the
     stock ownership changes in the Company.


8.   Common Stock

          Common Stock
          ------------

          On June 5, 2001, the Company issued to various  employees an aggregate
          of 133,000  shares of common  stock for services  rendered,  including
          20,000  shares of common  stock to the  Company's  Vice  President  of
          Operations.  On June 5, 2001,  the  Company  issued to each of its two
          non-employee  directors  50,000  shares of common  stock for  services
          rendered.  The  aggregate  fair market value of such shares of $24,465
          was charged to operations during the year ended December 31, 2001

          On  January  28,  2002,   the  Company  issued  to  each  of  its  two
          non-employee  directors  100,000  shares of common  stock for services
          rendered.  The  aggregate  fair market value of such shares of $60,000
          was charged to operations during the year ended December 31, 2002.

          During the year ended  December 31, 2002,  the Company  issued 123,750
          shares of common stock to its Chief  Executive  Officer as a bonus for
          capital raising efforts pursuant to his employment agreement effective
          September 1, 2000, which were valued at $82,570.

          On January 28,  2002,  the Company  issued to 75,000  shares of common
          stock to its Vice President of Operations for services  rendered.  The
          fair market value of such shares of $22,500 was charged to  operations
          during  the year  ended  December  31,  2002.  During  the year  ended
          December 31, 2002,  the Company  issued to various other  employees an
          aggregate of 220,000 shares of common stock for services rendered. The
          fair market value of such shares of $66,000 was charged to  operations
          during the year ended December 31, 2002.

          During the year ended December 31, 2002, the Company issued to outside
          consultants 484,000 shares of common stock for services rendered.  The
          fair market value of such shares of $247,588 was charged to operations
          during the year ended December 31, 2002.

          During the year ended  December  31,  2002,  the  Company  conducted a
          private  placement  offering  consisting  of units  comprised  of four
          shares of common  stock and four common  stock  purchase  warrants for
          each $1.00  invested.  The warrants are exercisable at $0.50 per share
          for a period of 30 months  (increased  from 18 months  initially) from
          the date of  issuance.  The  Company  raised a total of  $628,750  and
          issued  2,515,000  shares of common stock and  2,515,000  common stock
          purchase  warrants.  Based on various factors,  including the exercise
          price and terms of the warrant and the trading range and volume of the
          Company's  common stock during 2002, the Company  determined the value
          of the warrants was nominal and therefore did not allocate any portion
          of the $0.25 unit sale price to the warrants.


                                     -F-17-
<PAGE>

          The  Company  issued to certain  consultants  47,125  shares of common
          stock for capital raising  services during the year ended December 31,
          2002,  which  were  recorded  at par value of $3,770  and  charged  to
          additional paid-in capital.

          Options to acquire shares of Common Stock
          -----------------------------------------
          On March 13, 2001, the Company granted to its Chief Executive  Officer
          an option to purchase an aggregate  of 800,000  shares of common stock
          expiring  on the  earlier  to occur of  three  years  from the date of
          vesting or March 13,  2006.  The stock option is  exercisable  in four
          equal  increments at prices  ranging from $0.38 per share to $2.00 per
          share,  which  was not less than fair  market  value of the  Company's
          common  stock on the grant date.  The stock  option vests based on the
          attainment of certain milestones by the Company, including raising new
          equity  capital  and  reaching   certain  levels  of  earnings  before
          interest, taxes, depreciation and amortization, none of which had been
          reached as of December 31, 2002.

          On June 5, 2001, the Company granted stock options to two employees to
          purchase an aggregate of 240,000 shares of common stock, consisting of
          an option  for  150,000  shares to the  Company's  Vice  President  of
          Operations and 90,000 shares to an employee,  exercisable through June
          5, 2006 at $0.15 per  share,  which was the fair  market  value on the
          date of grant,  and vesting in equal  annual  installments  on June 5,
          2001, 2002 and 2003. The employee left the Company effective  November
          6, 2001,  at which time options for 60,000  shares were deemed  vested
          and options for 30,000 shares were terminated.

          Warrants to acquire shares of Common Stock
          ------------------------------------------
          In conjunction with the restructuring of the Company's  obligations to
          its primary  secured  lender on June 25, 2001,  the Company  re-priced
          previously  issued  warrants to purchase 12,500 shares of common stock
          exercisable  through  December 31, 2003 from $16.00 per share to $1.00
          per share, and issued new warrants to purchase 25,000 shares of common
          stock exercisable at $0.50 per share and 25,000 shares of common stock
          exercisable at $1.00 per share through June 25, 2011.

          On June 5, 2001,  Mitchell J. Francis,  the Company's  Chief Executive
          Officer,  exercised  a  portion  of a  previously  issued  warrant  to
          purchase  1,538,461  shares of common stock.  Mr. Francis  exercised a
          portion of the warrant and acquired 923,077 shares of common stock and
          paid the exercise  consideration by canceling his $120,000 loan to the
          Company.  The unexercised portion of the warrant for 615,384 shares of
          common  stock was extended  for an  additional  two years and cashless
          exercise  provisions were added. The exercise price of the warrant was
          approximately  equal to the fair market value of the Company's  common
          stock on the extension date.

          During the year ended  December 31, 2002,  the Company  issued to Gang
          Consulting  Inc.  warrants to purchase  900,000 shares of common stock
          exercisable  for five years at prices ranging from $0.25 through $4.00
          for financial advisory services.  The aggregate value of the warrants,
          calculated  pursuant to the  Black-Scholes  option pricing model,  was
          $496,000,  and was  recorded as deferred  compensation  expense and is
          being charged to operations over the 18-month period beginning July 1,
          2002 and ending  December  31, 2003.  The Company  also issued  50,000
          warrants to a consultant for services valued at $24,500. The aggregate
          value of all such warrants charged to operations during the year ended
          December 31, 2002 was $189,833.

          On  February  4,  2002,  as part of the  Company's  2002  compensation
          agreement with its Vice-President of Operations,  the Company issued a
          warrant to purchase 50,000 shares of common stock exercisable at $0.41
          per  share,  which  was the fair  market  value on the date of  grant,
          vesting if 2002 revenues from the Company's Las Vegas Facility were at
          least  equal  to 2001  revenues.  As of June  30,  2002,  the  Company
          determined  that it was  likely  that this  warrant  would  vest.  The
          aggregate value of such warrants charged to operations during the year
          ended December 31, 2002 was $32,500.


                                     -F-18-
<PAGE>

          A summary of warrant  activity for the fiscal years ended December 31,
          2002 and 2001 is as follows:

<TABLE>
                                                                      Weighted
                                                         Number       average
                                                          Of          exercise
                                                        Warrants        price
                                                        --------        -----
<S>                                                  <C>            <C>
          Balance outstanding, January 1, 2001           15,625         $1.25
          Warrants granted                              665,384          0.18
          Warrants exercised                                  -             -
          Warrants expired                                    -             -
                                                      ---------         -----
          Balance outstanding, December 31, 2001        681,009          0.35
          Warrants granted                            3,515,000          0.88
          Warrants exercised                                  -             -
          Warrants expired                                    -             -
                                                      ---------         -----
          Balance outstanding, December 31, 2002      4,196,009         $0.77
                                                      =========         =====
</TABLE>

9.   Stock-Based Compensation Plans

          At December 31, 2002, the Company had various stock-based compensation
          plans, which are described below.

        Employee Stock Option Plan:
          The Company  adopted a Stock  Option Plan (the  "Plan") for  officers,
          employees,   directors   and   consultants   of  the  Company  or  its
          subsidiaries.  The Plan  authorizes  the granting of  incentive  stock
          options and  non-qualified  stock  options to purchase an aggregate of
          not more than 112,500 shares of the Company's  common stock.  The Plan
          provides that options  granted will  generally be  exercisable  at any
          time during a ten-year period (five years for a stockholder  owning in
          excess of 10% of the Company's  common stock).  The exercise price for
          non-qualified  stock  options  shall not be less than the par value of
          the Company's  common stock.  The exercise  price for incentive  stock
          options  shall  not be  less  than  100%  of the  fair  market  of the
          Company's  common  stock on the date of grant (110% of the fair market
          value  of he  Company's  common  stock  on the  date  of  grant  for a
          stockholder owning in excess of 10% of the Company's common stock).

       1995 Directors' Stock Option Plan:
          The Company  adopted a  Directors  Stock  Option Plan (the  "Directors
          Plan") for non-employee  directors of the Company.  The Directors Plan
          authorizes the granting of non-qualified  stock options to purchase an
          aggregate  of not more  than  12,500  shares of the  Company's  common
          stock.  The  Director's  Plan  provides  that options  granted will be
          exercisable  during a ten year  period  and will vest on a  cumulative
          basis as to one third of the total number of shares covered thereby at
          any time after one year from the date of the option is granted  and an
          additional  one-third of such total number of shares at any time after
          the end of each  consecutive  one year  period  thereafter  until  the
          option  has  become  exercisable  as to all of such  total  number  of
          shares.  The exercise price for  non-qualified  stock options shall be
          the fair value of the Company's common stock at the date of the grant.

          A summary of option  activity during the years ended December 31, 2002
          and 2001 is as follows:


                                     -F-19-
<PAGE>

<TABLE>
<CAPTION>


                                                                                                       Weighted
                                                                                       Number           average
                                                                                         Of             exercise
                                                                                       Options           price
                                                                                       -------         ---------
<S>                                                                                     <C>              <C>
           Balance outstanding,  January 1, 2001                                        498,188          $0.40
               Options granted                                                          210,000           0.15
               Options exercised                                                              -              -
               Options expired                                                                -              -
                                                                                        -------        ---------
               Balance outstanding, December 31, 2001                                   708,188           0.36
               Options granted                                                                -
               Options exercised                                                              -              -
               Options expired                                                                -              -
                                                                                        -------        ---------
           Balance outstanding, December 31, 2002                                       708,188           0.36
                                                                                        =======        =========

           Options exercisable, December 31, 2002                                       530,688
                                                                                        =======
</TABLE>

          Information  relating to stock options at December 31, 2002 summarized
          by exercise price is as follows:

<TABLE>
<CAPTION>

                                           Outstanding                                    Exercisable
                        ------------------------------------------------------  -----------------------------------
                                                                                                       Weighted
                                                                                                       Average
    Exercise Price                                  Life          Exercise                             Exercise
      Per Share                Shares             (Years)           Price             Shares            Price
----------------------  ---------------------  ---------------  --------------  -----------------  ----------------
<S>                              <C>                 <C>              <C>            <C>                   <C>
        $0.50                    300,000             4.0              $0.50          100,000               $0.50
        $0.43                    132,688             4.3              $0.43          132,688               $0.43
        $0.39                     14,666             5.3              $0.39           14,666               $0.39
        $0.38                        834             9.0              $0.39                -               $0.38
        $0.25                     50,000             3.0              $0.25           50,000               $0.25
        $0.15                    150,000             4.0              $0.15           50,000               $0.15
        $0.15                     60,000             4.0              $0.15           60,000               $0.15
                                 -------                                             -------
    $0.15 - $0.50                708,188             4.0              $0.36          407,354               $0.22
    =============                =======             ===              =====          =======               =====
</TABLE>


          The  Company  has also  agreed to issue  options  to its CEO for up to
          2,050,000 shares if certain performance criteria are met.

          All stock  options and warrants  issued to employees  have an exercise
          price  not less than the fair  market  value of the  Company's  common
          stock on the date of grant, and in accordance with accounting for such
          options  utilizing  the  intrinsic  value  method  there is no related
          compensation  expense recorded in the Company's financial  statements.
          Had  compensation  cost for stock-based  compensation  been determined
          based on the fair value at the grant dates  consistent with the method
          of SFAS 123, the  Company's  net loss and loss per share for the years
          ended  December  31, 2002 and 2001 would have been  reduced to the pro
          forma amounts presented below:


                                     -F-20-
<PAGE>

<TABLE>


                                        Years Ended December 31,
                                        ------------------------
                                         2002              2001
                                         ----              ----
<S>                                  <C>               <C>
           Net loss:
               As reported           $ (1,863,604)     $ (785,069)
                                     ============      ==========
               Pro forma             $ (1,988,079)     $ (909,544)
                                     ============      ==========
           Loss per share:
               As reported           $      (0.42)     $    (0.53)
                                     ============      ==========
               Pro forma             $      (0.44)     $    (0.62)
                                     ============      ==========
</TABLE>

          The fair value of options  granted are  estimated on the date of grant
          utilizing the  Black-Scholes  option-pricing  model with the following
          weighted average assumptions for 2002 and 2001, expected life of 5 and
          3 years:  expected  volatility  of 256% and 208%,  risk-free  interest
          rates of 6.1% and 6.5%, and a 0% dividend yield.  The weighted average
          fair  value  at  date  of  grant  for  options   granted  during  2001
          approximated $0.15 per option.

10.  Commitments

        Lease commitments
        -----------------
          The Company  leases  office space for its  corporate  headquarters  in
          Studio  City,  California.  Additionally,  the Company  leases  retail
          spaces for its attractions in Las Vegas, Nevada and Edmonton,  Canada.
          The leases are  operating  leases,  and certain of the leases  contain
          rent  escalations.  Deferred rent relating to the rent  escalations at
          December  31,  2002 and 2001 was  $27,949  and  $45,601  respectively.
          Deferred rent is being  reduced over the  associated  remaining  lease
          term, approximately $17,600 per year.

          Minimum  future rental  payments for each of the next five years is as
          follows:
<TABLE>

           Year ending December 31,:
<S>                                                      <C>
               2003                                      $   316,163
               2004                                          227,381
               2005                                           50,995
                                                         -----------

                                                         $   594,539
                                                         ===========
</TABLE>

          In addition,  some leases  require the payment of  additional  rent if
          revenues exceed a certain level.

          Employment agreement
          --------------------
          Effective  September  1, 2000,  the Company  entered into a three-year
          employment  agreement  with  Mitchell J. Francis to serve as Chairman,
          President and Chief Executive  Officer.  The agreement  provides for a
          base annual salary of $275,000, annual increases of 8% (which were not
          taken  in  2001  or  2002),  and  annual  bonuses  based  on 6% of the
          Company's  annual earnings before  interest,  taxes,  depreciation and
          amortization  in excess of $500,000.  The  agreement  provided for the
          issuance of stock options to purchase  300,000 shares of common stock,
          with an  exercise  price of $0.50 per share,  vesting in equal  annual
          increments on September 1, 2001,  2002 and 2003.  The  agreement  also
          provides for the granting of stock options to purchase up to 1,250,000
          shares of common  stock based on  attaining  and  maintaining  certain
          market  prices for the  Company's  common stock  ranging from $1.00 to
          $5.00 per share,  and stock  options  to  purchase  100,000  shares of
          common stock for the opening of each new ride facility, exercisable at
          fair  market  value on the  date  each new  ride  facility  opens.  In
          addition,  in the event  the  Company  completes  a new debt or equity
          financing, for each $1,000,000 of such funding, or fraction thereof on
          a pro rata basis,  the Company is  obligated  to issue to Mr.  Francis
          shares  of common  stock  equal to 5% of the  shares  of common  stock
          issued in any such  financing  transaction.  During  the  years  ended
          December 31, 2002 and 2001, the Company incurred $275,000 of salary



                                     -F-21-
<PAGE>

          costs in each year  that were  accrued  or paid to Mr.  Francis  or an
          affiliated company under this agreement.

          Pursuant  to the  Company's  previous  employment  agreement  with Mr.
          Francis  that  expired on August 31,  2000,  the  Company  granted Mr.
          Francis stock options as a result of attaining certain objectives,  as
          follows:  (a) during September 1998, the Company granted Mr. Francis a
          bonus in the form of a stock  option  to  purchase  25,000  shares  of
          common stock  exercisable  at the fair market value of $0.25 per share
          for a period of five  years,  in  conjunction  with the opening of the
          Company's facility near Atlanta, Georgia; and (b) during January 2000,
          the Company  granted Mr. Francis a bonus in the form of a stock option
          to purchase  25,000  shares of common  stock  exercisable  at the fair
          market  value of  $0.25  per  share  for a period  of five  years,  in
          conjunction  with the opening of the Company's  facility in Elizabeth,
          New Jersey.

          Effective May 13, 1998, the Company entered into a severance agreement
          with Mr.  Francis  that  provides  for  certain  compensation  to such
          executive  officer in the event of a change in control of the Company.
          The term of the  severance  agreement  was through June 30,  1999,  at
          which  time  it  was  automatically  extended  for  one  year  periods
          commencing on July 1, 1999 and on each  subsequent  July 1, unless the
          Company gives notice not later than December 31 of the preceding  year
          that it does not wish to extend the severance  agreement.  A change in
          control  of the  Company is defined  as:  (a) the  acquisition  by any
          person  or  entity  of 20% or  more  of the  Company's  voting  equity
          securities;  (b) a change in control of the Board of Directors; or (c)
          a merger or consolidation of the Company with any other entity, unless
          the  shareholders of the Company prior to the merger or  consolidation
          continue to represent at least 80% of the combined voting power of the
          merged  entity.  In the  event of a change  in  control,  among  other
          compensation  and  benefits,  the  severance  agreement  entitles  Mr.
          Francis to  receive a  severance  payment  of five  times his  current
          annual salary upon his termination without cause.

          Retirement plan
          ---------------
          The  Company   has  a  401(k)   retirement   plan.   The  plan  covers
          substantially  all employees.  Under the plan,  participants may defer
          the receipt of up to twelve percent of their annual compensation,  but
          not to exceed the maximum amount as determined by the Internal Revenue
          Code. The amount of the employer matching contribution is equal to the
          sum of 25% of each dollar deferred, limited to 1% of the participants'
          compensation.  The Company may make additional matching  contributions
          as determined and approved by the Board of Directors. Total retirement
          plan  expense  amounted  to $3,968  and  $3,966  for the  years  ended
          December 31, 2002 and 2001, respectively.

          Litigation
          ----------
          At December 31, 2002, the Company was involved in the following  legal
          proceedings:

          a. The Company's former Chief Financial Officer, Toufic R. Bassil, has
          asserted  claims  against  the  Company  for breach of his  employment
          agreement  and his wrongful  termination  as an officer of the Company
          without cause effective March 1, 1999. These claims are being asserted
          pursuant to a binding  arbitration  proceeding  through  the  American
          Arbitration  Association.  In January 2002, the arbitrator  determined
          that the Company is liable for damages  from breach of the  employment
          agreement, although damages have not yet been determined. The wrongful
          termination  claim is still in the discovery  stage and the Company is
          actively defending this matter. In the opinion of management, adequate
          provision has been made in the consolidated  financial statements with
          respect to the foregoing claims.

          b. In late June 2002, the Company closed its New Jersey ride facility.
          During July 2002, the Company and its wholly-owned subsidiary,  Cinema
          Ride  Times  Square,  Inc.,  were  named as  defendants  in a  lawsuit
          initiated  by the  landlord  of the  Company's  former New Jersey ride
          facility,  Elizabeth  Metromall,  LLC,  in the  Superior  Court of New
          Jersey. The lawsuit results from the contractual  relationship between
          the  landlord  and  the  Company.  Management  believes  that  it  has
          counterclaims  against the landlord  sufficient  to offset any damages
          for which the  Company  may  ultimately  be found  liable.  Management
          believes  that it will be  successful  in its defense of this lawsuit,
          and has therefore not accrued for any expenses associated



                                     -F-22-
<PAGE>

          with  this  lawsuit  in the  consolidated  financial  statements.  The
          Company's   consolidated  financial  statements  do  not  include  any
          adjustments for recovery of claims against the landlord.

          c. The Company owns 50% of a  subsidiary  named  Tickets2Nite,  LLC, a
          Nevada limited  liability  company,  which was formed on September 24,
          2002 pursuant to an Operating  Agreement,  with the other 50% owned by
          Entasis, LLC ("Entasis"), an independent third party. The new business
          venture,  which  commenced  operations  during  November  2002,  sells
          tickets to Las Vegas shows at 50% of the original box office price, on
          the same day of the performance,  from a ticket booth located adjacent
          to the giant Coca-Cola  bottle on the Las Vegas Strip, in front of the
          MGM Grand Hotel.  The Operating  Agreement  specifies that the Company
          will oversee the day-to-day operations of the new business venture.

          On December 24, 2002, the Company filed a lawsuit  against  Entasis in
          the Clark  County,  Nevada  District  Court.  The  lawsuit  relates to
          matters  concerning  the  management  and funding of the new  business
          venture.   Entasis   funded  only  $95,000  of  its  $200,000   equity
          commitment,  and was impermissibly  interfering with the operations of
          the new business venture.

          On February 27, 2003, the Clark County,  Nevada District Court granted
          the Company's  motion for a  Preliminary  Injunction  against  Entasis
          relating to the operations of the business. The Preliminary Injunction
          prevents Entasis from  interfering  with the day-to-day  operations of
          the Tickets2Nite business or having anything to do with Tickets2Nite's
          banking.

          Trial with respect to the Company's  lawsuit  against Entasis was held
          on May 7 through 9, 2003.  No  decision  had been  issued by the Clark
          County, Nevada District Court as of May 19, 2003. The Company does not
          believe  that the  resolution  of this  legal  proceeding  will have a
          negative impact on the Company's interest in Tickets2Nite,  LLC, or on
          its consolidated results of operations or financial position.

11.  Non-Cash Financing and Investing Activities

          The following  non-cash  transaction  occurred during the years ending
          December 31, 2002 and 2001:

<TABLE>

                                                                                      2002               2001
                                                                                      ----               ----
<S>                                                                                <C>               <C>
           Common stock issued upon warrant exercise for
               settlement of officer loan payable                                  $        -        $  120,000
           Transfer of capital lease obligation to notes payable                   $        -        $  133,500
           Issuance of common stock to outside consultant in
               equity transaction                                                  $    3,770        $        -
           Conversion of accounts payable to notes                                 $   45,906        $   41,225
           Acquisition of capital lease assets and related obligation              $   13,257        $  104,093
           Issuance of common stock for fixed assets                               $    4,200        $        -
           Acquisition of fixed asset with loan                                    $   32,682        $        -
           Investment in joint venture with capital lease                          $   55,352        $        -
</TABLE>



                                     -F-23-
<PAGE>


                                INDEX TO EXHIBITS

Exhibit
Number      Description of Document
------      -----------------------

 3.1        Certificate of Incorporation, as amended. (1)(P)
 3.2        Bylaws of the Company. (1)(P)
10.1        Cinema Ride, Inc. Stock Option Plan. (1)(P)(C)
10.2        Equipment lease between the Company and Sign Systems dated April
            6, 1995. (2)(P)
10.3        Lease between the Company and Forum Developers Limited Partnership
            dated July 2, 1993. (1)(P)
10.4        Amendment to lease between the Company and Forum Developers Limited
            Partnership dated May 18, 1993. (1)(P)
10.5        Third lease amendment between the Company and Forum Developers
            Limited Partnership dated July 27, 1994. (1)(P)
10.6        Fourth lease amendment between the Company and Forum Developers
            Limited Partnership dated December 30, 1995. (2)(P)
10.7        Form of Promissory Note and Security Agreement (stock pledge) of
            Mitchell J. Francis dated July 5, 1995. (3)(P)
10.8        Standard Office Lease - Gross between the Company and
            WFC Ventures L.P. dated March 21, 1995. (3)(P)
10.9        First Lease Amendment between the Company and WFC Ventures L.P.
            dated April 15, 1995. (3)(P)
10.10       Lease between the Company and West Edmonton Mall Property Inc.
            dated July 17, 1995. (3)(P)
10.11       Amendment to lease between the Company and West Edmonton Mall
            Property Inc. dated April 7, 1998. (7)
10.12       Master Equipment Lease Agreement between the Company and Finova
            Technology Finance, Inc. dated December 12, 1996. (4)
10.13       Amendment to Master Equipment Lease Agreement between the Company
            and Finova Technology Finance, Inc. dated March 10, 1999. (6)
10.14       Form of employment agreement with Mitchell J. Francis dated
            September 1, 2000. (7)(C)
10.16       Joint Venture Agreement with Dave & Buster's, Inc. dated May 29,
            1998. (6)
10.17       Loan Agreement between the Company and Mitchell J. Francis dated
            February 2, 1999. (6)
10.18       1995 Directors Stock Option Plan. (6) (C)
10.19       Warrant expiring February 2, 2002 to Mitchell J. Francis. (6)
10.20       Lease between the Company and Jersey Gardens Mall dated October
            19, 1999. (7)
10.21       Amendment No. 1 to Warrant Certificate issued to Finova Capital
            Corporation to purchase 12,500 shares of common stock at
            $1.00 per share. (8)
10.22       Warrant issued to Finova Capital Corporation to purchase 25,000
            shares of common stock at $0.50 per share. (8)
10.23       Warrant issued to Finova Capital Corporation to purchase
            25,000 shares of common stock at $1.00 per share. (8)
10.24       Warrant Holder Rights Agreement between the Company and
            Finova Capital Corporation. (8)
10.25       Second Modification Agreement and Waiver of Defaults between the
            Company and Finova Capital Corporation dated June 25, 2001. (8)
10.26       Lease Modification Agreement between Cinema Ride times Square,
            Inc. and Elizabeth Metromall LLC dated June 13, 2001. (8)
10.27       Operating Agreement of Tickets2Nite, LLC, a Nevada limited
            liability company, dated September 24, 2002. (9)
21          Subsidiaries of the Registrant. (6)
99.1        Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
            2002. (10)
-----------------------

(1) Previously filed as an Exhibit to the Company's Registration Statement on
Form SB-2, and incorporated herein by reference.
(2) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-QSB for the quarterly period ended March 31, 1995, and incorporated herein by
reference.
(3) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-QSB for the quarterly period ended June 30, 1995, and incorporated herein by
reference.
(4) Previously filed as an Exhibit to the Company's Current Report on Form 8-K
filed on January 28, 1997, and incorporated herein by reference.
(5) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-QSB for the quarterly period ended September 30, 1997, and incorporated
herein by reference.
(6) Previously filed as an Exhibit to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1998, and incorporated herein by
reference.
(7) Previously filed as an Exhibit to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1999, and incorporated herein by
reference.
(8) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-QSB for the quarterly period ended June 30, 2001, and incorporated herein by
reference.
(9) Previously filed as an Exhibit to the Company's Quarterly Report on Form
10-QSB for the quarterly period ended September 30, 2002, and incorporated
herein by reference.
(10) Filed herein.


(P) Indicates that the document was originally filed with the Securities and
Exchange Commission in paper form and that there have been no changes or
amendments to the document which would require filing of the document
electronically with this Annual Report on Form 10-KSB.

(C) Indicates compensatory plan, agreement or arrangement.



                                     -F-24-