Golf Host Resorts, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding twelve months, and (2) has been subject to the filing requirements for the past 90 days. — Yes X No

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED BALANCE SHEETS


		September 30,		December 31,
		2003		2002

		(unaudited)
CURRENT ASSETS:
	Cash	$	139,518	$	—
	Restricted cash		2,670,865		2,520,849
	Accounts receivable, net		1,397,783		2,069,962
	Other receivables		180,373		61,554
	Inventories and supplies		1,362,136		1,157,792
	Prepaid expenses and other assets		427,684		514,493

	Total current assets		6,178,359		6,324,650
INTANGIBLES, net			11,817,643		12,463,987
PROPERTY AND EQUIPMENT, net			37,428,334		38,025,063
OTHER ASSETS			5,181,886		5,701,950

		$	60,606,222	$	62,515,650

The accompanying notes are an integral part of these consolidated financial statements.

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED BALANCE SHEETS


		September 30,			December 31,
		2003			2002

		(unaudited)
CURRENT LIABILITIES:
	Cash overdrafts	$	480,771		$	69,846
	Debt due within one year		79,001,205			79,003,552
	Accounts payable		3,768,698			4,973,036
	Accrued payroll costs		1,150,735			893,224
	Accrued interest		21,451,823			14,538,319
	Other payables and accrued expenses		3,006,963			2,721,823
	Deposits and deferred revenues		2,174,310			2,003,938
	Due to related parties		598,013			198,802

	Total current liabilities		111,632,518			104,402,540
DEBT DUE AFTER ONE YEAR			88,330			—
OTHER LONG-TERM LIABILITIES			10,265,009			10,265,009
LONG TERM REFURBISHMENT			5,623,095			5,548,514
DEFERRED INCOME TAXES			1,255,000			1,255,000

	Total liabilities		128,863,952			121,471,063

SHAREHOLDER’S DEFICIT
	Common stock, $1 par, 5,000 shares authorized, issued, and outstanding		5,000			5,000
	5.6% cumulative preferred stock, $1 par, 4,577,000 shares authorized, issued, and outstanding		4,577,000			4,577,000
	Paid-in capital		(8,487,323	)		(8,487,323	)
	Shareholder receivable		(219,784	)		—
	Accumulated deficit		(64,132,623	)		(55,050,090	)

	Total shareholder’s deficit		(68,257,730	)		(58,955,413	)

	Total liabilities and shareholder’s deficit	$	60,606,222		$	62,515,650

The accompanying notes are an integral part of these consolidated financial statements.

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)


		Quarters Ended September 30,						Nine months ended September 30,

		2003			2002			2003			2002

REVENUES:
	Resort facilities	$	2,015,046		$	1,752,027		$	8,628,252		$	10,149,089
	Food and beverage		1,623,538			1,675,795			7,921,313			9,076,147
	Golf		1,717,147			1,715,605			8,347,857			9,187,693
	Other		870,351			1,327,330			3,264,267			4,265,135

			6,226,082			6,470,757			28,161,689			32,678,064

COST AND OPERATION EXPENSES:
	Resort facilities		1,544,593			1,333,655			6,788,304			7,562,081
	Food and beverage		1,515,733			1,426,942			5,817,633			6,194,251
	Golf		1,734,641			1,440,819			5,188,103			4,699,426
	Other		2,148,252			1,910,170			6,728,247			6,611,544
	General and administrative		763,045			1,053,885			2,832,666			3,379,422
	Depreciation and amortization		1,358,480			1,311,941			2,852,876			2,943,464

			9,064,744			8,477,412			30,207,829			31,390,188

OPERATING (LOSS)/INCOME			(2,838,662	)		(2,006,655	)		(2,046,140	)		1,287,876
INTEREST, NET			2,275,869			2,256,235			6,844,162			6,862,945

LOSS BEFORE PREFERRED STOCK DIVIDEND			(5,114,531	)		(4,262,890	)		(8,890,302	)		(5,575,069	)
DIVIDEND REQUIREMENTS ON PREFERRED STOCK			64,077			64,077			192,231			192,231

LOSS AVAILABLE TO COMMON SHAREHOLDER		$	(5,178,608	)	$	(4,326,967	)		(9,082,533	)	$	(5,767,300	)

The accompanying notes are an integral part of these consolidated financial statements.

GOLF HOST RESORTS, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDER’S DEFICIT



	$1 Par Value				5.6% Cumulative
	Common Stock				Preferred Stock
									Paid-In			Shareholder			Retained
	Shares		Amount		Shares		Amount		Capital			Receivable			Deficit

Balance, December 31, 2002		5,000	$	5,000		4,577,000	$	4,577,000	$	(8,487,323	)	$	0		$	(55,050,090	)




Shareholder receivable		—		—		—		—		—			(219,784	)		—




Loss available to common shareholder (unaudited)		—		—		—		—		—			—			(9,082,533	)

Balance, September 30, 2003		5,000	$	5,000		4,577,000	$	4,577,000	$	(8,487,323	)	$	(219,784	)	$	(64,132,623	)

[Additional columns below]

[Continued from above table, first column(s) repeated]

Total

Shareholders’

Deficit

Balance, December 31, 2002
$ (58,955,413 )

Shareholder receivable
(219,784 )

Loss available to common shareholder (unaudited)
(9,082,533 )

Balance, September 30, 2003
$ (68,257,730 )

The accompanying notes are an integral part of these consolidated financial statements.

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(unaudited)


				2003			2002

CASH FLOWS FROM OPERATING ACTIVITIES:
	(Loss)/income before dividend requirements on preferred stock			$	(8,890,302	)	$	(5,575,069	)
	Adjustments to reconcile net income to net cash provided by operations:
		Management company contribution			—			(425,688	)
		Depreciation and amortization			2,241,594			2,638,202
		Provision for bad debts			(159,349	)		212,449
		Gain on disposal of capital lease			(27,739	)		(294,822	)
		Rental pool expense			611,282			305,262
		Changes in operating working capital			7,265,465			5,659,421

			Cash provided by operations		1,040,951			2,519,755

CASH FLOWS FROM INVESTING ACTIVITIES:
	Increase in other assets				(16,637	)		(34,235	)
	Purchases of property and equipment				(948,979	)		(282,945	)

			Cash used in investing activities		(965,616	)		(317,180	)

CASH FLOWS FROM FINANCING ACTIVITIES:
	Contribution from owners				—			21,239
	Repayment of existing debt				(68,417	)		(133,645	)
	Additional borrowings on existing debt				132,600			—
	Increase/(decrease) in other long-term liabilities				—			(1,940,194	)

			Cash used in financing activities		64,183			(2,052,600	)

NET INCREASE IN CASH					139,518			149,975
CASH, BEGINNING OF PERIOD					—			665,402

CASH, END OF PERIOD				$	139,518		$	815,377

NONCASH FINANCING AND INVESTING ACTIVITIES:
The Company satisfied its preferred stock dividend liability to GHI through the intercompany account				$	192,231		$	192,231

Master lease agreement refurbishment program				$	5,623,095		$	3,256,120

Capital lease extension				$	49,542		$	—

The accompanying notes are an integral part of these consolidated financial statements.

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The financial statements for December 31, 2002 were prepared assuming the Company will continue as a going concern. As discussed in the notes to consolidated financial statements on Form 10-K dated December 31, 2002, the Company has suffered recurring losses from operations, has negative working capital and has a shareholder’s deficit. These issues raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in the footnotes. Additionally, as described in Note 6 of the notes to consolidated financial statements on Form 10-K, the Company has defaulted under the terms of its debt agreement and Golf Host, Inc. (the Company’s parent company) is a defendant to a class action lawsuit. These financial statements do not include any adjustments that might result from the outcome of the uncertainties.

These financial statements and related notes are presented for interim periods in accordance with the requirements of Form 10-Q and, consequently, do not include all disclosures normally provided in the Company’s Annual Report on Form 10-K. Accordingly, these financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

Certain prior year amounts have been reclassified within the Form 10-Q to conform with the current year presentation.

The accompanying consolidated balance sheet for September 30, 2003, and consolidated statements of operations and cash flows for the periods ended September 30, 2003 and 2002, are unaudited but reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature.

The Company’s business is seasonal. Therefore, the results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal years.

The Company recorded at closing in 1997, a resort intangible asset of approximately $30,400,000. This intangible related to the purchase of the Innisbrook Resort, which contained an existing rental pool agreement and a recently executed management agreement with Westin Hotels. The intangible is being amortized over twenty years on a straight-line basis. Amortization expense for all intangible assets was approximately $646,000 and $644,000 for the nine months ended September 30, 2003 and September 30, 2002, respectively.

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 2002 and through September 30, 2003, the Company reviewed the carrying value of the intangible asset and determined that further impairment had not occurred. Advance booking and rental pool participation have stabilized from a historical perspective, and pro-forma cash flows, based upon advance bookings indicate that no further deterioration in the carrying value needs to be recognized.

Golf Hosts, Inc., the Company’s parent, was named as a defendant in a consolidated class action lawsuit whereby the plaintiffs allege breaches of contract, including breaches in connection with the Rental Pool Master Lease Agreement. By order dated April 2, 2003, the Company was substituted in place of Golf Hosts, Inc. as the defendant in the lawsuit. The plaintiffs are seeking unspecified damages and declaratory judgment stating that the plaintiffs are entitled to participate in the rental pool if one exists, a restriction of golf course access to persons who are either condominium owners, members, their accompanied guests, or guests of the resort and a restriction of the total number of club memberships. Deposition of class members and others, including depositions of prior executives of Golf Host Resorts, have been taken and additional discovery remains. The previously scheduled trial date of February 3, 2003 has been postponed by the Court;

GOLF HOST RESORTS, INC. AND SUBSIDIARY
(a wholly owned subsidiary of Golf Hosts, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

a new trial date has not yet been set. In July 2003, the lawsuit class was de-certified leaving approximately 80 plaintiffs in the lawsuit. Plaintiffs have filed a notice of appeal regarding the de-certification decision. As this litigation is still in progress, the Company is not yet able to determine whether the resolution of this matter will have a material adverse effect on the Company’s financial condition or results of operations. The Company believes it has successful defenses based upon consultations with legal counsel and intends to vigorously defend this action.

The Company has recorded a liability and related asset in the approximate amount of $5,623,000, in recognition of the Master Lease Agreement refurbishment reimbursement program. The liability will be settled in accordance with the terms of the agreement and the asset will be amortized on a straight line basis beginning in 2002 and ending December 31, 2009. Amortization expense for the asset was approximately $611,000 and $305,000 for the periods ended September 30, 2003 and September 30, 2002, respectively.

As noted in the Company’s 10K filed as of December 31, 2002, the Company has defaulted on its primary mortgage with Golf Trust of America (“GTA”). The Company is engaged in negotiations with “GTA” and is seeking a solution to its default status. At the time of this publication, no definite or final agreement has been reached.

The following unaudited financial statements of the Innisbrook Rental Pool Lease Operation (the Rental Pool) are for the quarters ended September 30, 2003 and 2002

The operation of the Rental Pool is tied closely to that of Golf Host Resorts, Inc. (the Company), and provides for distribution of a percentage of the Company’s room revenues, as defined in the Rental Pool Master Lease Agreements, to participating condominium owners (Participants).

The Innisbrook Rental Pool Operation is party to lease agreements with an affiliated entity, whose ability to continue as a going concern is in substantial doubt.

The operation of the Rental Pool is more fully discussed in Form 10-K, for the fiscal year ended December 31, 2002 (file No. 2-64309).


	September 30,		December 31,
	2003		2002

	(unaudited)

ASSETS
LIFE SAFETY RECEIVABLE FROM PARTICIPANTS	$	44,271	$	—
RECEIVABLE FROM GOLF HOST RESORTS, INC. FOR DISTRIBUTION		680,446		1,790,798
INTEREST RECEIVABLE FROM MAINTENANCE ESCROW FUND		8,314		15,856

	$	733,031	$	1,806,654

LIABILITIES AND PARTICIPANTS’ FUND BALANCES
DUE TO PARTICIPANTS FOR DISTRIBUTION	$	470,319	$	1,480,977
DUE TO MAINTENANCE ESCROW FUND		218,441		325,677
LIFE SAFETY SETTLEMENT LIABILITY		44,271		—

	$	733,031	$	1,806,654

MAINTENANCE ESCROW FUND
ASSETS
CASH AND CASH EQUIVALENTS	$	1,888,015	$	4,991,956
RECEIVABLE FROM DISTRIBUTION FUND		218,441		325,677
CONSTRUCTION WORK IN PROGRESS		39,421		7,284
CARPET CARE RECEIVABLE		9,018		23,576
INTEREST RECEIVABLE		13,519		9,012

	$	2,168,414	$	5,357,505

LIABILITIES AND PARTICIPANTS’ FUND BALANCES
ACCOUNTS PAYABLE	$	108,387	$	2,820
CONSTRUCTION RETAINAGE		4,302		—
INTEREST PAYABLE TO DISTRIBUTION FUND		8,314		15,856
PARTICIPANTS’ FUND BALANCES — ESCROW A		1,601,935		1,366,611
PARTICIPANTS’ FUND BALANCES — ESCROW B		445,476		3,972,218

	$	2,168,414	$	5,357,505

These statements were prepared from the books and records of the Rental Pool without audit and, in the opinion of the Rental Pool Operators, include all adjustments which are necessary for a fair presentation.


		Current quarter						Year-to-Date

		2003			2002			2003			2002

GROSS REVENUES		$	1,965,259		$	1,728,450		$	8,463,294		$	9,981,870

DEDUCTIONS:
	Agents’ commissions		56,349			47,699			316,817			420,815
	Credit card fees		45,388			40,776			199,308			236,282
	Audit fees		5,387			3,813			16,161			12,187
	Uncollectable room rents		—			2,295			2,119			26,666
	Linen replacements		28,655			17,351			102,852			126,379
	Rental pool complimentary fees		824			2,413			2,453			4,233

			136,603			114,347			639,710			826,562

ADJUSTED GROSS REVENUES			1,828,656			1,614,103			7,823,584			9,155,308
MANAGEMENT FEE			(1,096,909	)		(967,743	)		(4,692,888	)		(5,488,598	)

GROSS INCOME DISTRIBUTION			731,747			646,360			3,130,696			3,666,710
ADJUSTMENTS TO GROSS INCOME DISTRIBUTION:
	Management fee		(172	)		(417	)		(747	)		(2,705	)
	Marketing fee		(94	)		(228	)		(407	)		(1,476	)
	General pooled expense		—			—			—			(12,355	)
	Miscellaneous pooled expense		—			(49	)		(45	)		(218	)
	Corporate complimentary occupancy fees		6,526			7,705			14,328			16,422
	Interest (Paragraph 3.1 (3))		(3,183	)		(3,183	)		(9,549	)		(9,549	)
	Gtd MLA guaranteed payment		—			—			1,592			—
	Occupancy fees		(242,777	)		(223,879	)		(814,308	)		(914,830	)
	Advisory Committee expenses		(47,068	)		(50,641	)		(148,605	)		(154,406	)
	Life-safety reimbursement		(22,135	)		—			(156,962	)		—

NET INCOME DISTRIBUTION			422,844			375,668			2,015,993			2,587,593
ADJUSTMENTS TO NET INCOME DISTRIBUTION:
	Occupancy fees		242,777			223,879			814,308			914,830
	Hospitality suite fees		370			1,216			4,234			4,234
	Westin Associate room fees		14,455			22,393			53,899			61,838
	Interest		—			—			2,890			—

AMOUNT AVAILABLE FOR DISTRIBUTION TO PARTICIPANTS		$	680,446		$	623,156		$	2,891,324		$	3,568,495

Average daily distribution		$	12.17		$	11.53		$	17.93		$	22.61
Average room rate		$	102.89		$	94.31		$	131.34		$	134.94
Occupied room nights			19,101			18,326			64,440			73,970
Available room nights			55,927			54,040			161,213			157,815
Occupancy percentage			34.2	%		33.9	%		40.0	%		46.9	%
Average number of available units			608			587			591			578

INNISBROOK RENTAL POOL LEASE OPERATION
STATEMENTS OF CHANGES IN PARTICIPANTS’ FUND BALANCES
FOR THE QUARTERS ENDED SEPTEMBER 30, 2003 AND 2002


		Current Quarter						Year-to-date

		2003			2002			2003			2002

BALANCE, beginning of period		$	—		$	—		$	—		$	—
ADDITIONS:
	Amount available for distribution		680,446			623,156			2,891,324			3,568,495
	Interest received or receivable from Maintenance Escrow Fund		8,314			19,303			33,354			57,021
REDUCTIONS:
	Amounts withheld for Maintenance Escrow Fund		(218,441	)		(211,923	)		(733,409	)		(833,779	)
	Amounts accrued or paid to participants		(470,319	)		(430,536	)		(2,191,269	)		(2,791,737	)

BALANCE, end of period		$	—		$	—		$	—		$	—

MAINTENANCE ESCROW FUND
BALANCE, beginning of period		$	3,079,987		$	4,943,836		$	3,444,280		$	2,726,458
ADDITIONS:
	Amounts withheld from occupancy fees		218,441			211,923			733,409			833,779
	Interest earned		8,314			19,303			33,354			57,021
	Charges to participants to establish or restore escrow balances		35,032			74,749			1,823,283			4,565,917
REDUCTIONS:
	Maintenance charges		(232,585	)		(163,948	)		(671,400	)		(452,259	)
	Refurbishment Phase II		(1,000,928	)		(1,310,243	)		(3,012,953	)		(3,281,652	)
	Carpet care reserve deposit		(14,562	)		(11,774	)		(43,138	)		(42,704	)
	Interest accrued or paid to Distribution Fund		(8,314	)		(19,303	)		(33,354	)		(57,021	)
	Refunds to participants as prescribed by the master lease agreements		(37,974	)		(108,881	)		(226,070	)		(713,877	)

BALANCE, end of period		$	2,047,411		$	3,635,662		$	2,047,411		$	3,635,662

During the third quarter of 2003, the Company’s results of operations continued to reflect the downward trend in the hospitality industry and the destination golf resort segment of that industry. Occupancy percentages at the Innisbrook resort were 4.2% greater than the same three-month period for the prior year. Total room nights were 773 greater for the period ended September 30, 2003 compared to the three months ended September 30, 2002. Group room nights were up 1,933 while transient rooms decreased by 1,160 room nights, as compared to the same period last year. Total revenue per room night decreased by 7.7% or $27.10 as compared to the prior year. Gross revenue per room night for the three months ended September 30, 2003 was $325.96 as compared to $353.05 for the three months ended September 30, 2002. Despite increases in room nights, the decrease in total revenue per room night resulted in net decrease in gross revenue of approximately $245,000 or 3.8%.

All expenses have been managed to respond to the reduced demand in the market place, including the day-to-day maintenance costs of the four golf courses. Operating expenses, exclusive of depreciation and amortization, increased approximately $541,000 or 7.6%. Depreciation and amortization also increased by approximately $47,000 or 3.6%.

The decrease in revenue combined with the increases in operating expenses and depreciation and amortization noted above, produced a net reduction in the comparative three month operating income of approximately $832,000. Operating income, before interest expense and preferred dividend requirements, was a loss of approximately $2,839,000 versus a loss of approximately $2,007,000 for the three months ended September 30, 2003 and September 30, 2002, respectively.

Interest expense, net of interest income, reflects the continued accrual of the Company’s GTA interest obligations. Total interest expense increased by approximately $20,000 or 1%. This increase was the result of effective interest rate changes on the GTA mortgage.

Capital expenditure reserves in the amount of approximately $603,000 were set-aside during the quarter ended September 30, 2003. Of this amount, approximately $184,000 was used to fund capital lease payments on operating assets such as golf carts, golf grounds equipment and computer equipment while $239,000 was used to replace and repair the conference center and clubhouse HVAC, clubhouse roofing, systems and miscellaneous deferred maintenance projects. The balance is being held in reserve to fund the new telephone switch and additional golf course equipment, both of which will be installed and or delivered before the end of the first quarter of 2004.

During the nine months ended September 30, 2003, the Company’s results of operations continued to reflect the downward trend in the hospitality industry and the destination golf resort segment of that industry as noted above. Occupancy percentages at the Innisbrook resort were 12.9% less than the same nine-month period for the prior year. Total room nights were down 9,530 for the period ended September 30, 2003 as compared to the nine months ended September 30, 2002. Group and transient room nights were down 6,978 and 2,552 room nights respectively, as compared to the same period last

year. Total revenue per room night decreased by $4.75 or 1.1% over the prior year. Gross revenue per room night for the nine months ended September 30, 2003 was $437.02 as compared to $441.77 for the nine months ended September 30, 2002. These reductions in room nights coupled with the decrease in room night spending levels produced a net decrease in gross revenue of approximately $4,516,000 or 13.8%.

Due to management’s reducing operating expenses in response to reduced demands, operating expenses, exclusive of depreciation and amortization, decrease approximately $1,092,000 or 3.8%. Depreciation and amortization decreased by approximately $90,000 or 3.1%.

The decrease in revenue combined with the decreases in operating expenses and increase in depreciation and amortization noted above, produced a net reduction in the comparative nine month operating income of approximately $3,334,000. Operating income, before interest expense and preferred dividend requirements, was a loss of approximately $2,046,000 versus income of approximately $1,288,000 for the nine months ended September 30, 2003 and September 30, 2002, respectively.

Interest expense, net of interest income, reflects change in the effective interest rates related to the GTA interest obligations. Total interest expense decreased by approximately $19,000 or .3%.

Capital expenditure reserves in the amount of approximately $1,808,000 were set-aside during the nine months ended September 30, 2003. Of this amount, approximately $663,000 was used to fund capital lease payments on operating assets such as golf carts, golf grounds equipment and computer equipment while $439,000 was used to replace and repair the conference center and clubhouse HVAC, roofing systems and miscellaneous deferred maintenance projects. The balance is being held in reserve to fund the new telephone switch and golf course equipment, both of which are expected be installed and or delivered before the end of the first quarter of 2004.

The following information may contain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Such statements may be identified by the inclusion of terms such as “believe,” “expect,” “hope” or “may.” Although the Company believes that such forward-looking statements are based upon sound and reasonable assumptions, given the circumstances in which the statements are made, the actual results could differ significantly from those described in the forward-looking statements.

Certain factors that might cause such a difference include the following: changes in general economic conditions that may influence group conferences and guests’ vacations plans; changes in travel patterns; changes in consumer tastes in destinations or accommodations for group conferences and vacations; changes in rental pool participation by the current condominium owners; reaching a settlement agreement with the Company’s primary lender; settlement of the Class Action Lawsuit; the ability of the Company to continue to operate the Innisbrook property under its management contracts; and the resale of condominiums to owners who elect neither to participate in the rental pool nor to become Club members. Given these uncertainties, readers are cautioned not to put undue reliance on such statements.

The Company’s working capital position has decreased to a deficit of approximately $105,454,000. This is a reduction of approximately $7,376,000 in working capital from the December 31, 2002 deficit of approximately $98,078,000.

The Company continues to experience seasonal fluctuations in its net working capital position. These fluctuations have been managed in the past through the utilization of an accounts receivable revolving credit line. Effective May 23, 2002, the revolving credit line with Wells Fargo Business Credit was terminated by Wells Fargo as a result of the Company’s default on the participating mortgage with Golf Trust of America (GTA).

The Company was informed by GTA on November 29, 2001 that the Company is in default on the $78,975,000 mortgage and accrued interest, arising from the Company’s failure to pay the October 2001 interest and all subsequent monthly installments. GTA has asserted its right to accelerate payment of the total outstanding principal and interest amounts.

As of November 2003, the Company is seeking to negotiate a Settlement Agreement with GTA. In connection with the proposed Settlement Agreement, the Company would transfer to GTA the Innisbrook resort property, three condominium units located at the resort, the Company’s ownership interests in GTA stock, and all rights, title and interests of the Company under existing contracts and agreements. In addition, the Company would provide limited indemnity to defend and hold harmless GTA (and its affiliates) from and against any and all costs, liabilities, claims, losses, judgments or damages arising out of or in connection with the Class Action Lawsuit, as well as liabilities accruing on or before the closing date relating to employee benefits and liabilities for contracts or agreements not disclosed by the Company to GTA. In return, it is anticipated that GTA would deliver to the Company a duly executed release. No Settlement Agreement has yet been signed and no terms are definite. Neither GTA nor any of its affiliates are under any obligation to execute the Settlement Agreement and GTA could initiate foreclosure proceedings or pursue any other legal remedies available to it at any time.

During October 2003, Westin Hotel Company, the manager of the Innisbrook Resort, provided ownership with updated net cash flow projections for the fourth quarter of 2003 and for the year 2004. Due to continuing softness in the general economy and specifically the destination resort industry, these net cash flow projections are significantly less favorable than previously projected for these periods, and will result in operating deficits for such periods.

As described in Note 4 of the notes to consolidated financial statements on the Company’s Form 10-K for December 31, 2002, management had determined that due to declining demand in the hotel golf resort business and related rental pool participation, which led to declines in operating results, impairment of the intangible asset had occurred. At December 31, 2000, an impairment charge of $7,441,000 was recorded. As a result of the continued decline in destination golf resort business during 2001 and the events of September 11, 2001, the Company had determined that further impairment had occurred and consequently recorded an additional $3,000,000 impairment charge during the quarter ended September 30, 2001. No further impairment has been recognized subsequent to the period ended September 30, 2001.


Item 3.		Quantitative and Qualitative Disclosures About Market Risk

		The Registrant does not have significant market risk with respect to foreign currency exchanges or other market rates. The Registrant’s debt has a fixed contractual interest rate through the year 2027 and, accordingly, fluctuations in interest rates are not expected to affect financial results.

Item 4.		Controls and Procedures

		Within the 90 days prior to the date of this report, the Registrant’s management, including the Chief Executive Officer, the Principal Financial Officer and the Registrant’s agent (Westin North American Management Company), carried out an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the evaluation, the Registrant’s Chief Executive Officer and the Principal Financial Officer concluded that the Registrant’s disclosure controls and procedures are effective in timely alerting them to material information to be included in the Registrant’s periodic SEC filings.

		There have been no significant changes in the Registrant’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer and the Principal Financial Officer carried out this evaluation.


Item 1.		Legal Proceedings

		Golf Hosts, Inc., the Company’s parent, was named as a defendant in a consolidated class action lawsuit whereby the plaintiffs allege breaches of contract, including breaches in connection with the Rental Pool Lease Agreement. By order dated April 3, 2003, the Company was substituted in place of Golf Hosts, Inc. as the defendant in the lawsuit. The plaintiffs are seeking unspecified damages and a declaratory judgment stating that the plaintiffs are entitled to participate in the rental pool if one exists, a limitation of golf course access to persons who are either condominium owners, members, their accompanied guest, or guests of the resort and a limitation of the total number of Club memberships. Deposition of class members and others, including depositions of prior executives of Golf Host Resorts, have been taken and additional discovery remains. The previously scheduled trial date of February 3, 2003 has been postponed by the Court; a new trial date has not yet been set. In July 2003, the lawsuit was de-certified leaving approximately 80 plaintiffs in the lawsuit. Plaintiffs have filed a notice of appeal regarding the de-certification decision. As this litigation in still in progress, the Company is not yet able to determine whether the resolution of this matter will have a material adverse effect on the Company’s financial condition or results of operations although the Company believes it has successful defenses based upon consultations with legal counsel and intends to vigorously defend this action.

Item 2.		Changes in Securities and Use of Proceeds

		Not applicable.

Item 3.		Defaults Upon Senior Securities

		Not applicable

Item 4.		Submission of Matters to a Vote of Security Holders

		Not applicable

Item 5.		Other Information

		Pursuant to an agreement with the SEC staff, included in the 10-Q filing are unaudited financial statements of the Innisbrook Rental Pool Lease Operation for the quarters ended March 31, 2003 and 2002.

Item 6.		Exhibits and Reports on Form 8-K

		(a) The following exhibits are included in this Form 10-Q:

		31.1 President Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

		31.2 Principal Financial Officer Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

		32.1 President Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

		32.2 Principal Financial Officer Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

		(b) The Registrant did not file Form 8-K during the three months ended March 31, 2003.

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


Colorado		84-0631130

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


36750 US 19 N., Palm Harbor, Florida			34684
(Address of principal executive offices)			(Zip Code)


(727) 942-2000 (Registrant’s telephone number, including area code)


PART I — FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S DEFICIT
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
PART II -- OTHER INFORMATION
SIGNATURES
Ex-31.1 Section 302 CEO Certification
Ex-31.2 Section 302 CFO Certification
Ex-32.1 Section 906 CEO Certification
Ex-32.2 Section 906 CFO Certification


	September 30,			December 31,
	2003			2002

Participating mortgage note at varying pay rates maturing in 2027 (in default)	$	69,975,000		$	69,975,000
$9,000,000 participating mortgage note credit facility maturing in 2007 (in default)		9,000,000			9,000,000
Capital leases ranging from 9.0% to 9.51%		114,535			28,552

		79,089,535			79,003,552
Less current maturities		(79,001,205	)		(79,003,552	)

	$	88,330		$	—


Date:	November 24, 2003	By: /s/ Merrick Kleeman Merrick Kleeman President

Date:	November 24, 2003	By: /s/ R. Keith Wilt R. Keith Wilt Vice President and Treasurer (Principal Financial Officer)

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	Total
	Shareholders’
	Deficit

Balance, December 31, 2002	$	(58,955,413	)




Shareholder receivable		(219,784	)




Loss available to common shareholder (unaudited)		(9,082,533	)

Balance, September 30, 2003	$	(68,257,730	)


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)